Stanley Ference, Stanley has an extensive background in intellectual property law, including Online Counterfeiting. He advises clients on all aspects of patent, trademark, and copyright law. Stanley’s practice includes litigation for both plaintiff and defendant, patent prosecution for computer-related technology, trademark prosecution and oppositions. Stanley has argued before the U.S. Court of Appeals for the Federal Circuit and has served as an expert witness. He is an E-Discovery Special Master for the United States District Court for the Western District of Pennsylvania. Ference was selected to the 2022 Pennsylvania Super Lawyers list. In 2020 Stanley was recognized by Best Lawyers in America, Chambers & Partners, IP Stars and Super Lawyers. He has also been recognized as a Lawyer of the Year by U.S. News and the firm has been recognized as a Best Law Firm.

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> Here’s a glimpse of what you would learn….

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley discusses the critical issue of online counterfeiting with Stanley Ference, a leading patent attorney from Pittsburgh. Josh shares his personal struggles with intellectual property (IP) protection, emphasizing its importance for business growth. Stanley offers expert advice on navigating IP challenges, including patents, trademarks, and copyrights. He highlights the necessity of proactive legal action and continuous enforcement to protect e-commerce brands. The episode provides actionable insights for seven-figure business owners aiming to scale, stressing the value of professional legal guidance in safeguarding their intellectual property.

Here are the 3 action items that Josh identified from this episode:

1. Prioritize IP Registration and Enforcement: Secure patents, trademarks, and copyrights for your products, and be proactive in monitoring for infringement. Regularly enforcing these rights is essential to protecting your brand from counterfeiters and should be a core business practice.

2. Consider Legal Action When Facing Infringement: When encountering counterfeits, consult with a legal expert to assess your options, even if you don’t have formal IP protections in place. Legal professionals can help you navigate complex cases, and actions like asset freezing orders can have a significant impact on reducing counterfeit activity.

3. Be Prepared for Ongoing IP Protection: Recognize that IP enforcement is an ongoing effort. Regular monitoring of marketplaces and prompt action against infringers will help maintain your brand’s integrity and reduce the risk of long-term damage. Stay organized and informed to streamline your IP protection strategy effectively.

Special Mention(s):

Related Episode(s):

This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures.

I started Hadley Designs in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then go to www.EcommBreakthrough.com (that’s Ecomm with two M’s) to learn more.

Josh 00:00:00  Welcome to the Ecomm Breakthrough podcast. I’m your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Michael Gerber, author of The E-myth, and Stephen Pope of My Amazon Guide. Today, I am speaking with Stanley Ferentz, one of Pittsburgh’s leading patent attorneys, and is a principal of Ferentz and Associates, an intellectual property law firm based in Pittsburgh, Pennsylvania. And today, we are going to be talking about how you can stick it to all of those online or overseas sellers that are cheating on your online listings. If they’re copying you, they’re counterfeiting you. They’re creating derivative works based off of your products. We’re going to be teaching you how to stick it to them so that they learn that if they want to compete in the US marketplace, they need to abide by the US laws, and they are not protected just because they live overseas. This episode is brought to you by Ecomm Breakthrough, where I specialize in investing in and scaling seven figure e-commerce companies to eight figures and beyond.

Josh 00:00:49  If you’re an ambitious e-commerce entrepreneur looking for a partner who can help take your business to the next level. My team and I bring hands on experience, strategic insights, and the resources needed to fuel your growth. So if you or someone you know is ready to scale or looking for an investment partner, reach out to me directly at Josh at Ecomm Breakthrough. Com that’s ecom with two M’s and let’s turn your dreams into reality. But today I am super excited to introduce you all to Stanley. Stanley has an extensive background in intellectual property law, including online counterfeiting. He advises clients on all aspects of patent, trademark, and copyright law. Stanley’s practice includes litigation for both plaintiff and defendant, patent prosecution for computer related technology, trademark, prosecution, and oppositions. Stanley has argued before the US Court of Appeals for the Federal Circuit and has served as an expert witness. He is an eDiscovery special Master for the United States District Court for the Western District of Pennsylvania. Ference was also selected to the 2022 Pennsylvania Super Lawyers list in 2020.

Josh 00:01:45  Stanley was recognized by Best Lawyers in America, Chambers and Partners, IP Stars, and Super Lawyers. He has also been recognized as a lawyer of the year by US news, and the firm has been recognized as a Best Law Firm. So with that introduction, welcome to the show, Stanley.

Stanley 00:01:59  Well, Josh, thank you very much for having me.

Josh 00:02:01  I am genuinely super excited to be talking to you today, because you’re hitting the nerve of, I think, 90% of all of the online sellers here where they are getting their products copied or derivatives of their products are being pitched. They come out with something new and then it’s no more than 3 to 6 months, and there’s online, there’s counterfeits and there’s replicas and there’s duplicates, and people are already knocking them off. And I hear so often so many sellers that are just like, well, I guess there’s not a whole lot I can do. But in reality, and I’ve learned this lesson myself because our business, we didn’t protect our copyrights, we didn’t protect our trademarks, we didn’t do that for a period of five years.

Josh 00:02:39  And had I protected those, I would argue our business could have been double or triple the size that it is now. But we kept letting other overseas sellers cheat and steal money and revenue from our business. So that’s why I am so adamant about this, because I never did anything about it. Because I didn’t feel like I had anything. There was no recourse for myself. You just have to let it happen. But, Stanley, you’re here to say it’s the exact opposite. You’ve got options. And so, Stanley, why don’t you kick things off by first? You’ve got some amazing examples that I want you to show to the audience of just the amount of counterfeits and things that you’ve seen, and your experience with all the clients that you’ve worked with.

Stanley 00:03:15  Okay. I’ll start off with this. This is called the Rapid Slicer and you’ll note the pictures. This is the authentic product.

Josh 00:03:24  So Stanley, just FYI to the listeners, if you’re listening to this podcast, he’s showing visuals here. So come check out the YouTube recorded version of this.

Josh 00:03:31  So you could actually see the products he’s shown up on the screen here.

Stanley 00:03:34  Yeah. Well this is the knockoff version. And as your viewers can see, the pictures are identical. The packaging looks a little different. But that’s the brand owners imagery. It’s all over the place. So we were able to get these knockoffs taken down. Okay. This is a product called the Orange screw and this is used for anchoring things into the ground. And the person behind this became very emotional about it, because the listings for the knockoff products included his own pictures, pictures of his hands, pictures of his wife, pictures of his mother’s dog. So it’s, you know, when you are knocked off, it can be a very emotional occurrence. Right. We also have, something called the egg hard boiled egg peeler. And this is the the original and the knockoff. Same size box, again, same imagery. And the products, are identical. And, we also have a dog chew toy here that acts as a toothbrush.

Stanley 00:04:43  And this brand owner found out that there was a problem with the knockoffs when somebody reached out to them, telling them the dog had destroyed it and eaten it, and pieces had gotten stuck in their stomach and wanted to know if the brand owner would pay for the bill for the surgery to remove the the pieces. And it wasn’t even the authentic product. It was a knockoff that was made using inferior product. So there’s all sorts of stuff out there, and you do have options when you’re knocked off. you know, the knockoffs can range from folks, selling directly against you on your own assigns and using your imagery and advertising, but not delivering your product to, you know, going out on another Asin. And the name of the game here is to recapture the lost revenue. And the, we had one client that lost 80% of their sales in a weekend when all of the knockoffs came up. Now, we’ve had other clients that, once we cleared up the marketplace, saw a 20% increase in sales.

Stanley 00:05:46  the largest we’ve seen in diverted sales, is over $7 million. that that was sold. Imagine what something like that would do to the bottom line of your listeners and viewers. And, you know, what we try and do is clean up the problems on the online marketplaces, particularly on Amazon, and, you know, have fair competition. Now, there are any number of tools that we can use, and we’ve used them all. It ranges from utility patents, design patents, trademarks, copyrights or just plain old unfair competition. And now one of the things I want your viewers and listeners to know is that they do have options when they have a problem like this. You know, every client we’ve got has said, you know, we’re very glad we found you. We’ve talked to other lawyers and they told us there was nothing we can do. And, you know, then it’s very well.

Josh 00:06:45  It’s Stanley, I’m going to interrupt you there just to just to echo that same sentiment, because I have also reached out and over the course of the last few years, as we’ve been trying to create our own defensive moat around our intellectual property.

Josh 00:06:56  I’ve had similar conversations with lawyers that’s like, well, you can try to submit your copyright infringement claim on the Amazon’s marketplace and your, you know, in your brand registry, console. You could also try to use the Apex program for patents. Right? design patterns, you just have to submit it through your brand registry. Same thing with trademarks etc. but if Amazon’s not going to accept it, I’m sorry, you don’t really have much you can do unless you want to pay 30 $40,000 for like a lawsuit, right? So, Stanley, I’m curious to hear your perspective on that.

Stanley 00:07:26  Well, it’s it’s a crapshoot with what you’re going to get making a complaint to Amazon or another marketplace, okay. You’re going to have somebody review it. They may or may not take it, and you’re not going to get the outcome that you want. we avoid all that by going into court and getting a judge to tell the marketplace what they need to do. And from the marketplace perspective, you know, that gives them some cover because they can tell their sellers, hey, we’re not the ones making this decision.

Stanley 00:07:53  You know, a judge made it, and we got to do what the judges ordered us to do. So if you’ve got a problem, go see the judge. And I said it can be very emotionally rewarding. At the conclusion of one lawsuit, when the business came back. The brand owner sent myself and my colleague white Stetsons, because we’re the guys that wear the white hats.

Josh 00:08:15  I love it. I love that, so, Stanley, maybe walk, walk our listeners through what are the different options that people can utilize to protect themselves? And then if they do have somebody infringing, what are the action items? Because basically you boiled it down to say, don’t rely on the marketplace because Amazon and frankly speaking, I genuinely don’t believe that Amazon wants to be the third party in or the middleman in any copyright infringement claims. They don’t want to be the middleman in any trademark infringement claims. They want to be out of it. And so, ideally, yes, if you’re coming with a court order from a judge, Amazon’s like, great.

Josh 00:08:50  We know exactly what to do on this. Whereas if you just throw it to them, be like somebody copying me, Amazon’s like you’re just at the whim of whoever is receiving that and how they’re feeling that day, right?

Stanley 00:08:59  Amazon or another platform is not your friend, okay. They’re not there to, look out for your best interest because any platform is making money from the sales of the knockoff product. So when they take the knockoff products down, they’re losing a revenue stream. Moreover, they’re incurring expense to take them down. So if you think Amazon’s going to help you, they’re not it costs them too much money to do that. Right. So you’ve got, you know, various arrows in your quiver and one of them is a patent. But unlike everything else with the patent, there’s a time limit you have to file for a patent application within one year of the first public disclosure. And that’s for the US. The US gives a grace period. Other countries do not. But the benefit of a patent is it covers the product itself, and it’s not unusual for us to see a continuum of problems.

Stanley 00:09:56  And it starts off with somebody knocking off the product and the packaging using the same name. And as you continue to push, you know, they may rebrand it. They may no longer use the brand owners photographs to advertise it, but they’re still delivering the same product. So the patent helps on the on the continuum because it protects the actual product itself. But there is the time limit. And then there are two types of patents. There’s the utility patent and also with design patterns. The design patent protects the ornamental features of a product. The utility patent protects the actual product itself, but they both have the one year limit. Then you also have a trademark. You have both a registered trademark and common law trademarks. So even if you, as you said, Josh, you know, you waited five years to register your trademarks, you still have common law protection even without a registration. And so all is not lost if you haven’t acted to protect yourself. You know copyrights. There’s no time limit to get a copyright registration.

Stanley 00:11:00  And the copyright attaches from the moment the expression is set forth in a tangible medium. Now, you can’t bring a lawsuit if you’re a US resident until you have a copyright registration that doesn’t apply to any of your listeners who are outside the US under a treaty named the Berne Convention. And then we’ve also brought cases under section 43 A and the landmark, which is federal unfair competition. And an example of that would be somebody who’s using your photographs of your product but not delivering your product. They’re delivering their own product. And so I tell clients, don’t worry about trying to pigeonhole your issue into one of these categories. What you want to do is talk to a lawyer like me and explain what your problem is, and then we’ll make the decision on what is the best way to resolve the problem. So if you’ve seen a dramatic decrease in sales, you know what’s going on and reach out if you’re seeing a slow decrease in sales. Again, reach out because in this area, you know, sort of being knocked off as a sign of success, nobody wants to knock off somebody that’s not doing well.

Stanley 00:12:17  So it’s hard to swallow, but it’s sort of congratulations. You’re so successful, people want to knock you off.

Josh 00:12:24  Yeah, exactly. Well, I think the best mindset shift there is, it’s kind of like when you’re playing a video game, and at the end of each level, you have to beat a certain boss or a monster, right, in order to make it to the next level. And as you up level in business, right, you’re beating different levels of the game of business. Okay. And then this is one of those those beasts that you’ve got to conquer at the end of a level, which is great. You’ve hit success. Now you’ve got people copying you. Welcome to level ten. Okay, now in level ten, you’ve got to figure out how to slay the dragon here in level ten. And then that will allow you to up level to level 11. And so I see it as more of like that’s the mindset I think people need to take is that don’t be afraid of this.

Josh 00:13:01  Don’t feel like, oh, if I just bury my head and don’t do anything about it, it’s going to go away. Like, you’ve got to face the dragon if you want to grow, if you want to scale, if you want to move on to that.

Stanley 00:13:09  And there’s all sorts of software out there that will identify for people hot selling items on Amazon and walk you through where to source it. But it’s totally without regard to any intellectual property rights that the creator may have. And yeah, it gets very frustrating and it’s very emotional. You know, folks have invested, you know, their time, effort and money. In some cases, people are putting retirement funds into building these Amazon businesses, and somebody comes in and knocks you off and takes away the sales, and you don’t have to just sit there and take it and go. Woe is me. You can fight back. Get them off the marketplace and get your business back. Right now, most. Like I said, our approach is through litigation.

Stanley 00:13:58  Most people are conditioned throughout their lifetime that, you know, lawyers are bad lawyers or sharks, and you want to avoid litigation. But many times clients don’t really have a choice. They’re back as to the wall, and litigation is a viable option that’s going to take care of the problem.

Josh 00:14:16  Yeah, I think that’s an important point. Like we have been taught like avoid. You don’t want to be involved in in a legal battle, right? You don’t want to have to work with a lawyer. So do anything you can to not do that. But I think there is a time and place for it. Certainly. So, Stanley, my question would be maybe can you walk us through maybe some case studies that you can share that are publicly available of, you know, different brands that you’ve helped out with and what was the course of action that you took. And ideally, maybe there’s maybe you could go through each of these different items, right? Like a patent. How did you go about resolving a pattern issue? How did you resolve a design pattern to copyright issue as well as trademark?

Stanley 00:14:53  Okay.

Stanley 00:14:54  let’s start with the copyright and the trademark. a copyright protects against copying. And actually. Before I start that, let me say, you know, there’s these various arrows in your quiver that you can use, but you have to enforce them. So getting them as a start. But you should not expect just because you have them, people are going to respect them. the you know, it’s chatting with one client and given their odyssey, I was told earlier this week, their big takeaway is you need to enforce what you have and the enforcement is up to you. You can’t rely on the marketplace to do it for you. And so the copyright protects against copying. it goes in, it attaches. At the moment something is fixed in a tangible medium. So Josh, in your business. How do you create your visual works?

Josh 00:15:47  Yeah. So my wife designs every single one of our products from scratch, hand-drawn everything, illustrations. And then we will see other people that might make a tweak or two here and there.

Josh 00:15:58  But you could definitely tell it’s like it’s a derivative work. They copied 80% of our stuff, but then they maybe switched a rainbow from the top down to the bottom so that they are different. Well, yeah.

Stanley 00:16:09  So they may be different, but they don’t want to be too different because they, you know, most people, when they see a product or hear about a product, you know, certain key aspects of the advertising stick in their mind. You know, it may be that there’s a rainbow in one of the pictures without really thinking about is the rainbow at the top or is the rainbow at the bottom? So they’re trying to design this stuff so it triggers an association with the authentic product. Okay. So your wife and your company have a copyright in those designs at the moment they are committed to paper fixed in a tangible medium. Right. But they’re not able to sue on them at that point. Is in the United States. And it’s different for folks who are in other countries under the Berne Convention.

Stanley 00:16:56  But for folks who are in the US, before you sue, you have to get a copyright registration. And the copyright registration is 65 bucks. It can take a couple of months if you want to pay some more money in $800, expedite fee. You know, you can literally get it overnight. And it’s not necessarily one copyright registration for each work or each advertisement or each picture. if there’s some common themes, you can group them together so you don’t have to spend, you know, 65 bucks for everything. And then once you get the registration, you’ve got the ability to sue on the registration and go into federal court. And you also have some benefits. You’re entitled to a presumption of validity, and you also have the ability to get statutory damages and attorney’s fees. So with statutory damages, Congress had said, you don’t have to prove what your actual damages are like a lost licensing fee or something. you can get up to $30,000 for non willful infringement and 150,000 for willful infringement. And on the trademark side, you have common law trademarks.

Stanley 00:18:07  So you don’t need to register your trademark. And a little brief history lesson here. Remember the United States is a federal government that the power resides in the people, and the federal government only has the powers that are given to it by the Constitution. The Constitution makes reference to patents and copyrights, but nothing about trademarks. So to get a registered trademark in the United States, you have to use the mark in commerce, which Congress has the authority to regulate. But you still have your common law rights, and there’s no time limit for filing a trademark application these days. With the number of Chinese applicants who are filing, it’s 11 to 12 months after you file before you get your first office action. So it’s going to be over a year before you get a registration if nothing goes wrong. If it goes straight through, you’re at about 13, 14 months. Okay. on the patents, you said there’s a design patent that will cover the ornamental design of a of a product. one of the most famous design patent cases was a Supreme Court case, Gorham versus white, with what dealt with the design of silverware.

Stanley 00:19:22  And and on the utility patent side, you can get, a patent that will protect against the product and also includes the method claim. Now it takes a while to get it. you’re lucky if you’re going to get your first office action within 18 months. On the utility patent side. It’s going to be 2 to 3 years before you get the patent issued. There are some ways to expedite it on the design patent side. It’s it’ll be a little quicker than that, but it’s not going to you know, it’s not like the copyright where you file it, you get it. one of the little known ways to expedite the patent side is if you’re 65 or older, the patent office will fast track everything for you. they’re concerned that if they don’t, you won’t be alive by the time they get to acting on it.

Josh 00:20:12  Fascinating. So the hack is get older.

Stanley 00:20:14  I’m not saying that. Enjoy your youth while you can.

Josh 00:20:18  Stanley, this is a great overview. Now, I would love to dive into some case studies and maybe share some real life examples of clients that you’ve worked with.

Josh 00:20:25  Walk me through. Like, what does that legal process look like and what what ended up happening for these.

Stanley 00:20:30  So we’ll we’ll start with the neg which is an egg peeler. This has a very interesting history. it was designed by two ladies, one of whom wanted to take deviled eggs to a cocktail party and was having problems killing the eggs. And it was prototyped on a three dimensional printer in their local library. But before they could use it, it had to be taught how to use it by an 11 year old. And now they, in their situation, they had several things going. the name, which was a registered trademark, was being counterfeited. A their imagery, their copyrights were being used as well. And they also have a utility patent on the product itself. So ultimately, no matter what people did in terms of the packaging and changing the imagery, they still had the patent to fall back on, and we were able to take care of the marketplaces and, you know, bring their business back to the level that it had been at because they took a big, big hit.

Stanley 00:21:43  And but it’s not it’s never over. It continues. It continues to this day. this particular product sells very well in the fourth quarter. And, and so you once you initially clean up the marketplace, you have to have some sort of monitoring and enforcement program in place. Okay. But, you know, you can see one of the founders, for the neg, will occasionally pop up in videos that are using by the knockoffs. So you can imagine the frustration and how emotionally upsetting that can be to, an inventor or brand owner to see themselves plugging the counterfeit product.

Josh 00:22:29  Yeah. So here would be I have two follow up questions for you on this topic. So number one is can you group multiple sellers into a lawsuit? So let’s say you’re being knocked off. You know, this guy is, you know, using your trademark. This guy is, you know, calling it a different brand name, but it’s the same product. Right. And it just has a different label and wrapper on it.

Josh 00:22:51  so my question would be this can you group multiple sellers into a lawsuit? And then number two is, you know, I could foresee this getting really, really expensive if you’re only recourse is like, all right, I knock this guy off. Now, one week later I’ve got a new guy, new Chinese, brand new new address, whatever. And now I’m going to have to file a new lawsuit. Like, that’s going to be overly expensive. And I think that’s the reason why a lot of people just don’t do anything because they’re like, this is way too expensive. How in the world can I police this if I get somebody down with a lawsuit, that’s great. But then somebody else started up their business next week.

Stanley 00:23:24  We it all depends on the economic harm that people are incurring. Right? we have brought lawsuits against individual sellers. So we brought them against, you know, a group of half a dozen or so, up to over 400. And, and I say it all depends on the economic harm, because it may be that, you know, there’s one seller out there that is really doing this.

Stanley 00:23:50  And we’ve seen situations where clients are losing between 100 to $200,000 a month in revenue based off of 1 or 2 sellers. So obviously, in that situation, you’re not so much concerned about the number of sellers. It’s, you know, what do we need to do to get those lost sales or those diverted sales back? So yes, you can group the, the sellers together. And, you know, the more the merrier, as it were.

Josh 00:24:16  Okay. And then are you just constantly like another shop pops up because I know what the oversea sellers, you know, as I attend different conferences and we had some overseas sellers that were kind of pulling back the curtain and saying like, guys, this is what you’re up against. This is what all these overseas sellers are being taught, where they go through and they get they purchase IDs and Social security numbers, etc. so that when their business goes down on one account, they go and pop open the new one. Here’s my id I already purchased. I’ve got thousands of IDs.

Josh 00:24:42  This is just a whac-a-mole game at this point, because they just pop up a new Amazon shop just like that. So are you just having to like, file, you know, lawsuit after lawsuit?

Stanley 00:24:51  What happens is the the word gets out that a brand owner is enforcing their rights and causing a pain for the seller. And for better or worse, there are a lot of products out there on Amazon. And we find what happens is once sellers start to realize that selling a particular product is going to cause them pain, they move over to another product.

Josh 00:25:16  Right? So they just go to like an easier target. You’re saying that the word gets around and they’re like, oh, this brand is really being defensive with their IP strategy, which they should. And so they just go to someone else that doesn’t care. I and you And you see that working more often than not. Like it isn’t this constant game of whac-a-mole. I’m sure it comes up occasionally, but do you see it? Like when somebody implements a defensive IP strategy, it actually cleans it up for a good period.

Stanley 00:25:44  Of time, does clean it up for a good period of time, but it’s not like you’re one and done. It may take several lawsuits against hundreds of sellers, and even then and then it’ll be pretty clean. But it’s never going to be entirely clean because you’ll have a few people that, you know, may be late to the game or maybe trying to circle back because they’ve, purchased and are holding on to a large amount of inventory, but it will be nowhere near what it was. Yeah.

Josh 00:26:14  Okay. Makes a lot of sense now. My next question would be, what is the average cost to file some of these lawsuits. And maybe they’re different. Maybe trademark lawsuit is cheaper or a copyright lawsuit is cheaper versus utility pen. I’m sure there’s a lot of factors that can go into this, but if you want it mine, maybe giving our audience maybe like a lay of the land of. Here’s the different types of lawsuits that we file. And here’s the here’s the average going rate as a ballpark just to help people budget.

Josh 00:26:37  And again, as you mentioned, like you’ve got to weigh the economic impact to your business. Like if you’re only losing $1,000, right? Are you really going to go spend, I don’t know, 5000, $10,000 to file a lawsuit plus, to recoup that. So, Stanley, can you give us insight?

Stanley 00:26:52  The cost is going to depend upon, the number of sellers that are out there. But we’re very cognizant of the impact that this has on people. And, you know, we we want to be able to work with our clients to make it affordable for them. And, and, you know, so far, nobody’s complained about our fees. You know, fear of the cost should not be a reason not to reach out, to deal with your problem. Okay?

Josh 00:27:19  Okay. Fair enough. Stanley, can you go through. Maybe there’s a couple other case studies you might be able to share. I think the egg, was a great example. A couple others you might be able to share with us and your clients.

Stanley 00:27:28  We had a recent one that included review hijacking. And what I mean by that is the folks had the sellers figured out how to create a variation on an Asin that the sellers did not own and were putting the their product up. So whenever the client would advertise for their own, you know, spend money to advertise their product, people would click on the advertisement, bring up the client’s, Asin page, they would see embedded in there, like you’re buying a different colored shirt. You’re wearing a blue one. I’m wearing a white one. Well, you had the client’s product and then at a cheaper price, you had the knockoff product. And the client was very frustrated because Amazon wouldn’t do anything with that. Well, you know, what happens there is the knockoff product now all of a sudden has access to all of the clients reviews. So this product that had been up for two days, had, you know, over 10,000 reviews, none of which were for the product. Therefore the client’s product.

Stanley 00:28:33  So we were able to include that in a lawsuit and point out to the judge that that’s unfair competition. You can’t be using reviews for something other than your own product to promote the product. And we’re successful in having the judge enter an order that directed Amazon to take down the competitor’s product. And I love that. I’m sure you’ve seen issues in your own business with reviews. Okay. Yeah. You know, in that particular case, they were sort of piggybacking off of the clients reviews. But people also sellers will also cycle through, products through assignees. So it may be that the, you know, a good segment of the reviews talk about features of the product that are no longer in the product because it’s a different product under the Asin. Again, that’s not permitted by Amazon’s policies, but people do it anyway.

Josh 00:29:23  So are you able to go after these? I love this this conversation where these are kind of more different. These are fringe scenarios, right? These are different than copyright infringement and trademark.

Josh 00:29:33  But I’m loving this. Like what other kind of like fringe scenarios have you dealt with just like these reviews? What else are you seeing that you filed lawsuits for to get resolved? You know.

Stanley 00:29:41  We these haven’t involved bringing lawsuits. These have involved helping the brand owners, where client got a copyright on a particular product. the product was noted by some Chinese sellers, and they filed a design patent, in Europe, the U.K. and the United States, and then use the US design patent as the basis to complain to Amazon and take down, the original creators listings. And so one of the things we’re able to do there is, file a request for re-examination, with the US Patent Office, to invalidate the design patent that was being asserted against our clients on our client’s product. We thought that was pretty creative on behalf of the Chinese sellers.

Josh 00:30:31  Yeah.

Josh 00:30:32  And that’s what that’s what’s insane is just like if you just played by the rules to begin with. Like, why? Why don’t you put the same amount of time and energy to be creative with trying to cheat the system, then you are just trying to come up with a better product, right?

Stanley 00:30:43  Well, I think one of the reasons for that is the market that they get access to through Amazon, and the amount of money that can be made.

Stanley 00:30:51  Yeah. you know, I spoke earlier about the diverted sales. The largest number we’ve seen is over 7 million in diverted sales, but we’ve also seen 900,000, a million. you know, and typically it turns out that, you know, say 20% of the sellers account for 80% of the sales by volume. So, you know, just knocking off a few of the counterfeit sellers can greatly increase the bottom line of the US seller. Yeah. Okay, because that’s when, you know, this all comes down to how can your listeners and viewers increase their sales, and are they losing sales to the knockoffs and the counterfeits?

Josh 00:31:36  Stanley, this has been a great episode. I think this has been very informational, not only for myself, but I hope for our listeners as well, and understanding what rights they have and understanding that they can actually do something. Before we wrap things up, I want you to talk real quick about kind of the last scenario that doesn’t apply to the patent or design panic utility, pan or copyright or trademark.

Josh 00:31:56  Was this kind of like unfair, competition act or something? Can you elaborate a little bit further on that and how we might be able to use that as a defensive strategy?

Stanley 00:32:05  Okay, so the landmark is the trade, and it’s the trademark act is named after, I believe, Senator Lanham, who was the proponent of it. But, it covers infringement of a registered trademark, counterfeiting of a registered trademark, and also unfair competition. Who knows what unfair competition is, right? It’s not statutorily defined. And so there’s a lot of room in there for the courts to create their own definitions of unfair competition. It’s sort of like Potter Stewart’s definition of pornography. I know it when I see it. All right. So what we’ve been able to do is for example, the review hijacking. That’s unfair competition. So that violates the Lanham Act. section 43 A and is a basis for the court to order it to stop. Now, we’ve also used it when somebody is lifting your images and you don’t have copyrights on them, the images.

Stanley 00:33:11  And then using those images to advertise a product that’s not yours. One of the very first cases that was brought under the landmark was here in the Third Circuit in Philadelphia, and it involved the situation, for dresses. And, there was a company that was doing very well with its dress. and the defendant, knocked off the dress. poor quality dress, but was using the company’s advertisements, but they weren’t delivering the same dress. So there’s a long history of case law that says you can’t use, either somebody else’s photographs to sell your product, and you can’t use, you know, photographs of another product to sell your product. You’ve got to be truthful. Right. So where, you know, who knows where these folks get the advertising materials that they use, but oftentimes they lift them from the brand owners own materials. Yeah. You know, be it your they’re just reusing your Amazon listing materials, to they’re scraping stuff off of the brand owner’s owners website. If somebody’s gone through Kickstarter or Indiegogo or one of the other early stage sites, people may lift the materials from there.

Stanley 00:34:31  So, you know, the unfair competition is pretty flexible. And if we are able to convince a judge or show a judge that what the defendants are doing is improper, that provides the unfair competition, provides a basis for the judge to do something about.

Josh 00:34:51  I love that, and certainly when you get a judge, order is does Amazon freeze that person’s assets so that they can’t just take out all their money and go lock things up and be like, yeah, good luck trying to catch me?

Stanley 00:35:03  Yes. Our orders include an asset for asset freeze provision.

Josh 00:35:07  And that’s where I think, like that’s where the teeth really sinks in a lot. I know the game with these overseas sellers. They think they can’t be touched. And so when you slap a lawsuit on them and get a judgment by a judge that then forces Amazon to freeze the distribution out of their Amazon account. They have $500,000 sitting in that account. You know they can’t take that money out. And so whatever, you know, judgment comes from the judge and whatever money may be coming to you or not.

Josh 00:35:33  that teaches a real valuable lesson to those overseas sellers. And that’s where they I think a lot of them, their eyes start opening up. And like you said, word starts getting around like, don’t go after them because they took all of my money. Right, right.

Stanley 00:35:45  It creates a pain point. And that pain point is not there. If you make a request through Amazon to have something taken down.

Josh 00:35:52  Yeah. It just it goes down. No financial impact, maybe a little bit. They got to figure it out, create a new Asin whatever. But it’s just it’s a barely a slap on the wrist. Right. There’s no.

Stanley 00:36:01  Ouch there. Yeah. Right. And with our litigation approach there’s an ouch. Their word gets out and they move on to other products where there is no ouch. Yeah. Right. And, you know, unfortunately, there are a lot of products out there that they can knock off.

Josh 00:36:19  But certainly Stanley, as we wrap things up, I love to leave the audience with three actionable takeaways for every episode.

Josh 00:36:23  So here are the three actionable takeaways that I noted. You let me know if I’m missing something here. Number one is enforcement of your IP is up to you. And I think this is the biggest misconception. There’s a lot of people that will go out and preach and sell you on the fact that you need to have design panels, utility panels, trademarks and copyrights. Now that’s true, you should have those. But guess what? If that’s the only service they provide you is like, here you go. We sold you these things. Good luck trying to figure out how to defend them. That’s where I think most people are stuck. And so yes, it’s great that you have those assets, but it is your responsibility to figure out a defensive strategy to actually protect your IP. And you need to go on the offense. You need to find those people that are infringing and then take the appropriate action. So that’s number one is enforce your IP rights. And I promise you, if everybody listening to this episode and everybody in the e-commerce space actually enforce their rights, guess what would happen? The overseas sellers would stop cheating if everybody enforce their rights, but because not everybody enforces their rights, they continue to cheat because it’s a quick buck that they can make as you laid out.

Josh 00:37:24  Right. So action item number two is you need to actually obtain IP if you don’t have IP. So if as you listen to this you’re like, oh, I don’t have some of these things. Trademark copyright utility pan design pan like you can go get them. And it’s a good proactive measure. But I think finally like the third and final action item is even if you don’t have those things, you don’t have a utility patent. Maybe that year is already passed. You still have a trademark. Even if you haven’t filed that trademark, you still have a copyright, even if you haven’t filed that copyright. So my final recommendation is if somebody is creating a counterfeit, they’re cheating. They created a duplicate or a similar listing or a similar product to yours. It’s a derivative off of your work. Go after them and it’s not. Go blindly after them. It’s higher. In expert and Stanley, I think you’re the go to person because you shared more kind of like actionable legal strategies and ways to defend yourself than I’ve ever heard from somebody else.

Josh 00:38:18  And so the approach that you make in so many people are sitting on their hands, they don’t want to get into a legal battle. And so they just put their head in the sand. But I promise you, you know, if you’re prepared, you will not fear. And so if you have somebody like a Stanley in your back pocket, you know that, okay, if this does happen, I don’t have to figure it out myself. I have an expert that has seen hundreds of different crazy cases and other violations and things that he’s seen on Amazon. Go to an expert. They can provide insight and figure out an actual defensive strategy for you, right.

Stanley 00:38:48  What the potential client needs to do, what the seller needs to do is identify that they’ve got a problem. They don’t need to figure out the solution to the problem. That’s what we’re here for.

Josh 00:38:57  Love that awesome Stanley. As we wrap it up, I ask each guest the following three questions. So here we go. Number one, what’s been the most influential book that you’ve read and why?

Stanley 00:39:04  Ever since I’ve been a little kid, I wanted to be a lawyer.

Stanley 00:39:08  and I used to read books in my parents basement. one of them was by Louis Nizer. And it was my life in court. And what I got out of that book is the lawyer’s role is not to tell a judge what they can do. It’s to tell the judge why they should do it. And acting as an advocate. And I think that’s really what lawyering is all about.

Josh 00:39:34  I love that that’s the first book recommendation of its kind as from a legal standpoint on this podcast. question number two, what is your favorite AI tool or software tool that you’ve been using?

Stanley 00:39:45  I’m going to go with just sort of the generic outlook. it’s just very hard to manage a calendar. And all of the emails and outlook helps do that.

Josh 00:39:55  Easy enough. Keeps you organized. All right. Final question. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following in?

Stanley 00:40:01  Well, I’m going to broaden that out a little bit into the tech space. I would say it’s probably one of the few times you hear these three people mentioned together, but Bill gates, Steve Jobs and Steve Wozniak, because what they did is they came up with an idea.

Stanley 00:40:17  You know, the Wozniak and Jobs started off in the parents garage and build up these huge companies. And so, you know, they had a great idea and were able to grow it and scale it and look where they look where their companies are today.

Josh 00:40:32  Great, great sources of inspiration, that’s for sure. Stanley, this has been great. If people want to reach out to you, they want to learn more about your services, your offerings. Where can they reach out to you at?

Stanley 00:40:42  you can check out our websites, our practice area website for this is online counterfeiting.com a memorable domain name. And our firm or firm website is law.com for e la.com. You can also reach out to me by email at SD Ferentz at Ferentz law.com. And again Ference is Frenchy like conference or reference.

Josh 00:41:09  Excellent. Stanley, thanks so much for taking time out of your schedule to join us on the show today.

Stanley 00:41:13  Thank you. Josh.