Season 1, Episode 98

The Dark Side of Infringement Complaints

False infringement claims can lead to serious consequences and may even result in legal action. In this episode, Chris and Leah discuss the negative consequences making erroneous infringement claims can have on your account and the long term damage that can result.

Show Notes

Transcript

[00:00:07] Chris: Hey everybody, this is Chris McCabe. Welcome back to another episode of Seller Performance Solutions. I’m here with Leah McHugh. Leah, how are you?

[00:00:13] Leah: Good, thanks. How are you Chris?

[00:00:15] Chris: I’m doing okay. Today we’re talking about some of the negative effects we’ve seen from brands who are, what would you say, over-reporting or erroneously reporting IP claims and submitting false IP infringement claims and committing abuses that lead to, in some cases, revocation of their brand registry. We’ve heard from some people saying, we lost our brand registry. Brand registry tickets aren’t getting answered in any meaningful way. We’re not sure what’s going on.

And then when we probe, I think you and I both talked to people about this recently, when we probe a bit, then they say, either we reported ourselves and some of those were counterfeit complaints without test buys or some of it’s just bogus IP claims. Is that fair to say?

[00:01:01] Leah: Yeah. And you know, it’s either them, like you said, or they’re maybe hiring a service who’s says that it’s not automated, and then turns out it’s automated and a few thousand false claims have been submitted on your behalf.

[00:01:14] Chris: Right. That was the recent one we talked about.

[00:01:16] Leah: Yeah.

[00:01:17] Chris: That was the 6,000 IP claims were submitted.

[00:01:19] Leah: Was the 6,000? I don’t remember. I just remember it was in the thousands.

[00:01:22] Chris: Yeah. Well, unfortunately, we’re in 2023 and we still talk to people who don’t understand that just because a reseller or someone on your listing is considered not authorized to sell your brand on Amazon, doesn’t mean you can use any and all tactics to get them removed. We understand it’s a proliferation of videos and articles and strange tweets and blog posts saying you can kind of do whatever you want to knock off anyone who’s not authorized.

I believe some of those people are offering that kind of advice because they understand that when, when their target has their listing or their whole account suspended and they contact Amazon, Amazon is likely to say something along the lines of, well, you have to show a letter of authorization to sell a brand, right?

Amazon’s part of the problem. They’re asking everyone for this, and they’re missing the fact that it might be a counterfeit complaint that has no basis or no proof.

[00:02:14] Leah: Yeah. Well, it’s a combination of the two, right? I mean, trademark infringement isn’t necessarily counterfeit, but I think sellers are kind of using those interchangeably, I mean like obviously if somebody’s actually infringing on your trademark or actually selling counterfeits absolutely you should be reporting them. I think the issue is that counterfeit reporting and IP infringement reporting is just getting used to get rid of people that you don’t want selling your product. And unauthorized sellers is not IP infringement, nor is it counterfeit products. And yeah, it probably seems like a quick fix, but one, there’s repercussions with Amazon.

And two, there are potential legal repercussions as well, which is also something that we’ve been seeing more and more often.

[00:02:56] Chris: More and more potential resellers suing a brand for making a false accusation. So that’s not necessarily losing brand registry, but you could be accused of damaging another business.

And I like that you said that people are using it interchangeably because I think Amazon teams are using those terms interchangeably as well. And that’s one reason why it’s kind of circular. Right? That’s another reason why brands are doing it, because they realize that Amazon’s using these terms interchangeably.

[00:03:26] Leah: Right? Well, and it’s the same, we hear people saying that their listing has been hijacked and hijacked listing means that somebody took your listing and is changing the information on it. Hijacked listing does not mean that somebody that you don’t want selling the product is selling the product on the same ASIN.

Which again is something that I see a lot of sellers use incorrectly or interchangeably, when what they actually mean is that they don’t want somebody else selling the product. And I think the issue for a lot of sellers. I also think there are probably sellers who know exactly what they’re doing, and they know that they’re reporting it incorrectly.

It just seems like a quick and easy way for them to get rid of sellers that they don’t want selling their products.

[00:04:03] Chris: Yeah, and this goes back to even some of the law firms that were pitching these services just to kind of collect fees, to exploit the ambiguity or the misnomers and the jargon around these terms.

And the way Amazon teams are known to mishandle some of these cases by just saying, we’ll get rid of these unauthorized sellers for you by helping you submit infringement claims or even fake counterfeit. They wouldn’t say fake. Of course, they’re pitching for purpose.

[00:04:31] Leah: But I’ve also seen people talk about using AI to write IP infringement claims and counterfeit claims. So you know that’s gonna be a mess. I look forward to seeing.

[00:04:42] Chris: That’ll add to the mess. Auto reporting automation around IP claims and infringements. I had a seller contact me the other day that was trying to cook up some scheme of like, well, what if I accuse all these people of copyrights because they haven’t copyrighted their images and I’m gonna copyright, you know, sellers who are looking for these angles to play will find receptive audiences out there, whether they’re pitching a service or whether they’re trying to use another service to report competitors. This is where Amazon kind of needs to get up to speed and wake up a little bit in terms of, this is a very well known, well trod path of abuse. So what are they prepared to do to up their game on reviewing IP claims instead of just rubber stamping them?

[00:05:29] Leah: Yeah. Well, and so I have three bad outcomes for doing this that I think most sellers don’t know about, which I would like to share with the sellers who are listening right now. So one we’ve actually talked about before, but I’m assuming not everybody listening has listened to every podcast episode. If you have, thank you. But one that we see most common is that your brand registry will get revoked if you report false infringement often enough. And Amazon realizes that. So you no longer get access to any of the brand registry tools as the brand owner. And there’s kind of an appeal path, but there isn’t really an appeal path.

And it’s not the kind of appeal path where you explain how you’re gonna make sure it never happens again. And then Amazon reinstates it. The appeal path is really just for like, well, this was incorrect and this is why, and maybe that’ll get reviewed, but there isn’t really an appeal path with Amazon in terms of like right now, it doesn’t really seem like they have plans on giving you access back to brand registry once they revoke brand registry.

Which brings me to number two. That most sellers don’t know about, which is once one brand registry that you’re associated with gets revoked, you can never enroll another brand again. Amazon’s now associated you with abusive conduct, and next time you try to enroll a brand, it’s going to be denied because you’re going to be related to abusive conduct.

[00:06:51] Chris: So for sellers that create a new brand and wanna launch a new brand, that brand won’t have brand registry access.

[00:06:59] Leah: The likely the likelihood that any of your future brands will get access to brand registry is fairly low, and I’m not going to say it will never happen because we all know that Amazon is inconsistent and maybe they’ll just miss it, but, We see a lot of brands who then who had a brand registry revoked or had an account suspended, whatever the case may be. When they try to enroll an entirely new brand that has nothing to do with that, it gets denied for being related to abusive conduct.

So it’s not like you can start a new brand and it’s like starting from scratch. You’re still related to the bad reporting and Amazon doesn’t wanna give you access to those tools again.

[00:07:37] Chris: Right, or just because it doesn’t happen right away doesn’t mean you won’t lose access later. If you have a competitor that reports you for something, they might discover it then and then take it away.

[00:07:48] Leah: Yeah, I mean, more and more it seems like it’s just automated. They’ve already flagged your account as abusive and you get almost an immediate denial when you submit a brand registry application going forward. So you’re not only putting your current brand at risk in terms of brand registry tool access, you’re also putting any potential future brands at risk.

And this brings me to two and a half point, two and a half, which, which is that if you’re using a service that’s have access to your brand registry account and they’re reporting false infringement claims on other accounts, their abusive conduct can also get you flagged and potentially result in the loss of your brand registry access because anybody related to your brand registry account doing any sort of abuse, has the potential of putting your brand registry account at risk, which is also something we’ve seen a lot where it wasn’t even necessarily the person, their brand owner itself.

It was someone that they hired and whether they did it on that account or they did it on another account, Purely the relation between them is what caused them to lose their brand registry, or not be able to get brand registry on new brands.

[00:08:56] Chris: Truth be told, I wanted to do a whole separate episode just on that, but more broadly, talking about if you hire a service that does a bunch of things that you don’t know about, even on accounts that aren’t tied to your brand or listings that aren’t tied to your brand, you could face the consequences for it. Because I don’t know, I’ve been doing a lot of interviews lately on who ultimately pays the price when a service does something on your behalf.

And you and I have also talked about all the questions we’ve gotten from sellers who are worried, we don’t even work with these people anymore. But they did all these things on our behalf. And rights ownership claims these days are clogging up the queues at Amazon.

They’re concerned about it. You should be concerned about contributing unsubstantiated claims to those cues because as we’ve seen in the past, when Amazon gets grumpy about something that’s making life uncomfortable for them, what do they do historically? They take it out on sellers.

[00:09:57] Leah: Well, and particularly in the extreme cases like we mentioned, where something’s automated and submitting thousands and thousands of incorrect claims, they’re just gonna shut all of that down as quickly as they possibly can.

[00:10:09] Chris: Yeah, it’s a code of conduct violation at that point.

[00:10:12] Leah: Yeah, so whether it’s on your account or another account that they’re working on, the likelihood is that you will be flagged for being related to that abuse. So something that a lot of sellers don’t realize and something that they should probably know.

And number three that a lot of sellers are not realizing is, You can get sued. You can get sued for damages for submitting false IP claims. And it’s not just, well, they’re not authorized, like that’s not gonna hold up in court if you’re claiming counterfeit or you’re claiming trademark infringement.

Again, these are legal claims that you’re making and if you’re making them knowingly, falsely, You could end up paying the reseller or even wholesaler, whoever it may be, you could end up paying them damages because of your actions, which probably didn’t seem that consequential at the time, but you know, later on it could be a problem.

[00:11:05] Chris: Some of the legal cases, I’ve been doing more expert witness testimony in these, you know, writing preliminary reports and some of these lawsuits, but some of these cases are due to the company or the seller signed an agreement saying that they wouldn’t sell the items on Amazon, and then they did.

And that’s constituting a breach and that’s where the lawsuit comes in. So there is more that we can dissect on that topic.

[00:11:32] Leah: Sure. If they’re in breach of contract, then you know, feel free to counter sue on that. But that doesn’t mean that your false IP claims are suddenly like mute.

[00:11:42] Chris: And a lot of people don’t understand who’s handling infringement claims at Amazon. Hopefully we’re at the point where you understand that there’s many thousands and tens of thousands of these floating around any given hour of the day for Amazon. You don’t have paralegals and lawyers studying these.

Who actually understand trademark laws or understand design and patent the way you think, you think that they would based on the messaging they send back to you. That’s not really how Amazon works.

[00:12:12] Leah: Well, patent, they at least have some process now.

[00:12:14] Chris: Yeah, the Apex process is here with us now, so I should have actually exempted that from, but in terms of, Copyright and trademark. We’ve had sellers tell us that they’ve called into, let’s say, account health reps and asked to review, hey, I got this infringement. We’ve seen language and messages, and we’ve heard sellers talking about calls they’ve had where the concepts of trademark weren’t even well understood.

Sometimes they even said, well, you violated this brand’s trademark, and that wasn’t even what the suspension notification said. So there’s a lot of kind of mixing and matching with these things if you really need good IP attorney advice. Leah and I have talked to a few different IP attorneys in this space over the last several years that we can refer you to.

We can’t give you IP advice since we’re not attorneys, but, we do understand that even some of the attorneys advising some brands don’t understand, this is scary I know, don’t understand the concepts of you can’t just report stuff to Amazon without consequences.

[00:13:18] Leah: Well, and I think generally speaking in my experience, The attorneys that we’ve seen work on this stuff who are maybe not giving good advice aren’t actually IP attorneys. So if you’re looking for intellectual property advice, speak to an IP attorney. I cannot stress this enough because yes, I have seen sellers have brand registry revoked due to poor advice from their attorney who was not an IP attorney. So keep that in mind when you are reporting these things that maybe it’s worthwhile speaking to an IP attorney before you start submitting infringement complaints.

[00:13:51] Chris: Which is, by the way, awkward for us when the brand owner shows us the letter from the lawyer and it’s like, well, this is wrong and we’re not lawyers, and we have to say, well, this is obviously somebody making an unlawful claim on your behalf who happens to be an attorney. Not shocking that there’s lawyers out there running around that aren’t really worth their fee. I think we all know, at least in the United States, that we’re kind of drowning in attorneys, but story for another time. The focus here is really just you need a second opinion. Get it. But make sure you’re not making any unsubstantiated IP claims. And don’t just kind of set it and forget it when it comes to reporting. Just because you think somebody unauthorized, you’re just because you’re assuming that somebody unauthorized is selling counterfeit or is violating any of either your intellectual property rights.

I wouldn’t make that assumption unless you think you’re on the right side of the law.

[00:14:42] Leah: Yeah. And final note as well, just on the legal side of things is, I know a lot of sellers or a lot of services that do this their first step is sending a cease and desist where you are threatening to submit in an infringement claim and again, that can have legal repercussions even though it isn’t through Amazon’s system. A cease and desist letter is a legal document. You are making legal threats if you are threatening to then report them for infringement, which is an actually infringement. So something to keep in mind. I know again, this is something I have recently seen people talking about just use chat gpt to write a cease desist letter. Like maybe consultant attorney is all I’m saying.

[00:15:19] Chris: Well, and also, I don’t know if we’ve heard from a lot of people who were sending cease and desist, who lost brand registry because of it. There’s kind of a disconnect between those two.

[00:15:28] Leah: Well, because it’s not going through Amazon’s system, right? It’s going directly to the seller. I’m not saying that that seller couldn’t then report you to Amazon, they probably could. But I haven’t personally seen that, but I have personally seen people take legal action for baseless, cease and desist letters. Yeah, so keep it in mind.

[00:15:45] Chris: We’ve seen what you just said, legal action that results from making those claims inappropriately. But we’ve also seen brand registry damage. Typically people show up in our inboxes saying, Hey, I don’t have access to A+ content anymore.

Or, Hey, I got a message from Amazon saying, I’m guilty of illicit, fraudulent, abusive behavior, and I don’t know what they’re talking about. When Leah and I dig deeper into these, which we don’t have to dig that deep, typically two questions in, we start finding out that there’s been some behaviors, some activities that aren’t compliant or that result in fake IP claims or unsubstantiated IP claims going in.

Amazon didn’t really do this in 2021 as much as 2022. And now in terms of taking it out on you, and you don’t want that to happen if you’re a thriving brand on Amazon. Any questions on this? As I always say, contact Leah, not me. She’s got all the answers.

[00:16:36] Leah: I will send you to an IP attorney.

[00:16:38] Chris: You can send them to an a good IP attorney, of course. Thanks again for listening to Seller Performance Solutions. We know they’ll be questions about this. We know people are struggling to understand some of the messaging they get from Amazon and some of the consequences of these types of decisions, so feel free to ask away and we’ll catch you next time.

Thank you.

Hosts & Guests

Chris McCabe

Leah McHugh

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