PLH 105 | Amazon Seller

 

As the world moves into the digital space, it has become very important for us to keep ourselves secure, most especially for those Amazon sellers whose products are sold virtually. CJ Rosenbaum of Amazon Sellers Lawyer takes us into some Amazon seller legal issues, talking about what is going on with this platform and how you can keep yourself, your IP, and your products secure and safe. He talks about digital rights management, the listing hacking process, and establishing your brand – from trademarks to copyrights and patents. CJ also touched on starting from Kickstarter and Indiegogo, and how you can protect yourself from falling victim to the risks.

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I am here with a cool guy. We got to meet around the circuit of the Amazon seller community and talking about various things. CJ Rosenbaum has this amazing AmazonSellersLawyer.com program. It’s specific and there are many things unique and special about what goes on. I say “special” because it’s maybe not good special. What’s going on in the Amazon world and you all are facing that at some point or another, whether you start out selling on Amazon or you eventually sell on Amazon. It’s going to hit you that there is a lot of stuff going on here that is universal to the digital rights management and everything that goes on. How stuff is processed is completely different than how we think about our products. I wanted to invite CJ on for us to talk about what’s going on in this world and how you can keep yourself secure and safe and your IP and your products. When something goes wrong, who can you trust?

When something goes wrong, all that I and my team of 35 people deal with are problems. I’d probably say 80/20, 80% problems and 20% problem prevention. If you do have an IP issue, an ounce of prevention is worth a pound of cure. You can protect yourself easily, cheaply do it yourself, and prevent a lot of problems or at least make dealing with the problems a lot easier if you take the right steps first as you’re developing your brand. The flip side of it is if you do have a problem, nothing is fatal in this ever-changing online retail world. It definitely feels fatal. Sellers all over the world fear getting suspended. If anything bad happens, take a deep breath. It’s business. It’s almost always easily resolvable and we’re here to empower and teach people how to handle a lot of things themselves.

Let’s start at the beginning because you didn’t start out an Amazon Sellers Lawyer. You didn’t start out in that world. What area of law were you practicing before?

I was a trial lawyer. I was a personal injury, ambulance-chasing trial lawyer and I loved every minute of it. I loved working for the victim. I loved going after the big corporations and beating up the city of New York when they did bad stuff. I was the guy in the courtroom and I loved it, albeit with some political changes here in New York. I went through a personal issue I had to pivot. Before I focused solely on Amazon, I was the guy in the courtroom talking to juries asking them to award millions of dollars for the victims of accidents, bad landlords, lead paint, sexual harassment and sexual discrimination.

That fits with what you’re doing now. You’re advocating for Amazon Sellers to Amazon majority of the time. You’re not necessarily going into court.

If you do have an IP issue, an ounce of prevention is worth a pound of cure. Click To Tweet

It’s almost always helping sellers deal with Amazon themselves or arbitrations against Amazon. There’s also some seller versus seller but we try and resolve those things as amicably as possible. If you’re a private label seller and you have an issue with another seller hijacking your listing, we do our best to resolve those issues amicably.

I’ve been practicing 27 years and people keep asking me this all the time and they’re like, “Isn’t China stealing your stuff? Isn’t your stuff getting stolen by other sellers?” and all of those things. I say, “The majority of the problems that I have are with whatever my channel or platform is. If it’s Staples or Walmart or Amazon, that’s where the number one problem lies and part of it is in their process.” For instance, Walmart, something came up and it was a trademark issue. It wasn’t even a design that I had done, but it was a trademark issue with a name that the company I was working for gave the product. They get this letter back from Walmart and the Walmart attorneys, we contacted them and tried to resolve it and say, “No problems but we believe we’re okay because their trademark is in this category and we’re in that category, which is allowed.” When we tried to resolve it they were like, “We don’t care. We don’t want to hear it. We get thousands of these every single day and our standard procedure is to send back a letter so you go figure it out.” That was it and I was shocked by that. That was early on in my career.

That’s the olden days. Now the problem is with the platform, but the solutions are with the platform also where they have to. We know Amazon, especially Walmart too, they are adept at avoiding liability that they follow the Digital Millennium Copyright Act and they expand upon it. Not only is it the problem, but they also have good mechanisms for the solution when you have to protect your brand. It’s not great if you’re selling major brands as a third-party seller, but if you’re developing your own brand, developing your own product they make it easy to protect your brand. Super easy and super simple because that’s how they protect themselves.

What are some of the majority of the things that you deal with? What categories do they fall into in terms of negotiations back and forth and infringements of some kind?

If you receive a complaint of infringement, the first thing we do is you do an analysis like, “Is our client infringing or not?” The vast majority of the time they’re not. Most sellers are not selling counterfeit products or at least not doing it on purpose. If they’re not infringing, we then reach out to whoever made the complaint and we try and persuade them to withdraw the complaint because it’s baseless. On the other hand, if our client is violating. You’re negotiating for the same goal to get that complaint withdrawn, but you’re negotiating from a different perspective because you did violate, either knowingly or you didn’t realize you were violating.

PLH 105 | Amazon Seller

Amazon Seller: While the problem is with the platform, remember that the solutions are with the platform also as where they have to be

 

If you’re a private label seller, it’s also an easy pathway to protect yourself. Right away you want to apply for your trademark. Right away you want to draft a warranty or some portion or some benefit of your product that somebody else cannot deliver. These things give you the ability to protect your listings and there’s a monitoring and cease and desist letters trying to get people to amicably stop hijacking your listing and if you need to make a complaint. It’s not rocket science. We’re good at it. We’re efficient at it because we do it every day, but it’s something that private label sellers can do themselves and what we’re happy to teach people. I am a huge believer in paying it forward. We’re here to help people and we could also do it for them. Whatever the company wants, the seller wants.

Are we seeing growth in dirty tricks like baseless claims? Are we seeing growth of that happening as a part of this listing hacking process?

I wouldn’t say there’s more of it, but they’re definitely getting better at it. People used to leave a bunch of bad reviews as a way of deep-sixing your product. Now, they’ve gotten better. Competitors will leave really great reviews that are clearly BS. It looks like the good guy manipulated his own reviews when in reality it’s a competitor deep-sixing him by leaving positive reviews. We’ve seen sellers take over the listings and adding pictures that don’t match the products. We’ve seen altering orders and sending back products and making complaints. We’ve seen how retailers have increased their game to hit certain levels of perfection, so have the bad actors. I don’t think there’s an increase in the bad actors, they’ve just gotten better at it.

They found the loopholes in the system. They found how the system is working, the algorithm’s working. At the end of the day, that’s what it is. Most of this stuff is this system, algorithm and a process. It’s not people. There are little people involved in the process.

Some people believe it’s all algorithms. A lot of people believe it’s mostly people. I fall in between the two. I have the unique experience of being able to cross-examine Amazon staff once or twice a month where I can hit them hard about whatever case I’m working on. I could also fish for extra information. Some of it’s mind-boggling. 70% of the time, Amazon will produce the same witness. Her first name is Tammy. I’m not going to reveal her last name. She basically described Amazon’s people that receive IP complaints of having zero legal training. Not a little bit, not a couple of weeks, nothing. I was like, “Are you serious, Tammy? Are you kidding me? There’s no training?” She was like, “No training, something to that effect.” I was mind blown. These people deal with the complaints every day and they don’t take even an IP paralegal and send them to India for a couple of weeks or bring them in or do it online?

Nothing is fatal in this ever-changing online retail world. Click To Tweet

That aligns though with my Walmart story because that’s what we found out too. It’s all handled by, at that time, secretaries and assistants. No one in the legal department ever saw it because their opinion was that there is no IP here. That it’s all conjecture and it’s not issued yet. If it was, you’ll go to court and deal with it on your own later. They treat it like there isn’t the law here.

What also blew my mind is let’s say you’re a private label brand and you send in a complaint to Amazon. You’re like, “It’s counterfeit and they’re unauthorized.” Counterfeit is a serious IP violation. Unauthorized is nothing but since you included the word unauthorized or authorized or map, they take it and throw it in the toilet and ignore the valid complaints because you included too much.

Being narrow and specific with your request, that’s what you’re teaching them and that’s what you’re doing. That is valuable and quicker to get a response.

It all matches Amazon’s consumer-centric company. All the Amazon people I’ve met are brainwashed, corporate culture, even the ones that had been fired. If you can save a customer half a penny, it doesn’t matter if you put 5,000 people out of work. They have this culture that consumer is always right. If you focus on something regarding the consumer, they act. If you focus on something regarding your rights as a brand owner, they could care less.

I wonder if we’re going to start seeing a shift because they’re bringing in more top-level brands like the Nikes of the world and those names. When you see that shift happen, this is why they’ve avoided their platform so long and yet now it’s a necessary evil for them. They have to have some of these brands on their platform or they’re going to lose traction. It’s going to be interesting to see how that shift starts to happen over time and if there becomes a better balance.

PLH 105 | Amazon Seller

Amazon Seller: Protect yourself with the right things in the right order with the right resources and right people.

 

We deal with more suspensions than any other company or law firm or otherwise in the world, so we have a good view. We started seeing this trend towards big brands, to protecting a big brand. Consumers are up here, and then the big brands and the third-party sellers are down on the bottom. They’ve been doing this now a good couple of years shifting towards brands, weeding out online arbitrage, weeding out retail arbitrage. There’s still a boatload of money to be made out of anyone to stop making money. There’s certainly a shift and that’s why it’s important for sellers to develop their own private label brands. You could be the next Nike or Under Armour.

That’s what we’re here about at Product Launch Hazzards. We’re here to help them through that process of creating something unique and highly saleable. That’s the ultimate goal. In a way, a lot of what we do here is trying to get it into territory at which no one feels that it’s competitive because it’s not easy pickings. That’s where we remove the opportunity for these bad actors to want to go after you. Maybe there’s expensive tooling involved or there’s a specialized design that it wouldn’t be cost effective for them to duplicate or you put such great each value into your brand and your customer service. On the other hand, no one is going to want to recreate that or no one can recreate that quite the same way. That’s what we’re trying to work on here at Product Launch Hazzards is making sure that people understand the tools that they can use to do that, but some of the ways are in that advanced protection as well. Right when you’re starting, they don’t know how great you are yet.

I don’t think your people know how great they are. When you have that idea and you jump in with both feet, you’re now developing your brand, your product. You have rights, you are fantastic. You’re doing something unique and it’s easy to protect it because as it blows up, then you want to have those tools already in place. It’s the business people themselves. You have to believe in yourself and building your own protections. Build your sword as you’re out there building your brand and your product and launching. This is all part of the same process that you need to need to follow.

What are some of these things that they can do to protect themselves from the beginning?

File for your trademark yourself, whatever name you came up with for your product or your company, your brand. You don’t even need the drawing yet. You don’t even need the fancy logo yet, just the words and do it yourself. USPTO.gov.

Experience will always matter. Click To Tweet

I have filed trademarks. They’re super easy and they’re not expensive because basically, it’s just a word. There’s no real explanation of anything you have to do.

I’ve been practicing also right in the mid-twenty years. You totally do it yourself. You do just the words. If something comes back, it’s called an office action, then you can call a lawyer to help you out. Do the application yourself. It’s easy and the website’s right out of 1996.

Anyone can do it because it is super simple. What about copyrights? Do copyrights apply? I know it’s a gray area with products now, but there are some things that are copyrightable.

Copyright is one of the easiest things in the world. If it is something you create, whether it’s a picture, verbiage, or a drawing. Anything that can be captured on any type of semi-permanent media, you automatically own a copyright interest in it. If you have to sue somebody, then you have to file it. By having my board made up, it’s now captured on a media. Whether I file it or not, I have copyright in. It’s automatic. If you take your own picture, you have a copyright interest in it without filing anything at all in the world. You don’t need to file anywhere at all. You created it, you own it.

PLH 105 | Amazon Seller

Your Guide to Amazon Suspensions: 2017-2018 Edition

That’s easy. The thing is I had an infringement incident with Staples and a client. We had urged our client to file a design patent on this. It was a decorative stitch pattern that was put on the back of an office chair. We said, “You can file a copyright on that because it’s decorative, it’s a simple pattern.” What happened was that they said, “We’re not that interested in that. We’re not going to file a design patent. It seems like a waste. It’s not enforceable.” Fast forward after a couple of years of selling it successfully, Staples said, “We’re going to send this out for bid in China and we’re going to knock it off.” When they did, there was no design patent associated with it. The copyright belonged technically to me because they never got an assignment from that. I said, “Do you want it?” They said, “We didn’t do this right the first time.” I was like, “There’s a $4 million a year mistake you made by not taking a couple of thousand dollars for infringement protection.” There are elements of products that can be copyrightable in and of themselves and be thinking about that and file those is what I recommend because of how they come about. Motifs become mainstream after a while so you definitely want to file them early.

Walk softly and carry a big stick. By filing, you have that big stick. When you amortize it, it’s not a lot of money. It’s not a lot of time. You want to be able to have that stick and say, “Staples, you’re selling my product. Here’s my billy club. Let’s work something out.” I was a trial lawyer and I was involved in more trials than if everyone reading this takes all the lawyers they know and adds them all together. I’ve got more trial experience than all of them put together. You can approach Staples. You don’t have to go to court. It will give you the ability to negotiate an advantageous agreement. Let them sell $4 million worth of stuff as long as you get your $2 million out of it or more.

This is the thing that most people don’t understand. It’s great to have a patent. It’s great to have all of that, but in reality is it matters little in the scope of what Amazon will do initially. All of that is related to many other things and tactics you talk about that they treat that IP protection as something outside of the digital realm. Why is that?

A lot of ways they do and in a lot of ways they do the hands off thing. The typical situation is there’s a seller selling a product and a brand owner or rights owner makes a complaint. Amazon either suspends the listing or the entire account unless the two sides work it out. If you developed your private label brand, if you developed your product and you’ve launched successfully, you’re holding the cards. You may choose to keep them down. You may choose to do a licensing agreement with them. There are a lot of things you can do. If your product is being hijacked on Amazon, there are a lot of things that you have at your disposal to protect and either stop that seller or to negotiate an advantageous distribution deal.

It’s interesting that most people think that Amazon is going to do it all, but it’s you negotiating with the other party and that is critically important. Make sure that you have all of your rights in line and you understand them and that you are on the right side of that. There are a lot of people who think that they’re right and they get their listing shut down and they were like, “You guys weren’t doing stuff right.” That does happen too. You have to make sure you’re on the right side of that. One thing I want to touch on is that we’ve both had this experience I’m sure with clients. Coming off a Kickstarter and then you finally get your product. It’s finally made. You cleared Kickstarter. You’ve made it. You delivered your goods and now you go to put it on Amazon and find out you already have these entire knockoffs on there. That happens a lot.

It’s a big problem, especially if you’re manufacturing in China. I’m not anti-Chinese. We have a full staff in China. We have five people in Shenzhen, one in Yiwu. They’re remarkable business people. Copying or copycatting is different culturally. By the time your whole Kickstarter thing is all wound up, there are six other factories who don’t even think they’re doing anything wrong who can produce it faster and cheaper than your whole plan. It’s an issue.

If you have to sue somebody, then you have to file it. Click To Tweet

We’re about to launch something on Indiegogo and Kickstarter. The difference is that we know what we’re doing because we’ve been doing this for so long. Our product will be ready to ship on the day that the campaign ends. It will be in Amazon at the same time. It will shift from the campaign straight into logistics, production, and all of the things that everyone still has to pay for and do we will have already done. That’s a different model of it, but it’s a way to use Kickstarter and Indiegogo because the marketing of that is valuable. It’s hard for many growing brands to skip that.

What’s also cool about that is that’s a pure example that experience matters because you’ve been around the block a couple of times. You know there’s a better way of the process or the order of things occurring to manipulate it, to protect yourself for the success that you plan. There’s a saying about experience matters, but that is one example about launching a product using Kickstarter and also having all the pieces of the puzzle in a certain order to protect yourself as you’re successful.

We call it the right things in the right order with the right resources and the right people. Either way that’s the way we talk about it here. It is that because you’re going to be able to take the opportunity of the good parts of these things, but you have less likelihood to fall victim to the risks of them. Speaking of risks, it’s not a Product Launch Hazzards episode if we don’t talk about some of the hazards of what you do every day and maybe some of the stories. I know you have attorney-client privilege, but there’s got to be some generalized stories you can tell of things that go all wrong for people because they didn’t do things in the right order.

One thing is you’ve got to do some research. I’m thinking of a product. It’s a type of plastic box. I’m not revealing too much. It was a great idea. Only no one spent the time going on USPTO.gov because someone else already had that great idea.

Google Patents is my favorite. It’s even easier because the USPTO is archaic. Google Patents is just as good. This is what people don’t realize about is that they don’t know that applications take a while to publish. There may be things in the works. You have to check regularly if you’re in the process of developing something.

Patents relate back to the filing date. If someone else files before you and then they get it, they’re entitled to all of your profits. You got to do some research. If you’re over 45 years of age, go to USPTO.gov. If you’re under 45 years of age, use Google but you’ve got to do some research. This particular client had two or three containers en route from China heading to California to go into FBA when her first batches got dinged. Unfortunately, the other side was 100% right. They had a design patent. Hers was exactly the same. Before you jump in with both feet, spend some time doing a bit of research to make sure that this idea is new. If you find something similar, I don’t want you to give up. Figure out a way to improve it to avoid the design patent. To me, the number one issue when you’re developing a product is you have to do a bit of research. I don’t think you need to pay tens of thousands of dollars. Google Patent, USPTO.gov, get a feel for it. Like the doctors say, “Start low and go slow.” Test the market. See what’s out there then jump in with both feet.

Let’s not have two containers’ worth, let’s have a couple hundred. Let’s keep it low. The other thing in my experience that I found from doing this is that it is a good thing to find competitive and to find other things out there. If the patents haven’t been reduced to use, in other words, if you find these patents out there but they never made the product or it didn’t happen, that’s a sign that you should rethink it and not do it. There are rare cases in there, but this is something where you want to think this through. At some point, when you find this discrepancy like you see something and you think you’re different enough. That’s when you go find a lawyer who can help you.

That’s when you go hire. Hire when you find the differences or when you need advice on that from someone who has deep knowledge and whether it’s the product or the patent process. That’s where the right resources can make the difference in making sure that you do that. We practice something here called intentional invention, which is we see opportunity. We see that there’s a market for it. We say, “Let’s invent into the gap of what consumers want most.” That’s where you start making money and that’s where you’re still able to protect yourself. It’s not creating a product that is me too.

There’s a kids’ movie. I’ve got a total of four kids, all different ages now. I got mine, hers, ours, stepchildren and that entire thing. There’s a movie called Robots. The saying was, “See a need, fill a need.” By taking my products and then seeing what the need is from that product. Maybe it needs another pocket or a handle, a zipper, a brace, a white or who knows what to improve upon it. By doing it, you improve the product. You avoid the design patent issue. Also, this whole thing about having a lawyer evaluate it, most people don’t call lawyers. They’re afraid of the cost. You could send me something and it could literally be five minutes for free say, “This is different enough. Go for it,” or you can clearly say, “No way, total violation.” That can be done for free. It’s the ones that are in between where sometimes you have to pay some money to get a thorough opinion. A lot of times it’s a phone call, a couple of emails and some pictures and says, “Tracy, that rocks. Go for it.”

They’re going to come back to you anyway and have you filed and have you done all those things. It’s good for you as well. You have a book.

PLH 105 | Amazon Seller

Amazon Sellers’ Guide: Chinese Intellectual Property Law

We have four or five books out. Your Amazon Guide To Suspensions, it’s how to avoid listing or accounts suspended. It’s also how to get your account back, a do-it-yourself plan of action guide. We have the Amazon Sellers’ Guide: Copyright Law, the Amazon Sellers’ Guide: Trademark Law. We have a book on Chinese Intellectual Property Law.

That’s a huge gap because I have done that where you try to find out information and there are few lawyers who are experienced in it. That’s a great need you’re filling right there.

I don’t think I’m a genius. I’m good at spotting what people’s needs are. This idea was given to me by a client of mine that I’ve known forever. There are Amazon sellers that need help. As far as I’m aware, there are only two lawyers who know anything about Chinese intellectual property law for US sellers, for US business people. The other one, what she talked about was complex and I was like, “This is terrible. I’ve got to explain this to people.”

We’ve stumbled into issues between factories and within China issues that we didn’t know existed that prevented our ability to get the product and sell it, even though there were US rights available. It was crazy stuff that happened. It’s convoluted.

I’m a huge believer in paying it forward. Anybody wants a copy of any of the books, I’m happy to send them a free copy.

What we talk about here at Product Launch Hazzards helps you do your job. It’s easier because there’s a concerted effort to making sure that we put protections in place, but also that we’ve thought it through in making sure that this is the reason people are buying from us. It makes it valuable at the end of the day too.

There’s no way to make up for the experience. When I first started practicing law, I took on any trial I could get. I used to tell people, “I’m going to do better for you because I’m going to work that much harder,” and I did. I did great. I worked my butt off. With experience behind me like the experience you have behind you, you’ve seen many screw-ups that you know how to avoid them and how to be more effective and more efficient, faster, cheaper, and better. There is nothing to make up for the experience.

Why we’re here is because we want to bring great people like CJ to you. They’re accelerators in your process to making sure that you don’t run into these hiccups of getting yourself shut down and being unable to make a profit. You have a plan and you want to keep to it and there are certain people in that process that are accelerators and that’s what we’re here to expose you to at Product Launch Hazzards. CJ, thank you so much for coming on and sharing your wisdom with us.

I’m honored to be part of speaking with you. Everyone who is selling on Amazon or thinking about Amazon, shops on Amazon. If you’re shopping on Amazon, I’m not anti-Amazon. Amazon is one of the greatest opportunities in the history of commerce. Amazon has a program called AmazonSmile. You sign on through AmazonSmile then it allows you to pick a charity. Once you pick a charity, it doesn’t cost you, the buyer, anything. It doesn’t cost the seller anything. Amazon then kicks back a small portion of the sale to the charity you pick. My charity is the Ty Louis Campbell Foundation. It was founded by a fraternity brother of mine named Lou Campbell and his incredible wife, Cindy. When they lost their son Ty, they turned the tragedy into absolute triumph and their pain into productivity and they created this foundation. All they do is raise money to find better treatments and God willing a cure for pediatric cancers. What exists now, it sucks. If you’ve ever seen a sick kid, it’s awful. It’s awful on an emotional level. It’s awful on a national level and productivity. It’s God awful. If you’re shopping on Amazon, use AmazonSmile and I would ask you to pick the Ty Louis Campbell Foundation.

Thank you for sharing that with us because I love that. That is one of the things that we’re here. Everyone has the impact that they want to bring to the world. Whether it’s a social impact, change the movement. Change the world in the way we shop. Whatever that might be, that is your impact. I thank you for raising your attention to the one that you care about because that’s going to mean something to someone more and I love that. Thank you much, CJ. I appreciate your time. Make sure you find him. Make sure you reach out when you need help.

Important Links:

 About CJ Rosenbaum

PLH 105 | Amazon Seller

Every time a suspended Amazon Seller contacts Rosenbaum Famularo, PC, the law firm provides the suspended Amazon Seller the opportunity to speak with them and explain what is going on with his or her suspended Amazon account. The law firm never charge for an initial consultation. They don’t accept money from suspended Amazon Sellers unless they think they can get the accounts back and get the Amazon Seller’s selling privileges reinstated. Every client that hires Rosenbaum Famularo, PC receives a call from the college-educated paralegal that is reviewing their file so that a better understanding of the suspended Amazon account can be obtained so that the paralegal can draft a Plan of Action for that particular suspended Amazon account. All of the writing and all of the analysis of suspended Amazon Sellers’ accounts is done in Rosenbaum Famularo, PC’s Long Beach, New York office. None of the analysis or any of the writing is farmed out to anybody outside of their team in their office. Every single Plan of Action for a suspended Amazon Seller, every single appeal for a suspended Amazon Seller and every single Bezos Escalation is written by Rosenbaum Famularo, PC in Long Beach, New York.


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