Online Sellers Facing Trademark Infringement Allegations

Have you been notified that Volkswagen is suing you and other online sellers for trademark infringement? The Plaintiff, Volkswagen, is seeking “injunctive and monetary relief” for what they believe is rampant counterfeiting. Wondering what you should do next? Respond to the lawsuit! Even if you don’t believe your business has infringed on the company’s trademarks, the allegations will still impact your business. The best way to address these allegations is to issue an appropriate response. 

Not sure how to compose a response to the lawsuit? An intellectual property attorney can help write one up for you! The reason why it’s so imperative to respond? If you don’t you could lose thousands and thousands of dollars. The potential amount of loss varies from seller to seller. Either way, if you don’t respond you’ll certainly forfeit whatever money you’ve thus far made from selling Volkswagen goods. 

Volkswagen Lawsuit | Temporary Restraining Order

Perhaps the most harmful part of these Schedule A infringement lawsuits is the temporary restraining order that comes with them. Volkswagen’s claims of counterfeit will lead to a restraining order. That impacts sellers’ online accounts and prevents them from getting their money. If this has happened to your business, you know precisely how aggravating it can be! You’ve built an online business, grown a customer base, and established your store as a strong competitor. All of a sudden, the notice of the Volkswagen lawsuit shows up and a restraining order goes into effect.

As mentioned, the frozen monetary amount could be in the thousands. That’s not a small thing, by any means. That capital is the foundation for your business to survive, grow, and thrive. Frustratingly, even though Volkswagen’s claims are only allegations, the Defendants need to address the lawsuit in order to re-access their money. How does an online seller named in the suit regain that access? One way is by reaching a settlement. 

Why Do Big Brands File Schedule A Lawsuits?

Volkswagen and brands like it utilize the Schedule A lawsuit for counterfeit issues because they can claim many sellers infringed on their intellectual property. Following that, the company attempts to settle with the Defendants. Due to the quick turnaround of that path to resolution, many sellers go along. This is frequently disadvantageous for sellers! Many settlements in counterfeit lawsuits leave Defendants with just 60% of their frozen assets. For these reasons, it can greatly benefit sellers to use an intellectual property attorney to resolve the matter! 

As it states in the legal complaint, “on information and belief, Defendants reside and/or operate in the People’s Republic of China or other foreign jurisdictions.” Sellers based in China and elsewhere may be intimidated by the lawsuit. Either they don’t understand the United States legal system, how to retain legal counsel or that they can get a lawyer, and/or don’t feel confident that legal action is worthwhile. Quite frequently, sellers who use an attorney find more advantageous resolutions. Don’t be scared by the lawsuit! You are entitled to a fair and reasonable outcome, especially if you’re a seller who doesn’t believe you’ve done what Volkswagen is claiming. 

Volkswagen’s Claims of Counterfeit

Speaking of Volkswagen’s claims of counterfeit – below are a selection of the brand’s allegations of trademark infringement:

E-commerce store operators like Defendants commonly engage in fraudulent conduct when registering the Seller Aliases by providing false, misleading and/or incomplete information to e-commerce platforms to prevent discovery of their true identities and the scope of their e-commerce operation.

E-commerce store operators like Defendants regularly register or acquire new seller aliases for the purpose of offering for sale and selling Counterfeit Volkswagen Products. Such seller alias registration patterns are one of many common tactics used by e-commerce store operators like Defendants to conceal their identities and the full scope and interworking of their counterfeiting operation, and to avoid being shut down. 

Counterfeiters such as Defendants typically operate under multiple Seller Aliases and payment accounts so that they can continue operation in spite of Volkswagen’s enforcement. E-commerce store operators like Defendants maintain off-shore bank accounts and regularly move funds from their financial accounts to off-shore accounts outside the jurisdiction of this Court to avoid payment of any monetary judgment awarded to Volkswagen. 

Intellectual Property Attorneys Exist for a Reason!

The sellers affected by the lawsuit have sold Volkswagen products on Alibaba, Walmart, Amazon, Etsy, Temu, and other platforms. Any of the Defendants should respond to the lawsuit! Maybe none of the allegations apply to your business operation. Perhaps you unknowingly sold goods that were counterfeit. No matter the details of your online seller account(s), you need to respond! If you ignore the existence of the suit or walk away, the money that’s frozen because of the restraining order will be given to Volkswagen. The same goes for settlements – the percentage you don’t keep goes to the company. Your intellectual property attorney can work with Volkswagen on your behalf to develop a solution that benefits you and your online business. 

Contact Stockman & Poropat, PLLC today for a free consultation! Our team will work directly with you to figure out the most effective way to move your business forward while keeping as much of your money as possible. 

Download the legal complaint below:

Up next we will be discussing the Bluey Counterfeit Lawsuit.