Pauline Tseng writes “Liability of Shipping Hubs for Counterfeit Products” for Bloomberg LawJanuary 2022
E-commerce sites are increasingly popular with buyers, but despite the convenience, online shopping remains risky. Reports show that a majority of consumers who unintentionally purchased counterfeit products found them on online marketplaces.
Mainstream media and lawmakers caught on to this phenomenon. The names of top e-commerce platforms make the headlines each day, and the recently reintroduced INFORM Consumers Act seeks to hold e-commerce platforms accountable for high-volume third-party sellers selling counterfeit or infringing product on their platforms. While much of this attention is focused on e-commerce platforms, an often overlooked actor—and potential source of liability—is the center of distribution. The center of distribution may include the U.S.-based shipping hub, fulfillment center, or warehouse that stores and ships counterfeit product to consumers across the country.
Foreign sellers rely on these U.S.-based shipping hubs to reach U.S. consumers quickly, establishing a new business model predicated on speedy shipping. This way of doing business introduces a new set of players that can be held liable for the distribution of counterfeit product. This article examines how counterfeit liability law has not caught up to this rapid change and how rights-holders can step in to hold these shipping hubs liable.