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Many Amazon sellers often don’t get why they should check for product patents before they buy products from their suppliers. However, by missing out on this step, they are opening a potential can of worms – which will make or break their businesses. Listen to Willy as he explains why it’s necessary to check for product patents when you are sourcing for your Amazon business.

In this episode, Willy is going to cover:

  • What are product patents and the nature of product patents;

  • The need to check for product patents before buying products from suppliers;

  • What will happen if sellers insist on listing patented products on the Amazon platform.

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TRANSCRIPTION

Many Amazon sellers don’t understand the importance of checking for product patents. They think it is a waste of their time – but what they don’t know is that by missing out on this step, they are opening a potential can of worms. And why do I say that? Let’s thrash it out in this episode.

Just a brief introduction about patents before I begin: a patent is a right that is granted for an invention, like a new product, process or improvement to existing technology. When you register a patent for your invention, you hold the exclusive right to use the patent. This means no other person can use or sell your products, unless they seek your permission.

If you manage your patents well, it can bring you many benefits. For example, you can use it to develop cutting-edge technologies, raise investment, or license your patents to third-party sellers, etc. This can allow you to earn lots of money. Meanwhile, another important thing to note about patents is that they are territorial rights – that is, the exclusive rights you enjoy as a patent owner for your products are only applicable in the country or region in which the patent was filed and granted. Other countries will not recognize this action. 

Let’s use what I ran into recently to illustrate this territorial aspect of patents. For me, I have three patented products in the US, and these products are selling well on Amazon. But I discovered some time back that some Chinese suppliers had copied my products. They manufactured an inferior version of my products, and started selling them in their country. As I didn’t apply for patents for my products in China, I couldn’t stop these sellers from making sales off my products. Unless they decided to sell the products on Amazon in the US instead, I won’t be able to file any complaints against them.

That’s very unfair, right? But you have to recognise that this is the nature of patents. Besides, there is a long-standing vice in China: some unethical Chinese suppliers just don’t have high regards for intellectual property rights, or IP rights. To them, using other people’s product ideas are common practices. Though comparing to five years ago, this situation has definitely been getting much better, thanks to the Chinese government’s efforts in advocating against the sale of unauthentic products.

And if you have been listening till this far, you may recognise one serious issue many Amazon sellers can run into, if they don’t check product patents before they buy China-manufactured products. Yeah, that’s right – if sellers don’t check product patents, they may unknowingly buy US-patented products from Chinese suppliers in bulk. Remember, your Chinese suppliers can still manufacture and sell those products to you and they won’t be penalized for doing so, because the products are not patented in China. However, should you ship and sell those products in the US, then you will be the one in trouble – because you will be infringing on patent laws!

Many Amazon sellers will be very angry about this, and they will probably go like: “That’s downright sneaky! How come the Chinese suppliers didn’t tell me if the products are already being patented in the US, and can’t be sold there? It’s like cheating my money!”

But the sad truth is, suppliers are not obliged to check or inform customers about product patents. Ultimately, suppliers are sellers themselves, and they want to earn sales from you. Who cares what you are going to do with the products after you bought them? What’s important is that they have earned the money from you already!

So, moral of the story is: as a seller, you always need to do your due diligence, and check if the products you want to buy from suppliers are already being patented in your destinated country of sales. You can do this quite easily too. For example, there’s this ‘Google Patents’ search page where you can search for product patents from around the world. It’s another step to your sourcing process, of course – but this is the only way to go, if you don’t want to discover you cannot sell your products after you bought them in bulk.

In any case, despite warnings about listing patented products on Amazon, some of the dare-devils among you may still want to do it. Perhaps you just want to replicate the products’ success for your own business, or you feel that it’s too much of a hassle to find authentic products that fit the bill for listing on Amazon. But what I can only say is: if you persist on selling patented products, you are going to face serious aftermath. 

First of all, such product listings will be discovered by the Amazon authorities sooner or later. Once they are being discovered, Amazon will ban you from selling them, and you will need to take the listings off its platform. That means, whatever income you derived from these products will turn zero overnight – and this is already the best scenario that can happen to you.

Next, the original patent owner can file a Digital Millennium Copyright Act report, or DMCA Takedown Notice against you. Just in case you don’t know, the DMCA is a legal act passed in the US to prevent illegal abuse of copyright owners’ original invention. After which, the patent owners can get help from patent lawyers to take over your listing’s sales by force. Because by law, you are not supposed to sell those products without their permission. Any income you derived from selling those products thus far should go to them. So, all the efforts you have done for this product will benefit the original patent owner instead.

Last but not least, do note that all Amazon Sellers have a score in Amazon’s backend management platform. If you sell patented products on the Amazon platform without permission, the Amazon authorities will blackmark you. This will take a hit on your Amazon Seller Account’s integrity, and in the worst-case scenario, you may even receive a notice from them, telling you to close down your account. That means – bye-bye to selling on Amazon! 

So please, check for product patents before you buy products from your suppliers. Do not trust suppliers to check patents for you – it’s always best to be in full control of such matters when you manage your Amazon business!

And this will be the end of this episode. Goodbye, and I will see you in the next episode.


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