Tag: Intellectual Property

On September 28, 2023, Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) introduced the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act. This bill is being introduced in modified form for the third time—it was introduced first in 2020, and again in 2021.

The bill, if passed, would: (1) modify the Trademark Act of 1946 to establish contributory liability for e-commerce platforms when a third party lists counterfeit goods; (2) require brand owners to provide platforms with advance notice of their trademarks so that they can proactively prevent sales; and (3) provide safe harbor for platforms that vet sellers to ensure legitimate and proactively take down counterfeit listings.

The SHOP SAFE Act would transform the current landscape of contributory liability claims against e-commerce platforms, and would undermine the landmark case Tiffany v. eBay, which established that, under certain circumstances, online marketplaces cannot be held liable for third-party listings offering counterfeit goods.

Gibney will continue to monitor developments. For questions, please contact info@gibney.com.

The Federal Trade Commission (FTC) announced the INFORM Act will take effect on June 27. Businesses with an online presence should understand what the new law means and how to prepare to avoid penalties. See Gibney’s prior update for more details on the Act requirements.

Background

Congress passed the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act – or the INFORM Consumers Act. To combat against online counterfeiting, the goal of the Act is to add more transparency to online transactions and deter criminals from acquiring stolen, counterfeit, or unsafe items and selling them through online marketplaces.

INFORM Consumers Act Guidelines

Under the new law, online marketplaces where high-volume third party sellers offer new or unused consumer products must:

• Collect, verify, and disclose certain information about those sellers
• Suspend high-volume non-compliant third party sellers
• Provide a clear reporting mechanism for consumers to report suspicious conduct

What are the penalties for violations?

A violation of the law is treated as a violation of an FTC rule and can result in civil penalties of $50,120 per violation. The statute also gives enforcement authority to State Attorneys General and other officials authorized by the State to file an action in federal court to enjoin further law violation, seek civil penalties, and obtain damages.

How Businesses Can Prepare

• Review read the new business guide to determine if you are covered by the statute
• Review and implement privacy and security safeguards
• Update their Terms and Conditions
• Consult with an IP Attorney to ensure compliance

For questions or more information, email info@gibney.com.

On April 20, 2023 Amazon launched the Anti-Counterfeiting Exchange (ACX) to combat the sale of counterfeit goods on its platform and make it safer for consumers to shop online.

What is the Anti-Counterfeiting Exchange (ACX)?

The program will allow participating stores and marketplace sellers to share information about confirmed counterfeiters who attempt to sell counterfeit products. In accordance with industry standards and best practices, an independent third party provides anonymized data and access for participants to share and receive information. Retailers can then make their own independent decisions about whether and how to use the information. Amazon has indicated that they have already detected hundreds of counterfeiters through the exchange.

The initiative has received support from the National Intellectual Property Rights Coordination Center and the Center for Data Innovation.

Amazon has indicated that it is working with other members of ACX to pilot the exchange and that it invites other retailers and marketplace service providers to join the Anti-Counterfeiting Exchange and collaborate on the retail industry’s collective efforts against counterfeiters.

Tracking Amazon’s Ongoing Anticounterfeiting Efforts

ACX is partner of a larger effort by Amazon in recent years to combat anticounterfeiting. In 2020, Amazon unveiled its Counterfeit Crimes Unit, a global, multi-disciplinary team of former federal prosecutors, experienced investigators and data analysts. The role of the Unit is to investigate counterfeiters on the platform, more effectively pursue civil litigation against counterfeiters, work with brands in joint or independent investigations; and aid law enforcement in criminal actions against counterfeiters. In March 2019 Amazon launched Project Zero to detect fake products before they are purchased.

Joining ACX

More information on becoming a member of ACX is available here.

Gibney will continue to monitor this initiative. For questions, please contact John Macaluso, Partner, Intellectual Property at jmacaluso@gibney.com.

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the INFORM Act) was signed into law by President Biden on December 29, 2022. A positive step in the fight against online counterfeiting, the Act supports consumers and brand owners by increasing the accountability of online marketplaces. It will also create greater transparency by requiring online marketplaces to disclose key information about their third-party sellers.

INFORM Act Highlights

High-volume third-party sellers are defined in the Act as vendors who have made at least 200 sales totaling at least $5,000 over a 1-year period.

Online marketplaces will now be required to:

• Collect, verify, and disclose certain information from high-volume, third-party sellers including bank account information, government-issued identification, tax identification numbers; online marketplaces must also annually certify any changes to the information
• Make certain information (e.g., sellers’ names and contact information) available to consumers through the sellers’ product listings
• Suspend further sales by individuals or businesses who fail to provide the required information, or to update it upon request
• Provide consumers with methods to report electronically and by telephone any suspicious activity on the marketplace.

What This Means for Brand Owners

As we previously reported, the INFORM Act is the latest in a series of efforts to combat online counterfeiting. As more brands increasingly transition from traditional brick and mortar to online retail, consumers will continue to see an increase in the sale of counterfeits goods online. While e-commerce platforms have started to implement policies to manage counterfeit sales, contributory liability puts the burden of responsibility on the both the counterfeit seller and the platform. These practices will begin to create incentives for online retailers to be more diligent and proactive.

What to Expect Next

The bill provides the Federal Trade Commission (FTC) and State Attorneys General with the authority to enforce these requirements. Requirements are set to take effect in late-June 2023. Prior to June, it is likely FTC will continue to provide more details on these regulations. Gibney will continue to share ongoing developments.

For questions, related to the INFORM Consumers Act, please contact your Gibney IP attorney John Macaluso at jmacaluso@gibney.com or email info@gibney.com.