RAISING THE BAR
GETTING TO ZERO A new Amazon tool takes aim at counterfeits. by HOWARD N. ARONSON, managing director, Lackenbach Siegel LLC A NEW AMAZON PROGRAM MAY BRING some hope of attacking — if not solving — the problem of counterfeiting for trademark owners. The program — optimistically dubbed “Project Zero” because it aims to reduce the number of counterfeits on its platform to zero — allows trademark owners themselves to remove counterfeit products from the Amazon site. Until now, trademark owners had to go through a process of reporting suspected counterfeits to Amazon. Then, the retailer would conduct an internal investigation before removing counterfeits. The process, as brand owners know, was time consuming, burdensome, costly, and all too often ineffective. Amazon states that in recent months it tested a pilot program with several brands. The web giant now plans to expand the program and eventually offer it to all brand owners. Amazon claims that if the program is as effective as its early reports indicated, removing counterfeits before items are offered for sale should make trademark enforcement 100 times more effective than removing reported counterfeits already online. However, the downside is that registering trademarks with Amazon under Project Zero will be more complicated than it was under the past system. The first requirement is that the trademark owner must be enrolled in the Amazon brand registry. Only registered trademarks are eligible for participation in Project Zero. Note that access to the program is by invitation only — for now. Amazon says that it will designate only selected brands, including reported trademark owners and current users Vera Bradley, Thunderworks, Kenu, and ChomChom Roller, to take part in the program. However, trademark owners can join a waiting list to be notified when they can actually participate in the program. REGISTRATION REQUIRED Toy companies will not have to read much of the fine print about Amazon’s Project Zero to discover that the first requirement
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for participation — even signing on to the waiting list — is registration of its trademarks with the U.S. Patent and Trademark Office. This requirement lengthens the already long list of advantages of U.S. trademark registration, including the right to use the registered trademark symbol; the right to file a trademark infringement lawsuit in federal court and obtain significant monetary remedies not otherwise available; legal presumptions, including validity, ownership, incontestability, and priority; the possibility of seizure of counterfeit goods; the ability to obtain recordation with U.S. Customs; and a bar to the registration of another confusingly similar mark, among many others. So, if your trademarks are not registered, consult your intellectual property counsel, who will guide you through the process. HOW IT WORKS Trademark owners can designate listings of products for removal, providing their trademarks, including logos and other designs, to Amazon. The retailer will then scan its approximately 5 billion listings each day to identify likely counterfeits. In addition, trademark owners are able to access a search portal online. When a trademark owner spots a suspected counterfeit, he or she can remove the product or the seller electronically with a click. Machine learning incorporates this owner-initiated removal information, increasing the accuracy of the automated systems now in place that scan the attempted uploads to the Amazon site and remove items that appear to be counterfeits. Amazon is also urging trademark owners to aim for a high rate of accuracy in their listings to maintain their Project Zero privileges. To that end, the retailer is running training sessions required for enrollment. Amazon also says that it will monitor use of the project to prevent misuse of the removal tools. SERIALIZATION PREVENTS COUNTERFEITS Amazon says that the best anti-
counterfeiting results are achieved when trademark owners serialize their products. The system generates serialized barcodes for products by individual units. As part of the manufacturing process, trademark owners print the new barcodes directly onto their product packaging or attach a sticker bearing the barcode to the product. The new barcode makes it easier to check products for authenticity in Amazon warehouses. When a customer orders a product using the serialization service on the website, Amazon can scan and verify the authenticity of the item. The pilot project showed that serialization allowed the company to detect all of the counterfeits before they shipped to customers, according to Amazon. However, product serialization is not required. Trademark owners may serialize some, but not all, of their products if they choose, with brand owners able to choose which products to serialize. Although it is free to enroll in the new Amazon anti-counterfeiting program — once a trademark owner is invited to access the automated systems — and use the counterfeit removal tool, the cost for using the product serialization service ranges between 1 and 5 cents per unit, based on volume. The current participants called the program “very effective,” “an insurance policy,” and “a game changer.” One company believes that its “counterfeit problem has nearly disappeared,” according to Amazon. However, only time will tell whether or not owners of trademarks for toys and other goods will find that Project Zero lives up to its name. »
Howard N. Aronson has provided legal counsel to toy industry companies for the past 30 years. He is the managing partner of Lackenbach Siegel LLP, an intellectual property law firm recognized for its nine decades of handling toy company issues. Grateful acknowledgement is extended to Eileen DeVries, counsel to Lackenbach Siegel.