Amazon and Champion-owner HanesBrands have jointly filed more than two dozen new lawsuits in connection with the sale of counterfeit goods on Amazon’s marketplace platform. In the complaints that they filed in a federal court in Washington state on June 10, Amazon and HanesBrands allege that the defendant Amazon sellers are running afoul of the law by offering up and selling “silicone covers for earbud cases that illegally bear registered trademarks of HanesBrands, Inc.,” namely, Champion’s name and well-known “C” logo without its authorization in an effort “to deceive customers about the authenticity and origin of the products and the products’ affiliation with HanesBrands.”
According to the newly-filed complaints, Amazon and HanesBrands argue that the defendants – which range from companies like Guizhou, China-based Dafang HaoJiafu Hotpot Store to individuals named Hao Jiafu and Zhang Pengju – have made “infringing use of Champion’s trademarks on their inauthentic products,” and in the process have “willfully deceived and harmed Amazon, HanesBrands, and their customers, compromised the integrity of the Amazon store, and undermined the trust that customers place in Amazon and HanesBrands.” This goes against Amazon’s work “to build and protect the reputation of its store as a place where customers can conveniently select from a wide array of authentic goods and services at competitive prices,” the e-commerce behemoth argues, noting that it invests “a vast amount of resources to ensure that when customers make purchases through the Amazon store … [that they] receive authentic products made by the true manufacturer of those products.”
While Amazon says that it “prohibits the sale of inauthentic and fraudulent products and is constantly innovating on behalf of customers and working with brands, manufacturers, rights owners, and others to improve the detection and prevention of inauthentic products ever being offered to customers through the Amazon store,” there is, nonetheless, “a small number of bad actors [that] seek to take advantage of the trust customers place in Amazon by attempting to create Amazon Selling Accounts to advertise, market, offer, and sell inauthentic products.” The defendants fall within this camp, according to Amazon, and have sought “to misuse and infringe the trademarks and other intellectual property of the true manufacturers of those products to deceive Amazon and its customers.”
With the foregoing in mind and in the wake of removing the defendants’ accounts from the Amazon marketplace, which Amazon says is in line with the terms of its Amazon Services Business Solutions Agreement, Amazon and HanesBrands filed suit, setting out claims of trademark infringement and false designation of origin, and citing violations of the Washington Consumer Protection Act, which prohibits the employment of “unfair methods of competition and unfair and deceptive acts or practices in the conduct of trade or commerce.” They are seeking monetary damages and injunctive relief to bar the defendants from selling products – and assisting others in selling products – on the Amazon platform, among other things.
The cases are not only the most recent in a larger attempt by Amazon to boost consumer and brand trust in its sweeping marketplace, particularly as it looks to amass new partners in the fashion and luxury space, they are the latest in a growing string of joint actions initiated by Amazon and fashion brands like Valentino and Salvatore Ferragamo, as well as companies like Yeti and KF Beauty. Facebook recently initiated a similar style lawsuit in April against one of its users in conjunction with Gucci, with this increasingly collaborative approach to stomping out counterfeits marking “a shift in the attitude” in terms of how brands and retailers are “dealing with online counterfeit goods,” Charles Russell Speechlys’ Anna Sowerby recently wrote for TFL.
Seller Identity Unknown
In what might be the most interesting element of the newly-lodged complaints: In at least one instance, Amazon makes it clear that it does not know who is actually behind the seller account on its third-party site. In one of the complaints, Amazon and HanesBrands assert that they are unaware of the identity of the defendant, which they claim is “an individual or entity doing business [on Amazon] as ‘Eartherlas.’” Amazon and Hanes allege that “the individual or entity behind [that] seller account [on Amazon] falsely represented their location as Kirkland, Washington and has registered additional false information with Amazon as part of a scheme to mislead the plaintiffs.” As a result, the plaintiffs contend that “the true identity of the Eartherlas defendant is presently unknown.”
Amazon’s assertion that it lacks verifiable information about this individual seller – and potentially, others – comes shortly after the U.S. Senate opted not to include anti-counterfeiting-specific provisions in the $250 billion China-focused bill that it approved on June 8. Absent from this legislative push – which is aimed at “countering China’s growing economic and military prowess,” according to the Washington Post – is the Inform Consumers Act. Reintroduced to the Senate this spring, the Inform Consumers bill sought to “combat the online sale of stolen, counterfeit, and dangerous consumer products by ensuring transparency of high-volume third-party sellers in online retail marketplaces” by requiring online marketplaces like Amazon to verify and disclose third-party seller information to consumers, co-sponsoring Senators Dick Durbin and Bill Cassidy revealed in March.
The Washington Post – which is owned by Amazon founder Jeff Bezos – reported early this month that the newly-approved Senate bill “excludes [the] measure designed to protect online shoppers from counterfeit and dangerous products after aggressive lobbying led by Amazon.” The publication cited Lori Wallach, an advocate at the watchdog group Public Citizen, who says that “Big Tech rigged the bill, killing the requirement that companies like Amazon inform consumers who their big third-party sellers are and where those products come from, which is mainly China, so we do not get scammed or injured.”
As of September 1, 2020, Amazon has required that third-party merchants on its U.S. site make their name and contact information available to consumers, with CNBC reporting at the time that sellers were “already required to supply this information to Amazon, but the new policy will make it available to consumers, allowing them to better vet third-party merchants and their products prior to purchase.” Amazon’s claim about the identity of the individual(s) behind the Eartherlas account seems to raise questions about the efficacy of such efforts without increased verification efforts.
Amazon was not the only marketplace operator to push back against the proposed legislation. Axios recently reported that online retailers like Etsy, eBay, and Poshmark, among others, challenged the bill on the basis that it “would hurt small sellers trying to supplement their income during the pandemic,” including by compromising the privacy of third-party sellers, the majority which run their businesses out of their homes. In a statement about the now-defunct bill, a spokesman for Amazon stated prior to the vote that it “favors large brick-and-mortar retailers, at the expense of small businesses that sell online, while doing nothing to prevent fraud and abuse or hold bad actors accountable.”
On the other hand, Axios noted that “retailers and other members of the Buy Safe America Coalition” – a coalition in favor of the bill that was formed by Home Depot, Walgreens and other major retailers – have tried “to spotlight and counter the growing problem of stolen and counterfeit goods during the pandemic,” albeit to no avail as of now.
One of the cases is Amazon.com, Inc., et al v. Dafang Haojiafu Hotpot Store, et al. , 2:21-cv-00766 (W.D. Wash.)