Protect Your eCommerce Business

Did you know that you may be liable for the sale of counterfeit products on your e-commerce site? To avoid devastating damage awards, you must be proactive. Why not start with some lessons from Amazon.com? The e-commerce leader just beat serious copyright claims in a case based on a vendors’ sale of knock-off goods.

In that case, a home goods manufacturer accused Amazon.com of copyright infringement for (i) posting images of pirated products; and (ii) selling products containing infringing labels. Thanks to Amazon.com’s practices and policies, the e-commerce leader: (i) prevented a finding of infringement; and (ii) obtained immunity from damages under the DMCA (Digital Millennium Copyright Act).

These 5 easy steps may help shield your e-commerce site from potential copyright infringement liability:

Automate Vendor and Product Intake. Amazon.com uses an automated file upload system — without Amazon employee intervention — which automatically generates a product detail page and creates ads based on content provided by third party vendors. The Court found that Amazon.com could not be liable for copyright infringement since by using such an automated system, Amazon.com did not “actively” copy, review, edit, alter any protected images. Your site’s interactions with vendor products and services should be automated.

Adopt a Written Infringement Policy. Amazon.com adopted and implemented a written infringement policy, which required account termination for repeat infringers. Amazon.com informed its vendors of the policy and introduced a set of procedures for complaints, take-downs, and vendor terminations. An infringement policy is a key requirement under the DMCA, which every online vendor should adopt. Mandatory training on the infringement policy should be provided to employees and supervisors.

Do Not Disengage Copyright Protections. Amazon.com did not attempt to circumvent any technical measures used to identify or protect the copyrighted images at issue. You should not alter or interfere in any way with any manufacturer’s technological protections of their copyrighted works, including for music, video, or images.

Promptly Take-Down Infringing Products and Services. Amazon.com was unaware of the alleged infringement until commencement of the above lawsuit. However, upon learning of the action, it quickly removed the potentially infringing material from its site. It is important that you immediately take down any potentially infringing works upon learning of possible infringement. Such an essential directive should be included in your infringement policy and should be exercised whenever appropriate.

Avoid Engagement in Your Vendor’s Business Activities.
Amazon.com did NOT have the right, nor ability, to control the third party vendors’ activities, nor could Amazon.com exert any influence on the vendor’s activities. You should avoid any interference, engagement, involvement, or influence in any of your vendors’ business activities. The more involvement you have with your vendors’ business activities, the more difficulty you will have deflecting their liability away from you.

Mitchell C. Shelowitz is the Managing Partner of Shelowitz Law Group, an international law firm operating out of Israel and New York. Mitch has extensive experience representing clients in complex intellectual property litigation matters in the U.S. courts. He is admitted to practice in New York, Connecticut, and Israel, is former General Counsel of Ceragon Networks (NASDAQ: CRNT), and is the founder of the Association of Corporate Counsel Israel (ACCI). Mitch Shelowitz can be reached at mitch@shelgroup.com. Follow him on Twitter @MitchShelowitz

This article is provided for information purposes only and does not constitute legal or other advice. You should consult with experienced intellectual property counsel for specific advice on the subject matter herein. Shelowitz Law Group does not represent Amazon.com.