One area that seems to cause tremendous confusion for brands trying to enforce their MAP (Minimum Advertised Price) pricing on Amazon is in what Brand Registry 2.0 will, and will not do for them. Lets dive into the reality of the situation.
Amazon began offering manufacturers a service referred to as “Brand Registry.” Amazon touts this program as “Proactive Brand Protection” and claims that its “automated protections use information about your brand to proactively remove suspected infringing or inaccurate content.” The company confidently claims that “Amazon Brand Registry helps you protect your intellectual property.”
Initial reviews of Brand Registry were mixed, but most manufacturers found themselves disappointed with the program’s limitations. Thus, in May 2017, Amazon rolled out what it referred to as Brand Registry 2.0.
Brand Registry 2.0 is reported to include several enhanced features to assist brands, including:
- Greater control over content listingsi
- Internal investigations of counterfeiting claims within four hours of the initial reportii
- Counterfeit investigations without prior product purchasesiii
- A dedicated user interface for registered brands (apart from Seller Central)iv
These improvements seem like a reason for manufacturers and brands to celebrate, right? And they are for many counterfeit activities. But it is very different for the unauthorized, low cost sales that are the source of the majority of the problems for most brands.
At its core, Brand Registry 2.0 is a program that allows manufacturers to “to take control of [their] product listings and verify that the most accurate and up-to-date information is listed and available.”Indeed, Amazon itself lists the principle purpose of the program as follows: “Brand Registry gives you greater influence and control over your brand’s product listings on Amazon.”
We know that unauthorized sellers on Amazon are a major predicate for sub-MAP sales and price erosion. In fact, one study revealed that the company’s TPR platform causes at least 13% price erosion off of brands’ minimum advertised prices. Given this significant impact on manufacturers and brands, you would think Amazon would do something to put a stop to this problem. Not so.
To the contrary, Amazon is quite transparent about its lack of concern for what it sees as a simple sales channel issue. In fact, on the page where Amazon offers information for brands about reporting infringement, the company says:
Amazon respects a manufacturer’s right to enter into exclusive distribution agreements for its products. However, violations of such agreements do not constitute intellectual property rights infringement. As the enforcement of these agreements is a matter between the manufacturer and the retailers, it would not be appropriate for Amazon to assist in enforcement activities. (See https://www.amazon.com/report/infringement)
In other words, Amazon is taking the hard and fast position that unauthorized sales do not violate a brand’s trademark rights. Amazon does not provide the reasoning behind its legal conclusion that unauthorized sales “do not constitute intellectual property rights infringement.” Presumably, it is relying on the First Sale Doctrine. If that is the case, however, the company also presumably fails to understand the critical “Material Differences” exception to that doctrine.
Did You Know That Excessive Abuse of Brand Registry 2.0 infringement reporting can get a brand blocked from Amazon?
One common misperception about Brand Registry 2.0 is that it is intended solely to protect brands as opposed to TPRs. That couldn’t be further from the truth. In fact, our clients tell us that when they (or their prior enforcement consultants) have relied too heavily on reporting alleged infringement via Brand Registry 2.0, they ended up getting blocked by Amazon rather than the TPRs who were peddling their products without authorization!
This flies in the face of Amazon’s claim that Brand Registry 2.0 is “Proactive Brand Protection.” As James Thomson, an industry insider (and former Fulfilled-by-Amazon Account Manager) reports: “Amazon frowns on this use of the brand registry and has been known to remove a seller from brand registry if [the program] is “abused” to control distribution.” (see http://sellersessions.com/brand-registry-gating-trademarking-and-transparency/)
Recall the last Dirty Little Secret … Amazon explicitly does not care about sub-MAP sales. Not only that, it is actually hostile toward brands who try to report such sales as a form of infringement. Indeed, several clients have contacted E-Enforce™ after having been blocked or suspended by Amazon for complaining one too many times about these threats to their business.
So What Are Successful Brands Doing To Manage Their Unauthorized Sales
Right now, brands still believe that Brand Registry will save them: it will not. However, there is still an answer. Quite simply, here is what successful brands are doing:
- Monitor the environment for worst offenders;
- Obtain the true, legal identity of these sellers (Note – requires PI Licensure in almost every state to perform this)
- Sending legal notices via email, text, and certified letters.
Simply put they are doing REAL enforcement. What E-Enforce does for brands is help them run this entire operation extremely cost effectively.
E-Enforce is a division of an internationally recognized investigation firm, Cyber Investigation Services, LLC. We have been providing litigation support and investigations for high profile cases and leading intellectual property law firms since 2010.
In 2012, we began combatting unauthorized sellers at the request of our client, Zo Skin Health. When we began that process, the company was overwhelmed with unauthorized retailers in online marketplaces. Today, they have virtually zero. Instead, they have the street credibility for aggressive E-Enforcement that keeps unauthorized sellers at bay. Unlike many companies that have suffered problems with unauthorized sellers, they have also enjoyed exponential growth in that time.
From 2010 to 2017, E-Enforce managed numerous corporate accounts. In fact, we were the exclusive E-Enforcement provider for a national IP law firm and several of its fortune 500 clients. In February 2017, we made our proprietary E-Enforcement system commercially available. It combines legal strategy, technology, and cyber investigation capabilities.
Today, E-Enforce™ employs a dedicated team of engineers, software developers, data analysts, product purchasing specialists, licensed cyber investigators, and seasoned former law enforcement officers. We dedicate our time and attention to helping our clients deal with this rapidly evolving problem of unauthorized sellers, counterfeiters, and grey market sellers. In addition to our in-house team, we regularly partner with legal professionals around the world who are specialized in the many aspects of fighting cyber-crime.
E-Enforce™ is committed to assisting clients with unauthorized sellers who are determined to erode our clients’ hard-earned margins and brand reputation.
We currently work with over 50 brands, including global companies, mid-sized operations, and small-but-growing manufacturers to thwart unauthorized sellers and counterfeiters alike. Our clients represent the following industries:
- Cosmetics& Hair Products
- Direct sales
- Paper products
- Home repair
- Women’s accessories
- Vitamins &Food supplements
- Pet products
- Sunglasses & accessories
- Consumer electronics
- Vacuum cleaners
- Purses and bags
- Radar detectors
- Skin care
- Health products