You’ve worked hard to build your brand. You made a great product, obtained a substantial number of reviews, and managed to build something from scratch while following all of the Amazon policies. And then a hijacker shows up on your listing. You call Seller Support, and they inform you there’s nothing they can help you do about it. But is that the end? No, in fact there are many ways you can take control of your listings and beat the hijackers using the power of the law. This article will give you a high-level overview of how to achieve this. If you would like assistance implementing any of these policies and strategies, Schick Legal Solutions is happy to help you achieve your goals.
What is a hijacker?
It would be impossible to begin discussing an anti-hijacking strategy without first defining the problem. A hijacker is when an unauthorized third-party seller lists a product against your branded ASIN. The product being sold by the unauthorized seller will either be a counterfeit knockoff of your product, or a “grey market” version of your good. The “grey market” is when someone purchased your product through a legitimate channel, but now is selling your product on your ASIN, often undercutting. For example, maybe you ran a launch promotion with steep discounts, and the unauthorized seller purchased your goods from your Amazon listing during this promo. Unless you have implemented an authorized seller enforcement strategy such as the one outlined in this article, there is no recourse for you to prevent someone from selling your product on your ASIN.
The First Sale Doctrine: Why does this affect me as a PL seller?
You’ll hear many retail arbitrage sellers throw around the term “First Sale Doctrine” as if it is the holy grail legal doctrine. Simply put, the first sale doctrine is a rule in trademark law that allows a legitimate purchaser of a product to resell the item. However, the first sale doctrine only allows you to resell the item if there are no material differences between the item when you purchased it and when you sell it. A material difference is any substantial transformation of the product – and material differences are not always physical! If you want to stop unauthorized sellers from selling on your listing, you must create material differences between products when purchased from you and when the product is purchased from an unauthorized seller. Once you’ve successfully created a material difference, the unauthorized seller loses the ability to claim the First Sale Doctrine – and you are back in control of your ASIN.
Let’s Dive Into Material Differences, and How to Create A Few Material Differences for your Product
There are many ways to create a material difference between the products purchased from a legitimate seller (you) and an unauthorized seller. The best material differences you can implement are non-physical material differences. Part of the anti-hijacking strategy is to implement a few of these material differences between items sold by you and items sold by unauthorized sellers. This means creating policies surrounding one or more of the following areas:
- Warranty Policies
- Customer Service Policies (such as satisfaction guarantees)
- Inspection Obligations for Authorized Sellers
- and various other policies for Authorized Sellers to comply with
TIP: You need to make sure these policies are properly drafted and implemented in order for them to be effective.
Communicate These Material Differences
Now that you have decided which material differences you would like to implement, the next step is for you publish these material differences. There are several ways you can inform the general public of these policies, and include:
- Updating the product description to publicize that only products purchased from (you) Seller are eligible for the material differences you selected. For instance, if you decide to offer customers a 1 year warranty, you would update your product description to state that only items purchased from you are eligible for a non-transferable one year warranty. Then, on your website you would want to publish a copy of your warranty and make sure the warranty document explicitly describes when the warranty applies and that it only applies to products purchased from you.
How Do Trademarks Play a Role?
In the article The Most Important Step to Protecting Your Amazon Listing from Hijackers , I discussed how trademarks are the foundation for protecting your brand from hijackers. This is because without a valid federal trademark registration, you cannot implement these policies effectively. In order to move on to the enforcement phase, you must have a trademark to properly assert your rights. If you don’t yet have a trademark, please visit this page to learn more about trademark services offered by Schick Legal Solutions.
Now, How to Enforce Your Rights
When you have a listing hijacker, there are a few paths to go down to get a hijacker off your listing. One option is to send the unauthorized seller a cease and desist letter. Sending an effective C&D to the unauthorized seller will be the fastest way to get an unauthorized seller off your listing. However, if you don’t send an effective C&D, it will be merely deleted by the unauthorized seller and they’ll continue selling your product. It is very important that you use a professionally written and diplomatic C&D. Always assume your C&D will be posted on social media, or posted in public. If your C&D is not professional and diplomatic, it will not be a good reflection on your company. Additionally, C&Ds that are written by an attorney use facts, not threats, to accomplish their intended effect.
At a minimum, your C&D letter must contain the following elements:
- A strong description of the intellectual property rights you are asserting. If the unauthorized seller is stealing your images and infringing on your trademarked name, this needs to be clearly described. You must also clearly describe the basis of your intellectual property rights – and your valid federal registration is exactly what this section needs to have referenced within it.
- You must clearly describe the infringement. This means providing the unauthorized seller with the Listing Name, ASIN, and a link to the ASIN. You also should provide additional information (when available) to show if there are bad reviews attributable to the unauthorized seller.
- You must clearly state the legal basis for your letter. This means citations to court cases showing that the unauthorized seller’s actions amount to infringement. It also means clearly laying out the material differences between the products sold by you and the unauthorized seller. If you cannot clearly state the legal basis for your C&D, you should not send the C&D. Sending a baseless C&D can subject your company to tort-law claims, including “intentional interference with business relationships” or “unfair competition.”
- Provide a deadline for when the unauthorized seller must close their listing.
TIP: Most hijackers are unaware of U.S. trademark laws, or may believe that they can list their generic product against your listing because they “look similar”. If you provide a professional and diplomatic C&D informing them of their error, many times they will leave your listing.
TIP: If you cannot confidently write a C&D letter that complies with the strict requirements necessary to state your claim, you should hire an attorney. Schick Legal Solutions can help you draft a compliant and professional C&D letter, and we can send it to the infringing hijacker on your behalf.
Next Steps if the Unauthorized Seller is Still on Your Listing
If you sent a C&D yourself, and the unauthorized seller is still selling on your listing, you will need to take additional actions. One step you can take is to hire a law firm like Schick Legal Solutions. We can send a C&D on our letter informing the unauthorized seller that we represent you, that we have reviewed your case, and provide them with specific legal citations to show what can happen if they fail to withdraw their unauthorized listing. In some circumstances, we may also prepare a draft complaint and include it with the C&D. The draft complaint is an actual copy of the lawsuit we intend to file against the infringing company, but is included to encourage the unauthorized seller to take down their listing prior to filing the lawsuit against the infringing seller.
If these actions are not enough to encourage the unauthorized seller to take down their listing, you can take legal action against the hijacker. You can bring an action against the seller in the United States Federal Courts, and obtain a court order prohibiting them from selling your product. Additionally, you may be able to get a court order freezing their Amazon account funds and any other bank funds the seller has within the United States. Amazon will comply with whatever action the court issues in the court order.
Amazon Routes to Remove Hijackers
Amazon does have its own mechanisms for removing hijackers, however they can be very time consuming. If you are a member of Brand Registry, you can report the infringement to Amazon. Fortunately, you can pursue the Amazon routes at the same time you are taking your own actions against the hijacker, such as sending the hijacker a C&D. More information about infringement and how to report it to Amazon can be found at https://www.amazon.com/report/infringement