In the world of e-commerce, platforms like Amazon and eBay provide a global stage for small businesses and individual sellers to offer innovative products to an increased number of potential consumers. However, the issue of intellectual property infringement—where sellers may unknowingly or deliberately sell counterfeit or unauthorized items—has become a major concern.
On the surface, e-commerce platforms have established policies and systems to tackle intellectual property violations, such as Amazon’s Brand Registry and eBay’s Verified Rights Owner (VeRO) Program, designed to protect brands from counterfeit goods and unauthorized sales. These programs allow rights holders to report infringements, leading to the removal of offending listings after review.
However, the reality is that these platforms do not enforce the full scope of activities that constitute infringement. The law prohibits making, using, selling, or importing a patented product. Each listed activity is sufficient, on its own, to constitute infringement. Nevertheless, most platforms focus only on selling, while tolerating other forms of infringement.
Consider an example. Barry invented a new product and patented it in the United States and China. At some point, Barry notices an unexpected sudden drop in sales, and discovers that an unaffiliated manufacturer based in China is selling the same product on eBay at a price 10% cheaper than Barry.
In theory, either the United States patent or the Chinese patent should be able to prevent sale of the infringing products to customers in the United States. The United States patent prevents it because the manufacturer is importing and selling the products in the United States, and the Chinese patent prevents it assuming the manufacturer is making the products in China. However, when Barry submits a request to eBay to remove the listing based on the Chinese patent, his request is denied on the basis that the seller has set up the listing so that the product can only be sold outside of China. In our example, Barry should still be able to remove the listing based on the United States patent. But what happens if Barry had not pursued a US patent, or it has not yet issued? Even though making the product in China is infringement of Barry’s Chinese patent, e-commerce platforms like eBay will generally not take action unless the infringing product is also sold in China.
E-commerce platforms understandably prefer to have a straightforward rule, where a listing is only taken down if it is patented in a country where it is being offered for sale. But such a rule does not always accurately reflect the law. By having standard practices like this, e-commerce platforms prioritize simplicity over getting the right result.
At McCoy Russell, we have experience in working with e-commerce platforms to achieve the right result, even when it is counter to the standard practices of the e-commerce platforms. We have a proven track record of navigating the complexities of e-commerce platforms, ensuring that our clients’ intellectual property rights are enforced effectively, even when the platform’s standard practices fall short.
