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SHOP SAFE Act
12/31/2022, 5:45 AM
Summary of Bill HR 5374
Some key provisions of the SHOP SAFE Act include requiring online marketplaces to verify the identity of high-volume sellers, maintain accurate seller information, and take down listings of counterfeit goods promptly upon notification. The bill also calls for increased cooperation between online platforms and law enforcement agencies to combat the sale of counterfeit goods.
Supporters of the SHOP SAFE Act argue that it is necessary to protect consumers from purchasing fake or harmful products online and to safeguard the intellectual property rights of legitimate businesses. Critics, however, raise concerns about the potential impact of the bill on small businesses and the burden it may place on online marketplaces to monitor and police their platforms. Overall, the SHOP SAFE Act represents a bipartisan effort to address the growing issue of counterfeit goods being sold online and to hold online marketplaces accountable for facilitating these transactions. The bill is currently being debated in Congress, and its ultimate fate remains uncertain.
Congressional Summary of HR 5374
Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act or the SHOP SAFE Act
This bill makes an electronic commerce platform liable for infringement of a registered trademark by a third-party seller of goods that implicate health and safety unless the platform takes certain actions.
Specifically, the platform may be contributorily liable if the seller uses a counterfeit mark in connection with selling, offering, or advertising such goods on the platform. The platform may avoid such liability by taking certain actions before the infringing act, including (1) requiring the seller to have a registered agent or a verified address for service of process in the United States, (2) verifying the seller's identity and contact information, (3) requiring the seller to agree to not use counterfeit marks with goods sold on the platform, (4) implementing procedures for trademark owners to request the removal of listings for counterfeit goods, and (5) implementing policies to remove and ban repeat offenders.
A person who knowingly makes a material misrepresentation in a request to a platform to take down a seller listing (because the listing allegedly uses a counterfeit mark and implicates health and safety concerns) shall be civilly liable to the seller injured by the resulting improper takedown. If a person makes 10 or more such improper takedown requests, the platform may sue on behalf of the sellers who consent to the platform's lawsuit. A party suing under this bill may choose to receive statutory damages (as opposed to actual damages) of $2,500-$75,000 for each improper request, depending on the circumstances of the case.
