December 1, 2023

Tech Companies Playing Lawyer—Oh My!

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In the fast-paced world of online marketplaces, the allure of quick and seemingly cost-effective solutions can lead brands into risky territory. At Vorys eControl, we’ve witnessed a growing trend of tech companies positioning themselves as legal experts, promising easy takedowns and high success rates.

As the adage goes, “When something sounds too good to be true, it probably is.”

This is often the case for brands that come to Vorys eControl after hiring tech companies advertising quick, easy removals, and touting high success rates and their ability to demand source information. These companies tell brands they don’t need lawyers and they should choose the cheaper option that’s even more effective. Unfortunately, the reality is often quite different. These companies rarely deliver on their promises—and when they do, the brand may also be unwittingly signing up for increased legal exposure.

Caveat emptor, “[Let the] Buyer beware”

In pursuit of swift resolution, many of these tech companies engage in deceptive—and sometimes fraudulent—strategies that can lead to high liability. For example, certain companies will make counterfeit complaints to Amazon without evidence the product in question is actually counterfeit and without performing a single test buy. Others pose as members of the brand team and represent to the unauthorized sellers that the team is considering making that seller authorized—an outright lie.

Penny rich and pound foolish

While some takedown companies’ strategies may have short-term success, they also have long-term risk, and what these companies cannot do is protect a brand from litigation arising from their methods nor defend them from lawsuits. What’s worse, many of these tech companies require a strong indemnification clause in their own favor, meaning the brand is on the hook for not only its own legal costs, but also defense for the tech company.

If you play with fire, you’re going to get burned

With the rise of non-legal-based enforcement, the Vorys eControl team has observed an uptick in lawsuits stemming from risky tech company takedowns. In many instances, unauthorized sellers have sued the brands, alleging defamation, trade libel, unfair competition, and interference with contractual relations. In some cases, the unauthorized seller even seeks to have the brand’s trademarks cancelled. When brands come to us after receiving such lawsuits, we must deliver the bad news that, in some instances, there is no good defense to the false and fraudulent conduct of the tech companies.

A stitch in time saves nine

To avoid this risk, the right experience cannot be overstated. Discount brand protection firms do not have the experience to properly assess when a listing takedown request is a strategic move and when it might catastrophically backfire.

Simply put, effective enforcement requires the comprehensive experience with online brand protection and technology-enabled strategic insights offered by Vorys eControl. We consult with and represent brands through every stage of their protection strategy, including pre-enforcement recommendations that can be implemented quickly with low risk, as well as takedowns that are effective, legal, and efficient.

If you’ve been burned by a tech company using improper techniques, reach out to attorney Martha Brewer Motley at mbmotley@vorys.com to discuss defense options. Or to explore legally compliant brand protection techniques, email Adam Sherman at acsherman@vorys.com.