Season 1, Episode 123

The Consequences of Bad Legal Advice

The legalities of the Amazon marketplace are perplexing and have become increasingly challenging for sellers to navigate. In this episode, Chris and Leah discuss the nuances of Amazon’s policies, the risks of improper legal representation, and the importance of specialized legal advice in certain areas, while offering insights into avoiding brand registry revocations and compliance blunders.

Show Notes

Transcript

[00:00:00] Chris: Hey everybody, welcome back to Seller Performance Solutions, or welcome if this is your first time listening. I’m Chris McCabe and I’m with Leah McHugh, both of ecommerceChris, tackling today’s crazy issues and curious decision making I guess we could say today. In terms of some of the hectic haphazard and bizarre Q4 appeals strategies that we’ve seen.

[00:00:26] Chris: And the types of appeals we see going in were rather alarmed. I know I overused the word alarm, but I think it’s worth it today for this particular topic. Because we’ve lately, not just lately, but especially lately seen an overabundance of legal references in appeals or appeals that aren’t legal in nature that an attorney who’s been hired recommends you send to legal, which is also a mistake. And the greater concept around when you bring in a lawyer and when you don’t. Maybe we can start with your [00:01:00] compliance stuff, your brand registry stuff. Do you just see wacky, brand registry took our IP reporting rights away, or our entire brand registry was revoked, or our product cannot be listed for compliance reasons. We have a lawyer and they did what. What are the common misconceptions and mistakes you’re seeing?

[00:01:18] Leah: Well, I think the biggest issue with brand registry is that certain lawyers have been sanctioned by the USTPO.

[00:01:24] Chris: Right.

[00:01:24] Leah: For, misrepresenting intellectual property cases to the USTPO and Amazon will actually revoke your brand registry if your lawyer is on that list. So in terms of brand registry, the main thing is like yes you probably should be working with an IP attorney for registering your trademark, or patent, or whatever the intellectual property is, but you should be doing your due diligence on that attorney, and I also would recommend strongly hiring an actual IP attorney to register your IP, not just any attorney who was like, yeah, I can do that too.

Particularly for patents that’s a very specific [00:02:00] area of law and not something that you just want to kind of hire any lawyer to handle. But again, the USTPO has a list of sanctioned attorneys. It’s publicly available. You can just plug the name of the attorney or their firm into the USTPO’s website and it’ll tell you if they have been sanctioned by the USTPO.

So that’s number one that you want to do because we have had a few people come to us with their brand registry revoked and I looked up their attorney and their attorney had been sanctioned. So definitely want to do that for brand registry. For compliance again, compliance is a pretty law heavy area of Amazon selling.

I think the biggest mistake I see sellers making is one, either not actually speaking to any attorney when it comes to legal matters or two, again, just using a wrong attorneys. They’re not using a specialized attorney for very specialized areas of the law. So FDA, EPA, health Canada. You want an attorney that specializes in that area because I have seen appeals where they just hired [00:03:00] an attorney who said that they could do it and the attorney actually referenced the wrong FDA product code in the appeal and I spotted that right away because I work on this every day but the seller is doing this and they aren’t working with an attorney that knows what they’re talking about they’re not going to spot those mistakes, but Amazon definitely will.

[00:03:17] Chris: Yeah i’ve seen that too. some sellers say well we hired an attorney. And they don’t seem to know much about why they hired that attorney. They didn’t ask about specialization or they swallowed some story they were told and they turned their brain off and they forgot about it from that point forward. For FDA issues, we’re only referring people to one attorney, right? And for EPA?

[00:03:36] Leah: I have a couple that I trust to refer people to.

[00:03:38] Chris: Okay, a couple.

[00:03:41] Leah: Similarly, because there’s a whole cottage industry, especially for FDA around misclassifying medical devices, because it’s easier to sell a class one device than it is to sell a class two device. So if you can make a class two device look like a class one device, it makes it a lot easier and cheaper to go to market. So there’s an entire cottage industry around that. So I have seen cases where [00:04:00] I am like, I’m pretty sure this is a class two device. And they’re like, no, our attorney did it as a class one. And then Amazon came back and we’re like, we spoke to the FDA and it’s class two.

[00:04:09] Chris: Right.

But in those cases, I think the attorney may have known this. They were actively trying to create a workaround. And they wanted the business, right? It’s not just that they were ignorant and didn’t know. And I see this with appeals.

[00:04:22] Leah: I see both, to be honest.

[00:04:23] Chris: I see it with appeals for account reinstatements, too. I mean, this is the most damaging thing when the entire account, not just an ASIN, is down. And the seller sold a bill of goods, right? The attorney obviously wants their business. They’re obviously willing to say whatever they can to convince the person that they’ve done cases like that in the past successfully. Maybe artfully dodging how often it’s been successful. But we’re getting streams and streams of sellers saying, well, we started with an attorney, it went nowhere, what can you do now? It’s because a lot of the attorneys or let’s say dot coms associated with attorneys and law firms are template mills and they’re just doing fill in the blank [00:05:00] copy and paste stuff.

And you were talking about the blacklist earlier. There’s like a formal blacklist that Amazon has of attorneys, but then there’s an informal blacklist. Well, what’s the informal one based on our experience? It’s the templates. They don’t change much. The investigators inside Amazon, which again, we’re not talking about your attorney had a direct pipeline to Amazon legal.

Because every brand or seller I’ve talked to about this, when I quiz them, did your attorney say, I know somebody, I’ve worked with them, they’re in Amazon Legal, they’ve helped us reinstate? Never. That never comes up. No one ever says, yes, I’ve written a letter to a person in Amazon Legal. But, the informal blacklist is your template’s been viewed a hundred times by other investigators for other sellers. They rejected it.

[00:05:43] Leah: Well, if we can identify the templates and who wrote them, I’m pretty sure Amazon’s investigators can.

They usually open with the same sentence. That’s what makes it so obvious. They use the same opening sentence every time.

[00:05:53] Chris: Well, yeah. If it starts with, “I am the principal of”, you’ve already shut off half of your audience inside Amazon, [00:06:00] but yeah.

[00:06:00] Leah: First sale doctrine is another one.

[00:06:02] Chris: Yeah, of course. Well, that’s anyway, putting that in has, jumped the shark a long time ago. But the only people out there that see more of these rejected template appeals more than us are seller performance investigators, internal compliance team, and policy enforcement people inside Amazon. But they see them constantly. So if it looks like a template, it looks fill in the blank, generic language, how many people have to get the greater details message back from Amazon to understand that fill in the blank templates while cheap are totally worthless.

You’re better off doing it yourself, right? And there’s no additional or impetus to do anything because it comes from a lawyer and they slap it on like law firm letterhead, if anything, it makes them less likely to take it seriously because there’s so many, kind of huckster law firms out there trying to jump into this space.

And they’re selling it as amazon will take you more seriously because it’s from a lawyer. Totally untrue.

[00:06:59] Leah: I Am very [00:07:00] much a proponent of having an attorney for legal matters. I think the main issue here is kind of similar to in our space of the non legal side of Amazon compliance. Generally when you’re hiring an expert, hiring the cheapest one is not the best bet.

[00:07:18] Chris: Or a carpenter or a plumber or an electrician, right?

[00:07:22] Leah: And so I think that’s, a large part of the issue is hiring the cheapest one. And I’m sure this comes off that we have, a B& R bonnet about attorneys, and again, like I said, I’m a very strong supporter of having an attorney for legal matters and having a specialized attorney for your specific legal matters, but the issue becomes just, oh, well, they’re a lawyer, so it’ll be taken seriously, and that’s just not the case.

[00:07:47] Chris: Well that’s how it’s sold.

It’s a pre-packaged.

[00:07:50] Leah: We have people come to us who it’s already been escalated to legal and nobody else internally to Amazon is going to touch it once it’s been escalated to legal. And if you don’t get a response from legal, [00:08:00] you’re still unlikely to have any other team want to touch it after it’s been sent to legal. So then you’re stuck, and people come to us, and there’s really not a whole lot we can do for them.

[00:08:09] Chris: Yeah, well, I’m planning to get to that piece of this in a second. I just wanted to finish , we refer people to lawyers every day. Experts. Copyright experts. We have one right off the top of our heads, we send people her way.

[00:08:22] Leah: I have a number of cases where I’m like, you don’t need to speak to me, you need to speak to a lawyer.

[00:08:26] Chris: Yeah, so it’s like, this is not a lawyer, it’s definitely a lawyer slam for the incompetent, unprofessional, sales pitchy lawyers who are just trying to reach in your wallet. It’s not about lawyers who are competent, who are experts in their field, whether it’s, and we refer some people to FDA compliance lawyers, EPA expert lawyers. Like I said a minute ago, copyrights, trademarks. We are not intellectual property attorneys. We understand the central tenets and concepts of intellectual property. We do not compose letters and act like lawyers because [00:09:00] we aren’t. So we refer people intelligently to those attorneys. What’s unfortunate in the Amazon space is that the attorneys who are screaming the loudest, trying to be seen, standing up, waving their arms the most are there ones that we refer to the least or not at all. Because those aren’t the most successful ones and they’re also the attorneys who are known for inflating their public persona or making themselves out to be a bit more successful than they are.

[00:09:30] Leah: Well, and a lot of them have like a degree in a completely different part of law than the ones that are the most popular.

[00:09:35] Chris: Right. I mean, what was the one I was looking at this morning? Real estate law? We’ve seen divorce, personal injury lawyers. I’m personally surprised.

[00:09:44] Leah: I’m also not against having a general counsel, but there’s a vast difference between very specific areas of law and just being like, well, I’m a lawyer, it’s the same thing is just kind of ridiculous, especially when you speak to those very specialized [00:10:00] attorneys who are like, yeah, that’s completely wrong. They don’t know what they’re talking about.

[00:10:03] Chris: We’re seeing a distressing number of people who tell us that their attorneys sales pitch is, well, if I can’t get you reinstated, I’ll take your arbitration case. And whether or not they’re transparent about how that takes a lot more time and a lot more money I have no idea and I don’t care because we don’t work on arbitration stuff. And if you get reinstated, you get your privileges back, you’re selling, you get your money, you get your access to your inventory, so you don’t need arbitration, right? So that’s in some cases, the cry of the desperate case.

But when they start writing to legal and the other day I saw somebody wrote, I think they called it a pre-arbitration letter and had them send it to legal or to legal’s attention.

My former teams and other policy enforcement seller performance teams; you’re disincentivizing them. You’re discouraging them from even being involved.

[00:10:51] Leah: Well, I imagine that they would get in trouble if they were to say something that disagrees with Amazon’s legal team at that point.

[00:10:58] Chris: Once you start throwing the word arbitration [00:11:00] around, you’re discouraging them. First of all, they won’t care. Second of all, that should be your last resort, not your first resort. So you’re killing your opportunities to appeal when you start throwing the A word around before you even get to that point. I think some of the attorneys are putting it out there early because they’re trying to justify the fee and they’re trying to cover themselves for, well, we probably can’t get this guy reinstated. We didn’t really tell him that up front, but we probably can’t based on all the other failures we’ve had. So let’s start getting the arbitration dialogue going soon. Legal keeps it until you’re finished with the arbitration case. You can’t do both. You can’t put a foot in both boxes. And even if Amazon says, well, okay, you’re thinking of doing arbitration, but you haven’t actually filed yet and you have submitted an appeal, so fine, we’ll take a look at it. They have no incentive to spend a lot of time reading escalations, appeals, POAs, if asked. Because they can see that you’re doing arbitration right behind it. So, like, why would they bother?

[00:11:58] Leah: Well, I think that’s the biggest thing once you start going [00:12:00] down the Amazon legal route, there is no going back. You can’t be like, oh well that didn’t work, we’ll try doing it this way. The other ways aren’t going to work once you’ve started down the Amazon legals team path. And that is unfortunately, like I said earlier, something that we see a lot of. People come to us after it doesn’t work and no other team is going to overturn legals decision.

[00:12:21] Chris: And we tend to see the train wrecks, I admit, where the lawyers had people send in 10 of these things, five of these things, whatever. It’s a lot easier to minimize the damage the law firm created by approaching us sooner. But it actually kind of doesn’t matter if the entire strategy, which you as the business owner should sign off on what their strategy is, not just hand them the keys to your car and say, go drive this wherever, however you want. If it’s just pounding legal, then okay. I mean, then you’ve decided to do that.

[00:12:50] Leah: Well, and again, there are certain cases where that is the correct strategy. But once again, it’s areas where there is a legal component to it, [00:13:00] and legal is the team that needs to make that decision for Amazon, for the other teams to act accordingly. But those situations are rare. And again, they’re normally based on specific areas of law.

[00:13:13] Chris: And they’ll do it on their timetable. You are no longer a willing partner to how long this takes. People do Jeff letters all the time. They do escalations to Dharmesh all the time just on the basis of escalation saying, we haven’t heard it’s been this long. Can’t make those complaints with legal. If it’s been two months legal will say yeah, we’re still reviewing it. We hear from people who have lawyers telling them all the time it’s in the right place. It’s been sent to the right people. So we know we got to the right people and they’re still reviewing it. And we can’t push them anymore. We can’t push them to send it anywhere else. We can’t ask for higher level review. They have it. They’re going to keep it. They’ll get back to you when they get back to you.

Inventory disposal dates, how long you go without the money, how long you go without selling; none of that is open for discussion. And I think a lot of these sellers who commit to that path don’t [00:14:00] understand that upfront.

[00:14:00] Leah: Yeah, agreed. I just think there’s a lot of confusion over what you need a lawyer for.

[00:14:05] Chris: So I know there’s going to be a lot of questions on this. Anyone has them and wants to know, or you’re super stuck and not sure what to do, maybe you’ve sent in some subpar appeals and things are going in the wrong direction. Let us know. We’re here seven days a week during Q4 especially. And we know this is the peak week or two right now. Thanks again for listening to Seller Performance Solutions. Thanks, Leah. I’ll see you next time.

[00:14:27] Leah: Thanks, Chris.

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Leah McHugh

Chris McCabe

 

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