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Amazon Brand Registry Can Protect Your CPG Brand From Counterfeiting & Infringement

Enrico Schaefer - February 6, 2020 - Brand Development, Brand Protection

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TRADEMARK COUNTERFEITING 101

Enrico Schaefer: Welcome to Tech Law Radio. On today’s show, we’re going to be talking a little bit about the Amazon Brand Registry. And as many of you know, I really focus a lot on helping companies grow and protecting their IP. So I’m pretty excited about this show today and the Amazon Brand Registry topic because more and more people are finding that the best way to sell their consumer goods especially is on Amazon. And Amazon is a great opportunity for a lot of companies, but also presents a lot of challenges in the fight against patent violations, trademark infringement, counterfeit goods and enforcement of MAP pricing.

Counterfeit Goods And The Amazon Marketplace

So we get a lot of calls from folks who are worried about counterfeit goods or imitation goods or copyright infringement, trademark infringement going on on the Amazon platform. So I’m excited today because we’ve got David Maloney on the show. And David’s got some really good expertise on the Amazon platform and how to protect your company and products against counterfeiting. David has got a lot of experience here. He’s got over 17 years of experience supporting brand protection, intellectual property and product activities for organizations. He’s worked for Whirlpool Corporation doing brand protection and working to remove counterfeit products from unauthorized sellers on Amazon and other marketplaces. He has got experience with the IACC, which many of you know is an amazing organization. It’s the International Anti-Counterfeiting Coalition. And so he knows how that organization works. So I’m excited today to welcome David to the show. How are you doing today, David?

David Maloney: Great. Thanks for having me, Enrico. It’s nice to be here on the show.

Enrico Schaefer: Great. So let me just ask you a little bit about your prior background. And just kind of give us the highlights and maybe a little bit of what your expertise is beyond the superficial introduction that I gave you a little bit earlier.

Brand Protection on the Internet Requires Expertise

David Maloney: Sure. I’m a brand protection and IP professional. I’ve been working in the industries for about 17 years supporting property, brand protection and product activities in the automotive and consumer product spaces.

So I’ve helped engineers, salespeople, e-commerce people with doing brand protection, enforcing property against counterfeiters, infringers, and most recently, working on Amazon doing my brand enforcement and takedown against patent infringers and using the brand owners of intangible property to position their product to get sold on Amazon by removing the violating sellers and their products. So it’s been very successful, and Amazon has been responsive with the techniques I’ve been using.

Enrico Schaefer: And what a lot of clients seem to understand really well is when they see something they don’t like on Amazon, right? They get highly motivated.

David Maloney: Yes.

Enrico Schaefer: But there’s more to it than that. What we are always encouraging is that you need to be very proactive, and you need to protect your brand. Your brand is your reputation. Your reputation is everything. And if something happens to your reputation as a result of counterfeit goods or trademark infringement, those can have really serious ramifications on your valuation and your customer experience. So these are very serious matters.

Counterfeit consumer goods are goods, often of inferior quality, made or sold under another’s brand name without the brand owner’s authorization. Sellers of such goods may infringe on either the trademark, patent or copyright of the brand owner by passing off its goods as made by the brand owner.

Wikipedia

It’s fine to be reactive when you see a problem as a brand, but it’s far better to be proactive and to try to put out the fires early or stop them from occurring in the first place. So with that, let’s talk a little bit about some of the brand protection trends and statistics, what can be done, resources for a business owner who’s looking to enforce their IP and prevent price erosion.

Accurate brand representation: Once you enroll, Brand Registry gives you greater influence and control over your brand’s product listings on Amazon. Powerful search tools:

Amazon Brand Registry enables you to easily find content in different Amazon stores. Search for content using images, keywords, or a list of ASINs in bulk and report suspected violations through a simple, guided workflow.

Proactive brand protection: Our automated protections use information about your brand to proactively remove suspected infringing or inaccurate content. The more information you provide, the better Brand Registry can help you protect and improve your brand experience.

Amazon Brand Registry

David Maloney: Amazon is a huge seller online, and they implemented Amazon Brand Registry probably about three or four years ago, and it continues to grow and allows brand owners to register, tell Amazon what their intellectual property is and enforce against counterfeits and other violating sellers.

Amazon Is Motivated To Protect Brands

So it’s been important for Amazon. In 2018, they invested 400 million dollars hiring about 5000 workers on Brand Registry just to handle takedowns of violating products. So they’re heavily invested in it, and they continue and want to grow their product selection to compete on the marketplaces, specifically, Alibaba in China is coming. So it is a key thing for them to keep their reputation that they have authentic goods up there and that people can go and purchase product and know that they’re getting a genuine product. So it’s a constant threat, it continues to grow, and Brand Registry allows individuals, sellers and corporations to get up there and submit requests and takedowns. A little history to it, back in 2016, Birkenstock stopped selling directly off of Amazon because of the counterfeit sellers. Most recently in January of even this year, IKEA said they’re not going to sell their products directly off of Amazon now. Third-party sellers were selling fake IKEA products. Major corporations are now taking notes that Amazon might not be the best place to sell. But, we also have to understand Amazon is so powerful and growing that they’ll have to find other channels. So Brand Registry is very important for startups, brand owners and native corporations to protect their reputation and be sure that the consumer feels that they’re getting a genuine product.

Enrico Schaefer: Right. Look, Brand Registry is not perfect, right? But it is a step in the right direction for brands. And the thing that motivated Amazon is they were starting to lose merchants as a result of all the counterfeiting that was going on. And my belief is Amazon also wanted to streamline its own internal process for having to handle this incredible volume of people complaining and reporting all kinds of IP issues across their platform. So with that, Amazon Brand Registry was born.

So tell us, David, a little bit just the nuts and bolts. How does the Brand Registry work for your customers? How do you get them into the Brand Registry in the first instance?

Preventing Price Erosion & Diverted Sales Provides Real World ROI

David Maloney: Yes. So a brand — kind of the trigger point is going to be kind of what we started with. Our corner is going to say, “Hey, our products are being counterfeited, and they’re being sold on these marketplaces. How do we stop them, and how do we protect our sales and prevent price erosion that occurs on the marketplaces from the constant driver of getting low prices?”

So after that, they’ll make a decision — how do we do this? They might ask an attorney. They’ll then probably eventually go to Brand Registry and try to register. To get registered, you’re going to need, first off, a registered U.S. trademark. Or if you’re in the United Kingdom, you’ll need a U.K. trademark for that respective country and Amazon Registry U.K. To do that, you’ll need to file an application, which could take 6, 10 or more months to get a registered U.S. trademark, and then you can apply to the Brand Registry. So that’s important to start today. Get your trademarks in place for your brands and for your products, whether you’re a startup or any other type of larger business. So that’s the most important thing is to get your IT in place, and from there, you can apply to the Web site of Brand Registry. And it’ll take maybe five weeks to get authorized and registered on Brand Registry. And then you’ll submit your agents, which is kind of the product number for Amazon. And it then gets approved by Amazon based on your reputation, your volume of selling, your trademarks and how serious you are using Brand Registry. So it’s a little bit of a process there, but it’s important for brands to do this today as the markets are going to continue to grow, and you need a trademark and patents, specifically design patents, especially on marketplaces to be able to enforce later on in your business processes and your products being sold.

Enrico Schaefer: Yeah. It’s interesting because we get, of course, as the lawyers, right, we do a lot of the threat letters and the litigation side. What Brand Registry is designed to do is really accomplish what is most of the time the number-one goal of the client which is get it taken down, right? That’s the immediate pressure. It’s not like that’s going to happen overnight. But Brand Registry is a step forward in helping to make that happen.

We can, as the IP lawyer, send a threat letter. But a lot of these folks that are engaged in counterfeiting or IP violations, they’re pretty sophisticated about hiding themselves and becoming — they may be outside the jurisdiction. So there are limits to what can happen on the legal side. And, of course, if you’re going to get involved in litigation, it’s going to cost you a lot of money. So Brand Registry might allow you to get the products removed, and it’s going to be a more cost-effective solution on at least that aspect of the problem is putting the fire out. So let’s talk a little bit about submitting takedowns, David. How does that process work once you’re a brand that is in the registry?

Dealing with Counterfeiting at Scale Can Be Frustrating

David Maloney: So once you’re registered, you’ll make some internal processes or use a provider to set up your system. And you’ll submit the takedowns with kind of a cut-and-paste blurb of why is this product violating against your intellectual property or is a counterfeit or is an unauthorized seller? So you’ll create a blurb or a legal argument to say, “This is why — this is our intellectual property, and this is why this violating product should be taken down.” And this could include your U.S. trademark registration, U.S. patent or design number, utility patent or design patent or copyright.

So you’ll put this in a blurb, and you’ll submit a takedown. And this could start off with hundreds of takedowns, goes into the thousands, depending on how diligent a brand owner is. So it begins a big, big process after a while. And people do not understand. Well, we want it taken down, but how many resources should we dedicate to this, and how big is the problem? Sometimes it’s hard to determine that. In organizations, maybe the salespeople aren’t watching or monitoring the reasons for competition or they’re not speaking with their legal departments or representatives or outside counsel. But sometimes it’s a problem of ownership of who’s watching competitors and unauthorized sellers in the marketplaces. So what Brand Registry will do, you’ll submit a takedown. And being registered gives you the advantages of customizing and managing the information on your product listing. This could be the title, could be the description, the words, the images or the packaging, other unauthorized sellers. Violators will copy your package and put their own brand name in there. It could be any word you want to make up, [unintelligible] or any type of similar-sounding name or spelling to your company. They could manipulate their product numbers and change characters which will get around algorithms that are built into Amazon Brand Registry and their proactive takedown technology. So there’s importance to being registered and having those advantages to control your content. And Brand Registry also offers you other types of features such as text searching, product image searching, analytics. So those are nice features, but the process becomes so overwhelming sometimes. It continues to grow with the data out there that people don’t know what’s working and what is most important. And Amazon has their internal processes and representatives who are trying to do their best to help the brand owners. And it can become a whack-a-mole, which is based on the game from 1976 where the person is continually whacking a mole down. And it’s a similar type of feeling when you can’t control what’s going on in the marketplaces. So a lot of attention needs to be built into the processes. But you also need to step back and say, “Okay, what works, and when do we need to escalate it?” So you can escalate it to an attorney, threat letters and other types of legal actions. But you need to be able to monitor it and say, “This money being spent is worthwhile.”

Enrico Schaefer: Yeah. David, this is a great point to jump in on — Sentinel Brand Protection, which is your your brand protection company. and the service you offer because the truth of the matter is, unless you are an Amazon seller and that’s your company and your business model, in which case you probably are doing Brand Registry yourself and you’ve got expertise, right, that’s just not the case with a lot of the folks out there who are either trying to protect their space on Amazon as a brand, or they happen to sell on Amazon as well, but it’s not their core business.

So tell us a little bit about what your company, Sentinel Brand Protection, would be doing for a brand to help navigate this whole process, manage the process and understand which moles should be whacked.

David Maloney: Yeah. We specialize in online brand protection for Amazon Brand Registry and other marketplaces. There are similar types of platforms such as eBay, [Barrow] and Alibaba. So we’ll specialize in working with the client to first put a lot of effort into finding the problem. People often don’t even know what the problem is. They just see a counterfeit image up on the Internet, and it’s then sent to a salesperson or a legal person like, “What is this?”

You Need a Brand Protection Process Based on ROI

So what we’ll do at Sentinel is define the problem, give you a summary of what’s going on — data points, and then getting evidence of what’s going on in the marketplace, analytics, how much product is being up there, how many Web pages, just so you can understand what the landscape is of the violations. That way, you know upfront and define the project of where we want to dedicate resources. This could be Amazon or another marketplace or it could be other types of plan protection that would work, like I mentioned, escalating it to an attorney or even litigation. So what we’ll do is define the problem, define the project, define what your expectations are and then perform the work. Amazon Brand Registry takedown or whatever the investigation might be to get you the intelligence for your business to operate properly and protect your sales and profits. That’s the key of business.

Enrico Schaefer: Yeah, it is the key isn’t it? It’s the number-one motivator for customers and clients because, look, these customers are worried about a lot of different things. Their businesses have a number of different challenges and opportunities they’re trying to navigate every day. And so sometimes it’s the fire that’s burning the hottest that gets the attention. And that’s fine. That’s always going to be the case. But look, there’s great ROI here if you do Brand Registry correctly and you don’t have to have a raging fire in order to have it make sense to contact Sentinel Brand Protection in order to start to get into the registry and to start protecting your brand.

What I always find, David, is that it’s kind of the real-world examples that sometimes connect them most with prospects who are looking to understand why and how they might want to utilize Brand Registry. Do you have any kind of examples out there that are kind of anecdotal stories of how the system works well for your clients?

Inept Takedown Requests Can Spoil It For Everyone

David Maloney: Sure. As I mentioned, data and the Internet is so vast and growing that it’s hard to manage what’s going on. There are people out there that make complaints to Amazon and kind of screw up the process by creating noise and distractions and confuse Amazon and confuse people within a company of what’s going on. So it’s important to be able to do the research necessary to get a factual explanation of what goes on to be able to make good decisions and judgments.

So some experiences I’ve had is kind of what I mentioned, big complaints by other sellers, people interfering with the processes or other Internet and Web [unintelligible] against your brand. It could be defamation. It could be other stories that are compromising to your brand integrity. So anytime upfront that you understand the problem makes a big difference later on. And [unintelligible] sometimes the Brand Protection, you could have a person spending hours and days, maybe thousands of complaints, and it might feel that nothing’s being done. You keep seeing listings up there. How do you know whether it’s working? Are your sales increasing? Are they going down? Or who is selling the product? Is it coming from another country, a seller in Asia? So using metrics to watch for patterns and being able to provide the client that data and understandable form is key to making good decisions.

Enrico Schaefer: Yeah, and it really is because what I find with a lot of our clients on Brand Protection issues, not even Amazon specific, is that sometimes it just feels very frustrating for the brand because they see the breadth of all the different problems that are happening on the Internet, and it makes them throw their hands up in the air, like, “I give up” before they even start.

Pick Your Fights Carefully. You Can’t Put Out Every Fire.

And what we tell clients is, “Look, it’s not about putting out every fire. It’s not about whacking every mole. It’s about finding the ones that are the most serious and the ones that are going to provide the most ROI and dealing with those.” What I think a lot of companies fail to understand is if they don’t protect, for instance, their trademarks, they lose their trademark rights potentially, and they certainly diminish the enforceability of those trademark rights if they’re not at least able to show that they’re engaged in activities of protection.

Enrico Schaefer, Litigation Attorney

So if you’re doing nothing, then chances are you’re going to have a hard time ever protecting your IP in the future. You have to have a program. It has to be sustained. It has to be ROI and priority-based. And if you do those things and you’re putting out the hottest fires along the way, you’re actually increasing your brand value.

David Maloney: For sure. This area continues to grow. Brand protection has grown every year for the last 15 or 20 years. And it gives a good opportunity to prove in evidence that intellectual property has value. You can give your intellectual property and enforce it on a marketplace, and you can see whether it’s made a difference, whether that design patent or the trademark has proven effective to deter counterfeiters and people from violating your band.

Enrico Schaefer: Yeah, it really is more important than I think many brands understand. And it is becoming more and more important because of the Internet. So tell us a little bit about the IACC and the use of third parties as part of this brand protection process.

David Maloney: Sure. IACC partnered with Amazon about two years ago. And as a third party to their Amazon Brand Registry, they give brands an opportunity to escalate a complaint. So if a takedown goes through a registry and has not come down after 48 hours or three or four days, a brand owner can escalate it to IACC.

And the installation is just that — it goes to a higher-level person. They try to understand their processes and say, “Why didn’t this come down?” Was it because intellectual property wasn’t described well? Was it because the representative didn’t understand it or are they just not doing their job because sometimes it gets tedious? So they offer another way to enhance the Brand Registry to be sure that their processes and their people are doing their job well. So it’s a good program, and it’s just another step in brand protection that continues to grow.

Enrico Schaefer: Yeah, it really is. Well, what else can you tell us, David, that you think is important for brands to know about the Amazon Brand Registry and the services that you guys perform for brands?

Every CPG Should Apply For The Amazon Brand Registry

David Maloney: I would encourage every consumer packaged goods to register on Amazon Brand Registry. It’s becoming a growing seller, of course, and people continue to purchase online with Prime.

So I think it’s important to take the efforts, even small steps, continuing those steps becomes a major program later on. So by doing nothing, you kind of get nothing for a result. But by getting online and by investing in brand protection and intellectual property for your company, you at least are taking the steps necessary to maintain your intellectual property and to protect your brand.

                                    So I think that as people see other major corporations develop this function, I think that other people will realize that they need to take some steps, especially if they start seeing counterfeiters and their sales dropping.

Enrico Schaefer:        Yeah, really unfortunately that’s the most motivating. I’m sure your company is like mine, and we encourage people to get out ahead of it, but we also understand that there really is the problem of priority. And when things are starting to go bad and counterfeit goods are starting to pop up, and they’re underpricing you, then you get highly motivated.

                                    So tell us how people get in touch with you at Sentinel Brand Protection if they’re looking for someone to really kind of take charge of the marketplace aspect of brand protection in the Amazon registry.

David Maloney:         Sure. Our website is www.sentinelbrandprotection.com. You can go up there, and our contact information is up there. You can reach out to us either by email, telephone or through LinkedIn. So feel free to go up on the website. We [unintelligible] up there describing our services and some tips and insights for the different marketplaces and how best to negotiate this jungle of brand protection and on marketplaces.

Enrico Schaefer:        David Maloney, thank you for being on the show today. This has really been a great discussion on the Amazon Brand Registry and online brand protection. This is attorney, Enrico Schaefer, and we’ll see you next time.

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