Intellectual Property and Brand Protection: Online Enforcement in the Digital Age
A client calls. The question is asked: “How do I stop a nameless someone from selling products using my trademark?” Or “how do I stop another nameless someone from infringing on my exclusive patent rights?” The traditional answer was – “take them to court” (if you can even get jurisdiction over them). Investigate (for months) the source of the post. Navigate (for years) in the U.S. and international courts. Then, hope against hope that the costs of enforcement will balance against the legal fees and expenses. And with ever-increasing commerce via the internet, the need for efficient and cost-effective IP and brand enforcement is only more pronounced.
The outcry from IP rights’ holders has spurred internet marketplaces to experiment and implement with new tools for swift and efficient takedowns of offers to sell infringing products. For example, Amazon, by far the largest online retailer, implemented several procedures for IP protection allowing rights’ holders to register brands and report infringement, and even including a Neutral Patent Evaluation Program. This article gives an eagle’s-eye view of some of these procedures and the benefits they hold for IP and brand protection.
Traditionally, patent, trademark, and copyright holders have used the courts as the sole means for redressing infringement. With fees and costs for even a small patent litigation reaching the million-dollar mark and taking years to complete, simply going to court is not a practical remedy for most businesses. While some courts provide expedited relief for egregious trademark and copyright infringement, the costs of these remedies when balanced against the likelihood of success leaves the rights’ holder questioning the value of such enforcement.
Online retailers accounted for nearly $900 billion in sales in 2021 according to the U.S. Department of Commerce, representing over 14% growth year over year. With that growth, infringement of patents, trademarks, and copyrights has also grown. For that reason, we have looked at the procedures put in place by the leading online retailers like Amazon, eBay, Rakuten, Samsung, AliBaba, and Apple to explore how they are addressing the infringement complaints from IP rights holders.
All the major retailers have some procedure for initiating a takedown request but, unfortunately, not all are easy, often requiring a court order to implement. As an example, and alphabetically first, AliBaba has an AliBaba Group IP Protection (“IPP”) Handbook that offers rights owners paths to takedown requests. A rights’ holder submits a complaint directed to the specific platform on which the asserted infringement is occurring. The complaint may cite any IP rights, including patent, trademark, and copyright. After that, the alleged infringer can submit a counter-notification, e.g., challenging the rights of the IP holder such as patent invalidity or absence of trademark protection. If there is a counter-notification, the complainant must respond, or the original complaint is deemed withdrawn. In certain instances, a rights holder will even get priority in the analysis by AliBaba in its “good-faith” takedown mechanism. All of this sounds great but, IP rights’ holders in the good faith program must demonstrate that they have filed more than 100 complaints in the preceding 3 months and were successful in at least 90% of the cases. AliBaba also polices the market on its own with advanced (unknown) algorithms.
Amazon has the most developed set of programs. Amazon has an extrajudicial Neutral Evaluation Program to resolve patent infringement claims. The process is limited to a single claim of a single, unexpired patent. The claim may be made against up to four third parties (not Amazon). Unfortunately, the rights’ holder does not get immediate access to the Neutral Evaluation Program. Rather, Amazon’s legal department must invite participation in the program. Once started, the rights’ holder must specify certain information, and Amazon, after receipt, will notify the accused sellers. Within three weeks of the notification, the accused sellers must respond, or Amazon will remove the alleged infringing product. If the accused seller responds, Amazon will select a neutral third-party evaluator. The costs for the program are $4,000 for the patent owner and $4,000 for the seller, with the winning party getting their money back. Within two weeks, the evaluator will render a non-appealable decision.
Amazon also has the Amazon Brand Registry. According to Amazon, the program allows brand owners to better protect, control, and monitor their brand on the platform. To be eligible, Amazon requires that the trademark owner have a pending or registered and active text- or image-based trademark in one of many specified countries (including the U.S.) The trademark must appear on the rights’ owner’s product or packaging. The brand must be enrolled in the Amazon Brand Registry by the trademark owner, and that owner may designate an agent as an additional user. Once enrolled, a rights’ owner can more readily make infringement complaints and seek takedowns using Amazon reporting tools.
EBay Inc. also has a program that allows IP rights holders to report eBay listing that may infringe on their rights. The Verified Rights Owner (VeRO) Program provides for the submission of a complaint dubbed a Notice of Claimed Infringement via email to eBay for trademark, copyright, and other patent or design rights infringement. The program is particularly geared to trademarks, requiring only the trademark registration as a basis of proof for any takedown action. For patents, the program requires a court order and the patent.
Each of these mechanisms provide new protections for IP rights’ holders. Anecdotal experience confirms the successes that rights’ owners have had in enforcing IP rights for each of these programs. But, given that some, like the Amazon Neutral Evaluation Program, require invitations to participate, the overall utility in the short run is subject to question. But each method is far less expensive than legal action in the courts and far more expeditious.
Key to IP protection for online enforcement is constant vigilance. Whether through services or through designated company/law firm representatives, monitoring online retailers for infringing activity is a must. Evidence of continuing infringement will be useful in initiating complaints for these extrajudicial procedures from the online retailers. And, should the procedures not work in a particular case, the IP rights’ holder will be set for court action.
About the Author: Philip L. Hirschhorn is a partner at Panitch Schwarze. He is an experienced trial lawyer specializing in patent litigation and other intellectual property proceedings, including post-grant proceedings before the Patent Trial and Appeals Board of the USPTO.
Reprinted with permission from the May 24, 2022 issue of The Legal Intelligencer © 2022 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Read the article on law.com here: https://www.law.com/thelegalintelligencer/2022/05/24/ip-and-brand-protection-online-enforcement-in-the-digital-age/