In terms of trademark protections, Amazon built a great fortress with its Brand Registry. However, the company’s latest foray into the IP process, IP Accelerator, may just have blown a hole in its walls. 

Brand Registry requires sellers to produce evidence that they are the legitimate owners of a brand. As evidence, Amazon usually accepts a federal trademark registration. It is a simple black and white means for Amazon to gauge who is a legitimate seller and who isn’t. Once on the Registry, companies have an easier time taking down illegitimate copycats. With its Registry, Amazon has created an effective, quick process for vetting brand owners and enabling takedowns without sellers having to go through the courts. 

This is all good. If you’ve successfully passed through the Federal trademark registration process, you’ve submitted the required specimens showing use in commerce, and the Federal government agrees that you have an exclusive right to this trademark. That’s a pretty rigorous process to prove that you’re not a copycat. It has some holes in it, but it’s pretty good, and a pretty solid gauge that Amazon can rely on to quickly assess trademark rights. 


Then Along Came IP Accelerator

Federal registrations can take a year or two to issue, however, so Amazon introduced the IP Accelerator to help valid trademark users reach its Brand Registry more quickly.  The trouble with the IP Accelerator is that it seemingly also greatly lowers the bar to the Brand Registry, leaving it ripe for abuse. 

All that sounds good. Except when you start thinking about how people could abuse the system.

The IP Accelerator speeds up the path to the Brand Registry by allowing companies to merely file a trademark application, using one of a handful of Amazon-approved law firms.  So, the old requirement of the USPTO granting a trademark is no longer the bar–merely filing, as long as one does so through an Amazon-approved law firm.  Yet, there is nothing stopping copycats from filing a trademark.  In fact, the Trademark Office is currently inundated with falsified trademark applications from foreign applicants, mostly from China.  Now these same entities can gain access to the Brand Registry even if there’s little to no chance of them ever obtaining a Federal Registration from the USPTO, and once there, these copycats can begin ordering take downs of the legitimate trademark owners.  What is worse is that access to the Brand Registry does not even require the filing of a use-based application, one accompanied by evidence of use of a trademark in commerce. Instead, even intent-to-use applications qualify–those where an applicant merely alleges an intent to use the mark in the future. 


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Setting the Bar

Amazon has some very compelling reasons to try to beef up its Registry. A Wall Street Journal article, for example, found thousands of fraudulent, banned or unsafe products for sale on Amazon. At least one provided a distinct health hazard that resulted in the death of a toddler. 

Certainly for Amazon, the ability to track down copycats is a big deal from a financial, legitimacy, and even a safety standpoint. To accomplish that, Amazon first launched the Brand Registry. Now it has the IP accelerator to help people get onto the Registry more quickly to fight off the copycats effectively. 

The problem is while Amazon set the trademark bar quite high with its Brand Registry, the bar for IP Accelerator has been set extremely low. And in fact, it might be non-existent. 

That could prove to be a much bigger problem for many legitimate trademark holders selling their products on Amazon. 


The Crack in the Armour

So, this accelerator seems like it may have opened a pretty big crack in the Brand Registry armor, though it has yet to be seen if anyone takes advantage of that crack. The hope is that Amazon has established protocols with its law firms to take steps to vet potential clients. For instance, the law firms could perform thorough prior user searches with each filing and refuse to file applications for applicants that were not clearly the senior user.  Even if such searching was performed, weighing the evidence to determine who is a senior user is often a job left to the courts and months of discovery, not a quick task handled by firms dealing with low margin fixed fee work.

We don’t know if Amazon is providing a kickback or subsidizing them to take on that extra work. But the reported fixed cap per trademark is very low. These firms will be depending on volume to make money. They will need to maximize efficiency to stay below that cap, so there isn’t much incentive to vet clients unless Amazon has offered something behind the scenes. 

The other issue is that copycats can be relatively sophisticated, and it could be challenging for these law firms to ferret out suspicious activity. For instance, even a low-grade artist can doctor a specimen to the point that an attorney won’t be able to see it as a fake.  

It can be a fairly intensive process to expose these fakes. And if the law firms aren’t being required to spot them, or are failing to do so, it will be really easy for copycats to get onto the Brand Registry either in parallel or before the real user gets on. That could cause some very real problems for legitimate mark holders before the USPTO filing is settled.


A Parallel Trademark Enforcement System

With IP Accelerator, Amazon has created a trademark enforcement regime that’s outside the court systems, and given the import of the Amazon marketplace, this regime could even be more important in the first year or two of a product’s life. 

If you can kick a competitor off Amazon, it might be more valuable than getting an injunction in court. A U.S. injunction is only helpful for infringement happening in the U.S., but with a company operating out of China, that injunction may not help much. If you can get Amazon to boot the competitor, however, that might be more valuable. 

So, Amazon has created a legal regime with the potential to be very beneficial to rightful trademark holders, but could also have opened a sizable chink in its own armor.


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