How unethical sellers abuse the system with bogus IP, trademark, copyright and patent reports
This post is by Chris McCabe, a former Amazonian and founder of ecommerceChris.com. For Amazon sellers, having their merchant account suspended means losing time and money trying to get back in business. ecommerceChris shows sellers how to keep their accounts healthy, or, if the worst should happen, how to get their account back from a suspension.
UPDATE FEB 2017: A follow-up to this post, How to Fight Amazon Rights Infringement Claims, covers Amazon’s changing attitude to false claims, how to create a Plan of Action, and how to file a DMCA counterclaim.
As demonstrated in a recent CNBC article about Samsung sales, Amazon scarcely has any process in place to vet disputes over sales rights or to filter counterfeit claims from alleged rights owners.
In order to meet a minimum liability standard, Amazon only acts upon properly submitted and completed notice claims of infringement. They notify specified marketplace sellers which party reported them on what listing, and how to reach that would-be rights owner via email. The rest is up to you.
Unfortunately, now word is out that anyone could submit a form without any true vetting or verification process on the other side. Investigators merely check the form for completed content in all the right spaces. They don’t independently verify that any of the information is actually correct, or valid. The rights owner makes a legally-binding declaration in the form, and signs it. What if you can’t locate a party who submits a false form?
If anything there does not square with reality, then it’s up to you to chase them down.
What is a Rights Owner Infringement?
There are different kinds of infringement complaints submitted to Amazon for review and action. It’s important to differentiate between counterfeit and Rights Owner infringement because Amazon treats them differently.
For a counterfeit complaint, Amazon asks the alleged counterfeiter for supply chain documentation. If you’re accused of selling inauthentic product, and especially if there’s a test buy involved from the buyer or accusing seller, you’ll need to provide as much documentation leading back to the brand or manufacturer as possible. If this means adding a letter from your distributor asserting, on their company letterhead, where they sourced the items, then so be it.
For Rights Owner complaints submitted via this form, Amazon removes the listing pending contact from the complainant. They need to hear directly from the rights owner in order to reinstate your listing. A Rights Owner complaint could be due to patent, copyright, or trademark infringement.
A patent infringement on Amazon means selling, or offering to sell, a patented invention without the permission of the patent owner.
Broad actions taking down not just groups of listings but entire accounts are common.
A copyright infringement is using other people’s images or text without authorization to use it on Amazon. Product listings, physical products, and packaging cannot include copyright content or images. Submission of a form indicating a copyright violation results in a listing removal and warning, at a minimum. Enough of these could result in a suspension.
Trademark infringement concerns symbols or words that are registered to a specific company or product. These may not be used or reproduced (i.e. counterfeit) without authorization. Some recent trademark claims, even for first time offenders, result in suspensions if the brand is sufficiently hot-button, like Apple. Whether you get a warning or an outright account suspension can depend on the brand that submits the complaint.
There’s evidence that all brands are paying a lot more attention to sales of their products on Amazon, and organizations like the NFL and MLB are stirring up concern internally at Amazon. Broad actions taking down not just groups of listings but entire accounts are common.
What’s Going On? A Quick Rundown
Amazon never gives out anything beyond an email address and does not vet the party submitting the form, but why? Internal policy directs investigators to take minimum action only to prevent dispute mediation around rights ownership.
Amazon assumes no liability for identifying true versus false rights owners
Amazon assumes no liability for identifying true versus false rights owners, they merely assess the documents in front of them as complete, look for the named seller storefronts and selected ASINs, and warn or suspend the targeted seller. They refuse to get involved beyond that line unless compelled legally.
While Amazon teams may only extend themselves as far as Amazon Legal will let them, we can’t consider the results anything less than a spectacular policy failure. Notice forms roll in hourly with no definitive proof of true rights ownership and Amazon teams continue to enforce them as legitimate. Listings are cancelled, sellers are warned, top-selling ASINs drop out of your active listings and increasingly, sellers find themselves suspended first, with questions asked later.
Amazon wants to avoid any chance that they could be missing reports of fake products or counterfeit items, and needs to take every step possible to ensure they err on the side of aggression. But the net effect on the marketplace itself is to undermine a seller’s sense of any protection or any real control of this entire process.
Why is This Happening?
Several factors have led us to this point. Long ago in a galaxy a bit too close to all of us, some devious and over-competitive sellers looking for weak systems to exploit came up with an idea: why don’t we accuse our competitors on a listing of violating our rights ownership? We’ll just give a token email address to Amazon and let them hammer our competition.
You can take shots at another seller from a free email address and watch your competition fall.
Amazon does not require rights owners to have any seller accounts at all, of course. So why not simply provide a freshly created free email address as the contact point, and name our target and the ASINs? Will Amazon find the time or interest to figure out who we are? Or will they simply take the listings down, and warn the seller?
The answer came back definitively on one side. You can take shots at another seller from an email address not associated with a seller account, and watch your competition fall. Enough rights owner violations coming in naturally lead investigators to suspend the account you’ve targeted. If anyone emails asking to resolve the claim, you can simply ignore it.
So the question becomes this: Why is Amazon handling these matters in this way? Are they simply trying to make 100% sure they prevent any potential litigation from brand owners after all the tussle around counterfeit sales on the site?
1. No real motivation to change
Amazon has little driving it to spend more time, effort, resources or energy on verifying legitimate rights owners. If their legal counsel advised them that they are not responsible for conducting research in the outside world regarding proper rights ownership information, they ultimately won’t bear the cost nor the liability. This view has been in place for several years and no external pressures rose up to challenge their methods.
2. No headcount for it, nor an ability to scale the work
Amazon is not interested in having dozens of investigators run down and check out who is truly the legal rights owner of a certain product’s sale or distribution, and who is not. That would require additional training of their Notice squad, and new hires with legal or paralegal type backgrounds.
Policy teams struggle as it is to meet service level agreements on their main email queues and usually face criticism for auto-response level quality. Adding this kind of work would water down the quality of their investigations ever further.
3. Is anyone really following this?
Amazon has not received much bad press nor public commentary on this question, outside of the usual seller forums and Facebook groups. Those readers are usually sellers who are preaching to the choir. To Amazon seller consultants like me, it’s an obvious area for public complaint. For sellers, it’s a known problem that they pray will never affect them personally.
Word is out among those most interested in abusing these processes, and pushing through forms that don’t reflect accurate or even good-faith rights ownership. Bad actors know that Amazon refuses to vet those forms beyond the above criteria, and also that Amazon won’t reject claims because they only have a free email address to send to the unsuspecting target. Once sellers know that the party in the middle with all of the authority will not intervene, it’s open season on everyone.
4. What plays out in the courts?
Not a lot that affects Amazon, apparently. If sellers sue each other claiming rights ownership violations, the only impact on Amazon is lost sales on a particular item. It’s one drop in an ocean of feverish sales and commissions for them.
If Amazon itself is sued, they can come back with a well-funded legal team. Are many sellers planning to do that? If they do marshal the financial resources, how long will it take? Will they win? But if Amazon loses a high-profile lawsuit because they failed to protect a rights owner, or they took action based on an inaccurate rights ownership claim, you’ll hear about it. Until then…
5. Is Amazon going to change this anytime soon?
Not from what I can see, until they are properly motivated or receive some incentive to do so. They’ve ignored improvement needs on both Seller Performance and Product Quality team matters for the last couple of years, and only recently have they shown any interest in commenting publicly on those shortcomings. They don’t currently fear public discussion of this subject.
I’ve detected no new evaluation of the notice queues, the teams that handle them, or any interest in making the marketplace a platform where sellers can sell without fear of account closure from false infringement forms. Sellers are on their own and left to their own devices, legal or otherwise. Unless an external party forces Amazon to confront this nightmare, they don’t need to allocate resources, financial or otherwise, to rectify this gaping hole.
OK, So What Do I Do?
What can you, as an Amazon seller and not a mini-god, do to reduce the chance that Amazon will take your entire account down after illegitimate claims of infringement? In an atmosphere where Amazon deflects any attempt to involve them in a rights-owner dispute, you may need to consider multiple avenues towards resolution.
1. Contact the rights owner
Try to contact the rights owner at the address provided, just in case they do in fact reply with any additional and helpful information. If you can resolve it with the alleged rights owner and if they are willing to contact Amazon to retract the form, that is the best of all outcomes. If you can fix the problem in the short and sweet way, do it.
In speaking with Private Label Lawyer Suzi Hixon on this subject, she indicated: “unless you can provide a valid reason as to why you were infringing the intellectual property rights of another seller, it’s unlikely the rights’ owner will have any reason to retract. If you are going to request retraction of a complaint, make sure you also provide an incentive to the rights’ owner to retract.”
2. Send a lawyer’s letter
In the absence of any reply from the supposed rights owner, have your attorney draft a letter on law firm letterhead to send to that party (or their attorney), and gauge the response, if any. If there’s no reply and there’s no evidence that the rights owner has anything to show for their ownership, move on to contacting Amazon and challenging their action.
3. Find and contact the real rights owner.
Hopefully, your supplier can give you the rights owner’s information. It’s worth asking them to supply you with a letter of authorization or even contact Amazon on your behalf. If the supplier will not give you this information, a quick search on the USPTO database may help you identify the rights owner.
Suzi Hixon advises: “You’ll also want to check the USPTO to determine the validity of the infringement claim. For example, make sure the trademark is not an abandoned or canceled trademark. You’ll also need to check the scope of the goods covered by a trademark. Some brands, especially famous brands, are notorious for being a bit overly aggressive in enforcement.”
If you aren’t sure if the alleged rights’ holder can substantiate your claims, you might need to retain an attorney to make sure you aren’t a victim of a bully or troll.
4. Send Amazon your lawyer’s letter
Email Notice teams and Amazon legal with your lawyer’s letter. Are they responsive? Do they ignore you? Has the letter stated the average daily sales you’ve lost due to this action, and due to their unwillingness to verify that an actual rights owner contacted them?
Each attorney will have a different take on this, but make sure you’re using someone who knows what they’re doing, and understands the work itself. There are a lot of quick buck artists out there currently plaguing the Amazon seller marketplace, plugging their “Amazon expertise”, but lacking the credentials to handle these matters. Investigate each attorney thoroughly.
5. Initiate litigation
Are you suspended by Amazon based on wrongly filed rights owner forms? Many of you are as I write this. Have you considered taking legal action to compel Amazon to justify the wrongful closure of your account?
You may have decided that you’ll simply appeal, promising never again to violate another party’s rights, but that represents only a short term solution. This could easily happen to you again and each time you’re suspended, it will get tougher and tougher to get your account back.
6. Take it to the press
A lot of sellers are unwilling to take this step because they fear retribution, or they don’t trust a public party to look after their interests. But is the reporter willing to talk anonymously, or do they demand that the seller identifies themselves? Often, sellers don’t even get to that point; they simply disregard the option. Some don’t understand how speaking “off the record” works while others don’t grasp the simple precautions you can take by contacting a reporter from an untraceable phone, but either way, this is sometimes the only way to get Amazon moving.
If they don’t care about resolving a major problem but the press calls them to get quotes about a story on it, they may suddenly find themselves a bit more interested. Think it over and decide for yourself what you’re willing to describe to someone who wants to hear seller experiences. Do your own research, your own thinking, and decide if you’re speaking to the right person to cover the subject, too.
Where does that leave us?
Amazon has countered seller complaints with PR-type language, contributing to the discussion by stating that it’s a complex issue, and they’re doing everything they possibly can to resolve it the right way.
In the meantime, make sure you’re looking out for yourself, taking the right steps, and not waiting for Amazon to take care of anything for you. It’s not up to them, ultimately, it will be up to you.
Chris McCabe can be contacted via ecommerceChris.com.