Consumers and businesses alike know and appreciate the value and dominance of Amazon in the marketplace. Over 100 million American households have Amazon Prime memberships, and it is reported that over 60 percent of consumers start their online shopping with a search on Amazon. Consequently, the growth of small-, medium- and large-sized businesses selling on Amazon continues to climb. There literally are millions of small- and medium-sized businesses around the world selling on Amazon, with the company reportedly adding approximately one million new sellers per year.
It is no surprise then that, as with traditional brick-and-mortar marketplaces, the Amazon platform can be a forum for intellectual property infringement. Some businesses learn that knock-off or counterfeit products with their branded labels are being offered on Amazon. Others discover that copyrighted photographs depicting their products are being used by unscrupulous vendors to sell their own similar-looking products. Businesses that devote significant resources to protecting their intellectual property, whether it be in the form of copyrights, trademarks or patents, should understand the basic steps that can and should be taken if they discover infringement of their intellectual property rights by sellers on Amazon.
Many businesses that encounter infringement for the first time are surprised to learn that Amazon, in most circumstances, is protected from liability when infringing activity occurs on its site. This can be particularly surprising when Amazon’s role with third-party sellers often is more than just allowing them to sell on the platform but will extend to fulfillment services, such as storing, packaging, labeling and shipping businesses’ products.
This may lead one to believe that Amazon should have some responsibility and perhaps liability when its vendors are infringing intellectual property rights of others.
This implicates a cyberlaw issue that has been the subject of federal legislation and many court decisions: Namely, is an online marketplace like Amazon simply a forum for its merchants or can it be responsible as a retailer for the products sold on its site?
The breadth of the various laws that provide protection to online service providers is beyond the scope of this article, but with regard to copyright infringement, Congress enacted the Digital Millennium Copyright Act (DMCA) in 1998. The DMCA contains a “safe harbor” provision that, in a nutshell, provides immunity to Amazon and other online service providers if they have adopted and implemented a mechanism for them to be notified when copyright infringement is occurring as well as a process for the “taking down” of the infringing materials.
The logic behind the law is clear – arguably, it would be unfair for Amazon to face liability for copyright infringement occurring on its site without its knowledge, but at the same time, Amazon cannot bury its head in the sand when it is notified of potential copyright infringement.
So what should you or your business do if you discover one of your copyrighted works is being used without permission to sell product on Amazon?
Amazon has a fairly straightforward process in place for addressing claims of copyright infringement. You should consider submitting online a report of the infringement to Amazon. You will be required to provide to Amazon a statement made by you, under the penalty of perjury, that you have certain copyrights and that you believe that those copyrights are being infringed by a seller on Amazon. You will need to provide a description of the copyrighted work, or a link to the copyrighted work or the copyright registration number, and the reasons you have a good faith belief that your copyright is being infringed upon.
It is important to note that your copyrighted work need not be registered with the U.S. Copyright Office to claim copyright protection.
When Amazon receives a so-called takedown notice having all the necessary information, Amazon will then contact the accused seller, notify the seller of the takedown notice, and often will remove or disable access to the allegedly infringing content. The accused seller can then contact the complainant and try to resolve the dispute amicably. Or the accused seller can submit a “counter-notice” to Amazon with a statement declaring, under the penalty of perjury, the reasons it believes there is no copyright infringement.
Assuming a valid counter-notice, Amazon will then notify the party filing the complaint of the counter-notice, and if the person or business filing the complaint does not institute litigation for copyright infringement within 10 to 14 days, Amazon typically will restore the allegedly infringing content and leave it to the involved parties to seek a judicial determination of whether there is copyright infringement.
Copyright infringement on Amazon or on other venues can be devastating to businesses and cause significant financial harm, and the takedown procedure provides businesses an effective way to combat infringement. On the other hand, sellers that have their Amazon content removed as a result of a wrongful accusation of copyright infringement can likewise suffer considerable financial losses. Consequently, the DMCA allows for serious penalties, including monetary damages and attorney’s fees, to be imposed on those who make material misrepresentations in a takedown notice.
Not surprisingly, there has been increasing litigation brought by businesses that have suffered financial losses due to misrepresentations in a takedown notice that ultimately resulted in lost revenue to the wrongfully accused.
While this necessarily general description provides a basic overview related to copyright infringement claims submitted to Amazon, there are similar processes regarding other forms of intellectual property infringement, such as trademark infringement, submitted to Amazon and other online service providers.
The critical takeaway for businesses is to appreciate that although online service providers such as Amazon may not have liability for intellectual property infringement that occurs on their platforms, they are obligated to take certain measures to combat infringement when they are properly notified.
Equally as important, businesses should not submit takedown notices to Amazon without appropriate care and investigation beforehand, because wrongful accusations of infringement can backfire and lead to liability if the wrongfully accused party has its content removed from Amazon based on misrepresentations.
Jeremy Walker, a director in McLane Middleton’s Litigation Department and a member of the firm’s Intellectual Property Group, can be reached at 603-628-1431 or [email protected].