We have written several times about counterfeit products being sold on Amazon. The Amazon selling platform welcomes all sellers and buyers. As a result, it has become so vast that control, much less elimination, of counterfeits seems to be an unreachable goal. In 2017, Amazon sales were reported to be almost 178 billion dollars through more than two million sellers. As of 2016, there were 310 million active customers, and in 2017, five billion packages were shipped by Amazon. These are mind boggling numbers. But why should business attorneys care? Because half of Amazon’s two million sellers are small to medium size businesses. These are your clients who sell on Amazon and counterfeits are their problem.
Amazon’s prior efforts to control counterfeits have been characterized as “halfhearted,” with allegations that an actual attempt to control the counterfeits would hurt many of Amazon’s sellers (who in fact sell counterfeits).
In apparent response to this criticism, Amazon within the last year has instituted a new program which we believe is more than a halfhearted attempt to control counterfeits. It is not a total solution, but is better than what existed.
AMAZON BRAND REGISTRY
Brand Registry relies on sellers of genuine goods to obtain trademark registrations, and then to register those trademark registrations with Amazon. A lot of buzz on the internet about Brand Registry is based on misunderstandings, misconceptions and Amazon’s own cryptic explanations. With this article, we hope to better explain this program without adding to the confusion. Our sources include an Amazon representative that one of us met at the 2018 International Trademark Association annual meeting and Amazon’s brochures and websites relating to, but not necessarily explaining, this program.
The new Brand Registry program took effect in the spring of 2017. Registration under the previous brand registry program does not qualify an Amazon seller for the new Brand Registry program. The seller must register in the new program. The biggest change between the two programs is that the seller now must have a registered trademark. Amazon in its great wisdom is leaving the judgement as to who owns rights to a trademark with the trademark office. The trademark office decides and Amazon accepts that determination. The party who then registers its trademark registration with Amazon has the trademark rights (in the Amazon universe) for the goods identified in that registration.
ONLY A REGISTRATION COUNTS
Merely filing to register a trademark is not enough; a registration must be issued. If your client does not yet have a registered mark, it will be a while before your client can register under this new program. Typically, it takes about 9 to 12 months to obtain a U.S. trademark registration. Also, such a registration has to be on the Principal Register; a Supplemental Register registration is not good enough. Accordingly, choosing a descriptive mark may prevent participation in Amazon’s Brand Registry.
SPECIFYING THE GOODS
Care should be taken as to what products are specified in the registration. A trademark registration does NOT give exclusive rights to the use of the word(s) that are registered. The rights to the word(s) are in relation to the goods being promoted by that mark. The takeaway here – use the services of a seasoned trademark attorney to obtain a registration as broad as the trademark office will permit. As your client adds new products, additional trademark registrations may have to be obtained to maintain rights under the Amazon Brand Registry program.
WHICH TRADEMARK OFFICE?
We have generically referred to the “trademark office.” This is because Amazon’s U.S. Brand Registry will accept trademark registrations from the United States Trademark Office AND registrations from the trademark offices of Canada, Mexico, India, Japan, France, Germany, Italy, Spain, the United Kingdom and the European Union.
Accepting registrations from the trademark offices of other countries provides counterfeiters an avenue to obtain rights in your client’s trademarks. For example, your client registers MY ORANGE for hats and scarfs at the U.S. trademark office and sells via Amazon. Counterfeiter then registers MY ORANGE at the Indian trademark office for t-shirts and hoodies and registers that Indian trademark registration with U.S. Amazon Brand Registry. Your client may be out the right to sell t-shirts and hoodies under the U.S. Amazon Brand Registry program. For now, the solution rests with your client and aggressive registration.
WHAT TRADEMARK SHOULD BE REGISTERED?
Register the exact trademark being used and register it in “standard characters.” Presently it is not clear whether Amazon will accept a registration with a design along with the word(s), so why run the risk?
This program requires your client to be proactive. If your client does not take advantage of Amazon Brand Registry, a counterfeiter may do so and your client may find itself characterized as “the counterfeiter” in the eyes of Amazon.