calling all amazon sellers – learn how to protect yourself and your business

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LEGAL ISSUES FORAMAZON SELLERS

A WEBINAR BY KARL KRONENBERGER & GINNY SANDERSON

ABOUT USKronenberger Rosenfeld, LLP

• We only accept clients with Internet-based businesses.

• We are located in San Francisco, but litigate cases across the U.S. and have clients around the world.

• We have defended clients in IP infringement cases, class actions, government investigations, and FTC actions.

ABOUT USKronenberger Rosenfeld, LLP

• We were one of the first firms to recognize Amazon sellers as viable businesses with unique legal issues.

• Through our years of work with Amazon sellers, we have identified their specific legal needs.

• We have developed cost-savings flat-fee and subscription bundles addressing the most common legal requirements of Amazon sellers to make attorneys’ fees both affordable and predictable.

UNLAWFUL CONDUCT

COMPETITIONVS.

CRIME

UNLAWFUL CONDUCTASIN HIJACKING

• When your competitor takes advantage of your failure to adequately brand your product and protect your IP to list the competitor’s identical product using your best-selling ASIN and win the Buy Box.

UNLAWFUL CONDUCTASIN HIJACKING

UNLAWFUL CONDUCTCOUNTERFEITING

• When your competitor hijacks your ASIN to sell a knock-off of your product, or any product that is not identical to the one you listed.


BUYING THIS: BUT RECEIVING THIS:

IS THE SAME THING AS….



Both are counterfeiting because, in each case, the product is differentthan what the buyer thought he/she was buying.


• Trademark counterfeiting is when a forged trademark is placed on a product that is not a legitimate product of the trademark owner. It is a crime with severe fines and up to five years imprisonment.

• You are liable for trademark counterfeiting, even if your manufacturer was responsible for applying the forged mark.



IS THE SAME THING AS….

Seller’s Trademarks

on Product

Not Anker Product; Forged Marks



Both are trademark counterfeiting because, in each case, the product falsely purports to be the genuine product of the trademark owner.

UNLAWFUL CONDUCTASIN HIJACKING VS. COUNTERFEITING

• Amazon takes a different approach to ASIN hijacking and counterfeiting.

• Through the Buy Box, Amazon encourages ASIN competition between sellers of an identical product because it drives prices down, which makes buyers happy.

• However, if the ASIN hijacking involves counterfeiting by your competitor (i.e., their product is not identical to yours in product or branding), Amazon will not tolerate it because it causes consumer confusion and is illegal.

UNLAWFUL CONDUCTASIN HIJACKING VS. COUNTERFEITING

Example ASIN Hijacking Counterfeiting OK?

Seller A has ASIN for generic “HDMI cable” with no branding. Seller B hijacks ASIN to sell same exact cable. Seller A has ASIN for generic “6-ft HDMI cable” with no branding. Seller B hijacks ASIN to sell 5-ft cable. Seller A, owner of AcmeTM, has ASIN for “Acme HDMI cable” with branding. Seller B hijacks ASIN to sell similar cable without branding. Seller A, owner of AcmeTM, has ASIN for “Acme HDMI cable” with branding. Seller B hijacks ASIN to sell similar cable with forged branding.

UNLAWFUL CONDUCTCOPYRIGHT INFRINGEMENT

• To own a copyright is to own the exclusive right to use or display a work of art.

• An author’s copyright in a work exists when it is first published, but registering the copyright with the U.S. Copyright Office gives the author enhanced legal protection.

• In the Amazon Marketplace context, copyrights apply to product images and original headings and descriptions.

• Copyright infringement is the unlawful use of another’s copyrighted images without permission.


• Generally speaking, the person who takes (or hires someone to take) the product images owns the copyright.

• If you are using your manufacturer’s product images, you do not have a copyright to them, and cannot accuse competitors who use these images of copyright infringement.

• Stock photo agencies retain all copyrights to their images and only provide non-exclusive licenses to use them. Thus, you cannot accuse competitors who use your same stock photo images of copyright infringement.

• Merely photoshopping your label or watermark onto stock or manufacturer images does not give you a copyright.

UNLAWFUL CONDUCTTRADEMARK INFRINGEMENT

• A trademark is a name, logo, or slogan that represents your company or product, for example:

• AppleTM (brand)

• iPhoneTM (product)

• TM (logo)

• There’s an app for that.TM (slogan)

• You have a common-law trademark when you start to use the mark in commerce, but registration with the USPTO provides enhanced legal protection.

UNLAWFUL CONDUCTTRADEMARK INFRINGEMENT

• In the Amazon Marketplace context, trademark infringement often goes hand in hand with trademark counterfeiting, where your competitor falsely claims to sell your branded product by hijacking your ASIN.

• Other examples include an attempt by your competitor to sell its own product with a brand name that is confusingly similar to your trademark.

UNLAWFUL CONDUCTPATENT INFRINGEMENT

• A patent protects your unique invention or product design against people who copy it without your permission.

• Unlike copyrights and trademarks, a patent is not created immediately upon completion or sale of your work—you must have it registered.

• In the Amazon Marketplace context, patent infringement claims most often arise when a longtime Amazon seller’s sales are threatened by a seller who has found a Chinese manufacturer to white-label a similar or identical product.

UNLAWFUL CONDUCTMISLEADING PAID REVIEWS

• Undisclosed paid reviews violate Amazon’s policies.

• Product reviews given in exchange for fee or discounts can violate the FTC endorsement guidelines.

• Reviews by employees can violate FTC rules.

• Amazon has already filed a mass action against reviewers who did not disclose affiliation or payment relationship.

• Will Amazon crack down on paid and incentivized reviews?

UNLAWFUL CONDUCTMISLEADING PAID REVIEWS

UNLAWFUL CONDUCTREVIEW ATTACKS

• A review attack occurs when your competitor hires reviewers to give you or your product bad reviews.

• Amazon’s October 2014 lawsuit against persons selling reviews on Fiverr is aimed at this conduct as much as those selling positive reviews.

• A review attack constitutes trade libel, among other unlawful acts.

UNLAWFUL CONDUCTFALSE CLAIMS OF IP REGISTRATION

• Trademark Symbols

• The TM symbol is used to provide notice of a claim of common-law rights in an unregistered trademark.

• The SM symbol is similar to the TM symbol, except it denotes the provision of services. Because goods, and not services, are sold on Amazon, the SM symbol should not be used.

• The ® symbol is used to provide notice of a registered trademark. Merely filing a trademark application does not give you the right to use the ® symbol.

UNLAWFUL CONDUCTFALSE CLAIMS OF IP REGISTRATION

• Trademark Symbols

• It is a crime to use the ® symbol for an unregistered trademark, yet Amazon Marketplace is full of sellers doing just that.

UNLAWFUL CONDUCTOTHER FALSE CLAIMS• The list of other false or deceptive claims made by Amazon sellers is

endless, but common examples include:

• False claims the product is “Made in the U.S.A.”

• False claims the product is “organic,” “natural,” “eco-friendly,” or made of a certain material

• False claims the product is manufactured by the seller

• False claims the product is “certified” to work with a third-party’s product

• Using prepaid gift cards or other “cheats” to create the illusion of legitimate sales and improve ranking

UNLAWFUL CONDUCTAMAZON’S RESPONSE

• Generally speaking, Amazon pays more attention to unlawful seller conduct than unfair seller conduct.

• Unfair conduct hurts you

• Unlawful conduct potentially hurts Amazon

• Thus, the more you can convince Amazon that your competitor’s conduct is unlawful, as opposed to just unfair, the more chance you have of Amazon taking notice.


• Common reasons for account suspension

• Compensated reviews

• Unlawful products

• Multiple seller accounts using single IP address

• Gift carding


• Slow

• Arbitrary (i.e., dependent on reviewing agent)

• Confusion of issues

• Suspension of your own seller account

PROTECTING YOURSELF

If Amazon won’t protect you against unlawful conduct, how do you protect yourself?

PROTECTING YOURSELFFORM YOUR CORPORATION OR LLC

• Personal liability for failure to incorporate

• Contract Liability

• Product Liability

• In our cease and desist letters, we expose competitor’s failure to incorporate

• Document joint ventures or partnerships on products

PROTECTING YOURSELFAGREEMENTS WITH SUPPLIERS & MANUFACTURERS

• Return of Product in the Event of IP Infringement

• Indemnification

• Overseas Suppliers

PROTECTING YOURSELFDEVELOP YOUR OWN BRAND

• Do not use manufacturer’s branding or IP

• Conduct a clearance search

• Own product name and labeling = fewer Buy Box issues

• Create value by developing your own IP


http://tmsearch.uspto.gov

http://tmsearch.uspto.gov/


VS.


Even Amazon is doing it!

PROTECTING YOURSELFREGISTER YOUR TRADEMARKS AND COPYRIGHTS

• Top seller = top target

• Amazon is full of unsophisticated infringers

• Don’t fall victim to bad seminar advice

• Benefit from the advantages of registration

PROTECTING YOURSELFFOR CRYING OUT LOUD, TAKE YOUR OWN PHOTOS!

• Photos are easy

• Copyright adds value

• Ability to send DMCA takedown notices to Amazon regarding infringers

PROTECTING YOURSELFLEGITIMIZE YOUR REVIEWS

• The importance of reviews for SEO

• FTC guidelines on reviews/testimonials

• Companies providing reviews

• Review management services

PROTECTING YOURSELFFIGHT INFRINGEMENT THROUGH AGGRESSIVE C&Ds

• The value of a lawyer-written letter

• Repeat offenders

• How to manage attorneys’ fees

PROTECTING YOURSELFLAUNCH AN ANTI-COUNTERFEITING DEFENSE

• Get Amazon to take notice

• Purchase infringing product

• Document differences

• Present evidence to Amazon

• Where warranted by revenue impact, pursue worst offenders through litigation

• Ongoing relationship with your attorney is key

PROTECTING YOURSELFLAUNCH A PRODUCT-TESTING OFFENSE

• For high-volume, high-revenue campaigns

• Conduct a sophisticated, expert analysis of competitor’s product composition

• Pursue worst offenders through litigation

MANAGING LEGAL COSTS

• Hourly value vs. predictable ongoing costs

• Flat fee bundles

• Subscription plans for high-volume sellers

• Legal advertisement

KARL KRONENBERGER(415) 955-1155 x114

[email protected]

GINNY SANDERSON(415) 955-1155 x113

[email protected]

KRInternetLaw.com