More than 160 sellers sued! Another common word is trademarked

Xiao Sun opened a cross-border e-commerce company in Shenzhen with 13 employees. Since 2016, he has been trying to export mobile phone cases to Europe and the United States through Amazon.

But since last year, Xiao Sun's business has stagnated. According to her, the store launched a new product at that time, which was a mobile phone case with an inflatable cushion around it to protect the phone.

When the product was put on the shelves, Xiao Sun also adopted the commonly used method of stacking keywords to attract traffic, and one of the keywords was "airbag".

Unbeknownst to her, the term “airbag” had been trademarked that same month by another phone case supplier, PopSockets, which sued Xiao Sun and more than 160 other sellers for trademark infringement a few months later.

According to Xiao Sun, both of his Amazon accounts were frozen, and the balance in the two accounts totaled more than $60,000. In the following months, Xiao Sun spent another $20,000 in legal fees, and the accounts were not unfrozen until June 2022.

In fact, Xiao Sun’s experience is not accidental. A new “bloody storm” is brewing in the American e-commerce circle.

U.S. law firms, especially several based in Chicago, have been focusing on mass infringement cases like this one, suing hundreds of sellers at a time for selling counterfeit goods on Amazon or other platforms.

The cases are aimed at protecting intellectual property holders from counterfeiters, who can be harder to track and hold accountable in the age of e-commerce.

But the lawsuits have also become a money-making business for plaintiffs and their law firms in the U.S. Bringing so many defendants together saves plaintiffs time and money filing suits in federal court.

Chinese sellers now make up the majority of Amazon’s third-party sellers. But as their business booms, they are struggling to learn how to adapt to a different culture and legal system.

According to a lawyer familiar with U.S. law, most Chinese sellers do not know how to take legal action when faced with such lawsuits, and ultimately choose to reach a settlement with the plaintiff or give up their blocked accounts and the balances therein.

Of the 163 sellers sued in the PopSockets airbag case, only six hired lawyers to defend themselves. Xiao Sun was one of them. She decided from the beginning that she would not choose to settle with the other party.

On the other hand, a consensus has been reached in the minds of many Chinese sellers: Be careful of orders from Chicago!

It is understood that many lawyers will order problematic products before filing a case. Over the years, most related cases have come from Chicago law firms, who will file lawsuits in the United States District Court for the Northern District of Illinois.

Of the 938 cases filed in 2022, nearly 85% (794) were filed in Chicago. So an order from Chicago could very well mean trouble is coming.

In today’s world where suing for infringement has become a business, sellers need to pay more attention to the intellectual property rights of their products. When writing listings, they should also take the time to check in advance which words cannot be used to avoid pitfalls.

Amazon

Seller

Prosecution

US Law Firm