Appellate Amazon Amazonlazarus Los: Amazon has said it is not liable for the third-party products its site sells, but a panel of judges in a California appeals court has ruled otherwise.
The ruling comes from a lawsuit filed by Douglas Johnson, who purchased a knockoff iPhone charging cable from Amazon. When he plugged it into his phone to charge it, the charger exploded and blew up in his hand. Johnson then filed charges against Amazon, saying that since they allowed the sale of these items without verifying the safety of what they were selling.
Amazon has always maintained that it does not assume liability for third-party products it peddles on its site. It provided a number of examples in which that would not be the case, including with items sold on the site itself, such as the book “Blue Smoke: The Life and Times of Delta State University’s NASCAR” (which Amazon still sells to this day).
But the court has now disagreed. According to a report by San Jose Mercury News, “The decision sided with Johnson and against Amazon. It said that under California law Amazon was not merely a passive, automated machine for matching buyers and sellers. It was also engaged in what it called ‘eye-to-eye’ dealing with customers.”
Neither party in the case has commented on whether they will accept the decision or appeal it. The ruling could have a huge impact on Amazon’s ability to sell third-party electronics, including knockoff versions of Apple products. The company is believed to have sold more than $1 billion worth of counterfeit goods in 2012 alone.
The ruling does not hold up in New York state, as other courts there have ruled that third-party products sold on Amazon’s site should be considered exempt from IP rights. For now, it seems unlikely that this will be upheld in any o f the other states where Amazon has sold knockoffs.
The National Retail Federation has argued that “a very high threshold must be met before eBay can be held liable.”
“Not only does [Amazon] have a physical presence in the United States, but it operates its marketplaces on a national scale and reasonably can be expected to monitor for infringements and take appropriate actions. While the court did not go so far as to state ‘the marketer of an infringing good’ is either an infringer or contributor to the infringement, where a marketer is directly responsible for the infringement and has taken substantial steps toward its prevention or removal, eBay should be held liable for damages,” NRF’s senior counsel, Michael Zombeck said in a statement.
UPDATE: There is an important second article on this topic here regarding the details of the case. According to Amazon, the ruling is a “loss for the Internet.” The article also quotes attorney Julie Samuels of the Electronic Frontier Foundation (EFF): “The court’s holding that Amazon could be liable under California law for goods it sells third-party vendors means that Amazon may have to police its site in some fashion,” she said.
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