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Webinar Transcript

Shannon: Welcome. Thank you guys so much for joining us. I’m here today with CJ Rosenbaum. He is the founding partner of the only full-service service international law firm that’s focused on Amazon Sellers. It’s Rosenbaum Famularo, P.C., and that is the law firm behind the AmazonSellersLawyer.com they’ve got a full-time staff in New York, Europe and China.

And they have three primary focuses that they handle. They handle suspensions and plans of action for reinstatement. They represent sellers in arbitrations against Amazon. And they also handle brand protection for private label sellers on all platforms. And CJ is also the author of several books including Your Guide to Amazon Suspensions the 2017-2018 Edition.

So, CJ, thank you so much for joining me and making time today, I really appreciate it. I’m looking forward to going through this with you.

Legal Disclaimer

CJ: Hey, I’m really, really happy to be on. Thank you very much. And let me start off by a lawyerly, lawyer-ies, legalese. First of all, we’re going to talk generally today, nothing we say today, you can’t take anything that we say to in terms of actually legal advice to your individual issues. Every single seller’s problems, every plan of action, every intellectual property issue has to be addressed on a fact by fact basis. So neither you nor I can be responsible unless we have all the information. So this is all general principles, how we help sellers all over the world, but for advice pertaining to your particular account, you got to call us and talk to us because it won’t make any sense, you can’t really rely upon it unless we know all the facts pertaining to your particular issues. So that’s our legal disclaimer for both of us.

Shannon: Yeah. Yeah and I haven’t had a chance and opportunity to CJ’s services personally but I can tell you that from the podcasts that I have listened to, through the webinars that he has been on, the information that you’re going to get today is incredibly valuable. You’ve had a firm for several years now, a couple of decades actually. Tell me at what point you made the shift and focus to Amazon because I think that lots of businesses have been out there, I made that shift in my business about three years ago. I could kind of see where things were going. I just realized Amazon was going to be taking this huge shift and also capitalizing on market share and audience and so forth and I made the shift to make my business about Amazon. Tell me your experience of what that looked like for you?

CJ: I’ve always represented entrepreneurs throughout my career even before I started practicing. I was helping out friends and friends of friends who were starting their own businesses. And one particular entrepreneur started like 8, 9 years ago in investigating the purchase of an Amazon-based business. And so, I was involved and then I wasn’t involved and then I was involved. And eventually he closed, several hundreds of thousands of dollars were put in and then shortly afterwards his account was suspended. Right? And so, he reaches back out to me and says, “There’s no one really there to help me. You have to look into this.” I started looking and I saw who’s out there, saw the consultants that were out there. The consultants have conflicts of interests. The consultants out there really did not have the intellectual property knowledge to really address a lot of problems and none of them had a team behind them. None of them actually had a staff. And if you call one in Texas, she works out of P.O. Box, if you call one in Boston, he travels but there is really is no team effort.

So, I guess around this same time as you, where we really shifted the firm’s efforts to focus on Amazon Sellers. And now, while I still take on cases, I’m a small town guy, but everyone else, the 20– I think we’re up to 22 people now around the world, all everybody else does is solely focus on Amazon. And about 40%, 50% of the business has nothing to do with the law it’s just writing really great plans of action for sellers with inauthentic and used sold as new and high ODR rates and that kind of stuff. And the other has everything to do with the law which is brand protection and intellectual property and arbitrations.

So, I guess around the same time is where we really kind of exploded into the space and never looked back and I love it. I mean I deal with the greatest entrepreneurs everyday. It definitely is high stress. It’s high pressure. Everyone has got to get back on, everyone has got to protect their brand as soon as possible and absolutely adore it, I love working with sellers.

Shannon: That’s fantastic. Yeah, I think that IP and the issue of Intellectual Property is one of the biggest areas of misunderstanding and misinformation, both for sellers, brands, manufacturers across the board. People are just sort of picking information here and there. And, so my goal today is cover some really basic information and provide the people with really credible terms and definitions as well as some general principles for filing infringements. There’s ways to go about it. There’s ways to not go about it. And there’s ways that people can be really aggressive and pro-active and get their own account shut down and there’s ways to do it properly. And so, I think it was one of the webinars you did with Skubana or with Chad Rubin and talked about the way that you– your philosophy for filing infringements and contacting sellers and giving people opportunities and I think you and I see eye to eye on that. I think that’s really important. So, let’s go ahead and dive in and get started.

Determining the Type of Infringement

The first thing I want to talk about, the first subject is determining the type of infringement. So again, we–I get sellers all the time and they’ll say things like, “Oh, I’m selling my product and another seller jumped on my listing. Well, that listing, that Detail Page, has my brand name which is trademark so they’re violating my trademark. And the answer is, no, they’re not. They’re not violating your trademark.

CJ: They’re not. That is not as simple as that.

Amazon Trademark Infringement

Shannon: Yes. So, let’s go ahead and talk first about trademark infringement and trademark registration. What is a trademark? And let’s talk about it specifically for Amazon. What’s a trademark and what does trademark registration look like for an Amazon Seller?

CJ: OK. Trademarks whether it’s on Amazon, eBay or any place else is really just a mark that you create that you register with the United States Patent and Trademark Office that indicates what a consumer can expect if they buy that product. Like, I use Macs, OK? I’m really getting pissed off with Apple lately because I think their customer service has gone down tremendously. But their computers just never crash, so I’m a huge Mac guy and when I see that Apple symbol, I know what to expect, like I know it’s never going to crash. I know it’s going to find the network. It’s a piece of cake. It’s going to last several years without any problems at all.

If you see the McDonald’s “M” you know that like the fries are going to be absolutely awesome. What’s quality to me, you know, it is what it is. You know what to expect. Those are all marks. And then when you get a mark it’s a really simple application, most people can do it themselves. If they run into a problem and then they might want to hire someone to help them, but you file this application with the USPTO and you get your mark and that then indicates to as you grow, what the consumer can expect.

Now, the basics of infringement means you can’t take the McDonald’s “M” and stick it on you hamburger joint, right? You can’t take the Nike swoosh and stick it on your own t-shirt or on your own pair of sneakers, OK? But if the product is genuine, if they’re getting it through you know gaps in your distribution chain, that’s not a trademark violation. Cause they’re selling the real deal with your mark.

Shannon: Talk about– let’s talk about word marks versus like a logo or design mark.

CJ: If you can afford to do both at the outset of your business, you should even if you need to put it on a credit card to get started. You should do both the word and also the logo and how you write it. One is they call fanciful writing and one is the verbiage. If you need to protect one versus the other I would go for the verbiage first.

Shannon: The word mark.

CJ: Yeah, the word mark in order to spread out the cost but if you’re doing it yourself, it’s really cheap. I think it’s like two and a quarter, $250 a category right now. And again, you can do these applications yourself. But you really should get the word mark first if you need to split them up, but you really should do both at the same time.

Shannon: And just to give people a background on what this looks like, what this enables you to do if you have a registered trademark, not only does that help protect your Intellectual Property but Amazon also gives a plethora of benefits including, the ability to do Enhanced Brand Content, now, Amazon Storefronts and Headline Search Ads including the Amazon Brand Registry 2.0 now requires a registered trademark. So just because you filed doesn’t mean it’s registered. You have to complete the registration process and then you’ll get a registration number.

CJ: Exactly. In fact, I hear– I get called, not everyday, but say at least once a week or once every two weeks where someone filed and it has been 90, 120 days, six months. It really should take 90 days soup to nuts. You filed it, within three months you should get your approval back or you’ll get something called an office action where there’s a problem with it. You need to redo it. And like the picture, I used the picture behind me, OK? Like our orange box here with these kind of globe circle things in there, you know that’s our mark. And it’s becoming known around the world that if you see that, that’s us. That’s Rosenbaum Famularo, that’s Amazon Sellers lawyer. OK? So you want to do it. You want to do it yourself. It shouldn’t take forever. And I kind of lost track of your question.

Shannon: So, we know what a trademark is now. People need a registered trademark. What does trademark infringement on Amazon look like specifically? And I’ve got a couple of examples but you go ahead and start and then I’ll play into that.

CJ: OK. You asked me what the benefits were, so yeah, you can register for all those things. You can get Brand Registry which is really content control. It’s just controlling the listing. And Amazon had said about roughly either two years ago, they were going to start giving gating to small brands the same as they do the large. I haven’t seen any evidence that they they’ve been treating anyone equally. That option is definitely there and you want to do that. You just want to give it a shot. I wouldn’t necessarily pay anybody to do it because I don’t think the people that are being paid are having any more success than people doing it on their own. I’m a big believer in empowering you know business people to handle things themselves. But yeah, Brand Registry, might as well apply for Brand Gating.

And what it looks like on Amazon or eBay or Etsy or any other platform is that you own that logo, OK, in your category. No one can take this and put it on someone else’s T-shirt. But if it’s a genuine deal, it really doesn’t provide any protection at all. But we can get into on another subject how to protect yourself, if someone else gets their hands on a pallet full of your product or truck load of your product, and you just can’t seem to close up your distribution holes. There are other ways to protect it other than trademark. And we can get into how private label sellers can protect it when hijackers are actually selling the real deal.

Shannon: Yeah. We’ll get into that in the second and third sections. So, one of the way or a couple of the ways that I’ve seen trademark infringement happens on Amazon is one, if somebody uses your trademark’s term in their seller display name for example, that’s a violation of your trademark and they can’t do that. Amazon will make them change that.

The second one we’ve seen them people do it is I work with the company, the brand has been around for 25 years. It’s very well known As Seen On TV, retail distribution etc. And other sellers will create similar looking products or just in the same category. And they’ll just try to sneak in the trademark term in order to rank for that because it has a very high search volume about you know 2,000 to 3,000 searches per month just for that brand name for that product.

And so, typically, what that looks like is then using your trademark name somewhere in their product copy or in some cases, even using the trademark on the packaging but that kind of gets into the counterfeiting and so, we’ll kind of move into that but have you seen other ways that a trademark is infringed aside from using copy in the Detail Page that is not identifying the product that they’re selling.

CJ: We see it in the Detail Page. We see it in other scenarios where it’s behind the pictures. We see it in the back-end. We see when they write compatible with or identical to or works with. And Amazon’s coming down a little bit harder on people who are using certain terms like that. So, we’re seeing it in all different ways the same ways that you’re saying it. Amazon seems to go in waves over the last three or four weeks if you’re putting the like Nikon or HP, right? Or some of the other big brands in the back-end. Then you real– you’re getting dinged more work than they did a few months before that. It kind of come in waves, I don’t really know why but focus changes. But those are the same ways that we see it coming through.

Shannon: I was going to ask you about that, yeah, because I know that that was mentioned in search terms so you obviously can’t see what’s somebody’s search terms are. But you know if you’re searching the product and there’s– that term is not anywhere in the product detail page, it’s likely in the search term on the back-end. Is there any way to protect against that?

CJ: Sellers know when this stuff is going on. So, all of a sudden if you’re a competitor selling a knock off, you know not using your logo on it is also not rising quickly or taking over in the search or getting the Buy Box. You know it’s there and you can make a complaint. The complaint, as long as you have a– let me take a step back. I don’t feel like anybody should make BS complaints. Either it’s a legitimate complaint and then you should absolutely make it, OK? I always recommend you do a cease and desist and try and resolve it amicably first. But if you have a legitimate complaint, then make it because that’s good business. So we’ll talk about how I think you should do it. But eventually, if you have to make that complaint, you don’t really need the proof right in your hand. You know if it’s in your back-end because they’re surpassing or they’re shooting up in the listings.

Trade Dress Infringement on Amazon

Shannon: Right. Yeah, I mean it’s – let’s take this sort of a subset of trademarks and talk a little bit about trade dress infringement. That seems to be sort of misnomer for a lot of people. Talk a little bit about trade dress and trade dress infringement.

CJ: OK. First, what is trade dress? Trade dress is like your entire product: the packaging, the shape the color, the texture, the promises that come along with it. It could be filed but it’s not necessarily filed. It’s everything that encompasses your product. There are two really great examples. One is a humidifier that’s in the shape of like a tear drop. Another is this make up sponge called the beautyblender, where it’s egg shaped, has a certain color like a fuchsia color. It’s got a packaging. It’s got a texture to it. And these are really great examples of trade dress because when you see this particular humidifier in a tear drop shape, it stands out. And the same thing with this particular sponge that women use for makeup. Those are great, great trade dress examples.

What your listeners can do, anyone listening to this program, what you can do is start looking at all the different things your product includes and encompasses and make it unique, right? If it’s a type of product you want to get the shape that matches something very unique, the packaging and just the whole look and feel is your trade dress. One of the problems with Amazon is that they don’t really recognize most trade dress complaints. They do buy it when it’s really crystal clear like the beautyblender or the humidifier in the tear drop shape. I can’t remember the name right now.

Shannon: Sure.

CJ: But generally Amazon is really difficult to get them to enforce trade dress you have to have a really, really good argument to get Amazon. I think they’re called the MPA team. My understanding is they have like practically no legal training. Even though they’re evaluating all these complaints. They are like zero or close to zero legal training and, you know I have the benefit of doing Amazon arbitration where I get to cross examine Amazon’s witnesses and they all have a built-in confidentiality. But I still have the knowledge. OK? So, trade dress, you really need to develop something that you know instantaneously, what the product is and how it’s different from for example, other knives, other cellphone cases, other humidifiers, other shirts or whatever it is, other microphones that really makes it unique. And then you have a chance of winning a trade dress argument. But patent, design patent, utility patent, copyright, trademark or other add-ons to the product are better things to use on Amazon to knock hijackers off.

Shannon: Good. OK. That’s really helpful. And you know to give you an example, I worked with a company and the trade dress infringement was so blatant that not only had they basically created a duplicate product. They had basically you know reverse engineered it and created the exact look and feel which was a very unique look and feel for the product. They also started using our photos as well because it so perfectly identifying the product. It was the exact same product. So, we basically went on both the copyright and trade dress. But that brings up the next infringement type. Let’s talk about copyright infringement and the two most common types that we’ll see on Amazon listings.

Amazon Copyright Infringement

CJ: All right. Copyright infringement is really, really easy to enforce on Amazon. It’s also– it’s almost as easy on eBay and other platforms but Amazon makes it super easy. Generally, copyright comes to sellers has to do with images and verbiage, OK? And you wouldn’t believe the number of sellers who create a listing and use other people’s images. Some don’t alter them at all, others just use Photoshop and alter them slightly or add their own logo to whatever the image is. And how many sellers just cut and paste verbiage. And we’ve seen it in the listings. We’ve seen it in the back-end. We’ve seen it in the add-ons to the product. We’ve seen it in the packaging of the product. So, if you’re suffering sales cause someone has stolen your copyright images or verbiage in any aspect of the product, you’ve got a really easy way of knocking those hijackers off. Amazon also in some of their ways makes it easy sometimes for the hijacker to redo their listing like if they just simply take off that image…

Shannon: Right.

CJ: …they’ll get back right on. Other times they give them a really hard time. But it’s definitely worthwhile complaint. Again, I would always try and work it out amicably first but it’s really easy for private label sellers to knock-off hijackers when they’re violating your copyright, piece of cake.

Shannon: Yeah. Or in the second aspect of that is simply dealing with the listing because a lot of times, you  know,  with a lot of brands and manufacturers that I work with we’re not concerned about shutting down people’s listings per se or knocking off the sellers. We simply want to protect our copyright. We simply don’t want them using our images. We don’t want them using our verbiage. So, you know, talk about a situation where somebody has a product and they pulled photos from your website and copy from the website. Typically, Amazon is going to respond one of two ways. Either they’re going to “shut the listing down” or they’re just going to remove that copy and image from the listing which I have seen both basically.

CJ: We see a lot less of that. Since we see both sides of the fence, most times Amazon will take the listing down.

Shannon: OK.

CJ: Often they’ll shut the whole sellers account down which is really I think bad for a brand. If you’re a brand, you’re goal is to protect your brand.

Shannon: Correct.

CJ: It’s not the people out of work or put people out of business. I think you got to keep your eye on the ball when it comes to that. But we’ll see the notice that there’s an issue with an image, right? And if we represent the person who received the complaint and then we’ll look at it and say, “You got to get rid of that image. You got to change your verbiage.” If we are the brand, right? And we also kind of want the same thing. But often if you’re the brand and someone has violated your copyright, violated your Intellectual Property rights, you can work out an agreement with that hijacker to keep them off your listings so they’re not a competitor because they did, they violated your rights and they opened themselves up to being liable for damages. And more often than not, what the seller will do is just go on to another product.

Shannon: So let’s talk about– so, first of all, a note on the images, with Brand Registry 2.0 you have access to a beta tool that allows you to upload your own product images, maybe a primary product images and the lifestyle images and actually it will search the entire Amazon database. And it will find both active and inactive listings that use those images. So, for example, I was doing a clean up with this company and we went on and looked at images on listings that had been you know basically out of style or out of stock for years.

CJ: Right.

Shannon: And we filed copyright infringements just to remove those images from even past listings to keep people from jumping on them in the future. And we did that without affecting any sellers. We just wanted the images removed. In terms of copyright law, do my images or does my product copy actually need to be registered with the US Copyright Office in order to be enforced? Or does it just need to be on my website? Talk about that a little bit.

CJ: It does not have to be filed. It does not have to be registered. You still own those images. You still own that copyright material. On the flip side, it does make it a bit easier to enforce like on the eBay platform, if you filed it, it does make it easier because they use the bureau system which is a little more robust. On Amazon, it doesn’t really matter. If it ends up being a dispute over it. You know, Amazon just throws up their hands and says, “You guys fight it out. Let us know how it resolves.” And to win that dispute, if it actually goes any place, it is better be able to show a history, to show a filing. But you don’t have to in terms of Amazon, because they are just, they are so quick to throw sellers off so they don’t incur any liability.

Amazon Patent Infringement

Shannon: OK. Let’s talk a– let’s move on to the next aspect and that’s patent infringement. What does patent infringement look like? And talk about how that differs from trade dress infringement.

CJ: OK. First, there are two different types of patents. OK? And if you have any European listeners, it’s patent over there, OK? So you have design patent and utility patent. Design patent is really how the product looks, how many buttons there are, how many lights there are, the shape of it you know three legs versus four or three inputs versus two. And it’s kind of wishy-washy because if you change the design a bit, if you improve it a bit, there’s a really good chance that you’re no longer violating the design patent because you’ve now changed the design.

Shannon: Yup.

CJ: It doesn’t give the greatest protection to sellers but it’s quicker and it’s cheaper to get. OK? A utility patent is how a product works. OK? They’re much harder to get. They’re much more expensive to obtain. But if you get that I mean you are like home free and nobody else can sell anything even similar to your product because it’s how the product works. In fact, the whole fight, a couple of years ago between Apple and Samsung had to do with like the gyroscopes inside and the shape of the phone and they really had­– they had a utility patent which is how they were able to sort of just kill Samsung. Eventually they resolved it because it was better for both companies with the mixture of technology.

But that’s the difference, now, if you have a design patent and someone is selling the same exact thing, you do a test buy, Amazon will take them right off. No questions asked. But then they could just change the product. OK? And if you are a brand and we can sort of help you reach that mark of how much you need to improve upon a product to get another design patent or to avoid a design patent problem, OK?

On the utility end, it’s just if you have a great brand new invention then it’s worthwhile to get it. All these people who made millions and millions of dollars selling fidget spinners, right? When the patent holder came out of the woodwork, they all disappeared. That’s how strong a patent is and that’s how easy it is to enforce across all the platforms. And you could even take these same IP rights that your listeners have for their brands and take them to the seller’s individual– I call them private websites so you have someone selling on Amazon which is not really public, it’s a private company but they sell on Amazon and eBay and they’re also selling it on their own webpage.

And you can actually go to them and say, “Listen, you’re violating my rights. I’m entitled to statutory damages against you, we can either work out a licensing agreement, right? Or, a distribution agreement where you’re going to share your profits with me or pay me a fee or you’ve got to stop selling.” And this is another way that you can enforce your rights and really take on the offensive to stop other sellers from really violating what’s yours and what you have put your blood, sweat and tears into.

Counterfeit Products on Amazon

Shannon: Let’s talk a minute again about what Amazon considers to be a counterfeit.

CJ: Counterfeit is basically fake, OK? Counterfeit is basically fake. It could look the same but it’s made in a different factory with different gauge wiring, different lights. It’s fake. It’s not yours, made in the same place. That is versus gray market which is the same exact product, OK, coming from the same factory, the same raw materials, OK? That’s gray market or holes in your distribution. Counterfeit is simply it’s just a fake product.

Shannon: Yeah. And I was surprised when I read Amazon’s definition which is they said, “we do not consider an imitation product to be counterfeit.” It has to actually have on it the word mark or logo of the product that you’re infringing upon for Amazon to be considered a counterfeit. And again, we’re not talking about counterfeits in general, that’s why it’s so specific to Amazon. We need to look at this is what Amazon considers to be a counterfeit if you’re actually going to be successful in issuing a counterfeit complaint. So, in some cases, trade dress maybe more applicable because the logo, the brand name isn’t actually on the product the package or the packaging.

CJ: Well, like, let’s say it’s an imitation. It’s the same microphone, right? Just a lower quality with it. I’m looking at– so I’m looking at my microphone right now.

Shannon: Right.

CJ: Lower quality. Amazon will still knock that hijacker off based upon your allegation even though they have this sort of wacky definition. If it is fake, it’s counterfeit. If they call it imitation Amazon’s team doesn’t pay attention to that anyway, it’s the allegation. So if it’s a fake product to yours, you do a test buy that looks the same but it’s not yours, it’s a counterfeit and it’s really easy to knock that hijacker off.

Amazon Listing Abuse

Shannon: Let’s talk– the last one we’re going to talk about in terms of determining the type of infringement is listing abuse. And I typically see those on bundles. But listing abuse is a very unique infringement type. It’s not specifically trademark or copyright or trade dress but listing abuse typically means if the product somebody is selling does not exactly match the detail page, say for example, we got a brand that has a product, right? And somebody else creates a listing and they have that brand or product but they have a really cool carrying case that’s their own unique addition so not necessarily looking at that as listing abuse to create that specific unique bundle.

But if I create that bundle, that listing with the product and the carrying case and somebody jumps on that listing, that’s only selling the product and not the carrying case, that’s usually the issue that we see most often. And it’s trying to get rid of that additional hijacker because you have to prove this listing very clearly shows in the images and in the copy that it includes the product and the carrying case. I ordered a sample. They’re not selling the carrying case. Or in one example, the carrying case had for example the brand’s logo on it and so we say there’s no way they can even legally produce that. We have to kick them up. So in that, in light of that, how would you look at protecting that from sort of hijackers who aren’t including those extra elements that are clearly displayed in the detail page?

CJ: What sucks is it’s like playing whack-a-mole, that is a slam dunk, get rid of them but you have to actually monitor your listings constantly and then make the complaint to knock them off because that’s one way that consumer is not receiving what they should and Amazon is still the most consumer-centric company like ever invented, OK? So the consumer is not getting it. The problem that we see more often is like you’re selling the product and somebody else adds the carrying case to it. It’s usually the reverse but if you’re selling it with the carrying case, you can cut the legs off of the seller who’s selling without your carrying case. And if your carrying case has your logo on it or something special about it, and they can’t their hands on it the same one, those are really easy ones to knock off. Contact the seller first do a cease and desist. And if they don’t comply within a day or so, make the complaint and knock them right off.

Amazon Distribution Enforcement

Shannon: Very– really helpful. CJ let’s move on to the second section. And these are just common seller questions. Again, I think there’s just a ton ambiguity and there’s a lot of misinformation out there. Let’s talk a little bit about distribution enforcement. Amazon is very clear, we do not enforce distribution. That’s a you problem. But let’s talk, are there things that a brand owner or private label or anybody who is selling a product can put in place to have some control or enforcement of distribution to restrict the number of or the sellers that would sell that product on Amazon.

Warranty Differentiation

CJ: A 100% OK? And again, we work on both sides of this fence, it’s 100%. One, you got to look at your warranty. OK, if your warranty says “Money back guarantee,” it’s almost meaningless because anybody can give back money, money is homogenous. And Amazon gives it anyway with the A-to-Z claim for any reason. It was raining when the UPS guy dropped off my package. That’s an A to Z claim they got to get their money back, OK? There’s a little bit of exaggeration.

But you can make your warranty something that somebody else can’t match. Wüsthof cutlery has a fantastic warranty that is very successful where they say that if you buy one of their knives from an authorized reseller and there’s a problem with that knife, they will send it back to the factory in Germany and fix it. Right? And this could apply to all sorts of products. So that no one else can match that because they don’t have access to the factory. We’ve seen it with very, very high end audio equipment where they need really high end testing to make sure like the right ear and the left ear match up. But it’s really any product you can do that and then you can also offer the consumer the ability to either we’ll send it back to the factory be fixed or we give you another one. But you want to add that in there and no one else can match that. It could be a license. It could be dis– it could be you know if you buy your, you know gym equipment like your weights. You also get rights to log on to our website. You get an add-on product.

We have one client who a small percentage of his sales, he would match and then donate to particular charity. It’s not really IP law but no one else can do that. Anyone can donate money to charity if they can’t match it up with his money for charity. So there are add-ons, there are warranties, there are licenses, like when I first started buying computers, right? And you needed to buy Word Perfect at that time, you would actually get a disc. And you stick that disc or five or six different discs into your computer and load it up. You weren’t really buying the disc. You’re buying a license to use the product for an update. Your product could include that if there’s a recall, you will participate in the recall which other people cannot because they won’t get the notices.

So, there are a lot of different things that we can add to products to prevent even Amazon from delivering the same thing. So, they have a real product, right? You could add something else to your product to delivery and use that to knock off hijackers. And that’s how you protect yourself against holes in your distribution because often you can’t close up the gaps. You know you sell it to a distributor, he’s supposed to deliver to a retail and you’re delivering it to like a hair salon with it’s very fancy hair care products and they buy and actually they sell on Amazon. How are you going to stop the individual hair salon from selling your stuff on Amazon? It’s virtually impossible. If you do certain add-ons to it then you have the ability to use those things as a sword to stop the hijackers.

Amazon and the First Sale Doctrine

Shannon: Let’s talk briefly about the first sale doctrine. What that means, way that’s been interpreted and how you know, brands can use that to their benefit because again, a lot of people will turn around and use it as a free for all. And can you provide a little clarification what that rule, initial ruling was and how that’s played out for brands on Amazon?

CJ: Sure. Basically, first sale doctrine applies in the United States. It does not apply in Europe. It does not apply in the UK. OK? But in the United States you can basically buy yourself anything you want as long as you are delivering it in the same fashion as when it was initially purchased. So I go to the discount rack in Marshall’s and I buy 100 microphones that ended up on the discount rack and I take them, I sell them on Amazon. I’m not violating you know Shure microphone’s IP rights. The customers are getting it in the same fashion that they would if they bought it directly from Shure or Bose or wherever.

Now, on the other hand, if those microphones came with something that only Shure or Bose or Audio Technica could deliver then you’re not getting the same thing under the first sale doctrine. It’s all about whether the consumer is getting the same exact thing where it’s materially the same or materially different. And most brands, even big brands have not worked this into their warranties or their licensing agreements yet which is why for the sellers who are very successful and for also for our brands and our private label sellers were successful because we’re focused on this.

So, if I represented you know Audio Technica who’s a manufacturer of the microphone I’m using right now, right? I would add something to their warranty or add a licensing deal to it that if someone bought 100 of these things, off the back of a truck and then they sold them on Amazon, that consumer was not getting the same thing. And that’s the difference. It’s really the focus on how to protect yourself on Amazon or other ways online.

Shannon: Well, let me give you a case, it’ll be a good example. We have a brand that we work with and people will drop-ship the product that they buy in retail. But it’s different packaging than what we sell on Amazon. We have a very specific product that we get straight from the factory that we sell on Amazon, nobody else has access to it. And in an attempt to kick sellers off, they’ll typically claim the first sale doctrine. What is a response to that from a legal standpoint?

CJ: Generally, that seller is right, OK? That they did not alter the product in any fashion especially with drop-shipping because it’s coming straight from the authorized seller, right? They’re just kind of putting the two of them together. So those are pretty difficult cases to win for the brand. But you can set yourself up to have the best argument. And again, winning on Amazon doesn’t necessarily mean the same thing as winning if you’re in a court of law.

Shannon: Right.

CJ: And brands can use that to their benefit. And they could specifically put right in their warranty that if this is purchased through someone else, through dropshipping, then we’re not going to give you the warranty. It will not apply, OK? Or the number that you get that allows you to sign on to our website or the ability to receive our special newsletter. OK? That only comes if you buy directly from us with no middle man.  And still most brands are not doing this. OK? they are just not so, the listeners out there, if you want to be able to gain this advantage, you need to use someone who’s really focused on this kind of you know, who was it Mark Twain, they said he had to learn just his portion of the river, right? The river captain had to know just his portion of the Mississippi.

Shannon: Right.

CJ: This is our portion of the Mississippi. OK? And these major brands are still not doing it. So, if people are doing that, they’re drop-shipping your product, OK? You need to pivot to protect yourself against that, to give yourself the ability to knock off those guys offline.

Shannon: And it has been interesting that we’ve had trouble updating the warranty section of an Amazon Detail Page so it has sort of like the default thing and it says, “OK, click here and see the warranty from the manufacturer” and that just kind of goes to a link with some generic verbiage. And we tried for months to update that and Amazon didn’t update it. And then even in enhanced brand content, you’re not allowed to add warranty information in the enhanced brand content. So really, it basically leaves– the suggestion that I was given was add an image with your warranty on the graphic and make that as part of listing. But, any thoughts in terms of the warranty aspect on Amazon.

CJ: We haven’t had that issue here when we’re doing it for our clients. You know, we generally try to stay off people. We try not to log on but everyday, we probably go on to anywhere between 10 and 30 different accounts you know give or take, even though we try not to. So I haven’t had that experience for taking a picture of the warranty. Right? It’s a good way of getting it out there. But the warranty is also something that arrives with the product.

Shannon: Right.

CJ: You can put the points that are important to develop your sword in the detail page, if you want to use up some of your space there. It can also just simply arrive with the product. And just because it’s not necessarily on Amazon’s page doesn’t mean the warranty doesn’t exist.

Shannon: Got it.

CJ: OK. It’s still the same thing that customers receiving, Wüsthof knives with a warranty that says we’ll send that knife back to Germany. Whether it’s on the listing or not, it’s still a difference on what the consumer receives and this is playing upon Amazon’s focus on the consumer. You know you got to– as a saying goes, “It’s easier to ride the horse in the direction that it’s going,” right? So, if the horse is going in the way to protect consumers, that’s the way sellers need to focus.

Establishing Material Differences on Amazon

Shannon: That makes a lot of sense. It’s a really huge takeaway. And we’ve already kind of covered the next point that I was going to make which is product and warranty material differences and any additional comments on the material differences that you would have in regards to Amazon.

CJ: You know it’s funny, I mostly speak at Amazon Seller events and now with growing brand protection, I’m speaking in some of those events also and I’m hearing the lawyers and all the white-shoe guys talk about this. And an interesting one was participating in a recall. I was like, “Wow! That really is a different add-on you can do to a product”, OK that hopefully will not cost you anything because your product won’t be recalled. But it’s an easy add-on, right?

Now, on the other hand, you could be creating liability for yourself but I thought that was very, very astute. And that was presented by a lawyer I think out of Chicago and you know I don’t claim to be genius we’re really, really good at what we do, but I’m also open to learning from everybody. So, recalls, licenses, newsletters, add-ons, all these different things, warranties are all different ways that sellers can add to what the consumer receives which on Amazon is the gospel. That’s the way to go. And you really need to look at your particular product and it doesn’t take a long time to do the analysis. A microphone is going to be different than a textile or a piece of clothing which is going to be different from an iPhone case. We need to look and say, “OK, what can we easily, officially and cheaply add-on to this product, OK that will not create big liability for us?” And that’s the answer.

Distribution Agreements with Amazon Sellers

Shannon: Well then going back just to the distribution enforcement aspect, one of the key things is you have to control the distribution but you have to have the distribution agreements in place with the distributors and with the resellers I found. And I’m not obviously a distribution attorney or an expert in distribution but that always comes back into play that people say, “Oh, you’re not authorized to sell this product” or you know “You’re violating MAP or any of these things” and it’s like if you don’t have an agreement with that person then you don’t have an agreement with them. So controlling distribution through you know agreements that have been drafted by you know distribution attorneys and people who are well-versed and knowledgeable about how this plays out is really, really key to enforcing your distribution before the product ever gets to Amazon.

CJ: Yes. It is– it’s vital and there’s no reason to reinvent the wheel like once we have a great distribution agreement we really can then use it for every client so it’s really also very efficient and effective. The most important thing in a distribution agreement is what the remedies are and how you enforce those remedies. You know, you never want to be in a position of having to go to court, right? You never want to be in the position of having to prove what your actual damages are because if your sales go down, it could be because there’s a new competitor, right? It could be because of the season. It could be because your product becoming obsolete, right?

So you want to have liquidated damage I said if you violate it, you owe us x dollars, OK? You want to have in my opinion that you want to be able to enforce it through arbitration instead of going to court? Right? And you want to be able to pick where you’re going to bring that arbitration. You want to limit the arbitration that agreement has to be written in a very specific type of way because a lot of arbitration agreements from like cellphone companies and cable companies have gone up to United States Supreme Court want to make sure they are written in a very specific manner so that they are enforceable. You also want a way of resolving things in a way that may not end your relationship because depending on the size of your brand, you may need those distributors.

And I’ll give you an example on a big scale, you know, Luxottica who owns basically every sunglass company, every brand you know like on the planet and what they do is they just flood the market with their sunglasses knowing that you know they can only sell about half through their authorized channels and the rest are going to end up on Amazon. And every six months or so, they go after people and it goes right back to the same thing. You want to sort of make sure you have a way of remedying if your distributors start selling on Amazon or if your retailers start selling to his brother-in-law who sells on Amazon, OK? There’s also a case called Leegin, L-E-E-G-I-N that said that you know these distribution agreements are only enforceable against people who sign them. Right?

Shannon: Correct. That makes a lot of sense. Sure.

CJ: So, the guy who has the brick and mortar hair salon, right, is liable to you. But when he sells it to his brother who sells it online, he’s not.

Shannon: Yeah.

CJ: So, you want to be careful who to do business with, you want to make sure that your remedy is something that’s palatable. Because the agreement itself is nothing if you don’t have a remedy that really helps you resolve issues efficiently to reach your goals.

Shannon: If your company has a limited number of resellers that they sell to, have you– has there ever been a situation that you’ve heard of or encountered where they actually said, “OK, we want you to sign our MAP agreement, we want you to sign our distribution agreement and we would like your Amazon seller IDs so that we know in the future if this ever comes up, we know who you are.” Has that ever come up or been an issue with you?

CJ: We have seen it. I’ve added it to the agreement but in reality it’s superfluous.

Shannon: Yeah. I can imagine it’s incredibly difficult and if you have thousands of resellers it’s probably nearly impossible.

Amazon Seller versus Seller Litigation

CJ: And it’s also impossible to enforce because you just sell it to someone else with an account or have another sellers account that you don’t know about. Also, what’s growing right now, no one wants to like poke the bear, poke Amazon, right? But there’s a growing area of seller versus seller litigation. OK? You see a lot of it with where brands here are going after sellers in Asia, OK? Where you’ll have a brand– I’ll give you an example of Brain Flakes, it’s a kid’s toy. Right? So they started alawsuit in the Northern District of Illinois which is the hotbed of this litigation as is the Southern District of New York and they sued John Doe Brain Flakes or VIAHART versus John Doe’s 1 to 200 sellers on Amazon. They started that lawsuit.

Then they went to court and they got the judge’s to sign off on a subpoena to Amazon saying, “Amazon, tell us who these sellers are,” OK? Then they got an order from the court freezing all those sellers’ accounts and more importantly, freezing all their money, right? Now, those sellers are frozen, they then reach out, I represent about a dozen or two dozens of these sellers resolving things with Brain Flakes. So, sellers can sue other sellers without even knowing who they are but the dollars and cents really have to work out. If you have two or three hijackers and you’re losing a couple of thousand dollars a month, is it really worth it? Probably not. If you’re losing tens of thousands or hundreds of thousands dollars in sales for a month, then litigation makes a lot of sense. Because your monthly cost of that litigation right, is going to gain you all of those sales in your bottom line. I am no huge fan of litigation. I’m like– I’m like the only lawyer in this area who actually, was a trial lawyer. You know, I’ve tried hundreds of cases, hundreds of cases. So court is really generally a bad place for small and medium size business except if you can quantify what you’re going to save in sales and quantify what it’s going to cost you on like a monthly basis to pursue that litigation.

Shannon: Right.

CJ: So seller versus seller litigation might be a good avenue if you’re big enough.

Amazon Selling Your Products

Shannon: So one of the situations that we see quite a lot is companies you know coming in and they show up and they see a product of theirs sold on Amazon and it says “Ships from and sold by Amazon” and they go, “We’re not selling to Amazon.” What can sellers and brands do when their product is being sold by Amazon? Is there anything they can do to prevent it if they don’t necessarily know who in the distribution system is leaking that product and selling directly to Amazon through Vendor Central?

CJ: Absolutely. And also, you know, people fear poking the bear, OK? But I want to tell you in all the arbitrations, in all the cases that we’ve worked with, with Amazon, they don’t retaliate. They’re not a retaliatory company. When they are right, they stand firm. When they are wrong, they resolve. If they’re violating your IP rights, they’ll take themselves off, almost as quickly as they will another third party seller, OK? So you don’t necessarily have to fear. It doesn’t mean this will continue in the future, they can change their mind and say you know, you coming after us, we’re going to cut your legs off but so far, we handle like 75% of all the arbitrations out there. They are a good company because they don’t retaliate. OK?

Shannon: In a sense that what you’re saying is you know, I’m the seller, I sell on Amazon through seller central. If I tell Amazon “You need to stop selling through this Vendor Central listing”, they’re not going to shut your Seller Central down.

CJ: Exactly.

Shannon: And I have seen the same thing that Amazon plays hard ball in a sense. They’re not emotionally involved. They’ll shut the sellers account down like that because they miss some deadline. It’s all algorithm based. And if you appeal, they’ll put it back up but there are no hard feelings about it. That’s the thing. It’s not like they get all emotional and I have encountered brands and sellers that say, I’m really scared. I don’t want to like yes, we’re losing thousands of dollars from Amazon selling this product. It’s an old product. Whatever the case may be we don’t want to hurt our sales and you’re basically saying you haven’t seen that be an issue.

CJ: I have not seen that be an issue with one caveat, OK? They don’t retaliate when you enforce your rights, OK? What I have seen is that if you do bring something like an arbitration to fruition and you have other shenanigans going on, multiple accounts, buying on Woot, selling on Amazon. When you bring it to arbitration, the level of scrutiny on your account and your name and your bank account, your products is at such a high level. The lawyer for Amazon is such a bright guy. He’s s great lawyer, he’s also a good person but his level of scrutiny, right, is extreme. And then his staff below him and the inside people at Amazon, you’re not dealing with the people in Hyderabad and Bangalore anymore. OK? So if you bring an arbitration and you have five other accounts, they’re going to find them. OK?

Shannon: Right.

CJ: Now, in terms of the brand, they don’t retaliate. They will take themselves off th listing they same way they do with third party sellers and they will protect your IP rights even against themselves.

Shannon: What does that look like? I mean for example, Amazon this selling product. It’s being sold by the distributor to them. It’s not necessarily– I mean it might be copyright infringement or trademark infringement or simply saying, “Hey, we did not authorize the seller to sell to you.” What’s the actual complaint? What’s the way to contact Amazon and bring that complaint to their attention?

CJ: OK. If Amazon is selling it, it’s almost always a genuine product. We have been involved in a case where they sold counterfeit products or problematic products, there was one was an iPhone and Apple made a complaint against our client. We were able to show that that particular phone was actually in Amazon’s inventory so Apple’s complaint really lied against Amazon what the issue was. But almost always, it’s genuine products that either have been shipped to them and sort of got lost and then absorbed by Amazon…

Shannon: Right.

CJ: …or the sellers or you shipped in 10,000 units and only 9,000 got logged in, right? And now you’re making, you’re putting in a case for the lost inventory. But it’s almost always genuine products. When they’re selling on your listing, that’s when you need these other add-ons or these other intellectual property issues that may take it out of the first sale doctrine. And if you have that you make the complaint the same way. Either you go to the same stupid two-page form online, you fill it out. They have to show that the consumer even from Amazon is not getting the same product and they will take themselves off if you’re right.

Strategies for Communication

1. Determine the Amazon Infringement

Shannon: Got it. So, we’ve covered a lot of the most common seller questions. We’re going to move in the third side of this and this is strategies for communications. And again, this is where you and I had a lot of agreement on and I think makes a lot of sense. But first thing you have to do is you have to determine the infringement. So we talk about that in the first section. What is the actual infringement that the seller is doing? The second thing that I believe is most important is cataloging all the infringements. So, if you’re a new brand, I’d say I worked with two types of companies in this.

2. Catalog all Amazon Violations

Shannon: One is they’re are new company and they’ve got a lot of press, a lot of promotion, a lot of marketing coming, and they immediately see other people pop-up, other sellers jumping on their listing duplicate listings. That’s one aspect. The other side is a brand that has been around for years and they’re coming into Amazon as a new seller and all of a sudden there is this massive amount of clean up. So just cataloging, here’s all the ASIN’s that are out there that are your product where people are selling your product. Here’s all the sellers, and again we recommend what looking not only at the seller display name but also the seller ID which is available in the URL because the seller display name can change everyday. And the seller ID will be the same but cataloging, knowing the infringement and cataloging the infringement is really important.

3. Contact the Seller on Amazon

ShannonLet’s talk about step number three, contacting the seller first. What are we looking at when it comes to that stuff?

CJ: All right. We always, always, always recommend that you contact the sellers through the messaging system, you know we can do it, you can use our letterhead that we send to you and you send it if you have 2.0 it’s much more efficient for the sellers to do it themselves. And you reach out to them explain to them what the violation is and give them a chance to remove themselves from the listing. More often than not, they’ll either stop selling or they’ll reach out to you and say, “Listen, we have 200 units left, 50 units left, how about you let us sell out and then we’ll go away.” And almost all of them you can get rid of probably 80%, 90% of the hijackers amicably.

And the reason why I recommend that is two-fold. One, I think it’s good business. They get off and it’s done. Number two, we all, all of us, we live and die now based upon our reviews. Right? And if you just put someone out of business, if you just cut their legs off, their friends, themselves, their family, their employees, their friends and family could buy a product, leave you really bad reviews, make a A-to-Z claims and all of a sudden your sales go in the toilet.

And if your goal is to protect your brand, you don’t need someone to be able post online that such and such a brand put me out of business. I had to lay off three people. A single mom with four kids, someone with someone disabled at home. It’s just bad business. It’s better to do it amicably to avoid those complaints or avoid that potential bad press coverage. And I have had this conversation where I had to tell a brand manager, another lawyer, “Listen, my client, if you keep doing this, he’s going on to social media. I’ve asked him to retrain himself for now but if you put him out of business, it’s going to cost you so much in your brand that it’s just not worth while. Let him sell his 10 units.”

Shannon: Yeah.

CJ: And then he is done. Because to the brand, what’s another 10 or 50 units if they’re genuine? It’s a drop in the bucket. But for the mom and pop in Nebraska, all of a sudden they can’t make their mortgage payment. So give them the chance to do it amicably. Make it short. We usually do 48 hours, OK? And then we might enter into agreements that they can sell out their inventory or sometimes the brands will buy back the inventory and try and resolve it amicably. If they don’t get off, then go through Amazon’s system and use your sword because then they’re violating your rights and they’re refusing to remedy it themselves. But I think it’s just best to try and do things amicably rather than create problems where there are none.

4. File an infringement with Amazon

Shannon: Yeah, I absolutely agree and this is a really key point. It is good business for the brand. And the only, the only time that we don’t do that is where the abuse is so blatant and so malicious or where that product that they’re selling is in fact a sub-par imitation, it’s counterfeit and it’s going to result in negative product reviews. That’s really key because the product reviews is one of the most difficult things to remove. Seller feedback, you can remove, that’s not a problem. But product reviews are really key, that’s why protecting the distribution is so important.

But CJ, I’ll give you an example of one of the brands I worked with. We have a situation where we are going through– we cataloged 150 sellers and about 50 duplicate listings and listings with our trademark and sometimes we couldn’t even tell. It’s like, OK, is this trademark infringement or is that actually our product? And so went through and all the ones that were questionable, we ordered samples from and we got one from a seller and we had contacted them and say, “You’re selling a counterfeit product on Amazon.” And they wrote back and said, “I had no idea. Because it actually has your logo on it, it has your brand. It has product packaging.” All of it looked the same. It’s even got the insert with the website and it was just, it was– you sort of like mentioned a gray market product. It was not– but it was not actually our product. So, it was a knock-off.

So, again, even in that situation, even though they were actually selling a counterfeit product, we said, “We understand that you didn’t know and we’re not going to file a charge or we’re going to dismiss the charge” and let people off. And we’ll get to that in a second, when it comes to the retraction. But it is important I believe as a brand to give people the benefit of the doubt. And once you know their seller ID and once you’ve had that engagement with them, you can always track and see what they do in the future. And we see 9 times out of 10 people want to run a profitable Amazon business. And they know that if they dive into your products again, or you know do anything, it’s not worth the headache for them. Guaranteed, they’re going to jump off the listing and they’re going to find other products to sell.

CJ: 100%. We’ve seen it with Apple products and we saw it with the very, very high end microphone. Domestically, I would say 95% of the time, 98% of the time, sellers do not want to sell counterfeit. One, they don’t want the problem with their account long term. And number two, they’re not really saving any money anyway, right? Because the genuine products cost just about the same as the counterfeits.

And we had two cases, one with the Apple product where our client, he felt that the deal was a little too good to be true. So he went to Apple and recorded his conversation at the Genius Bar where they confirmed they were real Apple products. Right? And he did the same thing for this other high end microphone. It turned out they were issues were like the batteries were different. Apple didn’t catch it. And with the microphone case, they actually had it do– and you’re like, first you do a visual inspection then you could open it up. The only way they found out that this microphone was different was the gauge of the wiring it was the same color, the soldering was done right but the gauge was slightly different, right?  We were able to keep the seller online by showing how extensive our research was and how they finally determined it. OK? But most sellers don’t want to be involved in counterfeit.

Also, on the flip side of that, if you come across a seller who’s not selling counterfeit, a lot of these things are also resolved with distribution agreements.

Shannon: Right.

CJ: Because you know what? Having other sellers online who may be better sellers than the brand themselves could be a huge benefit or getting– it’s like getting more shelf space in the supermarket. So, a lot of them were resolved by just amicably they say, “OK, I’m really sorry. We’ll get off. We didn’t realize it was counterfeit. Let us sell our last 200 units or how about we work together and we become a distributor for you? And we honor your MAP pricing whatever you’re issues are.” And a lot of times it’s a really advantageous agreement because a lot of people are really good at developing the product, developing the brand, the idea of people, where another seller might be better at moving it online.

Shannon: Yeah. I’ve seen specifically an issue where the company the seller has product at FBA. As long as we confirm that it’s legitimate product we typically will let them sell through because really it’s no harm no foul. It’s usually a couple of hundred units at the most. And typically, it’s more like 10 to 15. Drop-shippers are a little more questionable because they’re not actually able to validate anything about the product. They never touch the product. They never see the product. They can’t confirm the customer is getting a good deal. So that’s typically a bad situation for brands if it’s un-monitored.

We use AMZ Alert for everything because you get a text message and an email the second somebody jumps on you listing or if you lose the buy box. But I think those are really key so basically once we’ve contacted the seller, if you’re not able to resolve it amicably, and again, I think 95% of them are. We rarely have to do a trademark or counterfeit or copyright infringement. But if you have to file that, you can go ahead and file that. Once that’s filed, you will typically get emails from somebody and they will say, “I didn’t know or there was an issue.” And in some cases, CJ, I had a situation where I had filed a copyright infringement I think and I had done it against a couple of ASIN’s and Amazon just lumped all the sellers together.

5. Retracting your Complaint if Necessary

Shannon: So, anybody who had ever added a product image or anybody who had sold on that listing, and so we you know in a span of about a week, we had a dozen people complaining and saying, “Can you withdraw this complaint?” Again, I think my advice is the same as yours. We’re not trying to hurt the sellers. We’re not trying to shut anybody down, we just want to protect the brand long term. If somebody has a legitimate complaint and says, “We’re sorry, we won’t do it again. And here’s the information that you need. Here’s our agreement not to sell this product in the future, not– and to stay off your listings.” Then the best thing to do is to send the email to notice-dispute@amazon.com and withdraw and retract that complaint simply because it’s the right thing to do. It allows them to keep their seller account in good standing and you’re not going to have a problem with them in the future, almost guaranteed. Any thoughts on that?

CJ: Yeah, I agree with it 100%. You want to make sure that you get their name, address, business name, corporation, you know who they are, who you need to monitor. I’d also add something here, if you’re having problems with hijackers located in Asia, OK? You want to do the same thing. They are a little bit harder to track, but I’d add something to it that if you’re having a problem with someone with a seller in Asia, you also may want to send someone in person to introduce themselves to the principals over there in person. You know we have full-time staff in Shenzhen, China. OK? And in terms of our brand protection, I have the ability to actually send a person respectfully over to that’s brand’s office, introduce themselves. And in Asia, that carries a ton of weight.

The relationship it’s called Guanxi it’s all about like saving face or losing face. And when someone shows up and respectfully speaks with them in addition to the email, if you can do it and says, “I’m from such and such or I represent such and such. We sent you this I just want to introduce myself to you and this is why you should stop selling the product.” It has a tremendous amount of weight behind it. And again, it’s amicable.

And if you are concerned about domestically, people leaving bad reviews and making A-to-Z claims, OK you take that to Asia where each company has 200, 300, 400 people working there, right? You’re talking about hundreds of instantaneous bad reviews you could end up with, if they want to do it. So this whole thing resolving it amicably first, I think is vital especially if you have domestically and also when you have hijackers from Asia. You can resolve it amicably, it’s cheaper, it’s faster, it’s efficient and then you avoid problems in the future that arise when there’s animosity.

Preventing Gray Market Distribution

Shannon: Yeah. Two quick thoughts on that, one is I remember Chad mentioning you know the best thing people do, brand owners can do to keep the warehouse or the manufacturer, for example, from selling out the backdoor to somebody else. He said, he was going over and taking the warehouse floor manager out for drinks. And establishing that relationship, know your people, have direct connections. It’s really important just for the integrity and I think authenticity and longevity of the relationship.

CJ: Yeah, it’s vital here. It’s vital here. It’s even more vital in Asia. Because it’s– here it’s that friendship, that relationship that you’re not going to screw over somebody you know. There it’s even more culturally significant to save face.

Shannon: Well, CJ, thank you so much for your time. I feel like we’ve covered so much really good information. And if you need to reach CJ at AmazonSellersLawyer.com is the website. And for IP infringement, trademark, counterfeits and stuffs, if there are questions, you can contact him and his team. CJ, again, thank you so much for the time, I really appreciate having you on today.

CJ: Oh thank you but I just also you know, one of the things that frustrates Amazon business people the most is there’s no one to talk to. Especially as they get older in years like I am, so you can also call us, we have telephones…

Shannon: Phone number.

CJ: Not just WhatsApp and WeChat and Skype and all this other stuff. It’s (877) 9-Sellers, (877) 9-Sellers and you can actually speak to us.

Shannon: CJ. Yeah. Thank you again so much, Appreciate it. Again, if you need to reach to CJ and his team, the information will be below the video. And thanks again.

CJ: Great. Thanks for having me on.

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