What should I do if I receive an Amazon Seller cease and desist letter?
The sending of cease and desist letters on Amazon has been a growing trend in recent years.
They can be used as a genuine defence of an intellectual property, or as an attempt to shut down the operations of a rival Amazon Seller, and not always on credible grounds. So what is a cease and desist letter and when might they be sent from somebody on Amazon?
A cease and desist letter is a document sent to an individual or business to stop purportedly illegal activity and not to restart it. The letter may warn that if the recipient does not discontinue specified conduct, or take certain actions, by deadlines set in the letter, that party may be sued. The do not necessarily have to be sent by a legal body in the first instance.
So why might a cease and desist letter be sent?
Whether it's a copyright, trademark, or patent, your ownership of intellectual property gives you specific rights. When someone uses your protected work without your consent, they are in breach of that right. This breach, called an infringement, may be stopped by sending a cease and desist letter, which should also state what action constitutes the infringement.
But the sending or receiving of cease and desist letters on Amazon opens up a range of other questions. What should my next step be? What should you do if you think the letter is baseless? What are the legal risks of ignoring them or countersuing?
Cease and desist letters have undoubtedly been used as an unscrupulous attempt to take out competitors at all costs by some Amazon Sellers, and it is important to understand the true legal issues at play in these cases. There is a method to the apparent madness of simply firing off a host of cease and desist letters everywhere to rival Amazon Sellers - some of the recipients, particularly if inexperienced or new to the site, might simply fold and discontinue their activity, even if they were doing nothing wrong.
Some Sellers want to control distribution of a product but lack the appropriate business strategy to track who sells their products on Amazon. They might turn to cease and desist letters as an alternative to the expense and complexity of a thorough brand strategy.
These are some of the reasons why it’s important to be armed with the legal facts surrounding cease and desist letters, and the processes that can take place within Amazon.
In some cases they can be the first step in an attempt to protect a brand - dealing directly with other Sellers takes out the need to involve Amazon themselves. If that initial attempt fails then Amazon could become involved - along with lawyers.
The reaction to these actions can vary wildly from case to case. Some companies will not take any action - either replying or ceasing activity - until they have some kind of formal legal correspondence. They might see cease and desist letters as an empty threat, which in some cases they certainly can be. Because of that, if it is you considering sending a cease and desist letter, Thompson and Holt would advise that you are as well versed in your legal position as you can be before taking any action.
The same can be said of submitting legal threats to Amazon themselves. In some cases Amazon will not respond through ordinary channels until an attorney or legal representative contacts them, which can delay an effective resolution. You may have a clear case for Amazon having made a mistake, but it’s important to get that first step right, which in most instances will involve using somebody well versed with the legal process.
One basic example is that if you use the word “arbitration” in a letter to Amazon, but have not made the formal legal request, you can expect to be ignored by them until you do. Their teams are well informed and experienced in these situations. Writing something that you think is a legal threat but hasn’t be done using the correct process will have the opposite effect of speeding up your claim - it will lead to it being ignored, without even a response to tell you that they aren’t taking it seriously. A correct strategy is invaluable in these situations.
Ignoring you until they receive a formal legal demand is seen as common practise by a lot of companies - it is a rational, methodical approach. Experts also suggest that attorneys will often research the histories of companies sending cease and desist letters, and if there is no record of suing in these situations before, again, it is easiest just to ignore them until formal legal processes begin. Because filings are public, it’s relatively straight forward for a company to look over past histories and determine whether they think a threat is a bluff or not. And if there is a history of cases, it is similarly simple to discover how successful they have been. A string of failed efforts will not work in that claimant’s favour.
Should I seek legal advice?
There is a high percentage of Amazon Sellers that don’t have the legal expertise themselves to compile successful cases, even if they are in the right. Online forums and message boards can offer poor or false information, with Sellers comparing cases with others that have subtle or considerable differences. A personal belief of what is fair and right is not comparable to the way the law works, and trying to bluff your way through that process is ill-advised at best and a potential disaster at worst.
If you are unsure of any stage of the process, it is advisable to get some kind of professional advice and assistance. Infringement cases on Amazon can be complicated matters that trained experts will be able to navigate with relative ease compared to a novice searching internet discussion groups.
Similarly, adopting the tactic outlined above of sending out mass cease and desist letters to rival Amazon Sellers in the hope that some will simply fall by the wayside is fraught with danger. The targeted Seller, especially if they are more familiar and knowledgeable about the process, could response in unexpected ways, opening yourself up to being sued if a claim in a letter is false. In America there are federal and state rules about the background work that should be carried out to support the truthfulness of a claim, and legal representatives should refuse a request from a client to send a cease and desist letter if they believe it is unethical or false.
You must be mindful of all this if you believe a cease and desist letter is the correct route for you to take, understanding the consequences and repercussions of your actions and having taken the necessary legal advice. You don’t want to end up dealing either with a well versed rival or Amazon gel teams themselves if you are standing on thin ice.
You should consider all the possible outcomes and whether they represent worth in pursuing your action. You are leaving yourself wide open to legal consequences if, for example, you accuse a rival of selling counterfeit goods without having verified that by making test purchases. And there are further considerations to be made within a cease and desist letter, that include tone and content that a legal representative will be much more familiar with, and understand the risks and benefits of.
Amazon does not have infringement claim processes in place to minimise competition, they are there to protect brand owner intellectual property, and protect customers from buying fake or misrepresented goods. Amazon will keep records of your legal letters for future reference, and it is probable rival Sellers will do the same, so this is not an action you should take lightly or without the relevant legal advice beforehand.
Prevent a cease and desist letter using Monitor and Protect
Thompson and Holt are also offering a free months trial of their Monitor and Protect service to help sellers prevent a suspension of ASINs or an their account during the COVID pandemic, more information on how to protect your Amazon seller account from a suspension can be found here.