CNBC recently reported on a startling case in which an Amazon seller’s most popular product, a generic toothbrush head replacement, was delisted after Amazon received a takedown notice. The takedown notice indicated that in order to reinstate the product, the seller needed to contact the law firm that had sent the takedown. But as it turns out, the firm in question, Wesley McCain Law Firm, doesn’t exist.
The lawyers and photos featured on the site for the firm actually work for another firm. The phone number listed on the site doesn’t work, the address belongs to another firm, and the website has since been taken down.
In the meantime, the seller estimates that he has lost more than $200,000 in sales. He believes that a competitor created the false complaint in order to bump him off of Amazon. As it turns out, this isn’t a unique experience. Amazon is notorious for suspending products and seller accounts, even for major brands, after receiving dubious claims of infringement.
However, the trend of being to so easily use ‘fake rights’ claims to suspend product sales will be short-lived.
There is immense financial and legal pressure to protect legitimate products from being victimized by extra-judicial proceedings. This practice is going to be short-lived—the law is currently catching up to this dubious practice, and those who perpetrate it.
Sooner rather than later, lawyers will start compelling Amazon and other retailers to disclose the origins of these false IP infringement claims. Once found, these fake rights holders will either face liability under a new interpretation of antitrust laws, DMCA counterclaims, or some entirely new theory. Intellectual property attorneys can not only understand today’s legal landscape, but can also anticipate where the law is going. Being prepared for a dynamic legal landscape is difficult, and rightsholders, legitimate and otherwise, do not want to be on the wrong side of the law. For more information, contact the Law Office of Michael O’Brien by calling us at 916-760-8265, or send us a message using our contact form.
It’s not just fraudsters attacking legitimate products—overzealous rightsholders are attacking competitors with dubious infringement claims.
These days, when the owner of a product is getting ready to market it, they will usually engage the services of an attorney to create a ‘package’ of rights for the product. This is a good strategy, as some rights are strong in some contexts and others are better elsewhere. The Law Office of Michael O’Brien helps people obtain legitimate IP rights all the time.
However, in some cases, these rightsolders will instead take a self-service approach because no attorney will help them with their dubious claims. Unlike the strategy above, the rightsholder here makes a package of a number of unenforceable copyrights and trademarks, which are almost entirely overbearing and unenforceable, and then use these specious rights to send takedown notices.
The notices take one of two forms:
- A claim that a product violates intellectual property:
- The product or its advertising materials use copyrighted text or images without permission.
- The product infringes upon a trademark by using a word (a brand name) or symbol (a logo) without authorization.
- A claim that the name brand product being sold is a counterfeit.
In either of these cases, Amazon will pull the allegedly infringing product(s) without any review, and the onus is placed on the seller to prove their legitimacy. In some cases, the seller’s entire account will be suspended, especially if the complaint alleges that they’ve infringed on the works of a big brand name, such as Apple or Samsung.
This can be devastating to a seller’s business, especially since success on competitive retail sites like Amazon is very inertia-driven. Being sidelined for even just a few weeks may cost years of progress climbing the search result listings. Having your account closed entirely is a whole other matter.
Attacking competitors with false infringement claims (or as I like to call them, “fake rights”) works because the retailers most often targeted—Amazon, eBay, Etsy, etc.—take the low-cost approach of having almost no vetting for these claims. If they receive one, they assume that it’s legitimate and act accordingly.
The day is coming when false infringement claims will yield massive financial awards for those who have their products pulled.
It doesn’t matter whether the person filing the false complaint did so knowingly, or out of the belief that their claims were legitimate. These tactics are causing turmoil in the marketplace, and people are starting to take notice. Amazon has begun to realize that if they don’t take steps to improve how they police their website, their market share may erode (or worse yet, will be the subject of lawsuits that impose new liabilities and responsibilities). Recently, the online seller has started to more carefully examine the source of complaints, and suspend those who repeatedly submit false claims.
It’s not nearly enough, and Amazon is still being too aggressive and shortsighted in how it deals with sellers. Infringement does happen. But nobody deserves to have their livelihood ruined because a retailer refuses to fix the weaknesses in their internal review processes.
The truth is that using fake rights claims to damage the competition violates U.S. antitrust laws. An experienced intellectual property lawyer can look at the legal landscape and tell you that a any day, a lawsuit will show up on the docket of an American court which (a) redefines Amazon’s responsibility to properly review infringement claims, and (b) creates massive new legal and financial liabilities for those who attack the competition with false infringement claims.
Whether you are an honest seller looking to protect your business from fake IP infringement claims, or you have been assembling a package of intellectual property claims which you’re starting to suspect don’t pass muster, you need to make sure that you’re on the right side of the law. Protect yourself and your business by obtaining the services of lawyer experienced in laws covering patents, trademarks, and copyrights, such as the Law Office of Michael O’Brien. For more information, contact us by calling 916-760-8265, or by sending an email using the contact form. We will be in touch with you shortly, and will do everything we can to be of assistance.