Trademark Infringement – E-Commerce Giants Sued For Online Selling Of Counterfeit Goods
Trademark infringement claims are on the rise with recent disputes related to the sale of counterfeit products on platforms such as eBay and Alibaba. In our previous blog post, Online Selling And Your Obligations To The Consumer, we highlighted the basic issues in relation to online selling regulations. At the heart of it, online sellers need to make sure they are in conformity with the law but, according to a recent article by Lawyers and Settlements, it seems that eBay and PayPal, as the online payment system, have failed to comply with these requirements.
Trademark Infringement Cases
A lawsuit has been filed against eBay and PayPal for trademark infringement following the sale of fake products on eBay’s platform. The filing itself notes that counterfeiting is a big business, costing retailers in the industry between $200 and $250 billion dollars each year and in addition, dilutes the trademarks of the protected products.
eBay’s Liabilities
The suit was filed by Wimo Labs – a company with many registered trademarks mainly for iPhone and Apple watch cases and alleges that as many as 2,000 eBay sellers (who are also named as defendants in the lawsuit) are using their trademarks to sell counterfeit products and deceive consumers. The way eBay and PayPal are involved in the infringing activities is that they have knowingly and deliberately facilitated and profited from the sale of the fake products. What is more, eBay is alleged to have engaged in soliciting eBay buyers to purchase fake products.
According to Deborah Klar, co-counsel with R. Rex Parris Law Firm on the claim, the claimant company has sent more than 5,000 notices of claimed trademark infringement to eBay since 2013, requesting the e-commerce giant to remove the fake products. Additionally, rather than responding to a third-party from The Counterfeit Report, eBay instead opted to change commentary on the report’s sites and blocked The Counterfeit Report’s corporate accounts.
Klar also commented that “the sale of fake products causes consumer confusion, adversely affects their brand and also means our client has lost sales.” She also adds that “as a result of the sale of these fake products on eBay, our client has suffered substantial damage.” The problem with fake products is that they are widespread on eBay and have a tremendous impact on the sellers invested in protecting their brands.
Paypal’s Involvement
Regarding PayPal as a defendant, according to Wimo’s counsel, the former eBay unit is the link between eBay buyers and counterfeit sellers. As such, the company is actually in a position to stop eBay’s practices by simply removing the ability for those sellers to get paid.
Alibaba And Their Approach
On a separate note, Chinese e-commerce giant, Alibaba, has recently been criticized for being too soft towards counterfeit sellers. As a result, Alibaba has launched a new English version of its counterfeit reporting system called “TaoProtect”. Although AliBaba has another platform called “AliProtect” which covers its other websites, TaoProtect has been developed exclusively for dealing with a range of Intellectual Property (IP) complaints such as copyright, patent and trademark infringement and unfair use of those IP rights. This reveals the scale of the problem as well as the serious steps conglomerates such as Alibaba take to ensure IP rights are effectively protected.
The launch of the English version of TaoProtect, UK and other Western European companies would be able to access easily the counterfeit reporting system. Alibaba’s US-based senior IP protection manager commented that “because the success and integrity of our marketplaces depend on consumer trust, we have comprehensive policies and practices in place to fight IP infringement.”
The improvement in their system comes partly as a result of the lawsuit filed against Alibaba by companies like Gucci and Yves St. Laurent. The suit was filed by Kering (the fashion house which owns these brands) last May and a US District Judge in Manhattan granted to some of them an immediate order barring sales of goods on Alibaba.
Lexology commented that, generally, for brand owners having secured trademark registrations in China, the US and wherever else your business operates is the safest route to tackle online infringement.
This article aims to be an informative piece, providing you with the latest developments in the IP and commercial world. However, it is likely that your business faces similar issues. Therefore, if you need specific help to your situation, we can help. We have experience of dealing with different platforms online related to Trademark Infringement.
