“Marketplaces [like Amazon] need to give the trademark owners and brands the critical information that they need to actively enforce their rights.”
As online marketplaces have been created and subsequently evolved over time, there always seems to be a point where counterfeits and diverted gray-market goods make their way onto those marketplaces. eBay was one of the first e-commerce sites that gave brand owners and trademark owners the ability to review, monitor and take down infringing goods. This program was called VERO (Verified Rights Owner Program). Alibaba and Amazon are now making their own similar efforts to rid their platforms of counterfeit and infringing goods in an effort to keep the big brands interested in selling on their sites.
So, the big question is whether these enforcement and take-down services being offered really work. The process and technology will be effective if the brands and companies are set up to use the tools and only if they actively monitor and enforce the process.
Typically, infringement occurs when a product becomes very popular very quickly. Most brands that grow quickly and become popular have two things working against them. First, they don’t have trademark registrations in the necessary jurisdictions for the products being infringed upon. This is a necessary piece in setting oneself up to enforce a brand (see below). Secondly, they don’t have the sufficient resources available to effectively monitor and take down the infringing goods.
Eligibility Requirements to Enroll in Project Zero (Amazon)
Interested Brands must have a government-registered trademark and have enrolled their brand(s) in Amazon Brand Registry.
For more details visit: Brandservices.amazon.com
Because the Project Zero program requires that brands have a registered trademark in order to enforce their rights, this means that popular brands without trademark registrations cannot enroll.
In my experience, giving brand owners tools like those outlined in the Project Zero (Amazon) initiative and VERO (eBay) works effectively for well-known and established brands that have teams available and have their trademark registrations in place.
In order for these take-down programs to truly work, however, the sites require the brand owners and companies to provide tangible proof as to who they are and what trademark registrations they possess. The trend is to err on the side of caution in these take-down efforts. In many cases, the sellers on these platforms can contest the take-downs and interact with the marketplaces to plead their case when appropriate.
An Ambitious Goal
There have been some claims made by Amazon stating that their serialization service of Project Zero will “stop counterfeiting for every product unit before it reaches a customer.” This is a very ambitious goal because it assumes that all brands being sold on Amazon cooperate and enroll in the service, which isn’t likely. For example, a few years ago, Birkenstock came out publicly and stated they will not sell on Amazon and any products found on the site bearing their brand and marks are not genuine.
The take-down tools being offered by the online marketplaces are useful but remember that these are reactionary efforts to a business and supply chain problem that can limit and potentially stop the flow of infringing and gray market goods onto these sites.
The best way to stop the creation and distribution of counterfeit and diverted/gray market goods is to target it at the source. This involves having a supply chain that is vetted, monitored and audited. In many instances I have observed how a rogue supplier or distributor trying to make some extra money can cause brand erosion and customer confusion through the creation and sale of counterfeit and diverted goods.
The Missing Link: Rogue Seller Identities
One issue is that both the VERO service and the Project Zero program do not reveal the identities of the rogue sellers. This critical information can be vital in actively monitoring and enforcing infringement both online and on the streets. Due to the fact that rogue sellers can set up almost untraceable profiles on these selling sites, it is basically a playground for infringers and diverters. Unfortunately, one trend that we have seen is that once a seller has had products taken down for verified infringement, they will simply set up another seller account under a new name and continue selling. There is no visibility into the actual seller account setup process that Amazon or others follow, but this visibility is crucial to stopping the creation of accounts by rogue sellers.
These marketplaces need to give the trademark owners and brands the critical information that they need to actively enforce their rights. Who the infringers are and where they are operating from is vital information that can be used to make additional undercover-evidentiary buys, send out cease and desist letters and conduct other enforcement. In my experience, the infringers will tend to seek out online platforms to sell their goods in order to make money because they know that these circumstances exist. Amazon’s program is definitely a deterrent, however, and it shows that they are committed to protecting brand integrity on their platform.
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