American E-Commerce Companies Unlikely to Face China-Like Counterfeit Liability
Attempting to root out counterfeiters online is like playing a game of whack-a-mole, but is placing the burden on e-commerce platforms an effective—or even reasonable—way to stem the sale of fraudulent goods?
July 08, 2019 at 09:30 AM
3 minute read
Last January, China enacted a new e-commerce law that holds online platforms liable for failing to “take necessary measures” to prevent the sale of counterfeit goods.
If you're a consumer who doesn't fancy the prospect of tarnishing your sneaker collection with a pair of knock-off Nikes, then this is potentially a welcomed development. For e-commerce companies in China, who can now face steep fines for failing to take action against the sale of counterfeit materials on their platform, the issue could be a little bit more complex. And it should possibly be of some concern to their counterparts in America as well.
“I think that flavors of [the Chinese law] could easily penetrate the U.S. marketplace… I could see some things coming down the pike where they are going to hold private industry responsible,” said Jason Bernstein, a partner at Barnes & Thornburg.
However, such an outcome is by no means a given. In the past, U.S. courts have sided with commerce companies when it comes to issues of trademark infringement. One of the more notable examples may be a 2004 lawsuit filed by specialty retailer Tiffany & Co. against e-commerce giant eBay. Tiffany alleged that a large amount of counterfeit silver jewelry had been made available for purchase on eBay, arguing that the platform should be held liable for trademark infringement.
Judges with the U.S. Court of Appeals for the Second Circuit ruled in favor of eBay, noting that a service provider must have “more than a general knowledge or reason to know that its service is being used to sell counterfeit goods.” In other words, an e-commerce company would need to be made aware of a specific instance of trademark infringement in order to be held liable.
The decision has provided something of a fall-back for other e-commerce companies such as Amazon that have found themselves butting up against copyright infringement woes.
“In these various lawsuits that Amazon has had, they tend to rely on that [decision] as sort of a bellwether case,” said Eric Giler, CEO of the IP protection company Ciprun Global.
Still, he pointed to the “Fulfillment By Amazon” service as one potential point of legal vulnerability for the e-commerce giant. Third party vendors sell a product, and Amazon handles the storage, shipping and customer service.
However, he thinks that there's the potential for the U.S. to continue to favor more a “buyer beware” approach then the more hardline stance China is taking with its e-commerce platforms.
“Amazon is trying to say, 'We're just a platform.' The question is going to become, do they have any responsibility? And so far they've managed to duck it,” Giler said.
To be sure, an online business taking responsibility for the content on its platform is not totally without precedent in recent history. Bernstein compared e-commerce companies identifying and expelling counterfeiters to the ongoing efforts by some social media platforms to eradicate the presence of fake news or other unsavory materials.
Bernstein could envision similar efforts being undertaken by U.S. e-commerce companies anxious about regulators potentially imposing their own equivalent of the Chinese law. Still, a video of a beheading is easier to flag than a counterfeit Gucci handbag. “It's really hard to look at content on eBay or Amazon and say, 'That looks like a counterfeit, I think we should take it down.' That's tough,” Bernstein said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
- 1Cars Reach Record Fuel Economy but Largely Fail to Meet Biden's EPA Standard, Agency Says
- 2How Cybercriminals Exploit Law Firms’ Holiday Vulnerabilities
- 3DOJ Asks 5th Circuit to Publish Opinion Upholding Gun Ban for Felon
- 4GEO Group Sued Over 2 Wrongful Deaths
- 5Revenue Up at Homegrown Texas Firms Through Q3, Though Demand Slipped Slightly
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250