Made In China, Sold On Amazon ( Part 3 )

Intellectual Property Issues with Chinese Sellers on Amazon

At this point, it’s become well-established that the laws which govern international commerce methods in China are not designed to protect true ownership of products or ideas. We’ve already covered a lot of the ways that some sellers in China don’t necessarily play by anyone else’s rules in the global marketplace and how difficult it can be to avoid their reach. 

Now, we’re going to talk about the ways that some Amazon sellers in China are privy to utilizing the intellectual property of others to develop products. They can utilize the same false review tactics described in the previous post to gather more sales on products that they may have stolen designs for or are potentially illegally reselling altogether. 

Does Amazon Monitor IP Theft?

Despite Amazon’s ability to track this and put a stop to it by halting sales that are highly reported, they don’t address it fully. They leave the bulk of the duty to sellers to ensure they follow IP (intellectual property) compliance rules. This is the honor system, to put it simply. IP owners are expected to do their own investigations to prove that their content is being replicated. 

In 2021, Amazon banned hundreds of Chinese brands from their systems across thousands of seller accounts. The main purpose of the mass ban was review manipulation, another tactic sellers tend to use to their favor. However, they have not yet produced a similar excursion into the possibility of widespread IP theft, despite the mountains of evidence that it is happening more all the time. 

In 2018, the presidential administration utilized a report that detailed the intellectual property that China has stolen. It also explained that the damage cost U.S. companies somewhere around $50 billion annually. According to other reports, those numbers run much higher, but $50 billion is the average that policymakers chose for this report. It was intended to initiate a round of tariffs on China for the behavior of this nature. 

Why is it Difficult to Manage?

Despite recent changes to China’s policies about property ownership online, it remains difficult for sellers to investigate cases of possible IP theft. For example, let’s say that you own the patent for an air fryer, and you see a model that looks identical to your design on Amazon. You explore the specs, and they match exactly, along with the materials, sizing, and colors. There is a very slight difference in the coloring of the buttons, but other than that, it’s your product exactly. 

You attempt to contact Amazon about it, and they see the color difference. They fail to investigate further. You attempt to investigate yourself, but you don’t hear back from the seller. Even when you do, they speak Chinese. You would be investigating through a language barrier, and the translation is difficult to understand. It would make sense for you to feel unsure as to whether or not the issue can be resolved. 

In order to prosecute anyone, you must prove that your design has been stolen and not reverse-engineered. To do so, you essentially have to audit the Chinese seller so they can produce a record of the expenses they devoted to engineering the product. If no expense exists, you can attempt to pursue the case. However, getting to this point will prove incredibly difficult, and you may find that there is a lot of questionable activity happening overseas. There are language barriers, proven court corruption, and uphill battles ahead. 

This situation applies to online infringement as well, but it’s even more difficult to prove that the ideas were replicated from their true owner, even if they are word for word. The element of pure coincidence saddled with the inherent vastness of the online landscape leaves too much room for possible overlap. That basis seems to be enough for Chinese courts. 

This means that until we can manage new ways to combat this problem, we’ll have to keep taking every measure we can to promote our brands locally, creating as much brand awareness as possible. It’s also a great idea to learn about and gather as much brand protection as we can afford.