We’re pleased to present this blog post by Robert Segall and CJ Rosenbaum, Esq.
CJ is a partner and Robert is a third year law student and paralegal at Rosenbaum Famularo, P.C., the intellectual property law firm behind AmazonSellersLawyer.com.
Some large law firms in the United States are targeting Amazon sellers. These firms assert baseless claims of trademark infringement. These law firms claim that Amazon sellers are not “authorized” by brands to sell the brand’s products. These law firms claim that unauthorized sales of their products amount to trademark infringement. Amazon’s sellers need to know how to address these baseless claims to protect their sellers’ accounts.
Trademark Basics for Amazon Sellers
A trademark is typically a name, symbol, figure, letter, word, or mark used by a manufacturer. The trademark identifies the source of the goods. The trademark instantly relays to the consumer the quality of the product.
Amazon sellers need to know that trademark infringement exists when the use of a trademark is likely to cause “consumer confusion” as to the source of the goods. Think about a pair of sneakers; if a new manufacturer decided to use the NIKE “Swoosh” on their shoes, there would be a high likelihood that consumers would be confused as to who manufactured those shoes. In this scenario, the new manufacturer could be held liable for trademark infringement.
The First Sale Doctrine for Amazon Sellers
The First Sale Doctrine is a very important part of United States intellectual property law that Amazon sellers must be aware of. The First Sale Doctrine provides Amazon sellers the right to buy and then resell practically anything they want. There are certain exceptions.
Amazon sellers need to know that under the First Sale Doctrine an Amazon seller that legally purchases a product has a right to sell that product in an unchanged state. If the Amazon sellers buys and resells the product in an unchanged state, there is likely no intellectual property right infringement.
Amazon sellers who do no more than simply source authentic products and resell them on listings that perfectly match those products, are likely not violating anyone’s rights. Amazon sellers who buy and sell genuine products are likely not violating Amazon rights owner policies.
A material difference in a product means that it is not offered in the exact condition as when offered by a manufacturer. If it can be proved that an Amazon Seller is offering a product that contains some sort of material difference from the manufacturer’s condition, the First Sale Doctrine does not apply and the seller can be held liable for any infringement.
The “New Wave” of Intellectual Property Complaints Against Amazon Sellers
Recently, some law firms in the U.S. have been contacting Amazon sellers and making allegations of intellectual property infringement. These messages typically contain a five-page attachment outlining in great detail how our client’s “unauthorized sale” of X Brand’s products amounts to trademark infringement.
The letters go on to cite various doctrines of law and attempt to intimidate Amazon sellers clients into stopping their sale of certain brands. The letters include the threat of being sued.
This wave of intellectual property complaints against Amazon sellers seem to be no more than an attempt by brands and large law firms to deceive sellers into thinking they are doing something wrong. Worse, the law firms issuing these letters are threatening Amazon sellers who are doing nothing wrong. It seems that lawyers are being used to stop competition by Amazon sellers.
False Claims of Material Differences
Unauthorized Seller – Lack of Quality Controls
The first claim we typically see in these letters is something along the lines of “your use of our trademark is likely to cause confusion to consumers because it falsely suggests the products you sell are delivered with all the same benefits, characteristics, and quality controls as the products sold by authorized resellers.” However, more often than not, the letter continues to state that the quality controls not found in our clients’ product offerings are nothing more than a requirement that authorized sellers provide personal consultation services to end-user customers. This is not a material difference, and federal case law agrees.
According to Standard Process v. Banks, it is inherent that certain services, such as an in-person consultation do not come with a product purchased via an e-commerce platform.1
Therefore, there is no damage to any goodwill or reputation of a brand that has not authorized an Amazon Seller to sell their product. Remember though, your products must be authentic, and must otherwise exactly match manufacturer’s condition.
Unauthorized Seller – Warranty Does Not Apply
The next type of claim Amazon sellers face are that the products are different because of warranty issues. This claim can be baseless for many reasons depending on the situation. For example, for most products sold on the Amazon platform, a warranty will not require a repair to be made to the product. Almost always, issues are resolved by providing customers with refunds or replacement products. As such, if an Amazon seller offers the same, the warranty is still in effect. In fact, the A to Z guarantee provided by Amazon essentially requires sellers to adhere to this standard.
Unauthorized Seller – Tortious Interference with Contract
The final type of this “new wave” of complaints involves claims of tortious interference with contract. Essentially, allegations state that our Amazon seller clients are illegally interfering with a brand’s contracts with their authorized resellers because these resellers are prohibited from selling their products to Amazon Sellers. However, although authorized distributors may have the exclusive rights and restrictions to sell a certain type of product, our clients are not a party to any of these agreements between the brand and its distributors. Further, our clients are acting for their own legitimate economic self-interest, and no to induce any distributors to breach their agreements with a brand. Thus, no tortious interference exists, and the Amazon platform does not enforce “Exclusive or Selective Distribution.”2
How Can the Team at Amazon Sellers Lawyer Help?
Many of the large corporate law firms which issue the complaints use the same “form” letters for all their clients and our team has likely read them hundreds of times at this point. These letters often contain mistakes about the products they represent, and more often than not are entirely baseless.
At Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com, we handle Seller issues on an individual basis. If an Amazon Seller contacts our office and has received one of these baseless intellectual property allegation “form” letters, our team is here to help.
Our focus is on making sure that these letters do not turn into formal reports of infringement to Amazon and to amicably resolve any issues with the complainants to avoid an account suspension. We perform a full analysis of your product offerings to ensure that you are not infringing any intellectual property rights. We contact the complainants with a strong, but respectful tone explaining the law and why infringement does not exist.
Amazon sellers that receive letters from law firms alleging an intellectual property right violation should not be intimidated. Often the allegations are baseless. Often the brand’s law seems to be attempting to use the law as a scare tactic.
1 *See Standard Process, Inc. v. Banks,* 554 F. Supp. 2d 866 (E.D. Wis. 2008) (holding that the defendant did not violate quality control standards by reselling plaintiffs dietary supplement products online; in particular, its policy of selling primarily to health care professionals who will give supplements to patients only after one-on-one consultation. The only issue was that the customers did not receive a one-on-one consultation when they buy the products over the internet, but the court reasoned, a customer making a purchase on the internet does not expect to receive an individualized consultation).
2 *See* [https://www.amazon.com/gp/help/reports/infringement](https://www.amazon.com/gp/help/reports/infringement) (“Amazon respects a manufacturer's right to enter into exclusive distribution agreements for its products. However, violations of such agreements do not constitute intellectual property rights infringement. As the enforcement of these agreements is a matter between the manufacturer and the retailers, it would not be appropriate for Amazon to assist in enforcement activities.”).