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Counterfeits Keep on Ticking After Taking a Licking on Amazon

by: The Knowledge Group

July 24, 2018

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Small vendors, authors, and inventors have found a convenient space to market books and other items on Amazon. That’s great. But it’s also easy for counterfeiters to sell their fake wares there—denting the reputations of small businesses and their products, and compromising the trust of online shoppers.

Who would buy counterfeit mouthguards or teeth whiteners if they knew?

In fact, as a federal investigation showed:

  • fake smartphone adapters come with the risk of lethal electrocution;
  • knock-off coffee mugs may contain dangerous levels of lead; and
  • faux brand-name makeup may include urine, arsenic, or rat droppings.

And the list goes on.

Hiding in Plain Sight

Amazon prohibits the sales of fakes. It uses algorithms to sniff out dubious branding. Nevertheless, counterfeiters manage to list their cheap knock-offs right on the pages offered by the real sellers.

Amazon has chased bad actors down and kicked them off in droves, but like hackers, they reappear and exploit another conduit. Some have no intention of shipping what they advertise. Others ship fakes from China or Hong Kong, in the long tradition of the knockoff luxury watch.

Amazon boasts that more than half of its online sales units come from indy vendors—a win for Amazon too because it need not deal with storing and moving these items, and the corporation takes 15% per sale to boot. These same independent sellers are forced to press Amazon to clean up piles of negative reviews from irate customers who wind up disparaging the original brand while the fraudsters slip off under the radar.

Legal Responses? Wait…

The sheer numbers of disparaged vendors, disgruntled customers, and safety risks make the whole scenario look like a class action waiting to happen. Not to mention all the ignored trademarks and other IP rights in the original items.

Republican Senator Orrin Hatch put a Senate hearing together to confront the fake sales of everything from bacteria-laden contact lenses to explosive batteries.

Meanwhile, seizures of counterfeits at U.S. borders keep rising and now represent well over a billion dollars annually in ripped-off profits.

We are covering the latest guidelines and trends when it comes to calculating intellectual property damages on our July 25 podcast. These are available both live and on-demand as well as being eligible for continuing legal education (CLE) credit.  Full information can be found by clicking here.

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