Amazon’s New Terms of Service for Sellers: Paragraph 4: License
You grant us a royalty-free, non-exclusive, worldwide right and license for the duration of your original and derivative intellectual property rights to use any and all of Your Materials for the Services or other Amazon product or service, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties; provided, however, that we will not alter any of Your Trademarks from the form provided by you (except to re-size trademarks to the extent necessary for presentation, so long as the relative proportions of such trademarks remain the same) and will comply with your removal requests as to specific uses of Your Materials (provided you are unable to do so using standard functionality made available to you via the applicable Amazon Site or Service); provided further, however, that nothing in this Agreement will prevent or impair our right to use Your Materials without your consent to the extent that such use is allowable without a license from you or your Affiliates under applicable Law (e.g., fair use under United States copyright law, referential use under trademark law, or valid license from a third party).
The Business Solutions Agreement (BSA) is your contract with Amazon as an Amz seller.
Many sellers do not even know it exists. It used to be hidden in the definition section when you signed up for Amazon. It states that you should be responsible for learning and understanding whatever changes Amazon imposes upon you.
Paragraph 4 of the new BSA talks about licenses and intellectual property rights. It reads:
You grant us a royalty-free, non-exclusive, worldwide right…
It used to say, “perpetual and irrevocable,” which means forever and you can never retract it. The words “perpetual” and “irrevocable” have been omitted. What has been added instead is that you are waiving your rights to Amazon. Here is the quote:
For the duration of your original and derivative intellectual property rights.
It is basically the same thing. However, it does not seem to include your heirs. If you die and it has been passed on to your children or grandchildren, then they will own it instead of Amazon. It should have been “irrevocable and perpetual,” but the language has changed a little bit in favor of sellers, but not really because you are waiving absolutely everything for as long as you own it.
It does not also indicate what happens if you sell it, at least not yet. Amazon crossed out a lot of parts, including the right to reproduce, perform, display, etc., to take back more than what they gave you, they removed the phrase “Your Trademark” and changed it to, “Your Materials.” It is frightening that “Your Materials” will include not just your trademark and logo, but other things that you would not normally transfer to anybody else, your copyright material. There are many written materials with copyright protection which other companies cannot sell. However, if that is part of “Your Materials,” then, you are giving that to Amazon as well.
Also, included in, “Your Materials,” are your licenses. If you remember the days when you used to buy software on compact discs (CDs), you were not actually buying the CD, you were buying a license to use that software. If that license is part of “Your Materials” that differentiates you from what a hijacker may deliver. You are giving Amazon the contractual ability to be a hijacker on your product. We are not sure if this provision will rule, but we will definitely challenge it at arbitrations. You have to understand what your contract is with Amazon. This major change from “Your Rights” to “Your Materials” just broadens what Amazon can do with the information.
It also allows Amazon to rightfully (because you are signing over the rights to it):
- Go around you and buy your products from your manufacturer or authorized retailers.
- Use Amazon vendors to get your products, which may be real or counterfeit.
- Take over your listing indefinitely.
As long as you own the rights, you are allowing Amazon to sell your products and use “Your Materials.” It also has certain contradictions in it. In the same portion of the paragraph, it says that Amazon will comply with your removal requests as to specific uses of your “Materials” because of your intellectual property rights. However, it again replaced “Trademarks” with the word “Materials.” Later on, in that same paragraph and sentence, it says, “Nothing in this agreement will prevent or impair our right to use your materials without your consent.” This paragraph is what we call “internally inconsistent.” It says you can pull out, but then it says Amazon can use your “materials” forever.
This paragraph also includes something that is interesting. It mentions “referential use under trademark law.” This pertains to using your Amazon trademark in a commentary, news program, or how-to guide.” For example, a guide on how to use a Sony camera, anybody can come up with instructions and use “Sony” in it. That is considered a “referential use.” Another example of “referential use” is writing an article reviewing the Sony camera. Amazon is not a beast, it is a retailer. In this paragraph, they are emphasizing their ability to act like a review company or a news article in using your Amazon trademarks without your permission.
The changes in this paragraph are significant. It allows Amazon to use all of your Marks, Licenses, and Copyright on all of Amazon-associated properties. It uses the word “Affiliates.” In any contract, you need to go back and look at the definitions. Amazon defines the term “Affiliate” as “any other entity that directly or indirectly controls, is controlled by, or is under common control with that entity.” Hence, Amazon Affiliates may refer to all of the different businesses that Amazon is involved in or may go into, in the future.
It is also reinforced by the definition of the term “Amazon-associated properties.” Amazon says:
That means any website or other online points of presence, mobile application, service, or feature, other than an Amazon site, through which any Amazon site, products, or services are available on any of them are syndicated, offered, merchandised, advertised, or described.
This is really a broad definition of how Amazon can use your intellectual property and anything included with your materials. It encompasses all of the Amazon sites around the world, including any other businesses that Amazon buys or owns. It also includes any place elsewhere where Amazon advertises.
This is a big change. This is broadening Amazon’s rights against you: to take what is yours.
This provision will not stand. You need to know about this provision, most especially, if Amazon has hijacked your listing or if they have allowed others to sell Amazon counterfeit products of yours. You need to know how to fight it, what your leverage is, and where the discrepancies are. You need to know what portions of the contract can be used to your advantage, should you have a problem with infringement in the future.
Please make sure you watch all of our videos regarding the loopholes Amazon created in the new TOS.