When Rex Parris launched an anti-aging skin regeneration product called Heraux, he deliberately avoided selling it on Amazon because he feared it would be fraudulently duplicated.
“How do we know what Amazon is selling,” said Parris, chairman of the board of Carthronix, which manufactures Heraux. “Other people could be selling counterfeits on Amazon but if I know that we're not selling any of it on Amazon, anything they sell of Hereaux is a counterfeit and we can seek to enjoin it.”
Central District Judge Otis D. Wright II issued an injunction against Amazon prohibiting direct sales of counterfeit goods.
“The fact that the court is acknowledging that Amazon is part of the conduit of selling counterfeit goods and holding them liable for it is a change in the way business is going to be done," Parris told the Southern California Record.
Parris, who also works as an attorney in Lancaster, foresees the legal action setting a precedent.
“It will extend to other products and other people are going to start suing Amazon,” he said. "This whole issue about China and counterfeit goods, which is a serious complaint, only works because of Amazon. It's not the stuff they sell on the street corners. It's the stuff that's sold on Amazon that makes this whole counterfeit market such a cancer on American business."
On May 3, Judge Wright ruled in Kinsley Tech v. Amazon that Amazon should file within 30 days a written report under oath about counterfeiting that has occurred with face masks.
“The court has said Amazon does not have immunity for this and it is just like any other retailer, which means they have to take steps to protect the consumer,” Parris said in an interview.
Some 10 billion listings were blocked on Amazon last year under suspicion of being fake, according to media reports.
“The preliminary injunction is a huge deal because it will totally disrupt how Amazon conducts business,” Parris said. “Until now, they've been able to escape liability with layers of protection.”
Parris added that he foresees Amazon potentially enhancing the way it holds vendors accountable.
“If the protective order is enforced and Amazon actually has to stop selling counterfeit goods, consumers will be able to get what they pay for,” he said. "Amazon has started a program where items are shipped directly to the consumer from the manufacturer. That's a safe way to do it.”
The court also issued a five-page protective order on May 19, which Parris said is likely included for privacy.
“Under a protective order, you can disclose things but not release it to the public,” he said. “Amazon may give all this information but it has to stay confidential.”