Secondary Trademark Infringement in the World of E-Commerce

We now live in a world where anyone can easily sell counterfeit, pirated, or even stolen goods online. This has been a boon to some, but a bane to others - mainly small businesses and individual rights holders. The current state of the law requires rights holders to heavily police their works and marks for infringement. In my experience, this means countless hours spent searching through website after website for infringing material, sending notices, and inevitably, losing time and money that could be spent elsewhere. But what about these e-commerce platforms that host the listings? In terms of litigation, there is not much to be done, however this may soon change. There will soon be discussion on the federal level about enforcing contributory trademark infringement against e-commerce platforms.

Contributory trademark infringement is a legal theory that a person/entity can be held responsible for infringement of a trademark, even though they were not the ones who actually infringed on the mark. In terms of e-commerce, we are looking at the platform being held liable for allowing, inducing, or maybe even knowing that trademark infringement was occurring on their site. On November 13, 2020, the USPTO published a notice titled “Secondary Trademark Infringement Liability in the E-commerce Setting.” The USPTO is requesting public input from rights holders, e-commerce platforms, and other interested people/organizations on how the traditional theories of trademark infringement apply to the e-commerce world. In fact, they specifically want the public’s opinion as to whether contributory and/or vicarious trademark infringement liability can or should be applied to e-commerce.

Generally speaking, as of right now, rights owners must somehow prove that the e-commerce platform knew that counterfeit goods are being sold on their website. This is nearly impossible in most scenarios, even if there is an allegation that the e-commerce platform generally knows about the sale of counterfeit goods on their site. E-commerce platforms will of course oppose any expansion of liability. They too have a difficult task in monitoring for counterfeit goods on their site. After all, if they want to be seen as a reputable and legitimate source of goods, it is in their interest to implement measures to prevent the sale of counterfeit goods. Hopefully some meaningful change occurs as the current practical and legal mechanisms are woefully insufficient. Any change should include more than just banning sellers of counterfeit goods. Too often those sellers just create new accounts and re-list the same knock off goods.

There is some legislation in the pipeline - the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act which may address many concerns. We particularly support identity verification, displaying contact information and principal place of business of the seller, and efficient and expeditious removal of listings through a reliable system.