Crazy! Sellers turn into "trademark hooligans", the first batch of 400 lawsuits

Nowadays, the cross-border e-commerce track is involuted at a speed visible to the naked eye. Especially after the entry of the "King of Volatility" Temu, the already difficult living space for sellers has become even narrower. The performance of many sellers is getting worse and worse, so some sellers have withdrawn or transformed. However, in this process, some people have started to have evil thoughts and started doing the kind of black-hearted business that they originally despised and hated the most: trademark squatting, and have become trademark hooligans.

The seller turned into a trademark hooligan, and the person who had been caught in the rain snatched someone else's umbrella

Whether it is a registered trademark or a patent, the original intention should be to protect one's intellectual property rights from infringement, but some people use it to make improper profits. In May this year, Yien.com reported such an incident: a small domestic company with four people specializing in cross-border claims business applied for a patent in the United States and then sued Chinese cross-border sellers. In less than half a year, it has earned more than 7 million yuan, and this year's expected income is as high as 25 million yuan.

At that time, many sellers were very angry about this behavior of "Chinese people cheating Chinese people". However, what was unexpected was that only two months later, Ennet noticed another incident:

A seller became a trademark troll, that is, registering trademarks and then suing platform sellers. As we all know, the competition in the cross-border e-commerce track has become increasingly fierce in recent years. This seller has not made much money in the industry for many years. Last year, he was TROed and lost nearly 200,000 yuan. With the idea of ​​"others messing with me, I will also mess with others", he decided to try this lucrative business.

His first business was in the toy category. He has already applied for the trademark and his lawyer is collecting evidence. According to the plan, he will sue 300-400 sellers and "claim" 2,000 yuan from each seller.

As a seller, he knew very well what would happen if the link was removed due to infringement complaints, but he still did it. He also knew that it was unethical, but he did not stop in the face of huge temptation. According to the above data, if he succeeded, he would have made at least 800,000 yuan in revenue this time. This is obviously faster than being a seller, and the cost of this business is still very low.

This is a lucrative business for trademark hooligans, but it is a great harm to sellers. Therefore, trademark hooligan sellers have always been hated. This seller has obviously fallen into a similar trap, but as someone who has been caught in the rain, he not only did not hold an umbrella for others, but also snatched other people's umbrellas.

Trademark/patent preemption has always been a headache for sellers, especially when Chinese people do this to Chinese people, which makes them hate it.

For example, the recent industry news that a company in Tianjin registered a large number of Amazon trademarks in China covered a wide range of categories, including clothing, tableware, and tools. Many sellers found their own trademarks on the list after checking.

Although there is no evidence that the company has done anything wrong with these trademarks, it has still caused panic among sellers, simply because they have suffered too much loss in the past.

"——The patent was preempted by others, the link was taken down due to complaints, and the product with a million-dollar revenue was ruined;

——The trademark of a product that has been selling well was maliciously registered. Now not only has the link been taken down due to complaints, but the other party has also extorted 300,000 yuan;

——Because the patent was preemptively registered, all the links were complained and removed from the shelves. Now we have paid tens of thousands of yuan to settle, but because the product is very seasonal and missed the sales season, it can only be stored in the warehouse to collect dust. "

In such cases, foreign rogue law firms can be regarded as accomplices of trademark rogues. Foreign media reported that law firms that are "proficient" in such cases file hundreds of similar lawsuits every year, and they make millions of dollars from default judgments and settlements in these cases. In 2022, at least 938 similar lawsuits were filed in the United States, each targeting dozens or hundreds of defendants.

Of those, about 85% were filed in federal court in Chicago, and about a third were filed by a single law firm. In the past few years, many sellers have been hit by intellectual property infringement lawsuits filed in Chicago. The total number of such cases has increased by more than 500% in five years.

An American intellectual property lawyer said that he had been commissioned by many defendants in these cases, 70% of whom were Chinese.

Intellectual property protection should be taken seriously, and these problems should be avoided

Sellers need to do three main things in terms of intellectual property protection: trademark, patent and domain name registration applications. At the same time, some details need to be handled and avoided.

Trademarks: When completing the brand trademark registration application, you should also avoid some common words that have been preemptively registered.

Not long ago, a Hong Kong company applied for a trademark for "Compatible with". A search for "Compatible with" on Amazon US alone yields 100,000 results, which shows that these commonly used words are very destructive.

According to incomplete statistics from Ennet, the commonly used digital words that have been registered as trademarks include "100%" and "one", the commonly used product words include "airbag", "HULA HOOP", "Tetris", and yoyo, the commonly used sports words include "POLO", and the commonly used adjective words include "Organic".

In addition, before unbranded products are put on the shelves, some words will be selected to indicate that the product has no brand, and these words can easily lead sellers into traps. Currently, Generic, Brandless, Nologo, N/A, N/B, nobrand, etc. have all been complained and blocked. Not only that, some keywords, such as USB Type-c, cowboy, and VR box, should also be avoided.

Domain name: register it simultaneously with the trademark, otherwise it will leave troubles

Many sellers don’t care about this aspect. They often spend a lot of money to register the trademark, but do not protect the domain name. This gives those who take crooked ways an opportunity to take advantage of it. These people usually pay attention to some newly registered trademarks and observe the sales of the products corresponding to these trademarks. Once the sales are up, they will register the domain name and then extort a high price.

If the seller does not spend money to buy back the domain name, they will be complained about copyright infringement. They usually use the registered domain name to build an independent website, and then complain about the seller's copyright infringement. Amazon's tone has always been to remove the product as soon as the complaint is made. Even if the seller can appeal the link back, the sales volume will be lost during the period.

Therefore, sellers must pay attention to the issue of domain name registration, especially .com domain names must be registered. After all, it is not expensive, only a few dozen dollars a year. Once blackmailed, you will have to pay dozens or even hundreds of times this amount.

Previously, a seller had reported to Yien.com that they had been complained about trademark infringement, and all 80 links had been disabled. When they contacted the rights holder through email, they found that the other party had registered the domain name with their trademark, and then filed a trademark complaint on the platform. If the seller wants to buy back the domain name, he needs to pay 8,888 yuan.

Patents: Even products that are sold everywhere need to apply for patents

Many sellers subconsciously believe that common products or public model products do not need to apply for patents, but reality tells us that this idea is very dangerous. In fact, sellers have suffered a lot in this regard.

For example, at the beginning of this year, a seller discovered that the "sticky hook" that can be seen everywhere in life has been patented. The US Patent and Trademark Office (USPTO) query shows that the product has applied for a design patent in the United States in October last year, and the patent is valid for 15 years. At that time, many sellers who sell this type of product or use this product in their products were panicked.

There is also the "grabbing clip" which has regained favor among women in recent years. The product also had an appearance patent applied for in August 2020.

These complainants are "certified complainants", and Amazon does not recognize public model products. As long as the other party complains, the product will be removed from the shelves, so sellers should also pay attention to the patent issues of public model products.

Trademark trolls

Trademark registration