Given its extensive media coverage, few of you will have let the third annual Amazon Prime Day pass you by unnoticed. However, Amazon’s success is down to more than just flash sales and impressive marketing campaigns. From its early days as an online bookstore, Amazon’s quick reaction to market trends and has allowed it to grow at a rapid rate into a global e-commerce leader, with an impressive service offering including Amazon Prime, Prime Now, Amazon Fresh and Fulfilled by Amazon.
Through its pro-competition and consumer-friendly business model, Amazon has successfully prioritised accessibility and scale of offering to win over both customers and sellers alike. However, following its recent expansion into new markets such as China, there has been a noticeable influx in the number of illicit goods available via the platform. Aided by universal product listing pages (“PLPs”) and product-specific Amazon Standard Identification Number codes (“ASINs”), products can be listed quickly, cheaply and with minimal checks alongside their genuine counterparts, making it the perfect breeding ground for counterfeits.
Whilst Amazon continues to introduce examination procedures and reporting policies in an effort to curb the tide of counterfeit sales, the problem is difficult to police and has resulted in some high profile and hard-line responses by brand owners. In particular, Birkenstock announced last year that it intended to withdraw and prohibit the sale of its products on Amazon, effective 1 January 2017.
Brand owners are right to be concerned here, as these products can seriously damage a brand’s reputation due to quality concerns, negative reviews and safety issues. However, not all brands have opted to cut-and-run. Choosing instead to work alongside Amazon, Nike announced earlier this month its decision to partner with Amazon and begin selling its products directly in order to control its online “brand presentation”.
Time to fight back
Spotting potential counterfeit operations early is key to limiting the exposure of such goods to the market. Cut prices, unusual trading names and minimal seller information are all helpful indicators, but well-documented trap purchases are essential for the purposes of evidencing any infringement complaint.
In an attempt to combat online IP infringement, e-commerce sites are now required to provide notice-and-takedown reporting functions. Once on notice, Amazon is obliged to take steps to investigate complaints, and delete listings and block seller accounts as appropriate. It is therefore vital to ensure such notices provide sufficient evidence to establish ownership of the IP rights relied upon and that the seller’s actions amount to infringement of those rights, in order to avoid further delays in the process.
Register for effect
So what can be done to combat these issues head on? Well, in an effort to increase the removal of counterfeits from its ecosystem, earlier this year Amazon launched its new service offering to brands, Brand Registry 2.0.
By filing their registered trade marks with this programme, brand owners are able to take advantage of its associated offerings. On the brand presentation front, owners can take further control over their PLPs and the associated “Buy Box”, whilst on the brand protection front, the advance verification and registration of a brand’s IP rights ensures a simplified and expedited enforcement process when reporting infringers.
Could “gating” be the future?
Recently, Amazon US appear to have been trialling a new “brand gating” programme aimed at encouraging brand and consumer confidence. In return for a fee, brand owners can apply to control which sellers are entitled to list products against their PLPs and ASIN codes. With access subject to the pre-authorisation and the payment of a fee, brand owners are essentially left to police their own products.
Whilst this programme offers clear advantages in thwarting counterfeit listings, it does raise various competition issues. In particular, whether these authorisation hurdles might inadvertently bully smaller (genuine) resellers out of the market, and whether certain brand owners might use the authorisation process to control retail prices, etc.
The reality of course is that for as long as brands remain profitable and popular with consumers, counterfeits will remain an issue. Whilst Amazon and its competitors continue to take steps in an attempt to steady and stop the flow of such goods, it remains the responsibility of all brand owners to proactively protect their position, with the concepts below applicable to all:
- Product control - take steps using Amazon’s Brand Registry to control your PLPs and take ownership of the “Buy Box”
- Registering rights - maximise the enforcement potential of your brand by registering trade marks with the UKIPO or EUIPO, and filing those registrations with Amazon
- Investment - recognise the importance and long-term benefits of committing resources to the continued monitoring and reporting of infringers
This article was first published in Essential Retail, July 2017.