SHOP SAFE incentivizes online platforms to be proactive about policing

First, The USPTO Should Explore Whether the SHOP SAFE Act Should Expand to All Products and Goods

As described in the Section’s letter to Congress supporting the SHOP SAFE Act, the Section strongly supports the implementation of the Act and believes that it would incentivize platforms to take proactive measures that help prevent sale of counterfeit goods. For the products it covers, the SHOP SAFE Act both addresses the primary goal of the DHS and the potential shortcomings of current legal doctrine as applied by the courts. In particular, the Act’s requirements that platforms address potential sale of counterfeit goods on a “reasonable” standard under Sections 1114(4)(A)(ii) (VII), (VIII) and (X) 7—rather than a particularized knowledge standard—and that platforms use available technology to screen goods under Sections 1114(4)(A)(ii)(VI) and (IX) may help shift to a more equitable shared burden between trademark holders, consumers, and e-commerce platforms. The Section looks forward to a chance to comment further on the “reasonable” standard and technological requirements set out in the SHOP SAFE Act once clarified by Congress.8

Given these benefits, the Section encourages the USPTO to track the Act’s success if implemented for health and safety products and consider how those successes could extend to all product types. The Section believes this could be accomplished by requiring annual reporting from relevant government agencies and e-commerce platforms regarding the impact of the SHOP SAFE Act on third-party sales of counterfeit goods on e-commerce platforms.

Second, the USPTO Should Explore Options for Potentially Implementing a Federal Standard that Sets a Reasonableness Standard for Contributory Liability for Trademark Infringement, Consistent with the Principles Set Out in the SHOP SAFE Act

The Section also believes that a single clear standard would be beneficial for all stakeholders, particularly when considering the wide array of jurisdictions e-commerce platforms reach.

One potential new federal standard worth exploring is one in line with the standard set out in the SHOP SAFE Act that would essentially impute liability to e-commerce platforms when they reasonably could have ascertained the infringement or counterfeiting. Although more clarification of the standard is necessary, it seems probable that it will incentivize e-commerce platforms to use appropriate precautions when faced with generalized knowledge of use of their services for infringement or counterfeiting. Trademark owners will still have the burden of proving when those measures are inadequate and will also likely still play a role in notifying platforms of instances of infringement to help platforms with the precautions they implement (including portals that give venues to trademark owners to report issues).