“It began as a standard approach to defend intellectual-property rights,” says Ning Zhang, an legal professional within the US who has represented Solar and different sellers in comparable conditions. However over time, Zhang says, she has witnessed the IP violation claims getting more and more baseless. “It doesn’t matter if [the claims] have any deserves—you’ll be able to simply sue [the sellers], freeze their accounts, and pressure them to barter with you to take their a reimbursement.”

Staking trademark violation claims

Chinese language merchandise have lengthy been related to counterfeiting and intellectual-property theft. This isn’t with out trigger. In 2022, 60% of the counterfeit items seized at US borders, by worth, got here from China. 

However IP rights and counterfeiting have turn into a lot blurrier ideas within the age of third-party e-commerce markets. Historically, counterfeit items revenue off established model names by using on their title recognition. Not all emblems are recognizable names, although; some simply appear like descriptive phrases.

In November 2020, PopSockets, a US firm that designs cellphone instances and different equipment, utilized to trademark the time period “airbag” beneath the class of “hand grips, stands, mounts, and instances tailored for handheld digital units.” The corporate has merchandise that use air-filled parts, however examples of the phrase’s use to explain comparable options additionally existed earlier than the trademark. The appliance was permitted a yr later, on November 9, 2021. 

Solar Qunming says she had used the phrase “airbag” earlier than to explain different cellphone instances she offered with out inflicting any bother. And she or he admits she didn’t verify whether or not it was trademarked this time. “If it’s an unusual phrase, we’ll look it up within the trademark database to see whether or not it’s registered. However by way of ‘airbag,’ the rationale why I didn’t look it up was as a result of I assumed it was only a descriptive time period. You see it in all places,” she says. 

The plaintiff, nevertheless, claimed within the lawsuit that defendants like Solar “deceive unknowing customers through the use of the POPSOCKETS Emblems with out authorization … to draw numerous serps crawling the Web on the lookout for web sites related to shopper searches for PopSockets Merchandise.” PopSockets declined to remark for this story.

These types of lawsuits first appeared on the radar of Eric Goldman, a regulation professor at Santa Clara College Faculty of Regulation and co-director of the Excessive Tech Regulation Institute, in 2021. A German firm that owns and licenses the phrase “emoji,” he found, had sued an estimated complete of greater than 10,000 e-commerce sellers from 2020 to 2021. Among the events sued had merely used the phrase to explain a product that really included the picture of an emoji. However the courtroom choices are working in its favor. In one of many dozens of instances, the choose discovered the copyright declare too expansive however however awarded the proprietor $25,000 in statutory damages from every of the 231 sellers being sued. 

Goldman, in a paper printed in March, calls this sort of lawsuit a “Schedule A Defendants Scheme” (or “SAD Scheme”). When these instances are filed, the names of defendants are put right into a doc, Schedule A, that’s typically instantly made confidential on the request of the plaintiff. Because of this, the instances can contain a whole lot of sellers on the identical time, but the sellers don’t know who else is being sued, they usually often don’t know they’re being sued themselves till the courtroom orders Amazon to freeze their accounts.