With the rapid and constant growth of online shopping, piracy has become a serious problem over the last few years. According the Global Counterfeiting Report, brands lost a total of $323 billion in 2017 because of online counterfeiting. The report also states that high end brands that sell clothing, handbags, cosmetics, watches, and footwear has lost a total of $30.3 billion because of piracy. If you think that a $600 Michael Kors bag is too expensive, you can go to Amazon and buy a high quality replica for only $130.
Counterfeiting can destroy your brand in many ways. It can reduce your revenues and profits. It can also devalue your products and can seriously damage your brand’s reputation. If consumers find a $100 replica of your $500 bag, they’d think that your product is only worth a hundred dollars. They will soon refuse to pay five hundred dollars for your luxury bags.
If you want to preserve your brand’s integrity and reputation, you must proactively deal with trademark and copyright violations.
What is An Amazon Trademark Infringement or an IP Infringement?
An intellectual property (IP) violation is the use of another person’s or company’s material (such as a trademark or a copyright) without consent.
Let’s say that you own a premium yoga mat brand called “Yoga Madness” which costs $150 each. You registered your brand with the USPTO (United States Patent and Trademark Office. A manufacturer in another city decided to produce yoga mats and place your logo and brand name on the mats without your permission. That’s a trademark and IP infringement. You can sue to collect damages and stop the manufacturer from using your brand name provided that your trademark is protected under the Lanham Act (also known as the Trademark Act of 1946).
There are two types of intellectual property – a trademark and a copyright. A trademark is a word, phrase, or symbol that’s associated with your product. For example, the name “Nike” is a trademark. The check symbol that’s also associated with Nike is also a trademark.
A copyright, on the other hand, is the legal right to print, publish, or use a literary or musical material. If you’re a writer or a composer, you need to register a copyright for your books and other literary work via the United States Copyright Office. But, if you’re an entrepreneur and you want to protect your brand, you have to register your logo and brand name with the USPTO.
When someone uses your trademark without permission, you can ask Amazon to remove the listing. The retail giant has the power to shut down the seller. You can also join Amazon Project Zero and remove the listing yourself.
You can also file an IP infringement case to stop the seller from using your trademark and collect damages (or monetary compensation) for lost profits and tarnished brand reputation. But, can you file an IP infringement case even if the violator did not sell the exact product or use your exact brand name? The answer is yes, as long as the consumers often confuse the counterfeiter’s product as yours. If the mark is so similar to yours that it generates confusion, that’s already an infringement.
Take Louis Vuitton as an example. As you may already know, LV is one of the most popular luxury brands in the world. We are all familiar with the brand’s famous fabric print which includes flowers enclosed in a diamond and the words LV.
Because people are willing to pay thousands of dollars of an LV bag, the company has become extremely protective of its brand. A few years ago, a Korean entrepreneur named Mr. Kim decided to build a restaurant called Louis Vuiton Dak. The restaurant also printed the trademarked LV pattern on its fried chicken takeout boxes.
The Louis Vuitton legal team filed a case claiming that Mr. Kim’s decision to sell fried chicken using the name “Louis Vuiton Dak’ has deeply damaged their brand name and reputation. Mr. Kim was ordered to pay damages of $12,500 plus attorney’s fees.
How to Spot Possible Copyright Infringement and IP Violations?
How do you know if someone is someone is counterfeiting your products or using your trademark without permission? Well, here are the signs:
1. Supply Chain Leakage
It’s no secret that some fake luxury bags are actually real. They’re made of the same materials as the real ones and they’re manufactured in the same factory. It’s almost common knowledge that third party luxury goods manufacturers usually produce extra bags and sell them for less than half of its original price. In Shenzhen, you can find a commercial center that sells fake luxury bags for a few dollars. But, what’s shocking is that these bags are actually authentic. They look exactly the same and product in the same factory as the ones sold in the brand’s flagship store.
Let’s say that you’re manufacturing your product overseas and someone bought a huge amount of your product from the manufacturer, imports your product, and sells it in the United States under your trademarked brand name – that’s an intellectual property infringement.
Having poor relations and communication with your manufacturer can lead to supply chain leakage and can result to trademark violations.
You have to communicate with your manufacturers and let them know that you are concerned about supply leakage and trademark violation.
2. An Influx of Bad Reviews
A growing number of negative reviews can be a sign of copyright/trademark infringement.
So, if your customers are starting to complain about the quality of your product, there’s a possibility that someone is creating and selling low quality replicas under your trademark.
3. Decrease in Buy Box Percentage
Listings that sell high quality products at a fair price usually get high buy box percentage.
If your buy box share starts to go down, it could be because someone offers your product at an incredibly low price. If you see someone selling your product way below your manufacturing and wholesale price, that person is definitely selling a low-quality replica of your product.
How to Deal With Copyright/Trademark Infringement?
As a brand owner, you’ve worked so hard to build your brand. You’ve spent a lot of money on product development and marketing. So, how do you protect your brand from counterfeiters and trademark violators? Well, here are some tips:
1. Make sure that you register your trademark.
You can’t file a case or make an IP claim if your trademark isn’t registered. Take Apple as an example. The electronics giant is known to be extremely thorough in protecting its brand. And yet, its legal team failed to register one important trademark “Steve Jobs”.
As you know, Steve Jobs is synonymous with Apple. He’s the soul of the brand. But, in 2012, Italian brothers named Giacomo and Vincenzo Barbato founded a clothing brand called “Steve Jobs” and there’s nothing Apple can do about it. If you want to enforce your trademark, you must register it with the USPTO.
2. Report trademark violations to Amazon.
You can report trademark/copyright infringement to Amazon through this link: https://www.amazon.com/report/infringement. Keep in mind that you can’t just let Amazon report a violation if you’re not the brand owner or an authorized representative.
3. Register your brand in Amazon Brand Registry or ABR.
The Amazon brand registry is a feature that allows you to control your brand content. It allows you to add rich and multimedia content via enhanced brand content and Amazon brand store.
When you register your brand, you’ll need to submit logos, words, packaging, and other things that make it easier for Amazon to identify which products are authentic and which ones are fake.
ABR also has an awesome feature called Project Zero. This program has three tools – automated protections, product serialization, and self-service counterfeit removal.
Amazon Project Zero is an advanced anti-counterfeit that uses machine learning technology to find fake products. It also allows you to add special serial numbers to your products as a sign of their authenticity. Lastly, it enables you to proactively remove counterfeits. You don’t have to report.
For now, Project Zero is an invite-only program. But, if you’re already in the Amazon Brand Registry, you can join the waitlist.
4. Use an airtight distribution model.
To avoid leaks, it’s wise to have an airtight distribution model. Make sure that you know where your products are going. It’s best to give exclusive distribution rights to your most reliable retails. It’s also wise to ask a lawyer to draft a solid online seller policy and make sure that all your resellers sign them. This can help you curb restrict unauthorized sellers and can give you more control over your brand image and product pricing.
5. File an IP Case or Claim.
What is an IP claim? Well, it’s a suit, demand, interference, complaint, or an arbitration concerning violations of one’s intellectual property rights. You don’t have to file a suit to file an IP claim. You can report the fake product or unauthorized seller using Amazon’s infringement claim. Amazon usually suspends seller accounts that sell trademarked products without permission.
But, if the damage is huge, it’s best to file either a civil or criminal case, depending on the gravity of the infringement.
Before you file a case, you have to make sure that you have exclusive rights to the trademark and that the duplication of your product or artistic work does not fall under the “fair use” exemption.
Final Thoughts: Be Careful of False Copyright Claims
Amazon trademark violations can potentially damage your brand reputation and can definitely reduce your profits. But, you have to be careful as you can be falsely accused of IP infringement.
The battle for the buy box is so intense that sometimes, sellers would file false trademark claims against their competitors to increase their buy box share. If you’re falsely accused of IP violation and your account got suspended on Amazon, you have to submit a proper Notice-Dispute claim. You have to explain the sourcing of your goods and provide supply chain documentation.