You work hard to source and sell quality products online. Imagine a situation in which you find that another Amazon seller is selling the same products, with the same branding, for a much lower price. Their sales will definitely cut into yours. While this scenario can happen legitimately, it may also be that the other online seller is hawking counterfeit goods and committing trademark infringement.
According to the most recent Global Brand Counterfeiting Report, the amount of total counterfeiting globally was $1.2 trillion in 2017. When the numbers for 2020 are tallied up, it’s expected that they’ll add up to at least $1.82 trillion. Further, the report stated that the losses suffered due to online counterfeiting globally amounted to $323 billion in 2017.
As an Amazon seller, it’s critical that you understand what trademark infringement is, what you can do to protect your business, and what to do if you are accused of committing selling trademarked products.
What is a Trademark?
A trademark is a symbol, phrase, or some other device that distinguishes ownership of a product or service. For example, the way that McDonald’s writes the “M” and the Nike swoosh are both trademarks. When you see either, you know what to expect.
United States federal law governs trademarks. Trademarks are described in section 32(1) of the Lanham Act a set of federal laws. A trademark is intended to stand as a mark of quality. They can be viewed at the government’s website for the USPTO (United States Patent and Trademark Office).
People that buy products from Amazon third-party sellers often rely on trademarks when making purchases. When they see a trademark, buyers know they are getting quality goods even though the seller is not an authorized reseller.
What is Trademark Infringement?
Trademark infringement occurs when someone takes a trademark, like the Nike swoosh, and puts it on a non-Nike shirt. If you take someone’s mark and put it on your product, that is clearly trademark infringement.
What is NOT a trademark violation in the United States is also clear: if you buy and then resell a real Nike shirt with the swoosh, it’s the real deal and there is no trademark violation. If you buy brand-name goods at Walmart on their discount rack and resell the goods, there is no trademark violation.
What may be trademark infringement is where one person uses a word, letter or symbol that is close to another company’s trademark. For example, if you use the same type of stripe that Adidas uses but make it four stripes instead of three, it may or may not be a trademark violation. The legal test is as follows: is your mark likely to confuse a buyer as to what they are purchasing. The test is known as the “likelihood of confusion.”
A likelihood of confusion occurs “when the consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service…”
What Could Happen if You Receive a Complaint for Amazon Trademark Infringement?
What happens in a court of law if you lose a case where you are sued for trademark violation? Section 1125(a) of the Lanham Act states that merchant sellers shall be liable in a civil action to any person that is likely to be damaged by the Amazon marketplace seller or Amazon marketplace reseller’s trademark infringement. This means that you could owe money if you are sued.
To bring an action under the law, actual damages need not be shown. You do not have to show that you actually lost money. To bring a case for trademark infringement, you must merely show the likelihood of damages.
In our experience, however, it is rare for a trademark issue originating on the Amazon platform to reach litigation. This is because most rights owners are satisfied once the accused stops any infringement. This means, when dealing with Amazon, most rights owners will file a trademark violation through the Amazon platform before deciding to prepare for trial.
Until recently, if a trademark complaint was made against your Amazon account, it meant instant suspension. Amazon did not have an employee acting as a “gatekeeper” so to speak to make sure that trademark (and other IP) complaints were legitimate. Unfortunately, we have seen many sellers take advantage of this system; they file baseless complaints against their competitors in hopes of getting their selling privileges removed. We have felt the effects of this injustice at Amazon Sellers Lawyer since our inception.
How Do I Get My Account Reinstated?
Previously, the only way to get selling privileges reinstated after a trademark complaint has been made against you was to communicate with the rights owner (trademark owner) and try to convince them to remove the complaint. This usually requires explaining either why you are not infringing, or apologizing and agreeing never to sell the accused products again. This may sound simple, but can be extremely frustrating when you are forced to deal with a rights owner who will not cooperate or does not understand the law. Further, when other sellers refused to withdraw a baseless complaint, those wrongfully accused had no recourse.
It seems like Amazon has realized the extent of this injustice and may finally have appointed a “gatekeeper” or “watchdog” to ensure that only valid complaints are filed. We have recently seen a new email from Amazon that is giving accused sellers the opportunity to dispute trademark (and other IP) complaints.
Example of email:
The basic steps for handling a frivolous patent complaint are below.
Step 1: Decide whether the complaint is true? Some products can cause a “likelihood of confusion” between your product and the right owner’s products.
Step 2: Reach out to the rights owner whether the complaint is baseless or not. If it is baseless, explain why you believe it is baseless and respectfully ask for the complaint to be removed. If the complaint is true, then explain that you understand your mistake and won’t allow it to happen again. Offer to stop selling the product in exchange for the removal of their complaint.
Step 3: Contact Amazon. Use their new contact email: email@example.com. This is a new way to request reinstatement, so take full advantage of the email and let them know you’ve contacted the right owner. Here is a great two-step approach: show Amazon that you understand what you are being accused of by explaining the trademark law. From there, explain why you aren’t infringing on their rights. Be sure to provide evidence in an organized manner.
Protecting Your Online Business from Trademark Infringement Claims
The most important thing you can do to protect yourself and your business from trademark infringement claims is to know your products well. You must stay up-to-date with the products you’re selling to ensure that you’re not violating trademark infringement laws. This is easier if you’re selling just a handful of items on Amazon. But if your product catalog is vast, like many Amazon sellers, it can be difficult to keep up with. If you have doubts about the trademarks of the products you’re selling, check with the USPTO, as mentioned above, to verify there’s no infringement.
It’s also important to have a good relationship and open communication with your suppliers. Discuss with them any concerns you may have regarding trademark infringement. If you don’t get the cooperation you need, it may be time to look for new product sources.
Nearly all of the trademark infringement cases that happen on Amazon can be settled amicably. However, if you believe that you’ve been falsely accused of infringement, you need to be prepared to defend yourself. Investigate and build your case before contacting the individual who filed the claim. Conversely, if you find out that you’re in violation, take care of it as soon as possible to avoid being suspended by Amazon. That typically means contacting the claimant’s agent and presenting your case, and of course, taking the item in question off your site right away.
Remaining a top competitor on Amazon requires more than just selling a popular product. It requires playing by the rules and avoiding suspension. The more you know, the less likely you’ll make mistakes. We know that trademark issues are prevalent on the Amazon platform and hope that this article helps explain how to best handle them. If you want to learn more about Amazon trademark infringement, false advertising, or speak with CJ about your particular issues, call Amazon Sellers Lawyer. Or, purchase our book, the Amazon Law Library, Volume I available on Amazon.com.
About the Author: This is a guest post from Amazon Sellers Lawyer, a legal team dedicated to defending sellers’ rights by applying legal strategies to protect their accounts and handle account suspensions, complaints and policy violations.
Editor’s Note: This blog post was originally published December 2016 and was updated in March 2021 to reflect more accurate and relevant information.