“It began as a traditional option to defend intellectual-property rights,” says Ning Zhang, an legal professional within the US who has represented Solar and different sellers in comparable conditions. However through the years, Zhang says, she has witnessed the IP violation claims getting more and more baseless. “It doesn’t matter if [the claims] have any deserves—you possibly can simply sue [the sellers], freeze their accounts, and drive them to barter with you to take their a reimbursement.”
Staking trademark violation claims
Chinese language merchandise have lengthy been related to counterfeiting and intellectual-property theft. This isn’t with out trigger. In 2022, 60% of the counterfeit items seized at US borders, by worth, got here from China.
However IP rights and counterfeiting have change into a lot blurrier ideas within the age of third-party e-commerce markets. Historically, counterfeit items revenue off established model names by using on their identify recognition. Not all logos are recognizable names, although; some simply appear like descriptive phrases.
In November 2020, PopSockets, a US firm that designs telephone circumstances and different equipment, utilized to trademark the time period “airbag” beneath the class of “hand grips, stands, mounts, and circumstances tailored for handheld digital gadgets.” The corporate has merchandise that use air-filled elements, however examples of the phrase’s use to explain comparable options additionally existed earlier than the trademark. The applying was accepted a yr later, on November 9, 2021.
Solar Qunming says she had used the phrase “airbag” earlier than to explain different telephone circumstances she offered with out inflicting any hassle. And she or he admits she didn’t test whether or not it was trademarked this time. “If it’s an unusual phrase, we are going to look it up within the trademark database to see whether or not it’s registered. However when it comes to ‘airbag,’ the explanation why I didn’t look it up was as a result of I believed it was only a descriptive time period. You see it in all places,” she says.
The plaintiff, nonetheless, claimed within the lawsuit that defendants like Solar “deceive unknowing shoppers by utilizing the POPSOCKETS Logos with out authorization … to draw numerous search engines like google and yahoo crawling the Web in search of web sites related to shopper searches for PopSockets Merchandise.” PopSockets declined to remark for this story.
These types of lawsuits first appeared on the radar of Eric Goldman, a legislation professor at Santa Clara College Faculty of Legislation and co-director of the Excessive Tech Legislation Institute, in 2021. A German firm that owns and licenses the phrase “emoji,” he found, had sued an estimated whole of greater than 10,000 e-commerce sellers from 2020 to 2021. A number of the events sued had merely used the phrase to explain a product that really included the picture of an emoji. However the courtroom choices are working in its favor. In one of many dozens of circumstances, the decide discovered the copyright declare too expansive however nonetheless awarded the proprietor $25,000 in statutory damages from every of the 231 sellers being sued.
Goldman, in a paper revealed in March, calls one of these lawsuit a “Schedule A Defendants Scheme” (or “SAD Scheme”). When these circumstances are filed, the names of defendants are put right into a doc, Schedule A, that’s typically instantly made confidential on the request of the plaintiff. Because of this, the circumstances can contain a whole bunch of sellers on the identical time, but the sellers don’t know who else is being sued, they usually often don’t know they’re being sued themselves till the courtroom orders Amazon to freeze their accounts.
