Intellectual Property

3 Takeaways From The Amazon Brand Protection Report

Amazon has carved out for itself a unique position as the leading online marketplace. With that success comes a great responsibility to help snuff out sales of counterfeit goods.

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Just as I sat down to write this, a notice popped up on my laptop that my Amazon package had been delivered. Fitting, since what follows is all about Amazon — and in particular, the important role the company plays in helping to deter the sale of counterfeit goods worldwide. For just one high-profile example of those efforts, I again refer readers to my column on Amazon’s joining as one-half of an anti-counterfeit tag team with designer brand Ferragamo. But of course Amazon’s efforts against the sale of counterfeit, as well as IP-infringing goods run much broader and deeper. And thanks to the widely reported release of Amazon’s Brand Protection Report on May 9, 2021, we can now take an informed look at the scale and effectiveness of Amazon’s accomplishments in both the anti-counterfeiting realm and with IP protection for brands and IP owners generally.

Before we get into three takeaways from the report itself, a minute on why being able to sell on Amazon is so important to counterfeiters. The simple answer, of course, is Amazon’s unrivaled grip on customer attention. But that is only one piece of the puzzle. Because all the customer attention in the world does a business little good, whether that business is hawking legit or counterfeit wares, if it remains difficult to get products into a customer’s hands. But as we all know, one of Amazon’s core strengths is shrinking the world to the point where it is reasonable to expect, within a few days, the delivery of goods thousands of miles from where those goods originate or are warehoused. As a result, it is no surprise that counterfeiters are magnetically drawn to try to sell on Amazon. As the report details, however, Amazon is doing quite a lot to repel existing and prospective criminal activity, propelled by an investment of over $700 million toward those efforts.

In the report, Amazon lays out a three-legged approach toward anti-counterfeiting, helpfully guiding us to our three takeaways from reading the report. First, the report discusses what Amazon calls its “Robust Proactive Controls” — or the steps it takes to keep counterfeit products out of what it prosaically calls the “store.” As one would imagine, that effort integrates both technological and human intervention, starting from when a prospective seller tries to set up an online storefront on Amazon. As an example, Amazon’s enhanced verification process for new sellers is credited with stopping a whopping six million attempts to create seller accounts by “bad actors.” Likewise, video verification and display of seller addresses is utilized to help deter would-be counterfeiters, who ostensibly don’t want the location of their fake-Hermes and Chanel-storing lairs made public.

In addition to trying to stop the creation of nefarious seller accounts, Amazon layers in ongoing monitoring of existing seller accounts to look out for suspicious activity that could be suggestive of counterfeit-selling criminality. Reading the report, one is reminded of the efforts credit card companies undertake to make sure that cards are only issued to creditworthy individuals, while continuing to monitor for fraudulent post-issuance activity. In one of the report’s headline statistics, Amazon proudly reports that its varied efforts have led to creating a marketplace where less than “.01% of all products sold on Amazon received a counterfeit complaint from customers.”

Second, the report touts Amazon’s “Powerful Tools for Brands” to help protect themselves from counterfeiters. While offerings like Amazon’s Brand Registry and Project Zero are well-known in the IP world, I was pleased to see that the report dedicated space to innovations like Transparency, a tool to confirm the authenticity of purchased products, that I was previously unaware of. I was also heartened by Amazon’s inclusion of information about its handling of utility patent disputes involving third-party sellers, a topic I have addressed in the past. Highlighting Amazon’s key role for patent owners looking for a speedy resolution of their concerns, the report mentions an astoundingly quick average time to resolution for utility patent complaints of seven weeks. What a boon for patent owners confronted with infringing sales on Amazon. And continuing in the vein of helping empower IP owners with legal tools to stop infringement, it was amazing to see that Amazon’s IP Accelerator — a referral service for small to midsize business to a curated set of IP law firms — helped connect more than 7,000 prospective IP owners in 2020. Taken together, Amazon’s contributions to a welcome increase in IP awareness are laudable.

Third, the report highlights how Amazon works toward “Holding Counterfeiters Accountable.” Reiterating the challenge that Amazon faces to ensure that only authentic products are offered to Amazon customers — in the face of counterfeiters “working to improve the sophistication of their abuse” — the report describes how Amazon uses both internal and external resources to ensure justice is served against bad actors. Those efforts include collaborating with companies large and small, from Ferragamo and Yeti to smaller brands like Dutch Blitz, in filing anti-counterfeiting lawsuits, as well as adopting a worldwide policy of reporting counterfeit activity to relevant law enforcement agencies. Add in efforts like working to stop the flow of counterfeit goods to U.S. shores — through collaboration with the IPR Center in monitoring ports of entry for items like counterfeit Super Bowl merchandise — and it is clear that Amazon’s partnerships with law enforcement and related agencies promise to continue to bear fruit in the fight against fake goods.

Ultimately, Amazon has carved out for itself a unique position as the leading online marketplace. With that success comes a great responsibility to help snuff out sales of counterfeit goods, for the benefit of a wide variety of important Amazon stakeholders. From legitimate Amazon third-party sellers, to brand owners, to Amazon investors, to customers — everyone has an interest in the success of Amazon’s brand-protection efforts. With the release of its Brand Protection Report, Amazon has made an important contribution to increasing awareness of its important efforts in this regard. We can only hope that Amazon’s 2020 successes hindering COVID-fueled efforts to increase counterfeit sales by the bad guys continue through 2021 and beyond.

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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