Trademark owners will file suits against secondary markets, creating barriers to new entrants – that reduces price competition

Cooperation between rights owners and online stores is necessary to combat counterfeiting. Any regime of secondary trademark infringement liability that attempts to assign primary responsibility to online stores would not address the core criminal activity. To the contrary, it would undermine cooperation by encouraging rights owners to pursue online stores out of convenience instead of bringing their expertise and resources to bear on counterfeiting directly. This shift also would have a harmful chilling effect on the secondary market for safe, genuine goods by raising barriers to entry for honest sellers and online stores and by encouraging online stores to err on the side of caution, resulting in restricted price competition and selection to the detriment of consumers and SMBs.

As acknowledged in the DHS Report, “[t]he rapid growth of e-commerce has revolutionized the way goods are bought and sold,”4 and the central role of e-commerce has been underscored by the unprecedented challenges of the COVID-19 pandemic. Online stores are pivotal in providing consumers with genuine goods and necessities quickly and safely more than ever before. Shifting the trademark liability legal regime would impede the fight against counterfeiting. For this reason, among others, Amazon favors maintaining the existing doctrine of secondary trademark infringement liability.

THE CURRENT DOCTRINE CORRECTLY FOCUSES ANTI-COUNTERFEITING EFFORTS ON COUNTERFEITERS

Because counterfeiters always will strive to circumvent legal requirements, an effective legal regime must encourage all stakeholders—rights owners, governmental agencies, and all stores—to work together to stay ahead of and deter bad actors. Proactive tools and information sharing are among the most successful ways to combat counterfeiting. Shifting primary responsibility in this fight to stores would subvert essential partnerships and ineffectively focus efforts on pursuing stores, who are themselves harmed by counterfeiting, instead of pursuing the bad actors responsible. The current doctrine creates the correct incentives to target criminal actors.