US lawmakers reintroduce bill on counterfeit liability

Lawmakers across the US political divide have re-introduced legislation that could make e-commerce companies like Amazon and eBay liable for counterfeit goods sold via their websites.

The bipartisan SHOP SAFE Act would establish trademark liability for online marketplaces when a third-party sells a counterfeit that poses a risk to consumer health or safety, and when they do not follow certain best practices.

It also aims to incentivize online platforms to establish best practices such as seller vetting to ensure their legitimacy, removing counterfeit listings, and removing sellers who repeatedly sell fake goods.

Online marketplaces would be required to take steps necessary to prevent the continued sale of counterfeits by a fake-selling third-party – or face contributory liability for their actions.

"As American consumers increasingly turn to the Internet to shop, counterfeiters have kept pace," said House Judiciary Committee Chairman Nadler (D-NY), one of the lawmakers behind the re-introduction along with Hank Johnson, Jr (D-GA), Darrell Issa (R-CA) and Ben Cline (R-VA).

"To stop this rising trend in online sales of unsafe counterfeit products, the law must keep pace too,” he added. Some reports estimate that about one-quarter of US consumers have unknowingly purchased a counterfeit good online.

American consumers increasingly do their shopping online—where they've been confronted by rising numbers of counterfeit products. The law must keep pace to counter this worrying trend, so I introduced the bipartisan SHOP SAFE Act to protect consumers.https://t.co/sFuHhMQ3X8

— Rep. Nadler (@RepJerryNadler) May 20, 2021

According to the US Census Bureau, Americans spent almost $792bn on e-commerce in 2020, up over 30 per cent from 2019. As more consumers opt to shop online, they are increasingly vulnerable to the rising number of counterfeit goods sold on e-commerce platforms.

On Thursday 27 May, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet will hold a hearing on the SHOP SAFE Act and efforts to stem the rising tide of unsafe counterfeit products online.