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The Winning IP Strategy Blog

2017-08-25_ebay-liability-knockoff-products

Is eBay liable for listings of knockoff products?

Consider the following factual scenario: A brand owner has patented a particular retail product and owns the intellectual property (IP) rights to the particular product. One day, the owner notices that knockoff products are being offered for sale on the e-commerce platform eBay. The owner petitions eBay to remove the infringing listing and documents his or her IP rights. Upon review of the request, however, eBay refuses to take down the listing or prevent the allegedly-infringing item from being sold. The owner thereafter files a lawsuit against eBay, alleging the e-commerce platform directly and contributorily infringed on its IP rights.

Under these facts, should the IP rights holder’s lawsuit succeed? Not according to the U.S. District Court for the Eastern District of Alabama.

Facts and holding of Blazer v. eBay, Inc.

In a case captioned Blazer v. eBay, Inc., the plaintiff had a patent for “Carpenter Bee Traps.” While his application for a patent was pending, the plaintiff noticed products being sold on eBay that he believed infringed on his pending patent. The plaintiff informed eBay of the allegedly-infringing product, but eBay refused to take action, claiming it could only act if the plaintiff had been granted a patent. When the plaintiff’s patent was approved, the plaintiff submitted a new Notice of Claimed Infringement (NOCI) through eBay’s Verified Rights Owner (VeRO) program. eBay again refused to remove the allegedly-infringing listing, claiming that its policy was to rarely remove listings based only on mere allegations of infringement. Instead, eBay claimed it needed an injunction or court order finding the patent holder’s claim of infringement against the seller is sustained. eBay claimed that this policy:

  • Protected legitimate sellers from “unscrupulous” patent holders who might attempt to shut down otherwise-legitimate commerce on the site; and
  • Recognized that eBay lacked the specialized knowledge and expertise as well as access to the protected product and the seller’s product to make an effective determination as to whether infringement has occurred.

The district court granted eBay’s motion for summary judgment on the plaintiff’s claims of infringement, after finding that eBay was not “offering to sell” any products through the terms of its platform, that it did not have any actual knowledge that the allegedly-infringing product actually infringed on the plaintiff’s patent, and did not “willfully blind” itself to potential infringement.

eBay’s VeRO program and IP rights vs. knockoff products (and counterfeiters)

eBay and other e-commerce platforms (such as Amazon, Alibaba, and even Facebook) all indicate that they take a strong stance against online piracy and the sale and distribution of counterfeit goods and products that infringe on individuals’ IP rights. To this end, eBay specifically has created a Verified Rights Owner (VeRO) program where a brand owner or the holder of IP rights can register these rights with eBay. Any holder of IP rights or brand Owner can submit a Notice of Claimed Infringement (NOCI) when the holder/owner believes that a product listing infringes in some way on the holder’s/owner’s IP rights.

As Blazer indicates, however, a NOCI is not likely to be successful in removing the allegedly-infringing listing from eBay unless it is accompanied by a court injunction directing the seller of the infringing product to cease and desist his or her selling activities or a court order that finds the seller’s product actually does infringe on the holder’s/owner’s rights. Other e-commerce platforms have similar policies, indicating that they do not possess the expertise to litigate whether a listing actually infringes on the holder’s/owner’s product and instead will require the holder/owner to prove the listed product actually infringes on his or her rights before the listing will be taken down.

How anti-counterfeiting software from Perception Partners protects your priceless rights and your valuable time

There is no doubt that your patents, trademarks, and other intellectual property are valuable brand assets that are deserving of protection and enforcement. Not only do these important rights cover your unique designs and products from being distributed without your permission and/or without just compensation to you, they also help you control your brand’s reputation (i.e., help prevent consumers from associating the quality and reliability of knockoff products  with your own brand’s quality and reliability).

Registering your identity, verifying IP rights and systematically establishing accurate complaints across multiple e-commerce platforms like Amazon, eBay, and Alibaba creates time-consuming tasks that can consume your legal resources, zap marketing energies, and distract sales leaders away from actually running your business. This becomes especially problematic when an alleged counterfeiter fights back. Perception Partners experts and Replicatch anti-counterfeiting software work together with you to rapidly spot online listings for potentially infringing knockoff products and then take effective action on your behalf. We can get problematic platforms and websites to remove those listings, and work to hide future counterfeit listing attempts, all while you continue to build your brand by conducting business as usual. Our handling of takedown, test purchase, complaint and law enforcement relationships – in conjunction with your legal counsel as needed – can provide cost-effective brand security while bringing you peace of mind, knowing that a knowledgeable and reliable partner is collaborating 24/7 to help protect your most valuable brand assets worldwide.

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