Scams & shams: The trouble with social networks

Online counterfeiting also damages brands in other ways. For example, some people who buy pirated copies of Microsoft Corp.'s Windows operating system may think they have legitimate copies, says Cori Hartje, senior director of the Microsoft Genuine Software Initiative. What they get is software that often includes embedded spyware and malware -- and they expect Microsoft and its channel partners to support the product.

Hartje says she's seen research showing that counterfeiters today can make more money from the spyware and malware than they get from selling the pirated software itself. Meanwhile, the user blames Microsoft for any problems the malware causes. "That hurts our brand," Hartje says.

At WWE, while the onus is on the corporation itself to find and shut down sites peddling pirated videos and other counterfeit wares, most sites do try to cooperate. Many video-sharing sites, such as YouTube, have tools available to report and take down footage that violates copyrights.

Dienes-Middlen says the challenge isn't shutting down the sites that WWE finds, but keeping up with the new ones that continue to crop up. While businesses can assign employees to do that, she recommends trying a third-party monitoring service to get a handle on the problem. Dienes-Middlen thought she had things under control -- until she did a test run with brand protection service MarkMonitor The losses WWE had uncovered on its own were just the "tip of the iceberg," she says.

Soon afterward, she went to WWE's chief operating officer to ask for additional funds to clamp down on the illicit activity. "This was something we needed to attack. Our most valuable asset is our intellectual property," Dienes-Middlen says. "You have to protect [it] or you lose your rights to it."