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[Megan, Christopher Ford, Debevoise & Plimpton LLP Counsel, Kate Saba, Debevoise & Plimpton LLP Associate, Hannah Beattie, Debevoise & Plimpton LLP Associate, 4/20/2024, World Trademark Review, “Does the US SHOP SAFE Act go too far in shifting liability? ”, https://www.worldtrademarkreview.com/article/does-the-us-shop-safe-act-go-too-far-in-shifting-liability, accessed 7/11/2024, LR]

Shifting the burden of detecting counterfeits

[Eric, 9-28-21, Technology & Marketing Law Blog, “The SHOP SAFE Act Is a Terrible Bill That Will Eliminate Online Marketplaces”, https://blog.ericgoldman.org/archives/2021/09/the-shop-safe-act-is-a-terrible-bill-that-will-eliminate-online-marketplaces.htm, accessed 7/9/2024, LR]

Overturning Tiffany v. eBay

[Megan, Christopher Ford, Debevoise & Plimpton LLP Counsel, Kate Saba, Debevoise & Plimpton LLP Associate, Hannah Beattie, Debevoise & Plimpton LLP Associate, 4/20/2024, World Trademark Review, “Does the US SHOP SAFE Act go too far in shifting liability? ”, https://www.worldtrademarkreview.com/article/does-the-us-shop-safe-act-go-too-far-in-shifting-liability, accessed 7/11/2024, LR]

Changing the landscape for social media marketplaces and small businesses

[Eric, 9-28-21, Technology & Marketing Law Blog, “The SHOP SAFE Act Is a Terrible Bill That Will Eliminate Online Marketplaces”, https://blog.ericgoldman.org/archives/2021/09/the-shop-safe-act-is-a-terrible-bill-that-will-eliminate-online-marketplaces.htm, accessed 7/9/2024, LR]

Who’s Covered by the Bill

[ROBBY, 1-19-22, Reason, “The SHOP SAFE Act Would Entrench Amazon's Dominance”, https://reason.com/2022/01/19/shop-safe-act-amazon-online-markets-big-tech/, accessed 7/9/2024, LR]

The SHOP SAFE Act is a typical piece of safety-themed legislation, in that it would accomplish something much more sinister than what its name promises. Far from protecting online shoppers from harmful products, this legislation—sponsored by Rep. Jerry Nadler (D–N.Y.) in the House and by Sen. Chris Coons (D–Del.) in the Senate—threatens to obliterate online marketplaces by subjecting them to increased liability.

[Megan, Christopher Ford, Debevoise & Plimpton LLP Counsel, Kate Saba, Debevoise & Plimpton LLP Associate, Hannah Beattie, Debevoise & Plimpton LLP Associate, 4/20/2024, World Trademark Review, “Does the US SHOP SAFE Act go too far in shifting liability? ”, https://www.worldtrademarkreview.com/article/does-the-us-shop-safe-act-go-too-far-in-shifting-liability, accessed 7/11/2024, LR]

The SHOP SAFE Act’s broad and vague “health and safety” definition

[Megan, Christopher Ford, Debevoise & Plimpton LLP Counsel, Kate Saba, Debevoise & Plimpton LLP Associate, Hannah Beattie, Debevoise & Plimpton LLP Associate, 4/20/2024, World Trademark Review, “Does the US SHOP SAFE Act go too far in shifting liability? ”, https://www.worldtrademarkreview.com/article/does-the-us-shop-safe-act-go-too-far-in-shifting-liability, accessed 7/11/2024, LR]

By 2025, online marketplaces are predicted to account for up to 50% of e-commerce sales in the United States. Counterfeiters have sought to exploit the rise of online marketplaces, leading to new debates around how to identify and prevent counterfeits from reaching consumers and who should hold this responsibility.

[Eric, 28/9/21, Technology & Marketing Law Blog, “The SHOP SAFE Act Is a Terrible Bill That Will Eliminate Online Marketplaces”, https://blog.ericgoldman.org/archives/2021/09/the-shop-safe-act-is-a-terrible-bill-that-will-eliminate-online-marketplaces.htm, accessed 7/9/2024, LR]

The SHOP SAFE Act, H.R. 5374, seeks to curb harmful counterfeit items sold through online marketplaces. That’s a laudable goal that I expect everyone supports. However, this bill is itself a giant counterfeit. It claims to focus on “counterfeits” that could harm consumer “health and safety,” but those are both lies designed to make the bill seem narrower and more balanced than it actually is.

[28/12/2020, Patent and Trademark Office, “Engine Advocacy”, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf, accessed 7/9/2024, LR]

The limits of filters—which will fail sometimes (likely often)—and the fact that startups would be incapable of identifying and removing all infringement on their own also brings substantial litigation cost and risk. Expanding platform liability over users’ alleged IP infringement would put early-stage companies at risk of being sued out of existence. It would also discourage entrepreneurs and investors from developing new technology or pursuing new e-commerce business models. Internet platforms, in particular, have been able to innovate and launch because they do not have to hire teams of lawyers to brace for litigation when users are accused of infringement. And investors would be reluctant to fund emerging e-commerce platforms if they knew the money would go to cover liability for user infringement.21

[Nicole, 04/16/2017, Amazon Sellers Lawyer, “Trademark Bullying by Big Corporations,” https://amazonsellerslawyer.com/blog/trademark-bullying-by-big-corporations/, accessed: 07/11/2024, shl]

Larger Corporations take extraordinary measures to protect their intellectual property rights, some of these efforts being unethical and illegal. The Patent and Trademark Office defines a trademark bully as “a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” These “bullies” take their preventative measures far beyond the threat of litigation. They will file suit against anyone they deem to be their competition, of whether or not their allegations hold merit. Litigation requires a devotion of time, money, and effort; and many competitors do not have the resources to fight. However, these corporations can afford the financial sacrifice and time spent. Companies are threatening litigation not just for actual infringement, but in situations where logos may be vaguely similar. Companies are also filing suit when they discover a smaller company is selling their product, but at a lower cost. The re-seller is selling an authentic product, but the company does not care. They want them removed, and they will attempt to eliminate their competition at any cost whether or not they are actually committing trademark infringement. This is trademark bullying, it is unethical, and it is happening every day.

[Jacob, 09/09/2019, United States Patent and Trademark Office, “Topping_TPAC_Notice_Fees,” https://www.uspto.gov/sites/default/files/documents/Topping_TPAC_Notice_Fees.pdf, accessed: 07/11/2024, shl]

The Problem:

[Puneet, 01/28/2023, IIPRD Blog, “Trademark Trolls – Tackling The Practice Of Frivolous Trademark Registration,” https://iiprd.wordpress.com/2023/01/28/trademark-trolls-tackling-the-practice-of-frivolous-trademark-registration/, accessed:07/11/2024, shl]

In the current era, intellectual property rights play a critical role in international trade. They are a must-have for entrepreneurs from all walks of life who want to avoid stumbling blocks and gain the benefits of their labours. “To protect the most basic manifestations of one’s creativity, trademarks with a global application are essential.” Because a pictorial representation of one’s innovation is required regardless of the previously mentioned concerns, trademarks have been made available to individuals of all classes and are not limited to a specific stream or business, it is important to protect a trademark. Nowadays, trademark trolls are being employed to take advantage of trademark rights in order to gain unauthorised profits.

[Jonathan, 05/27/2021, Internet Association, “The SHOP SAFE Act: Stemming the Rising Tide of Unsafe Counterfeit Products Online,” https://docs.house.gov/meetings/JU/JU03/20210527/112713/HHRG-117-JU03-Wstate-BerroyaJ-20210527.pdf, accessed: 07/10/2024, shl]

IV. REMOVING PROTECTIONS FOR ONLINE SERVICE PROVIDERS IS NOT THE SOLUTION TO THE COUNTERFEITING PROBLEM.

[Robin, 02/23/2022, IP Justice, “SHOP SAFE: Ill-Considered Counterfeiting Bill Misses Mark,” https://www.ipjustice.org/digital-rights/shop-safe-ill-considered-counterfeiting-bill-misses-target/, accessed: 07/10/2024, shl]

In an attempt to protect consumers from defective and unsafe counterfeit products online, Senator Coons (D-DE) introduced SHOP SAFE (Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2021) in May 2021. Representative Nadler (D-NY) proposed an amendment on September 26, 2021 that has since been adopted. On January 25, 2022, the House of Representatives inserted this proposed legislation into the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act (COMPETES) Act of 2022, previously referred to as USICA (United States Innovation and Competition Act). Although many legislators were concerned about SHOP SAFE, no changes were made when it was inserted into COMPETES.

[Andrew, 05/2022, Journal of Intellectual Property Law, “Reconsidering the Willful Blindness Doctrine in Contributory Trademark Infringement,” https://digitalcommons.law.uga.edu/cgi/viewcontent.cgi?article=1491&context=jipl, accessed: 07/09/2024, shl]

2. Legislative Proposals Fall Short of Solving the Problem

[12-28-20, Patent and Trademark Office, “Engine Advocacy”, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf, accessed 7/9/2024, LR]

The doctrine of contributory liability currently applied by U.S. courts is balanced and largely working well. Many small or early-stage e-commerce companies would not be able to afford the cost and risk of a legal framework that mandates proactive policing and/or holds companies liable for user-generated infringing content they have no knowledge of or direct involvement in. And any changes which shift the fundamental balance in the current law could have outsized and negative impacts on startups. Such changes would reduce the viability of existing and prospective startups—potentially forcing them out of the market—but it would also restrict options for the content creators and small businesses who rely on diverse e-commerce offerings, reduce innovation and competition in the online marketplace, and harm the U.S. economy as a whole.2

[Cara, 25/1/20, Patent and Trademark Office, “IN THE MATTER OF REQUEST FOR COMMENTS ON SECONDARY TRADEMARK INFRINGEMENT LIABILITY IN THE E-COMMERCE SETTING”, https://downloads.regulations.gov/PTO-T-2020-0035-0020/attachment_1.pdf, accessed 7/9/2024, LR]

EFF opposes any expansion of secondary trademark liability for e-commerce platforms, or any other class of intermediary. EFF shares many of the concerns raised in comments submitted by Engine Advocacy,1 Internet Association,2 and the Computer & Communications Industry Association,3 including those addressing risks to competition and innovation; suppression of lawful expression; and the practical problems with automated filters. The current secondary liability framework, as described in Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), strikes an appropriate balance by incentivizing intermediaries to take action if they become aware of specific infringing conduct, while keeping the burden of actively policing infringement on trademark owners—as has always been the case under U.S. law and custom, both online and offline.

[28/12/2020, Patent and Trademark Office, “Engine Advocacy”, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf, accessed 7/9/2024, LR]

III. There are improper takedowns and abuse of the current system, and policymakers should avoid shifting liability to e-commerce platforms which would exacerbate problems and lead to a sizeable removal of legitimate content

[28/12/2020, Patent and Trademark Office, “Engine Advocacy”, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf, accessed 7/9/2024, LR]

II. Current legal doctrine is working, and changes in this area of the law would put startups and their users at a significant disadvantage

[Austin, S. Economics, B.A. Philosophy, Syracuse University, 10/23, Boston University Law Review, “INCORPORATING A DEPOSIT MECHANISM INTO THE DIGITAL MILLENNIUM COPYRIGHT ACT TO FIGHT ONLINE COUNTERFEITING IN E-COMMERCE,” https://www.bu.edu/bulawreview/files/2023/10/CHURCH.pdf, accessed: 07/11/2024, shl]

B. Benefits of Implementation