The SHOP SAFE Act: A Safe Harbor for Big Tech Counterfeiters

The SHOP SAFE Act: A SAFE HARBOR FOR BIG TECH COUNTERFEITERS

Certain members of Congress are pushing forward the SHOP SAFE Act. This legislation grants immunity for trademark infringement to online selling platforms like Amazon, provided that their Chinese suppliers "attest" that they "have taken reasonable steps to verify the authenticity of the goods" and "agree not use a counterfeit mark". Seriously – Congress is offering to waive liability for Amazon based on their implementation of an "honor system" for their Chinese suppliers!

If this bill becomes law, small businesses will continue to suffer while big tech enjoys yet another bailout from their friends in Washington DC.

PIRATED PRODUCTS IS BIG BUSINESS

• Amazon makes hundreds of millions of dollars in revenue from selling counterfeit products on their platform.
• Amazon claims they do not “use in commerce” the trademarks applied to the millions of fake products used on their platforms.
• Amazon faces a massive liability under the Lanham Act for peddling pirated goods on their platform.
• Under the SHOP SAFE Act, Amazon can avoid liability for trademark infringement by merely pointing the finger at their Chinese suppliers with fake ID’s, bogus addresses, and false representations. Today Amazon claims they have implemented most, if not all, of these so-called “best practices”.
• The SHOP SAFE Act would grant Amazon immunity – a “safe harbor” – so that they cannot be sued for trademark infringement under the Lanham Act.

The SHOP SAFE ACT HELPS AMAZON AND CHINA STEAL IP

• Knock-offs steal profits from and threaten legitimate small businesses.
• Counterfeit products are often low quality and hurt the reputation of legitimate businesses.
• Trying to stop pirated goods from China can be a full time job that few small businesses can afford.
• Sub-standard fakes harms unwitting consumers.

If you bought skin cream for your grandmother on Amazon and it burned her face leaving permanent scars… Who should be held liable?

If you bought an genuine iPhone charger on Amazon and your iPhone caught on fire…Who should be held liable?

When you click ‘add to cart’ on Amazon and the perfume you bought your mother for Mother’s day turns out to contain Horse Urine… Who should be held liable?

When you order school supplies for your children using the ‘Buy Again’ button on Amazon only to receive counterfeits containing lead to poison your children…Who should be held liable?

If you bought a hover board on Amazon and your house burned to the ground due to it being a counterfeit battery…Who should be held liable?

When the dog leash you bought on Amazon snaps, recoils, hits your eye and blinds you for the rest of your life…Who should be held liable?

Amazon and their Chinese partners make billions of dollars peddling pirated goods that harm American consumers and honest small businesses. This law would perpetuate the shell game and grant Amazon and other online stores immunity for their misdeeds.

It's about time that Big Tech stopped harming small businesses. Congress must STOP the SHOP SAFE Act.

DEBUNKING THE SHOP SAFE ACT

The so-called “best practices” required by the SHOP SAFE Act are negligible and ineffectual. Chinese suppliers relentlessly circumvent such feeble measures. Fake ID’s fake addresses, and broken promises are we can expect from Chinese agents. Individuals often run dozens or even hundreds of online stores. Bots scrape, copy, and replicated listings along with all the intellectual property. If one account is suspended, a dozen more pop up to replace it. Amazon claims they are already doing most, if not all, of the provisions required by the SHOP SAFE Act. They don’t work at all.

The reality is that Amazon knows exactly how to police their platform. A big brand that threatens them with a massive lawsuit or a big brand that offers them enhanced profits is granted special treatment. Amazon will block sellers from offering that brand. Or restrict it to only sellers approved by the rights owner. Whenever it is profitable to stop counterfeits, they are very good at stopping them. Whenever it is profitable to sell counterfeits, they sell tons of them (while feigning “reasonable measures” to the contrary).

Other sellers – like Walmart – are required to sell authentic products. They set high standards for their suppliers, they require insurance, a DUNS report, CPSC approvals, UL listings, credit references, indemnification, and bonding. If there is a problem with a product sold by Walmart they make sure their suppliers fix it and their customer is made whole. They hold back payment or require posting of a bond to ensure that customers are compensated for any defective or illegal products that make it through. Amazon knows how to do this. But have shirked their obligations because they claim they are “only a platform”.

The courts are onto their game and are closing in. Amazon is not “just a platform”. They are extensively engaged in commerce – they buy, sell, advertise, contract, warehouse, ship, and transact in counterfeit goods. They:

use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.

15 U.S.C 1114(1)(a). Today Amazon is liable for trademark infringement under the Lanham Act. Rights owners can sue them and are likely to prevail. This has Amazon very nervous that they will soon be held accountable for their gamesmanship. But under the SHOP SAFE Act Amazon would have immunity from trademark infringement which would be a terrible injustice. They are culpable and fully capable of cleaning up their platform. China has their own laws. Amazon should be required to obey ours – not given a free pass.

No more unintended consequences. No more favors for big tech. No more selling out to Chinese interests. No more attacks on U.S. small business. 

For more information visit usinventor.org or contact josh@usinventor.org