Steve Suddell, inventor of the “Neck Hammock,” raised just over $200k on Kickstarter. He was on cloud nine – for about a minute. A week later, he began receiving angry emails from backers stating that his product was being sold for 50% less on other websites. After some investigation, he found websites featuring all of his images, videos, and content, advertising the Neck Hammock at half the price. He was concerned that Kickstarter would take his project down (as was the case with another product campaign, C-Rest), because the listings violated their policy of “not being able to sell the product anywhere else as long as the campaign is active.” The problem was, his product was not being sold elsewhere; rather, it had been copied and counterfeited. This has become very common with Kickstarter projects, and while Kickstarter is aware of the problem, it has not taken any steps to help the creators/inventors on its platform.

Yekutiel Sherman also knows all too well what it’s like to become a victim of China’s lightning-speed copycats. After he launched his Kickstarter campaign (but prior to manufacturing his first unit) of the “Stikbox,” a smartphone case that turns into a selfie stick, a cheap knockoff version of the product was being sold on AliExpress at half the price.

Unfortunately, these experiences are not uncommon. Crowdfunding platforms, Amazon and sites like Taobao have become feeders for knock-off artists to source other people’s new gadgets. These companies are deep-pocketed, and can get a product manufactured and sold well before the inventor’s campaign is fully funded. This just goes to show that your brilliant idea – even if it is patented or trademarked – could be on sale through Chinese distributors or other bootleggers even before you’ve gotten your project funded.

If you are an inventor who is considering using a crowdfunding site to fund your new idea, be diligent in protecting your proprietary information. There are strategies you can employ that describe the features, advantages, benefits and objectives of your invention without disclosing key details that would enable someone else to rip you off. Consider scheduling a consultation with an experienced intellectual property attorney who can provide you with some affordable strategies to protect your product, such as working with U.S. Customs and Border Control.

The copyright is so overlooked that even product attorneys forget what a powerful member of the IP protection league it is. For example, patent rights enforcement tends to be technical and complex, often requiring long, costly legal battles with Tony Stark caliber experts to prove infringement. However, copyrights, which protect property such as images, illustrations, infomercials, and product packaging, are pretty easy to eyeball, even for an untrained juror.

Copyright is also the most affordable IP protection to secure. Moreover, copyright infringement triggers statutory damage awards that can soar to up to $30,000 per occurrence; plus, recovery of attorney’s fees. As such, trial attorneys are more willing to take on a (properly registered) copyright infringement case on a contingency basis. Of course, statutory damages are merely a fallback, with many product owners seeking actual damages (i.e., lost profits), which is an entirely different hulk of a task.

Additionally, the copyright is the only member of the IP protection league that successfully combats counterfeit sales on platforms such as Amazon; trademark registration alone will not suffice to remove counterfeits on Amazon. To be sure, the counterfeit seller merely has to allege that it is selling a legitimate product, and then there is no infringement thanks to the First Sale Doctrine (you bought it, you own it, you can resell it and call it what it is). In some instances, the infringer changes the name of the product, which effectively shields it from a trademark infringement claim altogether. However, the right to resell a product does not give rise to the right to display copyrighted images for the purpose of that sale. This is another reason why the copyright is so powerful.

While patents and trademarks are formidable tools for many reasons other than defending against knock-offs and counterfeits, with the copyright being such a low-cost titan in the IP universe, it’s a wonder more businesses do not utilize its armor. For maximum protection, copyrights need to be registered in a flash, so be sure to summon an intellectual property attorney prior to your product rollout.

Those of us in the consumer products industry are either directly or indirectly aware of the problems Amazon poses to brand integrity and consumer protection. It is impossible to prevent counterfeit products from being sold on the platform, and, perhaps even more frustrating, Amazon is making it exceedingly difficult to remove those counterfeit listings and stop repeat offenders. In many cases, before Amazon will remove a listing, the product owner is required to purchase the knockoff and prove to Amazon, via photos, that the goods are fake. And, of course, Amazon takes its percentage on that sale. Outrageous, right?

Not only do counterfeit goods sold on Amazon harm the product owner in the way of lost sales, but brand integrity suffers as well. Because the infringer can get away with using product copyrights and trademarks to sell counterfeit goods, the consumer believes she is ordering the real deal. In turn, when the consumer receives the product and it breaks, or does not perform as advertised, that consumer leaves a poor review, which the product owner then cannot remove from Amazon. It’s a nasty cycle that, as many product owners can attest to, Amazon seems to have no interest in remedying. And honestly, why would it? The courts have held, including most recently in Milo & Gabby, that Amazon is not liable for the infringement of third-party sellers on its platform. What’s the possible solution for product owners (and ultimately, consumers)? Enter, Donald Trump.

As he does with so many, the Donald has been spatting with Amazon owner Jeff Bezos via Twitter and on the campaign trail. Trump claims that Bezos is concerned that if he wins the election, Trump will go after Amazon for its “huge antitrust problem.” According to Trump, it is for this reason that Bezos, who also owns the Washington Post, has 20 staffers digging for dirt on the presidential candidate. While many others are also doing their best to prevent a Trump presidency for various reasons, could Trump be right about Bezos’ motivation?

Antitrust laws promote competition and protect consumers from predatory business practices. Seth Bloom, former general counsel of the U.S. Senate’s Antitrust subcommittee, recently stated that because there needs to be some illegal behavior and not just a large market share, “The test … is whether the conduct of Amazon is benefiting or harming consumers.” He went on to say that he hasn’t heard anything said about how Amazon is harming consumers. Well, apparently Bloom has not ordered a counterfeit food chopper that arrives broken, or counterfeit skin care products that cause severe allergic reactions. If he had, he would know that consumers are being harmed and that Amazon’s brand protection department is well aware of it.

These practices could spell trouble for Amazon should the Federal Trade Commission or Department of Justice start poking around. So, perhaps being called out by Trump — and (hopefully) other high profile individuals/companies — will put some pressure on Amazon to come to the table and address some of these issues in order to … err … make Amazon great again.

Jessica M. Pfau is a partner at Phillips & Pfau LLP. She can be reached via e-mail at 

Jessica@DigitalLawGroup.com

When dealing with infringement on Amazon and eBay, the process usually goes something like this: you search for your product on the platform and find an unauthorized listing (or oftentimes, several) that displays your trademark and images from your product website. You (or your attorney) fill out the infringement report provided by the platform, and typically within 48 hours you receive the notice that a reported listing has been removed.

Unfortunately, in many instances, the listing goes right back up because the seller is not prohibited from relisting a product after being reported and removed for infringement.  Thus, takedowns become a frustrating game of whack-a-mole until it ultimately becomes apparent that the infringer is not giving up.

In these situations, copyrights become the product owner’s greatest intellectual property asset.  If the infringer is using images, videos or text from the product website or infomercial, you can request a subpoena from the clerk of any United States district court for the identification of the infringer, without filing a civil action.  Although this may seem like a tedious process, it can be much more efficient than continuously reporting the same infringers.

Digital Law Group has takedown experience on Amazon, eBay and Alibaba, and has issued subpoenas for seller information.

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