Amazon Sued Over Alleged Counterfeit Headsets for Sale

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By Alexis Kramer

Amazon.com Inc. failed to kick sellers of counterfeit headsets off its site, a virtual reality company alleged in a lawsuit filed May 2 ( Wow Virtual Reality Inc. v. Amazon.com Inc. , C.D. Cal., No. 2:17-CV-0331, 5/2/17 ).

Wow Virtual Reality Inc. alleged that third-party merchants are hawking virtual reality headsets on Amazon that infringe its “VR BOX” mark. In a complaint filed in the U.S. District Court for the Central District of California, Wow claimed that Amazon hasn’t removed a majority of the sellers, even though it’s been notified of the alleged trademark infringement.

The case highlights the difficulties e-commerce platforms such as Amazon, eBay Inc. and Alibaba Group Holdings Inc. have in monitoring and reducing the number of counterfeits on their sites, which sell hundreds of billions of dollars in goods per year. Amazon’s anti-counterfeiting policy expressly prohibits the sale of fakes and warns merchants that it may immediately suspend or terminate their selling privileges.

An Amazon spokesperson didn’t immediately respond to a Bloomberg BNA request for comment.

According to Wow, most of the allegedly infringing sellers that stayed on Amazon are designated as Amazon Prime or Fulfillment—a designation given to sellers that give Amazon a bigger share of sales revenues as compared with other sellers. Numerous infringing sellers identified by Wow continue to sell counterfeit products on Amazon “with Amazon’s knowledge, tacit approval and for Amazon’s benefit,” Wow said.

Wow brought claims of trademark infringement, contributory trademark infringement and unfair competition against Amazon. It seeks an order barring Amazon and its sellers from using or displaying the VR BOX mark on Amazon.com.

The Fraser Firm PC represented Wow.

To contact the reporter on this story: Alexis Kramer in Washington at aKramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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