The European Union Intellectual Property Office (EUIPO) has released a new report that looks at the variety of online business models infringing intellectual property rights (IPRs).

The report highlights several illicit examples of marketing through Business-to-Business (B2B) and Business-to-Consumer (B2C) websites, online marketplaces and social media. It says that this illegal industry thrives on the misuse of IPR belonging to others and is often built on the use of domain names and other digital identifiers.

“It more and more relies on new encrypted technologies like the TOR browser and the bitcoin virtual currency, which are employed by infringers of IPR to generate income and hide the proceeds of crime from the authorities”, it said.

The report finds that several IPR-infringing business models are based on generally applicable online business models, such as B2B or B2C websites and marketplaces. The revenue sources of the IPR-infringing business models are to a large extent the same as for non-infringing business models. However, it noted that in addition to traditional bank transfer and credit card payment, these business models also increasingly include the option of making payments in virtual currencies (mainly Bitcoins).

It identifies 25 IPR-fringing models, with majority of these models using TOR technology and located on Darknet. Further analysis and case studies reveal that these websites prefer payments in digital currencies – bitcoin, Litecoin, Anoncoin. Many websites also offer special discounts for making payments in bitcoins.

“Darknet Markets primarily make use of cryptocurrencies for payment transactions. Bitcoins are the predominant method of payment but other cryptocurrencies are also widely accepted”, it said.

The report further stated that the ‘notice and takedown’ procedures which are widely used by the operators of marketplaces and other internet service providers on the open part of the internet do not appear to be applied to the same extent on the darknet.

“A number of the analysed business models are based on concepts that make it easy for the providers to be able to continue their businesses even in the event that an enforcement action has been initiated. In some of the business models the providers openly state to their customers that they have included resilience against enforcement actions in their businesses model”, the report said.