Popsockets is one of the biggest bullies in the marketplace. They've sued many, many sellers that were selling legitimate products trying to bully them off the market with various loopholes in the first sale doctrine.
The basic strategy is to include a bunch of FUD about how there's counterfeiters in general on Amazon, then try to lump legitimate sellers in with that. See the 79 page complaint from my last link, filed just last month. They have a template lawsuit that's dozens of pages long, and they just fill in the specific seller details. They have a bunch of screenshots of negative customer reviews, but those are from Amazon broadly and are not connected to the seller they're suing - they use the same negative reviews for all their lawsuits. (It looks like they have two negative feedback for popsocket sales traced to that account out of the many pages of negative reviews that isn't connected to an account.)
To be clear, they are not alleging counterfeits in the lawsuits. The claim is that the product doesn't carry the manufacturer warranty, and that sellers don't follow the right quality controls, both of which are very shaky claims legally (warranty restrictions are problematic under federal law, and there's no serious quality control concern on sealed electronics accessory products - it's the same product in the same warehouses, it doesn't magically become lower quality just because a different seller is selling it. There's a potential quality control concern with groceries or products requiring temperature controls, but it stretches credibility to argue that applies to sealed popsockets.) But a small seller can't afford the hundreds of thousands of dollars it takes to get a court decision affirming that. I know multiple sellers that have settled rather than fighting it. It's the path of least resistance.
Popsockets is not the only brand that's been using these abusive tactics. There's a string of lawsuits by Otterbox, Skullcandy, GNC, Murad, Standard Process, Noco, and others. Most of them are being pushed by a lawfirm called Vorys, which is associated with a large Amazon seller by the name of iServe/Pattern (one of the top 10 third party Amazon sellers, see https://www.sellerratings.com/amazon/usa, note Zappos and 6PM are Amazon-owned and Asurion, LLC is selling services, not products), that gets exclusive contracts with brands and then sues many of their competition that's undercutting them.
It's a scheme just begging for an anti-trust investigation.
iServe and Vorys also are fairly effective at working with manufacturers to get the desired price levels.
Consider the example of Spectra Baby, one of the largest suppliers of breast pumps in the United States. Spectra Baby is involved with both Vorys and Pattern (iServe). For example, their website states that if a breast pump was purchased on Amazon, they will only honor the warranty if iServe was the seller.
According to a popular price tracking application, there were seven offers on Amazon for Spectra’s popular S1 model pump in January of 2018. The selling price was $160. As late as May 2, Amazon itself was selling this product for $169. By the end of May of 2018, however, there was only one seller remaining and the price was $200. Although there have been some one-off sales by “unauthorized” sellers, the Amazon price for the S1 pump has remained remarkably consistent at $199.99 since 2018. Fortunately for buyers of this now $200 breast pump, iServe is "glad" to “provide invoices for insurance purposes". You can check out the price history yourself with the Keepa chrome extension.
Putting legalities aside since IANAL, how would a PopSockets -> third party -> Amazon -> customer supply chain ever be cheaper than PopSockets -> Amazon -> customer? Besides abstract "fairness", what's the benefit of allowing third party resellers here?
Usually some sort of price discrimination. Let's say Brand X pays $5 to produce something and sells it wholesale for $15 to stores, for a retail price of $30. Assume Amazon fees selling at $30 are $10, so Brand X can sell on Amazon at $30 and get back $20. A third party could divert goods from a retail store, say they pay an extra $1, and price at $28, and will net $18 from Amazon and be left with a profit of $2.
Alternatively, maybe a store had overstock and sold the goods in bulk at a loss.
Or sometimes they sell the same products cheaper in another country, and it turns out to be cheaper to buy there and import to resell here.
That explains why their crap is so expensive, and you can hardly find an alternative product. Amazon is a good guy here trying to lower the consumer price for that shitty piece of plastic, but no. Everyone is so upset at Amazon for making a lot of money, they forget their own interest and would rather side with real assholes
Interesting, so is it immoral to sue someone who is blatantly copying your product and providing a much cheaper knock off with much poorer quality?
I'm not sure how I feel about this. Maybe it's just a bad idea to copy someone else's product unless you really plan on improving upon it.
I don't imagine pop socket has a limitless budget for lawsuits either. They may really think they are doing the right thing here.
I guess this is the gray market that he's talking about. All these companies that are just copying products and creating cheaper versions with worse quality.
And amazon is facilitating that. Interesting and certainly worth shouting about.
These are products that popsockets manufactured, sold to distributors, which then made their way to Amazon. It's not a copy, it's the real thing, just sold at a price popsockets doesn't like.
Per https://www.vox.com/the-goods/2019/2/8/18215313/popsockets-c..., they've spent over $7 million on lawsuits in 2018 alone. The article claims it's all about counterfeits, but if you read through the actual suits it becomes clear that it's not about counterfeits but mainly about what I described above. They want to protect their margins against discount retailers. It's nothing new, brands have always hated discount stores, and it's obviously extremely lucrative to get rid them if it enables your authorized sellers to get higher prices. There's a reason MAP policies (minimum advertised price) are so prevalent.
> Interesting, so is it immoral to sue someone who is blatantly copying your product and providing a much cheaper knock off with much poorer quality?
That looks like a deliberate deflection. ikeboy specifically said that, while the lawsuit alleges inferior quality, that allegation is bogus. I would say that it is immoral to sue someone alleging inferior quality when the quality is not, in fact, inferior.
Just wanted to clarify a bit of the legal terminology here. There's a loophole/exception to the first sale doctrine that says if the products are materially different, it can be considered trademark infringement even if the product was originally made by the brand.
In some jurisdictions, there's a "quality control" subcategory of "material difference". The quality controls must be non pretextual. The basic argument is that if the brands's products are subject to quality control procedures that the alleged infringer is not following, then the products are different enough that it can potentially create a likelihood of confusion between the two. Only a jury can actually decide if there's such a material difference in a particular case.
Now, quality control can be temperature controls, or it can be additional inspections before sale, and so on. It must be something where customers would care about the difference, so you can allege customer confusion.
In these cases and in most of the vorys cases I've seen, the quality controls appear very pretextual. If the product is sealed, authentic, and there's no damage to it, it's hard to see why any consumer would care about any of the alleged differences in quality control.
The cases I've seen where quality control was accepted by a court were typically imports, where there were actually different standards being used for the ones the brand was selling in the US. In my view, none of these would go anywhere if they made it to court. But that's very expensive - it's been at least several years that similar cases have been filed, I'm aware of over 100 so far across 30+ different brands, and as far as I know none have actually gone to a jury. Most settle well before that point, or are voluntarily dismissed.
> If the product is sealed, authentic, and there's no damage to it, it's hard to see why any consumer would care about any of the alleged differences in quality control.
If I understand you correctly, the only differences in quality control would be if there were quality control tests that these units failed after they were sealed. That seems... quite unlikely.
Alternately, there were quality control tests that these units failed, but they sealed them in the standard packaging anyway. That also seems unlikely.
Plus even if it was inferior that’s not necessarily a bad thing. Maybe I can’t afford the nice thing at $x but can afford it at $x-1 dollars. That’s a benefit to consumers who would otherwise be priced out. I don’t think anyone would argue it’s immoral that Apple has an iPad alongside their iPad Pro.
https://www.courtlistener.com/docket/14939738/popsockets-llc... https://www.courtlistener.com/docket/16007022/popsockets-llc... https://www.courtlistener.com/docket/15050057/popsockets-llc... https://www.courtlistener.com/docket/15683859/popsockets-llc... https://www.courtlistener.com/docket/15639919/popsockets-llc... https://www.courtlistener.com/docket/16620695/popsockets-llc... https://www.courtlistener.com/docket/16620699/popsockets-llc...
The basic strategy is to include a bunch of FUD about how there's counterfeiters in general on Amazon, then try to lump legitimate sellers in with that. See the 79 page complaint from my last link, filed just last month. They have a template lawsuit that's dozens of pages long, and they just fill in the specific seller details. They have a bunch of screenshots of negative customer reviews, but those are from Amazon broadly and are not connected to the seller they're suing - they use the same negative reviews for all their lawsuits. (It looks like they have two negative feedback for popsocket sales traced to that account out of the many pages of negative reviews that isn't connected to an account.)
To be clear, they are not alleging counterfeits in the lawsuits. The claim is that the product doesn't carry the manufacturer warranty, and that sellers don't follow the right quality controls, both of which are very shaky claims legally (warranty restrictions are problematic under federal law, and there's no serious quality control concern on sealed electronics accessory products - it's the same product in the same warehouses, it doesn't magically become lower quality just because a different seller is selling it. There's a potential quality control concern with groceries or products requiring temperature controls, but it stretches credibility to argue that applies to sealed popsockets.) But a small seller can't afford the hundreds of thousands of dollars it takes to get a court decision affirming that. I know multiple sellers that have settled rather than fighting it. It's the path of least resistance.
Popsockets is not the only brand that's been using these abusive tactics. There's a string of lawsuits by Otterbox, Skullcandy, GNC, Murad, Standard Process, Noco, and others. Most of them are being pushed by a lawfirm called Vorys, which is associated with a large Amazon seller by the name of iServe/Pattern (one of the top 10 third party Amazon sellers, see https://www.sellerratings.com/amazon/usa, note Zappos and 6PM are Amazon-owned and Asurion, LLC is selling services, not products), that gets exclusive contracts with brands and then sues many of their competition that's undercutting them.
It's a scheme just begging for an anti-trust investigation.