Alicia Kaufmann '27
Staff Editor
On Thursday October 3, the Law School’s LawTech Center welcomed Mark McKenna ’00, UCLA Law Professor and Faculty Co-Director of the UCLA Institute for Technology, Law & Policy. After a warm introduction from Professor Danielle Citron, McKenna presented an upcoming paper that he co-wrote with Jeanne Fromer of NYU School of Law, titled Amazon's Quiet Overhaul of the Trademark System, that will be published in the California Law Review in 2025. The paper addresses Amazon’s unilateral impacts on trademark law, or the platform’s “ancillary spillover effects on how the legal system works,” according to McKenna.
McKenna began with the main assertion of the paper: the traditional system of trademark law is being turned on its head by Amazon’s new rules surrounding its Brand Registry. If you’re wondering what Amazon’s Brand Registry is, don’t worry, I also had no clue this existed. But apparently, as Amazon’s success grew, third party sellers on the platform became increasingly worried about a lack of accountability for counterfeiting established brands. Amazon’s solution to this concern was to create a Brand Registry, where brands could apply to be recognized by the platform, sort of like celebrities getting verified on Instagram. The registry provided a private dispute resolution system with automated enforcement, so registered brands could submit complaints about counterfeiting and have perpetrators taken down. Rather than building an entire recognition system from the ground up, Amazon decided that the “ticket to entry” to the Brand Registry would be the federal trademark registration system. If a brand was able to get federal trademark registration from the U.S. Patent and Trademark Office (PTO), they could be admitted into the Brand Registry.
In 2019, Amazon amended this rule. No longer did brands need to receive registration to be admitted to the Brand Registry, simple proof of submission of an application to the PTO was enough. The thrust of McKenna’s presentation surrounded the meaningful impacts of this change. McKenna outlined that in order to understand these impacts, an understanding of traditional American trademark law is necessary. In the United States, trademark rights exist at common law. In a majority of countries, registration with the federal government is what establishes your right to trademark, but in the U.S., registration is simply official recognition of an already conferred right that arises out of use of the mark. Traditionally, in this system, localized small- and medium-sized companies have little incentive to pursue registration because unregistered trademarks hold up just as well in court as registered ones. Accordingly, McKenna articulated, Amazon’s amendment of their rule has caused a huge uptick in applications to the PTO from small- and medium-sized businesses that previously had little incentive to be registered. This has caused a back-log in the PTO, as they are not used to this high volume of applications.
McKenna also pointed out that there is a “distance between application and registration” in the PTO system, meaning a lot of people who apply for registration get denied in whole or in part. So, accepting brands that have applied but wouldn't necessarily qualify for registration has significant effects, one of which is trademark extortion. Exemplified in Home It, Inc. v. Wen,[1] Amazon's new rule has facilitated extortionists that look for unregistered brands on Amazon and submit an application to the PTO in that name for the purpose of threatening to invoke the Brand Registry against the original company in return for money or other payment.
Even more concerning, McKenna warns, is the increase in applications for generic, descriptive, and nonsense marks. A generic trademark is the common name for a product or service; a descriptive trademark merely describes a product or service; and a nonsense mark is a string of letters that does not mean anything on its own.[2] For example, for a trademark for a furniture store, “Furniture” would be generic, “Fabulous Furniture” would be descriptive, and “fff” would be nonsense. These types of marks are generally not registerable with the PTO. Nonetheless, brands applying to the PTO with these non-registerable names are allowed to be admitted to Amazon’s Brand Registry.
McKenna explained that the acceptance and use of these marks by Amazon essentially does away with the purpose of trademark law. The goal of trademarking a brand is to establish name recognition and build a reputation under that name. With super generic and descriptive brand names, like “Furniture” or “Mustaches,” companies are not building up the same type of recognition. Also, some brands have strategically entered the Brand Registry under a few different marks in order to try out different techniques for each one, and once they are successful under one they transfer all of their effort there. Again, this does away with the purpose of branding. Brands are supposed to have to deal with both the positive and negative reputations they create, while these tactics allow companies to only get the positive effects.
Thus, when a consumer is looking to purchase on Amazon, they rely on the site’s algorithm and customer reviews when choosing products. No longer are consumers relying on the reputations that brands have developed in order to narrow down options. McKenna refers to this phenomena as the “decentering” of brands on the platform. “Third party sellers aren’t reaching customers by branding anymore.”
Amazon’s house brands, however, “AmazonBasics” and “Amazon Essentials,” are front and center for every product search. So, while other brands are being decentered and washed out, Amazon is upping its own brand recognition. A student from the audience asked, “is this not just how Walmart or Target strategically places its house brands in the eyeline on the shelf in a better view than other brands?” McKenna responded that, yes, the problem is not that Amazon is putting its house brands first, it's that it's putting its brands first, and homogenizing all the other ones. “That would be like Walmart putting Great Value in the best position, and covering up the names of all the other brands.”
McKenna explained that these effects challenge us to consider whether we are more confident in branding or Amazon’s algorithm and customer reviews to give consumers useful and accurate information about products. He argues Amazon’s algorithm is a “blackbox” and customer reviews can easily be faked, so the information we receive can be mystified and unreliable. So is Amazon replacing one mechanism for an equally bad, if not worse, one? Is brand recognition any better? Should the PTO and Amazon work together to solve this issue? I’ll let you sit on that while I order some more paper towels.
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hcr9bm@virginia.edu