Amazon Gets Tough with Sellers of Fake Goods; Make Sure You Have a Federally Registered Trademark Listed in Amazon’s Brand Registry
According to industry estimates, on a single day in late November, customers ordered more than 26.5 million items from Amazon. On average, that’s a mind-bending 306 items per second.
Not all of the estimated 200 million items available from the online giant are sold by Amazon itself. Indeed, as much as forty percent of Amazon’s sales are now generated by nearly two million third-party “Amazon Marketplace” sellers. The mutual benefit is obvious; the merchant pays a commission on each sale in exchange for access to the hundreds of millions of consumers who visit Amazon’s website every day.
However efficient it may be, this structure virtually eliminates any face-to-face vetting of individual vendors and sellers. Anyone can now become a distributor of goods on Amazon, and like platforms. An unintended (though probably foreseeable) consequence of this introduction of unknown vendors has been a surge in sales of counterfeit goods to unsuspecting consumers.
Amazon is not unique; buyers through China’s giant Alibaba marketplace and online auction pioneer eBay have also reportedly been frequent victims. Fake Amazon Marketplace items run the gamut ranging from Dr. Dre’s “Beats” headphones to designer shoes. Moreover, some consumers have had more than their wallets damaged. In 2013, several instances of singed hair were reported by Amazon Marketplace consumers of one of an estimated 20,000 phony “Instyler” electric hair straightener wands.
After enduring years of criticism over its silence in the face of the problem, Amazon filed what many consider to be long-overdue lawsuits against two Marketplace sellers of allegedly counterfeit goods this past November. The first is accused of offering unauthorized copies of the “Forearm Forklift,” a strap system designed to enable users to more easily lift furniture and other heavy objects. The second alleged pirate sells a knockoff of the popular “TRX” exercise fabric strap. Fitness Anywhere LLC, seller of the genuine TRX, estimates that more than $100 million worth of the phony product have passed through Amazon’s virtual doors. The suits allege breach of contract based on the fact that counterfeiting is prohibited by Amazon’s Business Solutions Agreement. The complaints also assert claims under the false advertising provisions of the federal Lanham Act.
Amazon’s “get tough” approach is a belated response to market pressures. A recent decision by Birkenstock to cease selling through Amazon due to counterfeiting issues and to reports that the National Football League and Major League Baseball have also been reluctant to allow Amazon to sell their officially-licensed merchandise. These decisions also seem due in part to counterfeiting concerns.
Be that as it may, legal action against alleged pirates is only one part of Amazon’s strategy. It is also establishing a registry of sellers who have provided satisfactory evidence of their products’ bona fides.
If you own a federally registered trademark, both Amazon and experienced sellers strongly recommend you register it in Amazon’s Brand Registry. In addition to blocking any other seller from using your mark (whether or not on counterfeit goods), Amazon brand registration can expedite the process of having counterfeit goods removed from the site.
Policing Your Product as Well as Your Trademarks
While Amazon makes efforts to protect its seller partners’ intellectual property rights and to maintain a digital space clear of counterfeit goods, there will always be those who slip through the cracks. Businesses must monitor the marketplace for counterfeits of their own products.
If you know or suspect that imitations of your products are in the marketplace, it is essential that you move quickly to identify and close down the source. At Sherman IP, we have the experience and resources needed to track down and shut down counterfeiters. Our attorneys will help you federally register your trademark, work with marketplace platforms like Amazon to police counterfeits and undertake other policing efforts to make sure that you are the one who benefits from your own trademarks.