AAFA renews call to make e-commerce sites liable for fakes

A trade organisation representing clothing companies in the US has called once again for online retailers like Amazon and eBay to be held liable for counterfeit goods sold on their platforms by third parties.

The American Apparel & Footwear Association (AAFA) makes the assertion in comments to the US Patent and Trademark Office (USPTO), as part of consultation on secondary trademark infringement liability that began last November and finished yesterday.

The consultation (Docket No. PTO-T-2020-0035) is asking for feedback from brand owners, online marketplaces and other interested parties on the application of the traditional doctrines of trademark infringement to the e-commerce setting.

“The foundation of our trademark system predates e-commerce and is not equipped to address the online counterfeiting issues experienced today,” according to Steve Lamar, president and CEO of the AAFA, which has previously called for a consumer awareness campaign about counterfeits on ‘trusted’ online marketplaces and social media platforms.

“While brick-and-mortar stores are generally liable for the products they sell, the same cannot be said about large online third-party marketplaces,” he adds.

In its letter to USPTO acting director Drew Hirshfeld, the trade organisation says there needs to be changes to the application of secondary infringement standards to online platforms by US courts.

The current approach isn’t effective because proving knowledge of counterfeiting by online marketplaces is difficult for brands and inconsistent across jurisdictions and the burden of online enforcement disproportionately rests on trademark owners.

The AAFA says its members report that it is difficult to successfully pursue secondary trademark infringement claims against online platforms – witnessed by Tiffany’s failed suit against eBay – so they have tended to include e-commerce platforms as third parties in anti-counterfeiting litigation.

“Current law does not adequately incentivise third-party marketplaces to take the steps necessary to keep counterfeits off their platforms,” insists Lamar.

“Further, this lack of liability results in limited efforts by online platforms to proactively monitor for counterfeits, moving the cost and burden to our members.”

The submission notes that marketplaces must have some accountability in order to create pressure to effectively address the counterfeiting activity taking place on their sites, adding that “there is room to establish the particular standards and factors that would lead to secondary liability, and to find the right compromise between the interests of the marketplaces and brands.”