The rise of the internet as an online store has indeed introduced a lot of different potentials for businesses to sell their products or services. Still, at the same time, this also faces them with many new obstacles for businesses that are seeking to secure their intellectual property rights. As many businesses are all fully aware, online sellers (the manufacturers approve some, but there are also many more that are not authorized) now have a low-cost, direct connection to the customers because of their websites and online retail shops. It has resulted in a wave of large retailers that are violating intellectual property rights – just like what is happening with Amazon. It is quite sad to note that legitimate sellers have to combat unauthorized seller removal in Amazon and in any other online selling platforms.  

Illegal online sellers are selling many goods which are counterfeits, most of them are selling goods that are made by the manufacturer with its trademark. The selling of “authentic” products by unauthorized dealers provides the most significant legal threat to well-known brand owners. It may or not be a great challenge for business, but counterfeits present a significant legal issue.

Because of this rampant issue, you need to know how to fight against these unauthorized sellers. Unauthorized seller removal prevents unauthorized dealers from getting the goods that they sell as “brand new” and “authentic” in several different ways. These unauthorized sellers will buy their products from global markets where prices are lower than in the United States, then import the products as “gray market” goods into the United States. They can buy the goods at a lower price from authorized dealers in the United States on clearance sales or returns. With the help of the Chelmsford removals company, the product could have been sent for sale to another through an authorized dealer in violation of the product distribution agreement. The products might have also been transported for resale by an authorized dealer to another, in contravention of the contract for product distribution.

These unauthorized sellers are competing unfairly. They are basically considered as “free riders”. They have low operating costs and do not make significant investments in customer service, showrooms, quality, or advertising. Still, unauthorized sellers are enjoying the fruits of such endeavors. They trade off the hard-earned reputation of the brand owner as regards the quality and customer service. Because they do not have similar operating costs, they can lower their product prices than the authorized dealers, diving down prices with their unfair advantage, which makes it hard for authorized dealers and even the brand owner to generate profit.

How to Go About Unauthorized Seller Removal

Warranty Policy 

Having warranties against unauthorized sellers are a necessary part of your security. Business warranties must explicitly inform customers that buying from unauthorized sellers, even from the other company’s “new” products, void warranty security. Apart from providing a profit to consumers who are purchasing from chosen dealers, it offers an essential tool for trademark and copyright infringement.

It is strongly recommended to have a strict policy on warranty. The next thing to do is publish it on the company website, listing registered sellers for self-verification purposes. Other measures to label legitimate goods, such as covert or overt markers on the items to trace them across the distribution process, may also be considered.

 List Down Unauthorized Seller Offerings:

You can send a message to unauthorized sellers first and let them know that you will be reporting them for violation unless they will remove the listing within 72 hours. If they do not remove it, you can then inform the violation to the appropriate online platform authority.

The Verified Rights Owner (VeRO) system allows owners of intellectual property to ask the removal of the listings which it claims in good faith infringe the owner’s patent, copyright, or trademark rights by signing a simple form known as the Notice of Claimed Infringement. The same with the Digital Millennium Copyright Act procedures, the listing party is notified and also has a restricted time to submit a counterclaim for reinstatement of the listing. If it does, the owner will have to file a suit to implement his or her rights to hold the listing off, but the listing party must have consented to the authorities’ jurisdiction.

Although quick and straightforward, there is a significant flaw in the takedown methods. Sophisticated, unauthorized, illegal sellers are simply reposting the listing under another name. The DMCA and VeRO programs are often regarded as a game of “whack a mole,” with less significant impact.

Going to Court:  

Where self-help measures are not any more effective, it might be appropriate to use the courts. The following methods offer you tools to claim against illegal online sellers.

Trademark Infringement:

The infringement of trademarks is the biggest asset owners to have an unauthorized seller removal program. However, there is nothing wrong with selling a legitimate product by an unauthorized seller, such as that it involves trademark or other legislation. For both trademark and copyright law, the first sales doctrine bars the brand owner from regulating downstream selling. But infringement of trademarks will still occur irrespective of the doctrine of the first sale.

The first sale doctrine allows the one who buys a branded goods and is usually entitled to resell that product in an unaltered condition. When the specific product has been sold on the market, a brand owner’s trademark rights are now “exhausted”. But there is an exception to what is often applicable in the context of unauthorized online sellers: the exception of the “material difference”.

The first sale doctrine does not cover accused infringers who sell marked products that are “materially distinct” from those sold by the owner of the trademark or its authorized sellers. A material deviation from the approved products causes doubt about the product’s source and results in the loss of its trademark owner’s goodwill. It means that substantially different goods that are sold by an unauthorized seller are not considered “authentic,” as they are confusingly different.

Courts broadly interpret the “material difference”: it is virtually any distinction between the authorized products and the unauthorized products that a customer could find relevant when buying the item. This also refers to small variations.