e-commerce enforcement

Presented by Tim Nichols

© 2016 Workman Nydegger

What is e-commerce?

• the buying and selling of goods and services, or the transmitting of funds and data, over an electronic network, primarily the Internet

• Amazon.com• eBay.com• Etsy.com• Shopify.com• Bigcommerce.com• Bonanza.com• GoAntiques.com• CafePress.com• Zibbet.com• Alibaba.com

Online marketplaces

• Key weapon that IP owners can use to combat online IP infringement

• Basic elements to “Report and Delist” are:– Notifying the online marketplace of infringing

listings or items on their sites; and– Requesting the online marketplace’s voluntary

delisting of the items• For the most part, online marketplaces honor

“report and delist” requests (for good and bad)

• Virtually every online has some form of IP policy that states “we take intellectual property rights very seriously. We comply with intellectual property laws and industry best practices in order to maintain the integrity of our . . . marketplace”

• However . . . .

“Report and Delist”

• The Digital Millennium Copyright Act (DMCA) includes a safe harbor that exempts Internet service providers and other intermediaries from direct and indirect liability for copyright infringement if they meet certain conditions

• Some of those conditions include:– No actual or constructive knowledge of infringing behavior– No financial benefit directly attributable to the infringing

activity, in a case in which the service provider has the right and ability to control such activity

– When given a proper notice of infringing material, the online marketplace “responds expeditiously to remove, or disable access to, the material that is claimed to be infringing”

17 U.S.C. 512(c)(1)

Copyright

• DMCA Takedown – This allows copyright owners to send “DMCA takedowns” to

online marketplaces in order to facilitate quick removal of copyrighted work from online websites

– What does a DMCA takedown look like?• Signature of copyright owner or authorized agent• Identification of work being infringed• Identification of infringing material that you want taken down and

enough information to allow the online marketplace to locate the material

• Ways for the online marketplace to contact you (address, email, phone)• A statement that you have “a good faith belief that use of the material

in a manner complained of is not authorized by the copyright owner, its agent, or the law”

• A statement that “the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.”

17 USC 512(c)(3)

Copyright

• Patent infringement can occur by making, using, importing, offering to sell, or selling a patented product. See 35 USC 271

• Milo & Gabby v. Amazon.com, 144 F.Supp.3d 1251 (W.D.Wash 2015)– Milo & Gabby is a small, family business that has design

patents protecting its animal shaped pillows– A Chinese manufacturer made copies of the pillows and

created sale listings on Amazon.com– When Milo & Gabby became aware of the listings and

informed Amazon, Amazon investigated the accusations and removed the products from its online store

Patents

Milo & Gabby’s Claim• Milo & Gabby sued Amazon for “offering to sell” the allegedly

infringing products on Amazon.com • Milo & Gabby alleged that:

• the infringing goods were listed on Amazon’s online store• Buyers made payments directly to Amazon, and• Amazon advertised the products, issued invoices, and shipped

the goods

Patents

The Decision• The Court found that Amazon did not communicate or set the price,

description, or quantity of the goods, and ultimately held that:“Amazon did not offer to sell the allegedly infringing products because there was no manifestation of the willingness of Amazon to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it”

• The Court admitted it was troubled by its decision and the impact it may have (e.g., Amazon can allow sellers to list and sell almost anything on its platform and still avoid patent infringement liability)

• The Court observed this as an example “where law lags behind technology” and suggested that Congress should address the issue

Patents

Patents

• Tiffany Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010)– Tiffany sells high end jewelry in retail stores, catalogues, and online

but not through third-party online retailers– eBay sells goods online by connecting third-party sellers and

buyers and without ever taking possession of the goods– Tiffany reported counterfeit listings to eBay– eBay promptly removed all listings that Tiffany reported and took

affirmative steps to identify and remove counterfeit Tiffany goods

Trademarks

Tiffany’s Claim• Tiffany accused eBay of both direct and contributory trademark

infringement

The Decision• Direct trademark infringement? No

– The Court held that eBay was not liable for direct trademark infringement because eBay’s use of Tiffany’s mark was protected by the doctrine of nominative fair use

• Contributory trademark infringement? No– The Court held that a service provider is not liable for contributory

trademark infringement unless the service provider (1) has contemporary knowledge about particular items on its site that infringe or will infringe in the future and (2) subsequently refuses to act on that knowledge

– For contributory trademark infringement liability to lie, the service provider must have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods

Trademarks

– IP owners are responsible to police and enforce their own IP on online marketplaces

– “Report and Delist” can be a powerful tool in an IP enforcement strategy

– Compared to the normal legal process of getting an injunction, which takes a long time and an enormous amount of resources, “Report and Delist” is fast and simple

– Using “Report and Delist” can be frustrating– Under the current laws, online marketplaces are more likely to remove

material that infringes copyrights and trademarks than material that infringes patents

Key points to consider