US government seeks input on online counterfeits

The US government has asked for comments from brand owners, third-party marketplaces and other stakeholders on the state of pirated and counterfeit goods trafficking online.

The request by the Department of Commerce – published in the Federal Register – comes after President Donald Trump signed a memorandum on combating trafficking in counterfeit and pirated goods that focuses on third-party marketplaces like Alibaba, Amazon and eBay as well as “carriers, customs brokers, payment providers, vendors and others.”

The first task outlined in the memo was the preparation of a scoping report, and it is for this that the Commerce Department is seeking information.

The House Judiciary Courts, Intellectual Property and the Internet Subcommittee is meanwhile also due to weigh the issue at a hearing scheduled for July 18, according to a Bloomberg Law report.

The move comes as Amazon has for the first time showed it may be vulnerable to liability suits over defective or counterfeit goods sold by others on its e-commerce platforms. A pair of recent court rulings allowing consumers to sue Amazon over counterfeit products have reversed the trend of serial victories for the company on the issue.

In one case in Ohio, a Tennessee family has been given leave to pursue a lawsuit against Amazon after a hoverboard purchased on its site – sold via a third-party Chinese company – caught fire and destroyed their home.

Meantime, another ruling earlier this month in Pennsylvania held that Amazon could be sued over a third-party retractable dog leash that was defective and left a woman blind in one eye.

Analysts suggest Amazon is however unlikely to be seriously affected by these piecemeal actions unless the federal government gets involved, so potentially a lot is riding on the outcome of the scoping report.

The memo says the document should provide data on origins of counterfeit and pirated goods and the types of products that are trafficked, and what technological solutions might be available to curb the trade. It is intended to provide “a foundation for any recommended administrative, regulatory, legislative, or policy changes.”

Amazon has just extended its Transparency programme that applies serialized codes to products that can be scanned in its fulfilment centres and – in theory at least – prevent them from being shipped to purchasers.

Comments must be received by 5pm Eastern time on Monday, July 29, 2019.