Toy Association Recommends Law Changes, New Responsibilities for Online Sellers
The Toy Association says the same safe-harbor law that protects YouTube for not preventing copyright infringement on that site should not apply to physical goods. The comments were filed in response to Commerce's request for input on the subject as it prepares a report for the president (see 1907080030). The association argues that the issues are more urgent, because counterfeit toys have not undergone safety testing, and that an online seller has more knowledge about its sellers' products than companies combing through listings do. They said "even the simple addition of proactive text filters can prevent thousands of listings every month."
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"While platforms have established programs to help brands remove counterfeit listings, many of these programs are reactive and require the constant vigilance and engagement of the brand owner to identify counterfeit listings," the industry association said. Even when a copyright holder notifies an e-commerce seller, under Digital Millennium Copyright Act section 512, the company selling counterfeits can then respond to the e-commerce platform that its products do not infringe on the copyright. In that case, the copyright holder would have to sue to stop the sale of the product. "Even a handful of counter notices can be a significant financial burden for a small company," the trade group said.
The group also argued against online retailer use of Communications Decency Act section 230 "to avoid liability for a variety of harms caused by sellers on their marketplaces such as sales of fraudulent or unsafe goods, and false statements made by sellers about counterfeit products on its site." So the association is recommending some changes to platforms' practices, and some changes to law. For the platforms, they'd like to see a policy whereby sellers are banned if they've had multiple violations (two or three complaints). They'd like platforms to require sellers to provide Children's Product Certificates, to show compliance with toy standards.
But they're also recommending that the Consumer Product Safety Improvement Act interpretation be changed to classify online marketplaces as retailers, which would require that the toys they are selling have undergone independent safety testing and certification, and would also require them to report unsafe products to the Consumer Product Safety Commission. If platforms are not willing to be proactive about copyright enforcement by examining metatags, country of origin, selling history, etc., the association recommends changes to the Lanham Act that would compel them to do so.