It is no surprise that Amazon, one of the world’s largest retailers, maintains its own process for managing infringement and counterfeit allegations. This process has opened up new strategies for asserting and defending infringement claims. In this article, we explain how trademark and patent infringement issues unfold on Amazon by describing the process for rights holders to report infringement, and the impact of successful infringement complaints, known as “Take-Down Notices,” on accused infringers. We also address the situation where an infringement dispute evolves into a lawsuit, and the resulting personal jurisdiction and state law issues that may arise.
How to Enforce Trademark/Patent Rights on Amazon
Amazon provides a mechanism for rights owners to report infringing activity via a rights owner complaint, known as a “Take-Down Request.” It is unclear whether the investigators reviewing these Take-Down Requests are attorneys or have any background in intellectual property rights. This mechanism allows rights owners to seek removal of allegedly infringing products from Amazon’s website. The Take-Down Request provides a rights owner with several drop-down choices, and a space to identify the allegedly infringing product(s) by listing the corresponding Amazon Standard Identification Number(s) (ASIN). The Take-Down Request does not ask for information to identify the accused infringer or its location.
A Take-Down Request may initially be refused based on the need to provide Amazon with additional information to decide the Request. Thus, after submitting the Request and receiving an email confirming receipt, Amazon may send a subsequent email seeking additional information. Once Amazon has made its determination on the Take-Down Request, the rights holder will receive an email explaining whether Amazon has decided to remove the accused item(s). In cases where Amazon has refused to remove the reported item(s), Amazon permits the rights holder to seek reconsideration by essentially submitting a new Request. The process is subjective and, therefore, an identical Take-Down Request may be resubmitted and subsequently accepted despite a prior rejection. To our knowledge, there is no limitation on the number of requests a rights holder can file for the removal of a particular item and there is no fee for submitting a Take-Down Request.
How to Defend Against an Improper Take-Down Notice
If the Take-Down Request is successful, the accused infringer will receive an email notification advising that the listing(s) for the accused infringer’s product(s) has been removed due to a complaint and that the product(s) may be re-listed if Amazon receives a retraction of the Request from the rights owner. The notification will also provide the accused infringer with the contact information of the rights owner.
Before discussing how to challenge a Take-Down Notice, it is important to appreciate the effect a successful notice has on an accused infringer’s business. The most obvious consequence is the immediate loss of sales on Amazon for the accused product(s). However, in some instances, Amazon may suspend the accused infringer’s entire Amazon account, preventing all sales of any product. This can occur where multiple Amazon policy violations have been submitted against the accused infringer including, but not limited to, infringement issues. If the entire account has been suspended, the accused infringer must submit a “Plan of Action” and include the following information: (1) “[t]he reason(s) you were selling allegedly infringing products and/or uploaded allegedly infringing content;” (2) “[t]he steps you have taken to ensure that you are no longer infringing;” (3) “[h]ow you will avoid infringement in the future;” (4) “[a]ny other pertinent information.” See Amazon Intellectual Property Policy. Clients should be warned that Amazon terminates accounts of repeat infringers in “appropriate circumstances,” but does not define the circumstances in which termination would be “appropriate.”
Contact Rights Owner and Respond Directly to Amazon Simultaneously. If an accused infringer believes the Take-Down Notice is meritless, the accused infringer has two options: (1) to contact the rights holder to try to resolve the issue and/or (2) to respond directly to the Take-Down Notice via Amazon. To maximize effectiveness and efficiency, one should exercise both options simultaneously.
A rights holder who submitted a successful Take-Down Request is not incentivized to cooperate with the accused infringer because its goal has already been achieved, namely, to cease sales of the accused product(s) on Amazon. Nonetheless, if the rights holder agrees to retract the Take-Down Notice, the retraction must be submitted to Amazon via the email address used to submit the Take-Down Request. This is important to bear in mind if one represents an accused party, particularly where a rights holder filed the successful Take-Down Request but then sold all of its assets, including rights to the asserted intellectual property and its Amazon account information. In this circumstance, only the acquiror can submit the retraction because it is in possession of the former rights owner’s Amazon account that was used to submit the Take-Down Request.
If the rights holder agrees to withdraw the successful Take-Down Notice, it is critical to the accused infringer that the rights owner also inform Amazon that the ASIN associated with the allegedly infringing product(s) be re-instated. Failure to reinstate this ASIN ensures that the rights holder still “wins” despite permitting the accused infringer’s product(s) back on Amazon’s website. This is because a product’s ASIN captures the momentum of the product’s sales on Amazon. For example, the more a product sells on Amazon, the more likely its ASIN will be at the top of Amazon’s search results for that type of product. To create an analogy in the trademark context, a product’s ASIN encompasses the “good will” of the product. Therefore, failure to secure re-instatement of the accused infringer’s ASIN forces the accused infringer to forgo its efforts in building this momentum. Essentially, this means that a new ASIN will be assigned to the product which will require the accused infringer to start from scratch and rebuild goodwill associated with the new ASIN.
The accused infringer should also respond directly to the Take-Down Notice and specify why the accused infringer believes Amazon’s conclusion is mistaken. In the trademark instance, the accused must also “[p]rovide any invoice or Order ID that demonstrates the authenticity of the product.” See Amazon Intellectual Property Policy.
File Suit Seeking Declaratory Judgment of Non-Infringement. If Plan A fails, or instead of or concurrently with Plan A, the accused infringer may seek declaratory relief of non-infringement. If the accused infringer chooses to file suit where it is located rather than where the rights holder is located, the accused infringer may encounter challenges in asserting personal jurisdiction over the rights holder. This is arguably because the removal, the act-at-issue, took place in cyberspace rather than within any particular state. See, e.g., Avocent Hunstsville v. Aten Int’l Co., 552 F.3d 1340, 1342, 1324 (Fed. Cir. 2008) (refusing to authorize personal jurisdiction over a declaratory judgment defendant who sent cease-and-desist letters into the forum and (an unsuccessful) Take-Down Request to Amazon that was intended to damage the plaintiff’s sales). This opinion is supported by the fact that the Take-Down Request seeks no information on the accused infringer’s location. This obstacle demonstrates how the law is behind in adapting to technology, and to the consequences of e-commerce in particular. Some courts, such as the Tenth Circuit in Dudnikov v. Chalk & Vermillion Fine Arts, 514 F.3d 1063 (10th Cir 2008), have disagreed with this approach and have found that the harm of an online retraction (in Dudnikov it was the removal of the accused infringer’s auction page on eBay) is sufficient to obtain personal jurisdiction where the accused infringer is located because the rights holder caused harm to the accused infringer in the accused infringer’s jurisdiction.
In addition to seeking declaratory relief of non-infringement, the accused infringer should consider adding state-based claim(s) to its complaint so that the accused infringer can seek additional relief such as damages for the loss of sales. For example, in New York, an accused infringer should consider whether it can satisfy the requirements to plead a claim for tortious interference with prospective business relations. However, an accused infringer should be wary that the rights holder may move to dismiss any state-based claim(s) on federal preemption deriving from the accused infringer’s patent or trademark related claim(s). To avoid dismissal, an accused infringer may have to show that the rights holder’s actions were made in bad faith and therefore should be subject to tort liability under state law. See, e.g., Dow Chem Co. v. Exxon Corp., 139 F.3d 1470, 1477 (Fed. Cir. 1998); In re DDAVP Indirect Purchaser Antitrust Litig. v. Ferring Pharms., 903 F. Supp.2d 198, 218 (S.D.N.Y. 2012).
As Amazon continues to grow and change the retail landscape, it is increasingly important for attorneys to have the tools to assist clients in navigating infringement issues on Amazon. This is particularly true because Amazon provides injunctive-like relief which previously could not be obtained without pursuing costly litigation.
Edward Weisz is a member and Alanna Miller is an associate of Cozen O’Connor.