Amazon lines up new plan to fight fakes – but detail all important in bid to win over brand owners 09 Dec 16
As Amazon faces a growing chorus of voices demanding that it does more to address its problem with fake goods, there are rumours that the company is working on a new anti-counterfeiting strategy.
CNET recently reported that Amazon is developing a new suite of online anti-counterfeiting tools for trademark owners, tentatively named Brand Central. The news site reports that while details on Brand Central “remain vague”, people familiar with the initiative say that “ensuring the source of products is … part of the project”, which will “help smaller sellers protect their trademarks and other intellectual property”.
According to Bloomberg, Amazon is also putting together dedicated teams based in the United States and Europe that will “work with major brands on a registry to prevent fakes”. These teams will “encourage brands – even those that don't sell on Amazon – to register with the online store”. Amazon will then require that any third-party vendors listing products bearing one of those companies’ trademarks to prove that they have the brand owner’s permission to sell them. This seems to be an expansion of a 'brand gating' scheme that Amazon has already been rolling out with regards to selected brands – including Adidas, Hasbro and Nike – which requires third-party sellers to produce proof that they have been authorised by the brand owner, invoices from manufacturers or distributors that show the purchase of 30 items within the last 90 days, and pay a non-refundable fee of up to $1,500.
This follows Amazon’s unprecedented action last month of suing vendors suspected of selling counterfeits on its platform. The company filed two complaints in a Washington state court, targeting a number of companies and individuals that are alleged to have been involved in the manufacture and sale of fake TRX suspension training gear and Forearm Forklift furniture lifting straps.
While Amazon has not been forthcoming with detail (or even confirmation) of these new measures, Suzi Hixon – a Kentucky-based lawyer who specialises in e-commerce-related brand protection – acknowledges that lawsuits alone are not the answer. “Bringing lawsuits against counterfeiters may raise awareness,” she says. “But, to be honest, I do not see it being a true deterrence. There are just too many nefarious sellers out there, many of them based internationally and it is simply too difficult and cost-prohibitive for your average Amazon seller to sue directly.”
So what is? As mentioned, the precise detail on Amazon’s latest suite of tools remains vague. But she suggests that what sellers really need are tools to help them combat counterfeiters: “For one, I would like to eventually see an easily accessible, seller-facing tool that a seller could use to ‘gate’ their brands. Sellers can currently request gating, but it isn't a straightforward process.” Additionally, she stresses that a more structured brand gating application process that outlines exactly what Amazon wants to see from a seller is needed: “Right now, when I make these requests on behalf of clients, I have a general idea of what I think Amazon wants. But it would be nice to have an official statement, particularly on what Amazon wants to see in order to tip that scale to the point where Amazon actually sees the risk of not gating outweighing the risk of keeping the listing open.”
According to Hixon, Amazon has been “fairly responsive” to brand gating requests she has made on behalf of her clients, but that it is still proving difficult to get approval. “It seems to help if the product is something that goes on or in the body – of humans or pets – and if there is already a strong brand presence,” she explains. “In other words, if Amazon sees that there could some product liability issues, and/or if Amazon sees that the seller has a strong and enforceable brand that the seller is proactively protecting as well. A seller really has to show Amazon that the risk of not gating outweighs having an ‘open’ listing.”
Overall, Hixon and her clients have found Amazon to be lackadaisical in its approach to helping brand owners selling their own products on its platform, but faced with imitations being sold by other vendors. “The response time for counterfeit seller removals, when going through normal channels, is simply too long,” she says. “It concerns me to hear that Amazon is suing counterfeiters [in the Washington cases], because I think their resources should go to developing practical tools to help sellers. Filing a lawsuit is expensive; litigation is expensive. Sometimes it takes years for a lawsuit to be resolved either through litigation or an eventual settlement. Although the counterfeiters may eventually have to pay up, does this really act as a "deterrence" for other counterfeit activity? I really doubt it.” Many of the counterfeiters are located in China, and are well aware of the fact that they are difficult to locate and to bring lawsuits against, she adds. “They are also very fly-by-night sellers. They hop from listing to listing, change their seller names, and so on. They are gaming the Amazon system – and this is why practical tools are necessary for legitimate sellers.”
Such practical tools may be forthcoming under the new Brand Central programme. Yet while lawsuits and rumours of new anti-counterfeiting tools may impart some hope in brand owners, it seems that Amazon still has a very long way to go to fully restore their confidence in its platform by those that have faced trademark issues. Just this week, Amazon itself was sued in a Washington state court by the manufacturers of items including ‘Snuggie’ wearable blankets, which accused the company of trademark infringement for selling knock-off versions of their products.
For most brand owners, taking such action isn’t an option and the creation of new tools is needed to help with the fight against fakes - but the detail will be all-important. Failure to provide brand owners with an increased ability to fight fakes could result in more following the example set by shoemaker Birkenstock and withdrawing from Amazon altogether. “I've been told by many clients that if Amazon does not step it up and help them, they are going to have to leave the platform,” Hixon warns.
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