Jack Ellis

Criticism of the availability of counterfeits on Amazon has been turned up a notch after Apple suggested that as much as 90% of items being sold as genuine Apple products by the e-tailer are fakes. The claim was made in a lawsuit filed by Apple in the Northern District of California this week, in which it accuses a company named Mobile Star LLC of trademark infringement.

As reported by the Patently Apple fansite, Apple alleges in the court filing that Mobile Star sold counterfeit power supply units, including adapters and charging cables, through the online platforms operated by Amazon and Groupon. It states that Apple “purchased a number of Apple power adapters and charging and syncing cables… that were directly sold by Amazon.com – not a third party seller – and determined that they were counterfeit”. On reporting this to Amazon, the e-commerce giant identified Mobile Star as the supplier, and agreed to turn over remaining Mobile Star inventory to Apple. The filing makes this further startling claim:

Despite Apple’s efforts, fake Apple products continue to flood Amazon.com. Each month, Apple identifies and reports many thousands of listings for counterfeit and infringing Apple products to Amazon.com under its notice and takedown procedures. Over the last nine months, Apple, as part of its ongoing brand protection efforts, has purchased well over 100 iPhone devices, Apple power products, and Lightning cables sold as genuine by sellers on Amazon.com and delivered through Amazon’s ‘Fulfillment by Amazon’ program. Apple’s internal examination and testing for these products revealed almost 90% of these products are counterfeit. Apple is concerned that consumers are being deceived into purchasing counterfeit products on Amazon.com and elsewhere in the mistaken belief that they are purchasing genuine Apple products.

That represents a stark appraisal of both the extent of counterfeiting faced by the company and the role that the e-commerce company can play in facilitating the sale of allegedly fake goods. The  fact that the items at the centre of the Mobile Star litigation were fulfilled by Amazon itself, and not by a third party, is highlighted as a concern in the court documents, Apple stating that “consumers, relying on Amazon.com's reputation, have no reason to suspect the power products they purchased from Amazon.com are anything but genuine”.

This is not the first time that a major brand owner has called out Amazon on its efficacy at rooting out counterfeits. Back in July, Birkenstock announced that it would be halting its supplies to the Amazon marketplace, as well as cancelling authorisation of third-part resellers.

In a letter written at the time, David Kahan, CEO of the footwear company’s US operations, said that “policing this [counterfeiting] activity internally and in partnership with Amazon.com has proven impossible,” adding that Amazon had been seemingly unwilling to pursue “multiple proposals and ‘out-of-the-box’ ideas” that he and his team had presented to the e-commerce firm on how to combat the issue. Kahan acknowledged that Birkenstock’s chosen course of action would not necessarily lead to an immediate removal of counterfeits from Amazon, but would at least guarantee any products sold via the website and claiming to be Birkenstocks are not sanctioned by the company. “By taking this course of action, we are, in effect, leaving the Amazon marketplace to counterfeiters, fake suppliers and unauthorised sellers with whom we have no relationships,” he wrote.

Amazon hasn’t commented on the Apple suit, but following Birkenstock’s letter released a statement noting that it “does not allow the sale of inauthentic items on its marketplace and occurrences of inauthentic products are rare”, adding that “every customer who orders on Amazon is covered by our A-Z guarantee and if they do receive inauthentic goods, we will refund or replace that item”.

Apple has not yet taken the more drastic approach adopted by Birkenstock but this latest complaint mounts more PR pressure on Amazon, which respondents rated as the fourth most challenging online marketplace from an enforcement perspective in this year’s World Trademark Review benchmarking survey. Online marketplaces run by Alibaba took top and third spots; and recently, a number of trademark stakeholders have called on the Office of the US Trade Representative to reinstate the Chinese company to its Notorious Markets list.

The challenge of policing online e-tailers clearly remains a time and resource drain for many counsel. For the cover story of the current issue of World Trademark Review, we asked some of the world’s biggest brand owners what gold-standard protection mechanisms they would like to see implemented by online marketplaces. We are some way off seeing the adoption of the top ten wish-list. In the meantime, Apple's court filing is a timely reminder of the scale of the problem.

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