AAFA calls for legislation to hold online marketplaces accountable for counterfeit sales

The American Apparel & Footwear Association submitted comments to the U.S. Patent and Trademark Office (USPTO) today regarding secondary trademark infringement liability in the e-commerce setting. Given the staggering and simultaneous growth in the share of sales by e-commerce, online sales of fake products are a major contributor to the observed growth in total counterfeit sales. These comments call for legislation to hold online platforms liable for counterfeit goods sold on their sites.

“The foundation of our trademark system predates e-commerce and is not equipped to address the online counterfeiting issues experienced today. While brick-and-mortar stores are generally liable for the products they sell, the same cannot be said about large online third-party marketplaces,” said Steve Lamar, president and CEO of the American Apparel & Footwear Association. “Current law does not adequately incentivize third-party marketplaces to take the steps necessary to keep counterfeits off their platforms. Further, this lack of liability results in limited efforts by online platforms to proactively monitor for counterfeits, moving the cost and burden to our members. This landscape makes it difficult for our member brands to pursue trademark infringement claims against these online platforms who facilitate the sale of fake product."

“The proliferation of counterfeits is becoming a crisis due to the expansion of online third-party marketplaces. This is why AAFA strongly believes that it is necessary to pursue changes to the application of the secondary infringement standards to online platforms,” adds AAFA’s head of Brand Protection & Manufacturing Initiatives, Christina Mitropoulos.

Fighting the sale of counterfeits online is a key policy priority for AAFA. Today’s submission follows an earlier submission to the USPTO calling for a consumer awareness campaign to alert Americans to the dangers and prevalence of counterfeit product on trusted online marketplaces and social media platforms. This follows AAFA’s submission to the Office of the U.S. Trade Representative as part of its review of Notorious Markets which listed many online third-party marketplaces as sources of counterfeit product; that submission is available for download from the AAFA website.