Infringement warning! Nearly 100 sellers have been cheated, and some have had millions of dollars frozen

The bad mood of the day starts when I find out my account is frozen.

One of the common reasons for cross-border e-commerce sellers to have their account funds frozen is copyright infringement. Many sellers operate cautiously, but they still cannot avoid being watched by some "law-abiding" hooligans. Recently, black law firms have been active frequently, and many sellers have been tripped up by these monsters. One seller had his funds frozen as high as one million US dollars, and he was very annoyed because he did not know the specific information of his copyright infringement.

Now that we have entered the peak season in the second half of the year, infringement issues should attract more attention from sellers. It is understood that the patents/trademarks of several peak-season products have been issued recently, and it is very likely that batch rights protection will be carried out in the future. Relevant sellers should pay attention. If they miss the peak season sales due to infringement, the loss will outweigh the gain.

Law firms file lawsuits in batches, nearly 100 sellers’ funds are frozen

Recently, Sun Ning (pseudonym), a seller on an independent website, told Yien.com that he encountered a strange thing: last Friday, his Paypal account was suddenly frozen. Normally, the reason for the restriction of a Paypal account would be stated, but this time it showed: "Unable to provide more information about the restriction of your account."

Without knowing the cause, the problem cannot be solved. Sun Ning was as anxious as an ant on a hot pan. Recently, he finally learned from his Paypal account manager that his account had been applied for a TRO (temporary injunction) by a foreign law firm, but the law firm information and infringement information were unclear. In addition, this time the law firm also applied for a temporary injunction on the Paypal accounts of nearly 100 domestic sellers.

Sun Ning sells common goods and never touches infringing products, so he never thought that one day he would be targeted by an American law firm. It is speculated that the other party is very likely to have secretly applied for a patent for an inconspicuous common product and then targeted it for infringement.

The anonymous TRO by the law firm was obviously intentional. The feedback from Paypal was that Sun Ning had to wait 14 days from the date of freezing to know the law firm information and infringement information, which was a torment for him. Because the current sales and account collection are normal, the longer the time, the more frozen funds he has in the hands of the law firm. Now the amount of money frozen in his account has exceeded one million US dollars. At the same time, because the law firm "hid and did not see anyone", even if he admitted his mistake, he had no way to find a lawyer to discuss a settlement. Not to mention responding to the lawsuit. (If there are sellers who have the same experience, you can leave a message below the article)

For platform sellers, one of the points that rogue law firms use to control them is to remove links if there is a complaint. Independent website sellers do not have this worry, but the freezing of account funds also brings many problems. "Although our sales are going on normally, the money withheld from PayPal has a great impact on our cash flow. The payment plans for various advertising fees, logistics fees, and procurement fees have been disrupted or even stagnated." Sun Ning said angrily.

As for this matter, the sellers on the platform are not resting on their laurels. After all, if the rogue law firm holds the patent, the targets of their lawsuits are not limited to independent site sellers. On the contrary, as long as the sellers on the platform encounter infringement complaint links, their links will be removed from the shelves, making it easier to extort money.

Rogue law firms are hot on the trail of Chinese sellers, and black cross-border businesses are helping the evil.

In recent years, black law firms have been active frequently, and even a gray industry has been formed. In order to obtain high profits, rogue law firms such as GBC, Keith, David, HSP, and SMG are hot on the trail of Chinese sellers.

Data from foreign media shows that from 2014 to 2019, the U.S. federal courts accepted thousands of infringement lawsuits from brands against cross-border e-commerce companies. China is a key region, with at least 97 brands "cracking down on counterfeit goods" from Chinese cross-border e-commerce sellers. In each "cracking down on counterfeit goods" campaign, a large number of Chinese sellers were involved and suffered heavy losses.

For example, in a certain brand’s anti-counterfeiting lawsuit, there were 1,549 defendants in China, and the court ordered $200 million in compensation for losses in absentia.

In addition to settlement money, default judgment compensation is another very important source of "profit" for rogue law firms. Usually, after filing a lawsuit, they will use template complaints to quickly advance the litigation process such as TRO temporary injunction, PIO preliminary injunction, and default judgment, striving to obtain a judgment of hundreds of thousands of dollars in a very short period of time (two months) before the seller has time to react. Then, the funds in the seller's account are forcibly transferred away.

In order to make huge profits, these rogue law firms even use crawler technology to collect evidence of infringement by sellers on cross-border e-commerce platforms such as Amazon. When they find suspected infringing brands, they place orders to obtain account and transaction information and collect evidence.

What makes sellers even more indignant is that there are Chinese people involved in this industry. That is, there are some Chinese who specialize in applying for patents/trademarks in the United States and other countries, and then cooperate with rogue foreign law firms, which file infringement lawsuits against Chinese sellers in batches and obtain temporary injunctions.

It has been observed that more and more people are engaging in "black cross-border" activities. Not long ago, someone said that his friend made a net profit of over 1.8 million in half a year in cross-border infringement compensation, with an average monthly income of over 300,000. He was very envious, and after some understanding, he set a "huge" goal for himself.

It is worth noting that Yien.com has recently observed that under the temptation of huge profits, even some sellers have transformed into black cross-border business.

The infringement risks faced by sellers are increasing, especially now that it is the biggest harvest season of the year for sellers. They should be more careful about some products that have infringement risks.

A large number of products are being certified during the peak season, sellers should be careful to avoid risks

Because traditional foreign festivals such as Halloween, Thanksgiving, and Christmas are concentrated in the fourth quarter, the fourth quarter is also the peak season for cross-border e-commerce sellers. Foreigners pay the most attention to the atmosphere during festivals, so lighting products with a full sense of atmosphere are definitely indispensable. I believe that many sellers have already received a lot of orders for related products.

However, sellers here should also be careful to avoid pitfalls. Recently, Een.com found that there are many lighting products that have been certified in recent months. For example, one of the tree lights suitable for use at Christmas has obtained a patent certificate in the United States on July 12 this year. The specific information is shown in the figure below. Sellers should pay attention and avoid stepping on the thunder.

Sellers of products that have already been certified should be wary of mass lawsuits from rights holders, and those that are currently being prosecuted should not be ignored.

On September 8, a hot-selling product finger stretcher filed an infringement complaint. The plaintiff was a company in Shenzhen, case number: 23-cv-8005. The design patent was applied for in 2021 and issued in February this year, patent number: D980990. Now its TRO is very likely to have been approved, and the funds of the seller's store have been frozen.

In addition, the lawsuit filed by horse and pet grooming brand Betty in June this year (case number: 23-cv-22322) has obtained a temporary injunction on September 5. This case involves two trademarks registered in the 21st category, and relevant sellers should pay attention.

In addition, faucet extenders, Bluetooth headphones, etc. have recently been the subject of infringement complaints. During the peak season, sellers must be extra vigilant and not miss out on the best sales time of the year due to infringement.

Infringement

Rogue Law Firm