Amazon strikes again, several Chinese sellers sued

Foreign countries attach great importance to the protection of intellectual property rights, and infringement has always been a taboo in cross-border e-commerce.

For sellers, infringement is no small matter, because once it is violated, the link may be removed at best, or the account may be blocked and the funds may be frozen at worst.

Amazon has always spared no effort in cracking down on infringing sellers.

Recently, Amazon took action again and joined forces with brands to sue infringing sellers on the platform.

Amazon and its brands sue several Chinese sellers for infringement

Amazon and its co-brander THERABODY, INC, filed an infringement lawsuit against Chinese sellers in the Western District Court of Washington State, case number 23-cv-00931.

It is understood that a total of 6 Chinese sellers were involved in infringement. They used the brand's trademarks "THERAGUN (Class 10 and Class 25), THERAGUN MINI (Class 10), THERABODY (Class 9, Class 10, Class 25, Class 28, Class 42, Class 44) without permission.

According to Amazon, the criminal gang attempted to sell counterfeit Therabody massage devices on its platform through six accounts.

It is reported that Therabody was founded by Dr. Jason Wersland in 2008 and is a well-known brand in the field of health technology. In 2009, Therabody invented the first fascia gun.

Theragun fascia gun was officially launched in 2016 and has now become the brand's star product, sold in more than 40 countries around the world and used by more than 250 professional sports teams.

(Image source: THERABODY official website)

Therabody has made a very strict layout in terms of intellectual property rights. The body, gun head and connecting parts of the fascia gun have applied for appearance patents in the United States, the European Union and Canada. The key technologies of the Theragun fascia gun have also been applied for US invention patents.

If the seller uses the trademark in the main image, title or description of the store link without authorization from the brand, it is an illegal infringement.

After discovering the infringement of sellers on the platform, Amazon directly deleted the relevant accounts by verifying the authenticity of the products, and proactively refunded customers who had already purchased the products.

If faced with prosecution for trademark infringement, how should sellers respond?

According to incomplete statistics, there were more than 3,000 infringement cases in 2022, and each case involved more than a hundred sellers. It can be said that most sellers have encountered infringement problems.

As we all know, the international market attaches great importance to the protection of intellectual property rights. If overseas sellers' products are involved in infringement lawsuits, they will face very serious consequences.

However, if a seller faces an infringement lawsuit, he or she still has the opportunity to file an appeal or defense with the Trademark Office through a licensed US attorney.

The seller's registered trademark is still valid. Even if the trademark registration is eventually ruled invalid by the USPTO, the seller's trademark is still protected by US law and cannot be easily infringed by others. The USPTO will also give the trademark owner some time to contact a suitable US lawyer. The seller can provide evidence of trademark use and request a reexamination by the USPTO. The key to whether the trademark can be re-validated, or even whether the Amazon store can be restarted, lies in whether the seller can provide a solid "first use date" and "continuous use" evidence.

At the same time, buyers can also take three measures to minimize losses. First, they can keep the original brand registration and then re-apply to the US Trademark Office with the existing problematic trademark. Second, they can re-apply and register the trademark in a different category and add another trademark to the existing trademark category. Third, they can wait for the original brand registration to become invalid, then apply for a trademark with the same name and category, and then register it.

Compared with other countries, trademark requirements in the United States are very strict and maintenance costs are very high.

It is understood that US trademark registration needs to be submitted by a US lawyer, which leads many sellers to look for agency companies because they do not have the relevant resources.

In order to attract customers, many intellectual property companies adopt free or even ultra-low-cost trademark models, but they are unaware of the huge risks hidden behind them.

If there is a problem with the seller's trademark, the store will inevitably be affected. It is understood that the US Trademark Office's system and Amazon's brand registration are instantly connected. Once the Trademark Office determines that the trademark is invalid, Amazon will cancel the registration, and both the trademark and the store will be blacklisted by Amazon.

The registration time for the American standard takes about 12-18 months, which is a relatively long time span. Sellers must keep their eyes open when applying for trademarks and choose compliant and formal agencies. Never take risks for the sake of temporary cheapness.

Before putting products on the shelves, sellers must conduct a detailed review and evaluation of the products and conduct trademark searches to understand the specific status of the products in terms of copyright, trademarks and patent applications, so as to avoid losses to the store due to product infringement.

3. Rogue American Law Firms Target California Proposition 65

In addition to being wary of product infringement, sellers should also pay attention to California Proposition 65, because once a seller receives a complaint email and fails to handle it in a timely manner, it will directly lead to the link being removed from the shelves and the funds being frozen.

What is California Proposition 65?

California Proposition 65, originally named the "Safe Drinking Water and Toxic Enforcement Act of 1986," is a grassroots initiative to protect consumers from toxic substances and chemicals in drinking water. Proposition 65 lists over 1,000 chemicals (with more added every year) that have been linked to cancer and birth defects, and the law requires any consumer product sold in California to disclose a warning label if it contains trace amounts of the above chemicals.

What product categories does California Proposition 65 apply to?

It is important for sellers to understand what products need to comply with California Proposition 65. The following product categories are covered by the proposal (partial):

Apparel and textiles, leather goods, food contact materials, toys, child care products, children's jewelry, sports equipment, cosmetics and personal care products, electronics, batteries, furniture, holiday lights, motor vehicle parts, leisure boats and other pleasure craft.

Proposition 65 allows California government officials, nonprofit organizations, law firms and individuals to file enforcement lawsuits, which provides rogue law firms with an opportunity to take advantage of the situation.

These rogue law firms would purchase products on the platform, test them for chemicals regulated under Proposition 65, and issue a 60-day notice to the seller and the platform.

The main purpose of rogue law firms' complaints is to extort settlement money from sellers. Most lawyers negotiate settlements between $10,000 and $20,000, and the law firm usually gets 90% of the settlement money. If the seller does not resolve the issue within 60 days and files a lawsuit, the average settlement fee will soar to $40,000 to $90,000, not including attorney fees.

Therefore, for sellers, the effective preventive measure is to first take the initiative to test the product to know whether the product contains the chemicals listed in California Proposition 65 that require warnings and the amount contained; then paste the warning label according to the proposal requirements; if the seller has no intention of compliance, he can choose to close the California route. However, California has many people with high spending power, so sellers are advised to make choices carefully.

Infringement

Prosecution