Just as I was sitting down to write this, a notice popped up on my laptop that my Amazon package had been delivered. Fitting, because the following is all about Amazon – and especially about the important role the company plays in preventing the sale of counterfeit goods worldwide. As just one well-known example of these efforts, I refer readers again to my column on Amazon joining as half of a counterfeiting team with designer brand Ferragamo. But of course Amazon’s efforts against the sale of counterfeit goods as well as goods that infringe on intellectual property go much further and deeper. Thanks to the widespread release of Amazon’s trademark protection report on May 9, 2021, we can now take an in-depth look at the extent and effectiveness of Amazon’s efforts in both anti-counterfeiting and trademark protection and intellectual property rights protection in general .
Before we dive into three takeaways from the report itself, let’s take a minute to explain why being able to sell on Amazon is so important for counterfeiters is so important. The simple answer, of course, is Amazon’s unmatched impact on customer attention. But that’s only part of the puzzle. Because all the customer attention in the world is of little use to a business, whether it is legitimate or counterfeit goods, if it continues to be difficult to get products into the hands of a customer. As we all know, one of Amazon’s main strengths is to shrink the world to such an extent that goods can be expected to be delivered within a few days that are thousands of kilometers from where those goods originated or be stored. Hence, it is not surprising that counterfeiters are magnetically attracted to try to sell on Amazon. However, as the report shows, Amazon is doing a lot to ward off existing and potential criminal activity, which is being fueled by an investment of over $ 700 million in that effort.
In the report, Amazon sets out a three-legged approach to combating counterfeiting, which helpful guide us to our three takeaways as we read the report. First, the report explains what Amazon calls “Robust Proactive Controls” – or what steps it is taking to keep counterfeit products away from what it prosaically calls a “store”. As you can imagine, this effort includes both technological and human intervention, starting with a potential seller attempting to set up an online storefront on Amazon. For example, Amazon’s expanded verification process for new sellers is credited with halting a whopping six million attempts to create seller accounts by “bad actors”. Likewise, video verification and display of seller addresses is used to deter potential counterfeiters who allegedly do not want the location of their fake Hermes and Chanel warehouses to be revealed.
In addition to trying to stop the creation of nefarious seller accounts, Amazon is constantly monitoring existing seller accounts to look for suspicious activity that could indicate a counterfeit crime. Reading the report is a reminder of the efforts that credit card companies are making to ensure cards are only issued to creditworthy individuals while continuing to look for post-issue fraudulent activity. In one of the headline statistics for the report, Amazon proudly reports that its multiple efforts have resulted in the creation of a marketplace where less than “0.01% of all products sold on Amazon have received a bogus complaint from customers.”
Second, the report promotes Amazon’s “powerful tools for brands” to protect themselves from counterfeiters. While offerings like Amazon Brand Registry and Project Zero are well known in the IP world, I was delighted to see the report featured innovations like Transparency, a tool for confirming the authenticity of purchased products that I was previously unaware of. I was also encouraged that Amazon included information about handling third-party patent disputes, an issue that I have raised in the past. The report highlights Amazon’s key role for patent owners looking for a speedy resolution to their concerns, and mentions an amazingly quick average time to resolution of utility model complaints of seven weeks. What a boon to patent owners faced with sales violations on Amazon. It was amazing to see that Amazon’s IP Accelerator – a small and medium business referral service to a curated group of IP law firms – helped connect more than 7,000 potential clients to IP owners in 2020. Overall, the posts are from Amazon to a welcome increase in IP awareness commendable.
Third, the report highlights how Amazon is working to hold counterfeiters accountable. The report reiterates the challenge Amazon faces in ensuring that only authentic products are offered to Amazon customers – in the face of counterfeiters “working to improve the refinement of their abuse” – and describes how Amazon does it both internally and internally used external resources to ensure justice is assured against bad actors. These efforts include working with companies large and small, from Ferragamo and Yeti to smaller brands like Dutch Blitz, in filing anti-counterfeit lawsuits, as well as establishing a global policy on reporting counterfeits to relevant law enforcement agencies. Add efforts to stop the flow of counterfeit goods to the U.S. coast – by working with the IPR Center to monitor ports of entry for items like counterfeit Super Bowl goods – and it’s clear that Amazon’s partnerships with Law enforcement and related agencies promise to continue to bear fruit in the fight against counterfeit goods.
Ultimately, Amazon has carved out a unique position as the leading online marketplace. With this success comes a huge responsibility to wipe out counterfeit sales for the benefit of a variety of key Amazon stakeholders. From legitimate Amazon third-party sellers to brand owners, Amazon investors to customers, everyone has an interest in the success of Amazon’s branding efforts. By publishing its trademark protection report, Amazon has made an important contribution to raising awareness of its important efforts in this regard. We can only hope that Amazon’s 2020 achievements, which are hampering COVID-powered efforts to increase the baddies’ counterfeit sales, will continue through 2021 and beyond.
Please send me comments or questions at [email protected] or via Twitter: @gkroub. Suggestions or thoughts on topics are very welcome.
Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading patent consultancy to the investment community. Gaston’s practice focuses on intellectual property litigation and related advice, with an emphasis on patent issues. You can reach him at [email protected] or follow him on Twitter: @gkroub.