Amazon and Valentino v. Kaitlyn Pan: contractual breach and counterfeiting
Amazon and Valentino join forces to sue Kaitlyn Pan and Hao Pan before a Washington State court for infringement of intellectual property rights (Amazon and Valentino v. Kaitlyn Pan Group and Hao Pan, box 2: 20- cv-00934 (Western District Washington)). It is not the first time that Amazon joins an intellectual property rights holder in an infringement lawsuit. For instance, in 2018, Amazon and Vera Bradley had together initiated three procedures aimed at stopping the sale of counterfeits on Amazon (Amazon.com Inc. et al. V. Kurth et al. , No. 18-cv-353, complaint filed, 2018 WL 1225083 (WD Wash. March 8, 2018); Amazon.com Inc. et al. v. Zhang et al., No. 18-cv-352, complaint filed, 2018 WL 1210758 (WD Wash. March 8, 2018) and Amazon.com Inc. et al. v. Jiang et al. , No. 18-cv-351, complaint filed, 2018 WL 1225150 (WD Wash. March 8, 2018)). Beyond the mere procedural interest in jointly seizing the courts, Amazon has multiple reasons for such an alliance.
First, Amazon has a legitimate interest in suing counterfeiters on the basis of the Business Solutions Agreement (“BSA”) between Amazon and the sellers. In addition, Amazon argues that the defendants damaged the integrity of its stores and threatened the trust that consumers might have in Amazon (para. 180). Amazon also has an interest in demonstrating to holders of intellectual property rights its will to enforce the clauses of the BSA relating to intellectual property.
Second, the unfavorable context for online market platforms pushes Amazon to show its goodwill. In recent years, several companies in the luxury industry have initiated legal proceedings in the United States and elsewhere to end counterfeiting acts perpetrated on Amazon sites. At the request of JM Weston, the Paris court recently sentenced The Frye Company for counterfeit and unfair competition (Lexology.com, 2020-05-06). At the request of the White House (iptwins.com, 2019-04-05), the Department of Homeland Security prepared a report in which it advocates a whole series of measures to reduce online counterfeiting (iptwins.com, 2020-01-29). On March 3, 2020, several representatives from the Democratic and Republican ranks issued a bill aimed at changing the conditions for implementing the responsibility of intermediaries. This bipartisan bill, called Shop Safe Act, aims to oblige intermediaries (in particular marketplaces and social networks) to i) flawlessly identify sellers; ii) verify their legitimacy; iii) delete the offers of counterfeit products and; iv) remove repeat offenders (iptwins.com, 2020-03-03). On March 4, 2020, several members of the Consumer Protection and Trade subcommittee (energycommere.house.gov/subcommittees) – a branch of the Energy and Trade Committee of the United States House of Representatives (energycommerce.house.gov) -, held a hearing on the safety of the products made available to the audience on online market platforms. Counterfeiting was at the heart of the debate (iptwins.com, 2020-03-16). Finally, as part of the annual calls for contributions intended for the production of the 301 report, the holders of intellectual property rights and representative associations regularly indicate Amazon (e.g., UNIFAB (iptwins.com, 2018-11-22) and the American Apparel & Footwear Association (iptwins.com, 2018-10-18)). Despite its policy of not mentioning U.S. businesses in its Section 301 report, the U.S. Department of Commerce had to designate Amazon.ca, Amazon.co.uk, Amazon.de, Amazon.fr, and Amazon in its report for the year 2019, (ustr.gov, 2019 Review of Notorious Markets for Counterfeiting and Piracy, p. 16). Admittedly, this is not Amazon.com, but the latter appears in the report drawn up by the European Commission (iptwins.com, 2018-12-16).
Thirdly, counterfeiting damages Amazon’s image, a phenomenon that the e-commerce giant is trying to reduce by massive investments and a multitude of measures. The lawsuit against Kaitlyn Pan and Hao Pan offers Amazon a new opportunity to recall its efforts against counterfeiting (see paras. 20 to 30 of the request). It is also a way to gain the trust of intellectual property rights holders when, according to some rumors, Amazon is considering launching a new platform exclusively for the luxury industry.
Source: Businesswire.com, June 18, 2020.