Amazon, Infringers and Design Patents: A Cautionary Tale

Amazon, Infringers and Design Patents: A Cautionary Tale

By: Doug P. LaLone

Combating copycats on Amazon can be an expensive, frustrating endeavor. This is doubly true when simultaneously taking on both copycats and Amazon. 

It is all too common of a story for sellers on Amazon: a listing pops up purporting to sell a replica of your patented, copyrighted, or trademarked goods. You file a complaint with Amazon, but receive only a canned, automated response from Amazon that no action will be taken because the listing does not infringe your rights. You resubmit the form, and receive the same response, over and over again. You look for a hotline with the hope of speaking with a human, but you are redirected to the online form.

Eventually, after numerous submissions and denials from Amazon, you succeed in having the listing removed, but three more listings pop up overnight. You are playing an endless game of Whac-A-Mole. You file requests that Amazon remove those new listings, the way it eventually removed the last listing, only to be told, once again, that Amazon does not believe the new listings infringe your rights-despite its previous conclusions to the contrary with other, identical listings. You submit more requests, until you either (1) successfully see the listing removed, or (2) your account is suspended by Amazon because you submitted too many requests. We feel this pain acutely, since we recently went through a similar experience on behalf of one of our clients.

Understanding Amazon’s business model might help shed light on the challenges vendors face in enforcing their intellectual property rights on the platform. Particularly in the US, entrepreneurs and small businesses selling products on Amazon prefer to ship their products from their own facilities. In such cases, Amazon makes around 20% commission for everything sold. For counterfeit products, many of which originate overseas, such sellers often store their goods in one of Amazon’s mega distribution centers. In those cases, Amazon makes even more money, around 50% of every sale (20% for the commission, plus another 30% for warehousing and distribution fees). These rates fluctuate, and in some cases are even higher. 

Thus, on its face, there is a perverse economic incentive for Amazon to continue to sell infringing products of foreign vendors at the expense of US intellectual property rights owners. Even more problematic, Amazon has been accused of stealing the designs of its vendors with some of its own Amazon branded products.

For Amazon vendors, properly securing your intellectual property may provide the much-needed legal leverage to combat copycats, especially on Amazon. For Amazon buyers, the next time you shop on Amazon, look for those products that say they are patented. You could be helping a local innovator protect its valuable asset, and its revenue stream!