Intellectual property rights are among the most valuable assets an Amazon store owner can own. These rights help distinguish the owner’s products from those of others and may prevent competitors from selling products with similar designs and functions. Yet trademarks and patent rights are national in scope. Without positive steps taken by the Store Owner to internationalize these rights, the Owner’s rights will be limited to their country of origin. This can have significant negative consequences when the store owner wants to offer their products on Amazon sites outside of their home country or sell their store to an aggregator.
Amazon sellers can protect brands with international intellectual property rights
Since trademark and patent rights are national in scope, unless an Amazon store owner internationalizes these rights, the store owner will have no way to prevent third parties from copying its trademarks, designs and inventions in other countries. Without international protection, not only an Amazon seller in another country can copy the store owner’s intellectual property, but the other seller can also register the store owner’s trademark in their own country. That seller can then use that record to block the Amazon store owner from offering their products in that country.
For example, if a UK-based seller of a popular British homeware brand with a distinctive design fails to obtain its trademark in the United States, it may find itself unable to use its trademark. on Amazon’s US site because a US-based seller has already obtained a US trademark registration for the mark and registered it with Amazon’s Trademark Registry. Even without a Brand Registry, the UK seller’s use of their own brand in the US could constitute trademark infringement. Similarly, without obtaining design rights in the United States, the UK seller may find it impossible to prevent competitors from using their design in the United States.
This is not considered bad faith. This is a function of intellectual property laws. But it is avoidable. When an Amazon store owner develops a new brand, design or invention, they must quickly obtain the rights in each country in which the store does and is likely to do business. This is especially true with respect to patents. If a patent application is not filed within one year of the product being offered for sale somewhere, a patent resulting from the application would be invalid.
Filing trademark applications abroad is not a difficult process. Due to various international treaties, foreign applications can be filed through the trademark office of the country of origin. For some trademark applications, the entire application process can be accomplished without hiring a lawyer outside the country of origin. Even if the Amazon store owner does not intend to expand their sales beyond their own country, the store owner should consider whether they may at some point be acquired by an aggregator or another entity that intends to expand the brand into other markets. These international rights make the store owner’s trademarks, designs, and inventions, as well as the store itself, more valuable and appealing to a potential buyer.
Importance of international intellectual property rights for aggregators
International intellectual property rights are equally important for aggregators and other buyers of e-commerce businesses. If an aggregator purchases an Amazon store with the intention of expanding the store’s products into new markets, pre-acquisition due diligence should determine whether the store’s brands are registered or available in the markets it wishes to enter. . If the brands are available but not registered, the aggregator should register them soon after acquiring the store.
Even if an Amazon store owner or aggregator does not intend to expand beyond the country of origin of the store, it is still important to obtain trademark and patent rights in the countries where store products are produced. This is particularly important for products made in China where there is a high incidence of bad faith trademark registrations and design patents. These intellectual property rights are often obtained by competitors and the factories that manufacture the store’s products. Trademark registrations and patents in bad faith can be used with China customs to block shipments from the store to the port or be invoked against the store’s authorized Chinese manufacturers. This often happens as a form of retaliation when a store changes manufacturers and the original manufacturer asserts its intellectual property in bad faith against the new factory. The easiest and most cost-effective way to avoid this is to secure the IP rights in China before someone else does.
Design patents are a powerful weapon against competitors on Amazon. Amazon is aggressively removing products accused of design patent infringement. Stores and aggregators that develop or acquire the rights to new products featuring unique ornamental patterns must apply for design patents covering those patterns. Since the application process can take more than a year, it is advisable to file the application as soon as the design is finalized, even before the product goes on sale for the first time. A competitor’s product that copies the applied for design does not become infringing until the design patent has issued.
Aggregators should also keep in mind that if they acquire a pending design patent application that covers a product or design that an aggregator is not sure they will use, it often makes sense to pursue the prosecution of the application and pay the costs of issuance, as the resulting patent can be used against competitors, whether or not the aggregator uses the design.