ebay Trademark Infringement
Despite ongoing prevention efforts, eBay trademark infringement continues to be a massive problem
Trademarks are words, phrases, symbols, or other designs that are placed on goods and/or packaging that identify a unique commercial source of goods and services. Trademarks can even be colors, like the famous trademarked light blue that Tiffany uses for its boxes. In this respect, trademarks serve the dual function of identifying a unique commercial source and also distinguishing that source from others selling similar products in the market.
eBay Trademark Violation
Trademark infringement on eBay ocurrs when someone uses a trademark that is idential or confusingly similar to a trademark owned by someone else without authorization. Unauthorized use of a trademark is damaging to the owner of the business, but there is also injury done to consumers. Consumers rely on trademarks as signals of quality. Infringement interferes with those signals, resulting in confusion and often in disappointment.
eBay Cease and Desist Letter
When dealing with a trademark violation on eBay, as a first step we always suggest sending a trademark cease and desist letter. If such a letter has been received by you, then having a trademark lawyer prepare a response is the next step.
These should be sent to the eBay sellers themselves initially, but at times we may also send them to eBay as well. If the infringer fails to comply, and then eBay fails to comply, eBay could be liable for contributory infringement.
The purpose of cease and desist letters is to officially demand that the infringement cease and that there be no future infringement. Another important purpose of a cease and desist letter is to let the infringer know that you take your trademark rights seriously and to deter future infringements. If further infringement do occur, the initial letter may set the stage for a claim of willful infringement which can lead to higher damage awards.
A typical trademark cease and desist letter will include the following basic elements:
- Proof of trademark and ownership — typically, the USPTO trademark registration number is provided
- Description of the infringing listing — generally, this part of the cease and desist letter will provide information on the eBay listings that are in violation of trademark rights. Generally, this includes the eBay listing numbers and URL’s or screen-shots of the listings may be included
- Statement of the infringing behavior — this part of the cease and desist letter states the basis for the infringing behavior such as knowing and fraudulent use of the owner’s trademark, use of a very similar trademark that is intended to confuse consumers, use of a trademark in the listing title with a different product being shown for sale, etc.
- Demand for cease and desist — the demand is for the listings to be removed and that the infringing seller agree to stop listing infringing merchandise in the future
- Demand for written assurance of compliance — the infringer should be asked to confirm by a certain deadline that the listing has been removed and that no future listings will be posted that are infringing
Reporting Violations to eBay
Another option is to demand that eBay remove infringing sales listings. Due to the potential exposure to a lawsuit if this is done incorrectly, we suggest that you only have a trademark attorney make this type of request. eBay provides a mechanism for this called the Verified Rights Owners Program or “VeRO” for short. See eBay’s information page here.
In simple terms, the process is this: the VeRO program requires that a trademark owner create a non-selling eBay user account. In establishing the user account, various information is provided including evidence of trademark ownership and registration, contact information and more. eBay verifies the information and, once verified, this account is enabled. The account is reserved specifically for trademark owners or their authorized representatives to submit complaints about any eBay listing that purports to infringe on the trademark rights of the VeRO account user. In theory, since the VeRO account has been verified, the processing of infringement complaints is streamlined.
Once a VeRO complaint is filed — technically called a “Notice of Claimed Infringement” — eBay conducts an investigation. The infringing sales listing will be removed if the infringement claim is sufficiently demonstrated.
If an infringement is substantial or if an infringer refuses to comply with all demands, it may be necessary to file a trademark lawsuit. When filing a lawsuit related to an eBay seller trademark infringement, there are many potential defendants that can be sued. The first defendant is, of course, the eBay seller. That is the main infringer and the main target of the lawsuit. However, many infringements may initiate from overseas. According to the US Chamber of Commerce, 86% of the world’s counterfeit goods come from China and Hong Kong. It can be difficult to identify and reach these overseas sellers for delivery of the court papers. Indeed, it is not uncommon for overseas sellers to never appear in US court.
However, through the legal doctrine of contributory trademark infringement, there are other targets that can be sued more successfully. The first alternative defendant is, of course, eBay. Even if eBay cannot be held liable for contributory infringement in the circumstances of your case, bringing eBay under the jurisdiction of the court is important so that the court may order injunctive relief such as ordering eBay to remove infringing listings and terminating the seller’s eBay account. Other potential defendants include:
- Credit card payment processors
- Non-card payment processors like Paypal
- Shipping services affiliated with the eBay trademark infringers
- Financial institutions where payment funds are held or from which expenses are paid to eBay
- Websites being used by the eBay trademark infringers
Like eBay, these potential defendants can be sued under theories of contributory infringement. There are several advantages to targeting these types of defendants. Like eBay, many of these businesses are located in the US or in countries that are signatories to international treaties and, thus, can be brought under the jurisdiction of US courts.
The main goals of litigation are to obtain injunctive relief from the court that stops the seller’s infringing activity on eBay and if possible to collect money damages. With respect to damages, victims of trademark infringement can recover several categories of monetary damages, including:
- Lost profits due to the infringement
- Disgorgement of profits obtained by the infringer
- Statutory damages
- In exceptional cases, Attorneys’ fees may be recovered
These categories of damages can be charged against the eBay seller and against any person or business that is found to be contributorily liable.
Additionally, trademark litigation plaintiffs can ask the judge to issue an injunction ordering the defendant to remove infringing eBay sales listings and to prevent the posting of such sales listings again in the future. Depending on the severity and willfulness of the infringing behavior, a court is empowered to order additional injunctive relief such as:
- Seizing the eBay infringer payment accounts like Paypal
- Freezing payment and financial accounts
- Ordering turn-over of any monies in such accounts
- Ordering payment processors and financial institutions to stop doing business with the eBay infringer
- Ordering turn-over of information held by third parties like addresses, personal information and information about other financial accounts — this is important as it might help locate an anonymous eBay seller and might identify monies which can be seized from other financial accounts owned by the eBay infringer
As can be seen, trademark owners have several legal strategies to pursue when confronted with trademark infringement by eBay sellers.
If you have an issue related to an eBay infringement, or if you have other trademark related questions, please contact us today.