Why You Must Respond to an IP Complaint – Do Not Ignore an Intellectual Property Complaint!
Intellectual property complaints (both valid and invalid) have become somewhat regular on the Amazon platform and are a common cause for seller suspension.
For Amazon sellers, intellectual property issues can be complex, but more importantly, they can cause your business to shut down completely if you lose your ability to sell.
Paralegal Ashley DiPinto of Rosenbaum Famularo, PC, states, “ignoring IP complaints will ensure that your account gets shut down.”
While many of our other articles discuss the application of intellectual property law to selling on the Amazon platform, this article examines why it’s so important to respond to intellectual property complaints regardless of whether or not they are valid.
Listing Suspension vs. Account Suspension
There are two main types of Amazon seller suspensions. Sometimes, an intellectual property complaint on the Amazon platform results in a listing suspension rather than an account suspension (although an account suspension is a possibility).
A listing suspension means that your Amazon Seller account is not permitted to sell on particular product while an account suspension means total inability to conduct any sales whatsoever.
Although a listing suspension can seem like nothing to worry about (especially if the Amazon Seller is low on inventory or doesn’t sell very many products of that nature), they should be taken seriously. While results can vary from account to account, even one or two intellectual property complaints can lead to a seller suspension.
Jason Powell, Paralegal at Rosenbaum Famularo, PC states, “always respond to an IP complaint immediately. Be respectful, let the complainant know that you take intellectual property issues very seriously. Respond. Hire a lawyer…you may or may not be violating their rights and only a lawyer can make that determination.”
Sellers must realize that intellectual property law goes well beyond the scope of Amazon’s policies and terms of service. Rights owners can and do act outside of Amazon’s report infringement page and sometimes will bring their intellectual property complaints to a court of law. Once this happens, the opportunity to negotiate a retraction of the complaint with the rights owner is lost.
What Happens when Complaints are Ignored?
Typically, when Amazon Sellers receive an IP complaint, the first step is to contact the rights owner to ascertain the basis for their complaint. This process usually involves several emails or letter correspondence with the rights owner. When a rights owner (or any other complainant) files a complaint in court, a notice of the impending lawsuit must be sent to the party accused of intellectual property infringement.
If an Amazon Seller ignores notice of a future lawsuit, the rights owner can seek what is called a “default judgment” against you.
A default judgment is a binding order by the court in favor of one party due to the failure of the other party to take action. In this context, Amazon Sellers will be at risk of a default judgment if they ignore notice of infringement or impending lawsuits; an issue that goes well beyond the scope of a seller suspension.
Also, courts can exercise what is called “personal jurisdiction” over Amazon Sellers who may be committing intellectual property infringement.
Personal jurisdiction is simply a court’s power over individuals involved in a lawsuit, it comes into play when the parties to a lawsuit live in different states. However, courts have held that personal jurisdiction exists for out of state defendants who allegedly engage in the sale of infringing products online. This means that a rights owner can force you to come to court in their home state if you do not properly cooperate and adequately respond to their notices of infringement.
Why You Must Respond to an IP Complaint – Conclusion
The team at Amazon Sellers Lawyer knows that every seller’s top concern is driving profits and remaining successful at what they do. While it may seem like a good idea to ignore an intellectual property complaint, especially if you receive only a listing suspension, or if the item is not crucial to your sales volume, the results of doing so can be debilitating to your business.
Regardless of the situation, it is always more cost-effective to communicate with a rights owner and attempt to avoid litigation if possible. Intellectual property law is complicated, but Amazon Sellers Lawyer is here to help.