There’s a question I often see tossed around our Facebook group and in the seller consultations I do 7 days a week.
What should you do if you receive a Cease and Desist from brands or other sellers?
What do you do when you think it’s baseless?
What are the legal risks of ignoring them or countersuing?
Instead of succumbing to the desire to take out competitors at all costs (or sales pitches from unscrupulous law firms), it’s important to consider the true legal issues at play in these cases.
For starters, why is this a problem, and why are some brands so fixated on the “Cease and Desist” strategy currently?
I spoke with expert IP attorney Casey Vaughn from Vaughn Law, who helps numerous Amazon sellers on these matters. We’re working to understand where the mistakes are made and how to handle these kinds of problems better in the future.
In terms of why we keep hearing about this issue, she says, “Some companies want to control distribution but lack the appropriate business strategy to track who sells their products on Amazon. They turn to cease and desist letters as an alternative to the expense and complexity of a robust brand strategy.”
For some brands, a cease and desist letter is the first step in their brand protection strategy. If they can deal with interlopers without having to go through Amazon, then great. If that fails, their next step may be to report you through Amazon or take further legal steps. Each situation must be treated given its unique characteristics.
How things can backfire if you make assumptions around your own or others’ use of Cease and Desist letters?
1. What happens if you send a Cease and Desist to a brand who’s accusing you of IP infringement?
”The people at the brand are likely to sit on their hands until you actually take the legal action,” says Vaughn. It could be perceived as an empty threat, potentially making it harder to resolve the issue. If you end up needing to ask for a retraction later, you’ve started off on the wrong foot and the odds of resolution are worse. Be sure that you’re 100% certain the Notice claim of infringement is baseless before you start hitting brands with legal letters.
2. What happens when you submit legal threats to Amazon?
Casey indicates, “When sellers send legal threats to Amazon, in some cases Amazon will just stop responding through ordinary channels until an attorney contacts them. This can really delay an effective resolution. If your intent is to communicate to Amazon, ‘we’re really serious about this and we think you’re doing the wrong thing’ this is not the way to do it.”
And you may have a clear basis for stating that Amazon made the mistake, right? But if you handle that step poorly, it won’t matter until an attorney who knows what he or she is doing is brought in to troubleshoot.
Similarly, don’t send threats of going to arbitration against Amazon until you have what Casey refers to as a “formal demand letter” sent by your attorney. A formal complaint is required and if you use the word “arbitration” in a legal letter but have not made the formal request, you can expect Amazon to ignore you until you do.
3. Why does Amazon and/ or why do brands ignore you until they receive formal legal demands?
There are several reasons that brands set aside emails from sellers until they receive proper contact from a legal representative. Casey mentioned that it is “standard practice” at a lot of companies when I asked her how common this is.
“It is also rational for companies to stop responding once they receive a quasi-legal threat until they receive the actual formal notice. Their attorney will look up whether or not the sender of a cease and desist letter has a record of bringing lawsuits about these kinds of matters. If the firm/individual doesn’t have a record of suing for these kinds of situations, it’s a lot easier to just ignore the letters.” Presumably they would continue to brush aside follow ups until they can’t ignore them anymore, or they’re motivated not to ignore them further.
Most sellers I speak with don’t have the legal experience to strategize their cases properly. Worse, they often misdiagnose based on another seller’s public post, or their own understanding of the law based on their own concepts of what is “fair” or “logical” but nothing else. As Casey told me, “it can have the opposite effect of what was intended: you wanted an immediate response, but it delays it indefinitely until you actually do what you said you would do.” Don’t make promises you cannot keep!
You will likely need some degree of professional assistance when dealing with these legal matters. Don’t copy and paste content from Seller Forums or from Facebook groups where another seller (also not legally trained, or not familiar with Notice team internal processes) somehow determines “your case is just like mine” and advises you to follow their example. That’s not how infringement cases work within Amazon, and it’s not how legal matters should be handled outside Amazon, either.
4. How do sellers know if their legal threats or complaints will be taken seriously?
Amazon’s legal teams, and really anyone’s, can check up on you, and for good reason.
“Because these filings are public, it’s straightforward to determine if a threat is likely to be a bluff or a real threat. It is also relatively straightforward to see that if the seller has filed similar cases and on what terms that they may have won or lost.”
Remember, as well that if you write something that could be taken as a legal threat to Notice teams, Seller Performance, Product Quality or Executive Seller Relations to escalate your ignored case, you may see the opposite result. Instead of getting a faster or more favorable response, you’re stuck in reverse going the other way. Proper strategy prevents sellers from making these kinds of mistakes.
5. What Happens to Sellers, Brand Protection Agencies, attorneys and others who send out spammy C and D’s?
I’ve developed my own theory about why some sellers have fixated on the technique of sending as many of these out as possible. They know a certain number of targeted sellers will simply drop away, without any fuss. That means a competitive advantage for them.
If you’re sending out spam C&Ds to discourage new sellers on a listing, one possible outcome is that the targeted seller could fight you back in ways you didn’t expect. Again, deferring to Casey’s legal expertise: “You can put yourself in a position in which you have consented to the recipient’s jurisdiction. If a claim in the letter is false, the claimant can be sued. There are also federal and state ethics rules about what background work the attorney is supposed to do about the nature of the claims and their truthfulness. The attorney, at least under the rules of ethics, is supposed to refuse a request from their client to send an unethical or false C&D letter.” As we’ve seen in numerous cases, attorneys are not always interested in refusing that work due to ethical concerns. If anything, they sales pitch their way around them.
This begs the question: Which attorney are you using to submit these letters? Will their methods and approaches hold up to scrutiny if the case winds up in court? Even if you never see a courtroom, will the state bar association receive reports of unethical activity and take action? And how does Amazon view the attorney you’re using, if you end up dealing directly with Amazon Notice or Legal teams?
Consider all of the potential outcomes, before you even begin. If you make false claims that cannot be substantiated, remember that “you are opening yourself up to an open-ended legal liability, especially if you are doing something like sending counterfeit claims without making test purchases,” Casey says.
So be wary of exposing your company (and yourself) to major legal risks that could last a lot longer than your tussle with this or that seller. Casey’s last word on this topic: “When companies allow their agents, who may not be attorneys (for example brand enforcement firms), to send out cease and desist letters that may contain false claims, they are opening themselves up to massive risks. There are other special considerations to make about the tone and content of a cease and desist letter that goes beyond whether or not the claims made are true.”
Remember that Amazon Notice teams don’t process infringement claims to help you muscle out competition at any cost. They are there to protect brand owner intellectual property, and to protect Amazon buyers from counterfeit or misrepresented goods. Keep in mind, Amazon has copies of your legal letters to them for safekeeping in case they have to revisit the matter in the future, and the other brands or sellers you target for legal action likely have their own counterpart attorneys to advise them. They may not give up so easily. They may have solid legal ground to stand on and they may be quite willing to defend themselves.