Scanning tech fails and marketplaces don’t know how to accurately detect a counterfeit

Shifting the Burden of Detecting Counterfeits The SHOP SAFE Act’s safe harbour provisions provide some reasonable requirements of marketplaces: for example, encouraging programmes to quickly remove suspected counterfeit listings and terminating sellers who repeatedly list counterfeit products. But the overall scheme creates a new and untested landscape by shifting the burden for policing for counterfeits from brand owners onto marketplaces. There are substantial technological limitations to screening technology, and platforms are often not well positioned to know every product a brand has made and how to identify every counterfeit that might be out there. To combat counterfeiting, platforms need to implement policies for screening and terminating listings and sellers and brand owners need to provide platforms with the information to effectively do so. In its current form, the act requires that marketplaces ensure sellers use images that accurately depict the goods sold and use “identifying characteristics” of listings and sellers to determine if goods are counterfeit, but it does not require trademark owners to provide a way for marketplaces to know what authentic goods should look like. Instead, the act only requires the trademark owner to provide the notice of its mark and a point of contact. It expressly prohibits requiring that trademark owners “participate in any program specific to the electronic commerce platform” such as an information-sharing programme. Without reliable information about brands’ products and trademarks, platforms cannot possibly implement successful screening measures and may be forced to remove non-infringing listings for fear of liability. Though AI tools are being developed that may have the future ability to compare logos and trademarks used in listings to those provided by brands, those tools may yield false positives and false negatives and will lack the context and judgement to identify legitimate activity that is protected by doctrines like fair use. To avoid engaging in costly inquiries, marketplaces may simply overcorrect by removing any suspect listings, sweeping in authentic products as well. While all parties should be engaged in the fight against counterfeits, shifting the burden entirely onto marketplaces in this way will harm all parties—the marketplaces, trademark owners, sellers and consumers.