It is interesting to note that in recent months, Internet giant Amazon.com has started to pay heed to complaints regarding counterfeit, “knock-off” goods being sold through the site. Through the years, Amazon, aided by an apparently sympathetic judiciary, has enjoyed effective legal immunity from claims of patent, copyright and trademark infringement by arguing that it doesn’t actually “sell” anything but, rather, merely “facilitates” sales by others. While acknowledging that many of its suppliers blatantly copy and knock-off others, Amazon’s position is largely, “Hey, leave us alone and go after the guys who are infringing.”
While the suggestion to “go after the guys who are infringing” has a superficial logic and appeal, the problem, of course, is that these crooks are located overseas, are almost always unknown, and, as a practical matter, are beyond the reach of U.S. courts. To legitimate domestic businesses and consumers victimized by such widespread and blatant copying, both Amazon and the Courts say, “tough luck.” Small consolation to those who (unlike the overseas, infringing, fast-buck artists) help build the courthouses and pay the judge’s salaries.
I am glad to see that this unfortunate state of affairs is becoming more widely known and a matter of larger concern. I have a particular interest in this given that, on December 12, I will be delivering oral argument at the Court of Appeals for the Federal Circuit in support of our appeal in Milo & Gabby v. Amazon.com, Inc. (16-1290). While expressing sympathy to my client, the lower court nevertheless absolved Amazon of liability, relying on the old claim that Amazon neither “sells” nor “offers to sell” products.
Regardless of what the CAFC does in our case, the basic problem and issue remain. By opening the U.S. market to literally anyone with a computer and willingness to click the box saying, “yes, I agree to the terms of service,” Amazon, as long as it remains legally protected, provides a huge end-run around the Intellectual Property laws of this country — a loophole that benefits admitted foreign fraudsters over the legitimate businesspeople of this country and those who wish to buy their genuine products.
This situation cannot continue and, one way or another, will be addressed, either through controlled voluntary action on the part of those concerned, or through the blunt action of the legal hammer. Whether our case reflects the last dying gasp of the fiction that Amazon doesn’t actually sell anything, or marks a needed change in a new direction, remains to be seen. Stay tuned.