Amazon has filed two lawsuits against individual sellers of counterfeit products as part of a broader crackdown on fakes sold on the internet retailer’s platform. The lawsuits, which were filed in a Washington state court on Monday, claim that more than 20 companies and individuals were involved in selling counterfeit exercise and furniture moving equipment.
While Amazon initiated three matters with the American Arbitration Association in June, alleging that third-party sellers on its e-commerce marketplace created “sock puppet” accounts, the two cases at hand, mark the first time in Amazon’s 20-plus year history that the company is properly suing merchants for selling counterfeit items on its marketplace. In this way, Amazon joins the likes of a number of big fashion houses, which have in recent years taken to fighting fakes by suing individual sellers in platforms, such as Alibaba, iOffer, and other online marketplaces.
Beginning in 2013, Louis Vuitton has been filing suit against individual iOffer sellers for selling counterfeit accessories, as opposed to iOffer itself. More recently, Lacoste filed suit against an array of iOffer sellers; Gucci filed against iOffer sellers; and both Chanel and Adidas filed suit against a handful of individual Amazon.com and iOffer sellers for offering counterfeit Chanel jewelry and iPhone cases, and fake Adidas wares.
It is interesting that these brands are targeting individual online sellers of counterfeit goods - in some cases - in addition to suing the main platforms, Alibaba, Amazon and iOffer, themselves. As we have seen in previous cases, such as Tiffany & Co. v. eBay and more recently in Kering v. Alibaba, designer brands have filed lawsuits against online marketplace sites in the past, but not individual sellers.
Chances are, most design houses have opted to sue individual sellers, as opposed to the actual platforms, after being dissuaded by the ruling in the Tiffany case, which found that while a large number of counterfeit goods were being sold on eBay, the online marketplace was not liable for trademark infringement. The Second Circuit court found for eBay, holding that eBay had taken the necessary steps in order to combat infringement (namely, implementing VERO, a fraud prevention program, actively pursuing counterfeit Tiffany sellers, etc.), and ultimately held that the duty falls in the trademark holder to police its mark.
This relatively new approach, in which design houses – and now platforms, themselves – are naming individual sellers (by their user names, of course) as defendants, is an interesting one in terms of the development of tactics for fighting online sellers of counterfeits, but it may not be the most effective. Chances are, the vast majority of the individual sellers will not be identified and even if they are, they will not be located.
As a result, their individual shops within Amazon, eBay, Taobao and/or iOffer will be shut down (thanks to a court order) and if the Department of Justice, in connection with the National Intellectual Property Rights Coordination Center, can locate funds that these sellers have amassed from the sale of such counterfeits, they will be turned over to whatever design house filed suit.