|Sun Feb 24 2013 20:52:27|
Amazon Sellers Beware, Manufacturers Are Targeting You
By: Ina Steiner
Manufacturers tired of seeing counterfeit items listed online are taking action - and Amazon sellers in particular should beware. Monday's Newsflash newsletter features two articles about counterfeits on Amazon and how the fight over the problem impacts third-party merchants.
The first case deals with Warner Bros lawsuits against Amazon DVD sellers in which one high-profile seller has been caught up. The Warner Bros campaign of lawsuits, meant to target counterfeiters, highlights the growing challenge of using Amazon's FBA service, particularly the risk of using the optional commingled inventory approach. The lessons: conduct due diligence on your suppliers; be prepared to defend your inventory; and consider business insurance if you list in high risk categories.
While Amazon has been able to launch a defense against legal actions, as it is doing in the case involving Tre Milano hair straightening irons, third-party sellers often become paralyzed and seem unable to defend themselves when facing copyright lawsuits.
Kevin Harmon, at one time one of eBay's biggest media sellers, told colleagues his legal troubles are the result of a policy in which the marketplace mixed his DVDs with those of other third-party sellers in its fulfillment center. According to court documents, the trouble started on September 25, 2012, when Janice Pearson, the Manager of Anti-Piracy Strategy & operations for Warner Bros. Entertainment Inc., purchased a copy of the DVD boxed set "The Mentalist: The Complete Fourth Season" from Amazon.com from "kevhead media."
When she received the package on October 10th from Amazon's Lexington, Kentucky warehouse, Pearson alleges that the DVDs were pirated copies. In filings with the court, Pearson states, "Defendant has not been authorized by Warner Bros. to reproduce, distribute, sell or offer for sale any product."
In discussing the case online, Harmon said his inventory is commingled with other sellers' - the item the Warner rep received could have been from up to 20 different sellers or Amazon itself, he said.
Manufacturers like Warner Bros are using the courts, and so is Tre Milano. But after it lost its lawsuit* against Amazon, it is trying to use the court of public opinion to wage war on counterfeiters. (*UPDATE: Tre Milano lost its bid for a preliminary injunction. However, Tre Milano's counsel Tom Peistrup said the lawsuit is ongoing and the two companies are scheduled to square off in Superior Court on October 22, 2013.)
It's a delicate line for manufacturers thanks to the volume of transactions Amazon processes. And that's the subject of Monday's second story - how some manufacturers are taking their criticism of Amazon to the media using a website called the Consumer Fraud Center.
Keep an eye out for Monday's stories and let us know what you think!
Update: Here are the articles:
Warner Bros Brings Fresh Assault on Amazon Sellers
InStyler Fights Amazon in Court of Public Opinion
Article edited on 2/25/13 to clarify status of Tre Milano lawsuit against Amazon.