As the largest online retailer in the United States, Amazon Marketplace captures 31.3% of the online retail market, nearly twice the share of Amazon itself, which only has 16.7% of the market. Because of the potential to reach so many customers, individuals and companies are increasingly turning to the Amazon Marketplace as a source of revenue.
Here are some considerations you should keep in mind while engaging in business on the Amazon Marketplace.
Trademark owners are able to sign up for Amazon’s Brand Registry, which is a protective brand program available if a trademark is registered in one of several jurisdictions, including the United States, Canada, and the European Union. Trademarks must contain text, words, letters, or numbers to be eligible for the program. At this point, Amazon will not assist in protecting common law trademark rights, nor can this program currently be utilized to protect trademarks that consist entirely of images.
Despite these limitations, Amazon’s Brand Registry makes it much easier for trademark owners to enforce their rights on the Amazon Marketplace and to promote their products.
One benefit to Brand Registry is that brand owners can select products to participate in Amazon’s Early Review program, which encourages customers to leave authentic reviews, which in turn can increase product sales.
Once a particular brand has been registered, the owner of the brand can apply for further protections by going through Amazon’s Brand Gating program. Once a brand has officially been “gated,” only authorized sellers of that brand may list it in their Amazon stores.
This practice allows Amazon to prevent counterfeiters and unauthorized retailers from selling new products from gated brands – this does not prohibit resale of used goods on the Amazon Marketplace. It builds trust in authorized sellers and in Amazon, which has come under fire for allowing counterfeit goods to be sold through its marketplace.
To participate, once a trademark owner has successfully registered a brand with Amazon, the owner can apply for brand gating protection by providing details about its efforts to protect its trademarks and avoid counterfeiters – demonstrating that it takes brand protection seriously. Brand owners should also provide a list of ASINs (Amazon Standard Identification Numbers) of products they wish to include in the program.
In approving brands for the gating program, Amazon gives priority to owners who are currently dealing with counterfeiters. It is also preferred for a trademark to be registered in the U.S. or have a pending trademark application at the time of application.
The application process for brand owners can take a month or more and can involve a dialogue with Amazon representatives, who may request further information before approving a brand.
Amazon Brand Guidelines
Once a brand is gated, only authorized sellers can list these products for sale as new. The application for this program includes:
- Paying a non-refundable deposit ranging from $500 to $5,000,
- Submitting a letter from the manufacturer stating that you are approved to sell their items, and
- Providing three different purchase invoices of protected products from the manufacturer or distributor
Sellers of multiple brands will need to go through this process, and pay the application fee, for each brand they want to continue selling.
“Private labels,” or brand owners who sell their own products through Amazon, may participate in the brand gating program and continue their sales without paying the deposit.
Amazon Cease and Desist Letter
Although Amazon has the option for intellectual property holders to report infringement, it is recommended to send a cease and desist letter directly to the infringing party. Cease and desist letters contain:
- An explanation of the protected material, including registration information, if applicable
- Links to and/or the ASINs of the infringing material in the other party’s online store
- A request for the infringer to immediately stop all infringing activity, such as by removing the copyrighted photographs, or ceasing to use the trademark or sell the unlicensed patented product
- That further steps will be taken should the other party fail to comply within the requested time frame.
Further steps can include:
- Making a formal claim with Amazon’s investigatory team, and
- Filing an intellectual property infringement lawsuit in federal court
Some cease and desist letters will also contain demands for licensing fees or settlement money in exchange for not filing a lawsuit.
A cease and desist letter from an Amazon attorney will be taken seriously because many sellers on the Amazon Marketplace are very concerned about the threat of account suspension or an Amazon ban. Account suspension or a ban can happen overnight, and could result in the seller’s funds being frozen or seized. Because these sellers often rely on Amazon for their sole source of income, this could be particularly devastating.
As a result, intellectual property holders can generate goodwill among sellers by appealing to them directly, rather than involving Amazon at the outset of a dispute. This can avoid unintended consequences, such as negative product reviews.
Although it offers the infringer an opportunity to settle the matter amicably, sending a cease and desist letter does not prevent you from taking further action to enforce your IP rights if the other party fails to comply with your demands.
Amazon Trademark Infringement
Trademark infringement may occur on Amazon by:
- Counterfeiting, which occurs when the trademark is used on a product not created by the trademark owner.
- Using a trademark that is confusingly similar to another company
- Reproducing the trade dress of another product’s design or packaging
Additionally, sellers may not use another company’s ASIN to list their own products.
In the United States, there are times when it is allowable to use another company’s trademark. Third-party sellers may use a trademark without permission of the rights holder on Amazon if they are:
- Selling secondhand authentic goods manufactured by that brand that were legally purchased, or
- Making truthful statements that their product is compatible with another product, such as by saying that a USB cord is compatible with a particular phone model.
It is also important to note that Amazon will not investigate or respond to claims regarding violations of exclusive distribution products. While there may be breach of contract claims resulting from exclusive licensing agreements, Amazon will not assist in enforcement efforts related to this type of dispute.
Amazon Copyright Infringement
Typical examples of copyright infringement on Amazon include using text, designs, images or photographs without permission.
However, copying certain information from another product does not constitute copyright infringement, such as:
- The physical specifications of the item, such as its size or weight
- Lists of the ingredients or components of the item, such as naming the materials used in clothing,
- Generic terms describing the product, such as listing a pillow as a pillow.
Moreover, although copyright holders have control over the first sale of their materials, they cannot prevent resale of lawfully purchased items, such as textbooks.
Amazon Patent Infringement
In the Amazon Marketplace, the most common types of patent infringement involve either
- Selling a patented product without having the proper license from the rights holder or
- Design patent infringement – selling knockoffs that look like the patented invention.
A patent holder can only enforce patent rights over the claimed elements in the patent application. Aspects of an invention that are not claimed, or that are specifically disclaimed, cannot be enforced.
Additionally, under the first sale doctrine, patent holders often cannot prevent resale of a legally sold invention. Purchasers may usually sell legitimately purchased secondhand or used goods without fear of intellectual property claims from the rights holders.
Unlike copyright or trademark claims, in order to enforce patent rights in the U.S., your invention must be registered with the Patent Office in order to enforce your patent monopoly rights.
For more information, please see our Amazon patent infringement page.
Amazon Enhanced Brand Content
Amazon’s Enhanced Brand Content (EBC) is an advertising tool available to brand owners participating in its Brand Registry program and authorized sellers of those brands. Sellers of approved EBC products may only apply this tool to products in an approved brand catalogue.
Listings with EBC have text and photographs displayed in a more appealing way, giving customers the impression of looking at a product catalogue. Details, photographs, and videos are highlighted on the product’s page. The attractiveness of these images can lead to greater sales volume and greater conversion rates. This type of content conveys greater authority to brand owners, who are competing with other products and third-party resellers who might be undercutting their products.
EBC is not the only tool for sellers to increase their consumer base or improve their product listings, but it can be valuable in competitive industries. Approval for EBC may involve a back-and-forth editing process until the final content is approved.
To ensure their EBC is approved for the program, Amazon sellers must follow Amazon’s policies. They may not use intellectual property, including copyrighted images or trademarked logos, without permission of the owner, or make promotional claims in the enhanced content listings. Photographs and graphics must be sufficiently high quality, and your text content should be engaging in order to be approved for the program.
Amazon Account suspension can be devastating for small or medium businesses that rely on Amazon to make a living.
Account suspension can occur for three general reasons:
- Violation of Amazon’s terms and conditions or Marketplace policies,
- Poor seller performance, or
- Selling restricted items.
If your account has been suspended, the first step is to figure out why. If your account was suspended due to a policy violation, you should research all policies to determine which rule Amazon believes was broken and formulate an appeal. We recommend that you utilize an Amazon lawyer if you are facing an Amazon ban.
If you are cited for “poor customer service,” you should determine what complaints were raised by customers. These could range from minor matters, such as peeling labels or clothing that runs small or large. Similarly, if your store sells restricted products, you will need to remove these items from your store and ensure Amazon that you will not sell them again through the Marketplace. Account suspension can last months, which can make it difficult for businesses to survive if the Marketplace represents their sole source of income.
You should be cautious with your appeal – Amazon will only let you submit an appeal once, and if it is denied, you may have to escalate the matter in order to have your account reinstated. You must ensure that your appeal covers all relevant information in a clear and professional manner. Despite your frustration with having your account suspended, angry language will not get your account up and running again. The easier your appeal is to read, the easier it will be for Amazon’s customer service representatives to give you what you want.
In order to avoid account suspension, Amazon sellers are encouraged to review all policies periodically and respond to their customer concerns quickly. Concerns may be raised directly by the consumer with the seller. They can be found in product reviews – even good reviews could result in suspension if the customer listed any negative comments.
This sort of regular audit of your account, consumer feedback, and Amazon’s policies will help you resolve potential issues before it is flagged for review by Amazon’s automated systems.
Sellers should also be aware of scammers, hackers, and unscrupulous competitors who may engage in acts of sabotage, making it appear that others are violating Amazon Marketplace policies, in order to improve their own product listings.
If you are interested in the assistance of an Amazon Lawyer, please contact us.