What To Do When You Get An Amazon Cease And Desist Letter

Summary

In this video, Steve Alcorn discusses how to handle cease and desist letters as an Amazon seller. He shares personal experiences with receiving such letters, including one from GNC and another from GlaxoSmithKline. Steve explains that cease and desist letters are not legally binding and serve as warnings rather than immediate legal threats. He advises sellers to assess their 'pain tolerance' and decide whether to comply or push forward. The video also emphasizes the importance of researching the company sending the letter and understanding the risks involved. Steve concludes by promoting his course on Amazon gating, which helps sellers navigate the platform more effectively.

Takeaways

• 😀 Cease and desist letters are warning documents, not legally binding on their own, and they serve as a precursor to a potential lawsuit.
• 😀 You are not legally obligated to comply with a cease and desist letter immediately, but ignoring it may lead to further actions from the issuing party.
• 😀 A cease and desist letter does not guarantee a lawsuit, but it can lead to one if the recipient continues their actions.
• 😀 When receiving a cease and desist letter, assess your 'pain tolerance' to decide how to respond—whether to pull products or comply with their demands.
• 😀 Companies like GlaxoSmithKline send cease and desist letters to prevent unauthorized sellers from distributing their products.
• 😀 In the past, the speaker received a cease and desist letter from GNC after selling their products via retail arbitrage, but chose to pull the listings to avoid account issues.
• 😀 In response to a new cease and desist from GlaxoSmithKline, the speaker sold out their stock before addressing the letter, avoiding the need for immediate compliance.
• 😀 Cease and desist letters often include claims about unauthorized reselling, warranty issues, and potential consumer confusion due to lack of authorized reseller status.
• 😀 The key issue often raised in cease and desist letters is the inability of unauthorized sellers to offer warranties on products, which may make them appear 'materially different' from genuine products.
• 😀 Researching the sender and understanding the potential consequences of ignoring the letter helps you make a more informed decision on how to respond.
• 😀 The speaker emphasizes that small-time sellers should carefully assess their situation, as larger companies may not follow through with lawsuits but can make the process unpleasant with repeated legal threats.

Q & A

What is a cease and desist letter?

A cease and desist letter is a warning sent by a company or individual to stop certain actions, usually related to intellectual property infringement, such as trademark or copyright violations. It is not legally binding but serves as a precursor to potential legal action.

Is a cease and desist letter a legal document?

No, a cease and desist letter is not a legal document on its own. It is simply a warning. While it may be written by a lawyer, it does not have the power to enforce any actions unless followed by a lawsuit.

What should you do when you receive a cease and desist letter?

When you receive a cease and desist letter, you should stay calm and evaluate your options. You can research the company, assess your risk, and decide whether to comply by removing the product, lowering the price, or continuing with your sales if you feel comfortable doing so.

Do you have to comply with a cease and desist letter?

You are not legally required to comply with a cease and desist letter as it is not enforceable on its own. However, it is usually advisable to follow its instructions to avoid potential legal trouble.

What is the main concern companies have when sending cease and desist letters to sellers?

Companies typically send cease and desist letters to prevent unauthorized sales, confusion in the market, and the sale of products that might not meet their quality control standards. They may also be concerned about warranty issues when third-party sellers are involved.

What is 'pain tolerance' in the context of receiving a cease and desist letter?

Pain tolerance refers to your personal comfort level with potential legal risks and consequences. It helps you decide whether to comply with the cease and desist letter, fight it, or simply stop selling the product.

What happens if you ignore a cease and desist letter?

If you ignore a cease and desist letter, the company may send additional letters or even escalate the issue to a lawsuit, though the chances of that happening are typically low for smaller sellers. However, continued non-compliance may lead to significant legal and financial risks.

How can you handle a cease and desist letter if you're still selling the product?

If you're still selling the product when you receive a cease and desist letter, you can choose to lower the price to sell out the inventory before the deadline, or you can pull the listing if you prefer to avoid further complications.

What should you do if a company demands to see your suppliers in a cease and desist letter?

You are not legally obligated to provide your supplier information unless required by law. However, you may choose to cooperate and provide the details to resolve the issue more quickly or avoid further legal threats.

Is it common for small-time sellers to be sued after receiving a cease and desist letter?

It is relatively uncommon for small-time sellers to be sued after receiving a cease and desist letter. Most companies are focused on preventing unauthorized sales rather than pursuing lawsuits, especially against smaller sellers.