Another common word has been registered as a trademark, and this time it's a bit outrageous!

There are many pitfalls on the road to going overseas, but almost every seller will tremble in their heart when encountering infringement complaints. The reason is that there are too many types of infringement complaints now, such as trademark infringement. Many common words have been registered as trademarks, and some of these words make people feel very outrageous.

Moreover, some people with ulterior motives and rogue law firms have turned it into a business. There are more and more groundless infringement lawsuits, and sellers are tortured terribly.

XM-L is actually a trademark. Common word trademarks have caused great harm to sellers

Trademark infringement is the most common form of infringement that sellers encounter, and there are many different ways to infringe on your product. Among trademark infringements, infringements on common words often cause the most extensive damage. Many common words have been registered as trademarks, and this list is constantly expanding, such as the recent case of XML.

"XM-L" is a size quantifier, commonly seen in the category of lamps. Some sellers also use it to indicate the size model, but in fact this word was registered as a trademark by Cree LED in the United States as early as 2017. The United States Patent and Trademark Office ( USPTO) shows that the trademark serial number is 87218890, and the registration categories are 021, 023, 026, 036, and 038. It is mainly used for light-emitting diodes (LEDs); semiconductor devices and LEDs, sold separately as parts of lighting equipment, lighting devices, downlights, table lamps, bulbs, flashlights, headlights, motor vehicle lighting, and portable lighting.

In recent years, Cree LED has frequently defended its rights. According to news reports, a seller was sued for millions of dollars last year for infringing the trademark. Now Cree LED has taken action again. On January 9 this year, it filed a lawsuit in the U.S. District Court for the Southern District of Florida, case number: 24-cv-20081, 24-cv60062. The court has issued a preliminary injunction.

Searching for "XM-L" on Amazon US yields over 10,000 search results, with lamps, audio-visual equipment, and 3C products being the most commonly used.

It is worth noting that as a major trademark owner, Cree LED is not only protecting the rights of XM-L, but also more than 60 other trademarks are on the protection list.

Of course, it is not easy for Cree LED to control such a large number of trademarks . The company was founded in 1987. As a leading manufacturer in the semiconductor field, it owns more than 1,300 US patents, more than 2,900 international patents and 389 Chinese patents (including authorized and pending patents).

XM-L is a LED lamp model developed by the company. It is hard for many people to imagine that a product model can be registered as a patent, but in fact, if you pay attention, you will find that there are many common word trademarks, because these trademarks are often sued. So much so that a seller complained that he, a cross-border e-commerce operator, was forced to become a professional member of the legal team.

What the seller said is not an exaggeration at all. After all, a large number of common words such as 100%, one, Tetris, yoyo, Organic, Frisbee, airbag, Generic, Brandless, Nologo, N/A, N/B, nobrand, Apple, Chapstick, Band-Aid, polo, Hula Hoop, VELCRO, PINK, VR BOX, Pandora, etc. have been registered as trademarks.

Even a widely used demonstrative pronoun like "the" has been targeted. In June 2022, Ohio State University in the United States successfully obtained a trademark for the word "the". It is mainly used in clothing categories, namely T-shirts, baseball caps and hats. And there are many companies and individuals who have applied for this common word as a trademark, because there are currently as many as 24 valid trademarks for "the".

Faced with these strange and emerging common word trademarks, sellers must be cautious and pay attention at all times, otherwise they may not only lose money, but also their insurance.

Sun Xiao (pseudonym) from Shenzhen is one of the sellers who fell into the trap. Because the phone cases he sold had inflatable cushions on the edges to protect the phone, he used "built-in airbag protective case" when stacking keywords to attract traffic. Unexpectedly, a few months later, more than 160 sellers including him were sued by another phone case supplier PopSockets on the grounds that they infringed PopSockets' airbag trademark.

Subsequently, Sun Xiao's two Amazon seller accounts were restricted and his $60,000 account balance was frozen. In order to deal with the lawsuit, he spent $20,000 to hire a lawyer. Although the account was successfully unfrozen later, his business was greatly damaged because he missed the sales window.

Malicious registration of brand domain names is common, and sellers are afraid of being blackmailed

There are many pitfalls in the field of infringement. In addition to common words, domain name infringement also makes many sellers very crazy. In the past two or three years, the number of domain name infringement complaints has increased significantly. Some people with bad intentions first register brand domain names, and then complain about the sellers' infringement on the cross-border e-commerce platform.

As we all know, sellers are often very passive in infringement complaints, because when receiving complaints, the platform will not verify the evidence too much, and will remove the seller's link or even freeze the account funds if it thinks the other party's words are true. Even if the seller can unfreeze the account and re-list the product through appeal, the sales and ranking will definitely drop after the sales are interrupted.

So when encountering such things, sellers often spend money to avoid disaster. But this is precisely what encourages such things to happen. Some people even register brand domain names and then directly email sellers to ask them to buy, otherwise they will complain.

Not long ago, a seller shared his experience and said that the domain name of the brand authorized by his Amazon store was registered by someone, and they were contacted to buy it. At first they ignored it, but they did not expect that the other party used more than 50 different accounts to purchase the same ASIN of their store at different times, and threatened: if they did not buy the domain name, he would complain to the platform about the authenticity of their products and the sale of counterfeit goods.

The seller was suddenly panicked. He was afraid that Amazon would close his store, and he was also worried that if he filed a complaint, the seller would use the same trick again.

Another Amazon seller in Changsha has also fallen into the same anxiety recently. As soon as the new account operated by this seller arrived, he received the same blackmail email, the other party claimed that they had registered the seller's international trademark domain name, and asked him to purchase the .com domain name within a fixed date, otherwise he would use the domain name to build an independent website and file a copyright complaint with Amazon.

In the email, the other party also did not forget to "kindly" remind the seller that even if the link could be appealed back, it would be seriously affected by being taken off the shelves for a long time, so he should carefully weigh the pros and cons.

The goods that arrived this time were a product that the seller was very optimistic about. For this purpose, he even made a mold and shipped 100,000 yuan worth of goods in the first batch. He simply couldn't afford it, but he was unwilling to pay just like that. "I searched and found that the purchase price on Alibaba Cloud was just over 5,000 yuan. The price was acceptable, but I felt very uncomfortable. I felt that I was being manipulated."

In fact, the experiences of these two sellers are not isolated cases. In recent years, the phenomenon of malicious registration of brand domain names and then blackmailing the sellers has occurred frequently, and there is an increasing trend.

“—— Someone sent me an email asking me to spend $20,000 to buy a domain name. If I don’t buy it , he will complain to me because he registered my brand as a domain name ;

——I also encountered this. The domain name wanted 400 US dollars and the payment was limited to three days .

——We encountered it before but ignored it, but we were complained about on the membership day. We later spent 800 US dollars to buy it back, and lost more than 170,000 US dollars in profit that month ;

——A friend of mine has more than 100 orders a day, and the domain name of the product that made it to the BS list was pre-registered by someone, who now sent a message asking for $10,000;

——The brand domain name was preemptively registered in July , and the other party came to extort 2,000 US dollars in October . If I don’t buy the domain name, will all the products be reported and removed from the shelves?

——As soon as the trademark application was marked with TM, someone else registered the .com domain name. Was it someone doing this on purpose? "

In such cases, the amount of money extorted from sellers ranges from a few hundred dollars to tens of thousands of dollars. Even if they can afford it, the sellers still feel uncomfortable as if they had eaten a fly. Moreover, sometimes these gangsters will pick some important sales nodes to cause trouble. The sellers hate this and are eager to find a solution.

Here are some solutions collected by En.com:

1. Build your own moat, register the domain name at the same time as the trademark, and you can also build a corresponding independent website. This doesn't cost much, a domain name is only a few dozen yuan a year, which is much more cost-effective than the possible extortion risks and losses that may be encountered later.

2. If the brand domain name has been registered, according to the suggestion of a seller, you can register a similar domain name with the company that registered the brand, and then establish an independent website to build a brand image. Mark the URL information in common places, such as product packaging, platform store contact information and after-sales methods, to form a complete chain that can be recognized at a glance, so that it is more difficult for the person who registered the domain name to complain.

  3. Call the police. This kind of thing is usually done by Chinese people, so the seller can ask the public security organs to intervene. Industry insiders have reported that the public security organs in Xiamen have filed several similar cases for investigation, all of which were charged with extortion.

4. Report and remove the domain name. There are many domain names, in addition to .com, there are also .net, .co.uk, etc. If all the sellers have to pay money to settle, no seller can afford it, so the best way is to invalidate these domain names. There are two ways: one is to report the domain name that has been registered on the website: https://www.gname.com/abuse/category/3 and request to cancel the domain name. The information that the seller needs to provide includes : brand certificate, product pictures with brand, screenshots of the brand page on the backend of Amazon, screenshots of evidence of the other party's blackmail, and a detailed description of the situation.

The second is to report directly to the domain name service provider and have the domain name removed from the shelves ( if the brand is R-marked ). This method has been proven to be effective by sellers. A senior seller, "Amazon Wuye", once said that if someone maliciously registered a domain name and then sent a private message to blackmail, you can directly file a complaint with the domain name platform. It has been personally tested to be simple and effective.

600,000 sellers have been maliciously prosecuted in ten years, with Chinese sellers becoming the main target

Whether it is a trademark infringement complaint or a domain name infringement complaint, it was originally a normal way to protect intellectual property rights. However, with the booming business of Chinese cross-border e-commerce sellers, it is becoming a lucrative business for some ill-intentioned people and rogue law firms. MIT Technology Review has reported on this issue in detail. The following is the summary of Ennet:

It's undeniable that Chinese products have long been associated with counterfeiting and intellectual property theft. In 2022, 60% of counterfeit goods seized at the U.S. border by value came from China, according to U.S. Customs and Border Protection. But in the age of e-commerce, the concepts of intellectual property and counterfeiting have become more blurred. Traditionally, counterfeit goods have profited from the popularity of well-known brands. But not all trademarks are recognizable names; some are just descriptive terms.  

For example , if Sun Xiao and more than 160 Amazon sellers were not sued by the right holder POPSOCKETS, many people would think that the airbag is an ordinary and common descriptive word. And it is precisely because of this that sellers will not check whether it has been registered in the trademark database when using it.

Seizing on this point, some so-called "rights holders" have been "harvesting" e-commerce sellers in the name of protecting their rights. Among them, a German company that owns and licenses the word "emoji" sued more than 10,000 sellers between 2020 and 2021. Some sellers who only use this word to describe products that actually contain emoji images have not been spared.

In dozens of cases, judges awarded $25,000 to the German company from 231 sellers even though they found the copyright claims were overly broad.

In a paper published last March , Goldman Sachs referred to such lawsuits as “Schedule A Defendant Programs,” or “SAD Programs.”

Chinese sellers have become the main target of such lawsuits. An American lawyer who represents sellers said that about 70% of his clients are from China, while less than 10% are from the United States.

This abuse of the intellectual property protection system has frustrated Chinese cross-border e-commerce sellers. They want to fight to the end, but the reality does not allow it, because lawyers are expensive and litigation takes a long time, which sellers cannot afford. So when they encounter such a thing, they usually choose to settle with the "right holder" or simply abandon the store. According to Goldman Sachs data, 70% of Schedule A cases end in default judgments.

This was the case in the airbag case. Among the more than 160 sellers sued by PopSockets, only six sellers, including Sun Xiao, hired lawyers to defend themselves. When Sun decided to go to court, Sun Xiao also tried to find other defendants to join and share legal expenses, but most chose to settle or give up their accounts.

Intellectual property bad faith litigation has been around for decades, but a large number of intellectual property lawsuits involving e-commerce sellers as defendants first appeared in the early 2010s. According to legal database Docket Alarm, the number of Schedule A cases filed in the United States rose from 105 in 2016 to 938 in 2022. Goldman Sachs estimates that more than 600,000 defendants may have been sued in this way in the past decade.

In these cases, in order to prevent sellers from transferring funds from their accounts after getting the information, the plaintiff may sue hundreds of sellers at the same time without revealing their names. In addition, hiding the list of defendants can also keep the plaintiffs information asymmetric. If someone decides to fight back, the plaintiff can remove the defendant from the lawsuit to prevent other defendants or judges from obtaining adversarial evidence.

In summary, filing such lawsuits is so easy and cheap that some law firms are launching them. It is like an assembly line, where the number of defendant sellers will continue to grow as long as a process is repeated. Sellers will find that even when one lawsuit is being appealed, plaintiffs are still filing new lawsuits against a large number of sellers and making the same intellectual property infringement claims.  

As part of due diligence, attorneys often purchase products before filing a case. For many years, most Schedule A cases have come from Chicago law firms filing lawsuits in the U.S. District Court for the Northern District of Illinois. Of the 938 Schedule A cases filed in 2022, nearly 85% (794) were filed in Chicago.

Many times, orders from Chicago may indicate that trouble is coming, and this is also a consensus among sellers: be careful of orders from Chicago.

It is reported that the amount of compensation awarded by federal courts in Chicago is much higher than that of courts in other jurisdictions, sometimes even more than three times, which may be the main reason why many rogue law firms choose to file lawsuits here.

Fortunately, some judges have paid attention to such cases and raised some questions. Last January, a judge in a Chicago court asked when hearing such cases: "Are we too lenient and not skeptical enough about this practice? Are we being taken advantage of by the plaintiffs' lawyers when we bring these cases?"

Speaking of the legal team, we have to mention GBC, which is notorious in the seller circle . It is reported that GBC is the first and most well-known law firm engaged in this type of intellectual property infringement litigation. Nearly one-third of all Schedule A lawsuits in the United States in 2022 were filed by GBC.

And its approach has become a handy template for conducting e-commerce IP claims at scale, with more plaintiffs’ firms and law firms scrambling to follow suit.

The American lawyer who represented the seller said: "Four years ago, the same few law firms might have handled such cases, but today, in the same location and the same jurisdiction, every time I encounter such a case, it is a new law firm that I have never heard of."

In infringement lawsuits, platforms do not have the right to say "no". Once the court notifies them to take action against these sellers, they must comply. However, among the many platforms, Amazon seems to be the one that sellers complain about the most. Some sellers complained that Amazon is the platform that best meets the plaintiffs' requirements. "It will immediately freeze the seller's account without any internal investigation, and it is difficult for us to defend ourselves."

Common word infringement