Saturday, December 06, 2008

An eBay VeRO Primer for the Uninformed, Like Me.

I normally don't comment on discussions I find on the eBay stores board, but in the past I have found there to be some very wise thinking going on there. Today I came across a thread discussing MAP and VeRO issues, which I have been blogging about for the last couple of days (sorry, just call me Johnny One Note) 

I really enjoy reading Carl's  (oldspartantrader) posts because he is a wise man and though I don't always agree with him, I still value his opinion. Carl points out that these issues are not simple and that he is glad that eBay is fighting against MAP and other issues because it would be too costly for him to do it on his own. I don't disagree with that.

But, then I kept reading and found out, that according to poster (itspostingtime), I don't know what I'm talking about in regards to VeRO and eBay's ability to change the program. itpostingtime says; "unlike Randy Smythe, who has written about this without any apparent understanding

So, since I can't clarify my position on the eBay stores boards, I figured I would do it on My Blog Utopia. 

Here goes:

First a little information regarding eBay's VeRO program from the company itself: 
"eBay is committed to protecting the intellectual property rights of third parties and to providing its users with a safe place to trade. eBay created the Verified Rights Owner (VeRO) Program so that intellectual property owners could easily report listings that infringe their rights. It is in eBay’s interest to ensure that infringing items are removed from the site, as they erode buyer and seller trust." [bold is mine]
eBay created the program to comply with the DMCA or Digital Millennium Copyright Act of 1998. Apparently this version of VeRO was deemed compliant with the DMCA, because there have been few if any challenges. 

There is a great document, written by intellectual rights attorney Scott Pilutik, that describes the issues surrounding eBay's VeRO program and heaven forbid he even suggests ways to fix it, which is what I am advocating. I suggest you take the time to read it (it is quite long). Here is a quick excerpt.
"Although the Internet seems custom-built for copyright infringement, trademark infringement also abounds, and nowhere is this more apparent than on eBay,  the Internet’s leading online auction site, where over one million items, many of them brand name goods, are traded each day.  As an online facilitator of services between parties exchanging brand-name goods, many which are not authentic, eBay may be liable as a contributory (or even vicarious) infringer.  

But while secondary copyright infringers can look to section 512 of the Digital Millennium Copyright Act (“DMCA”)  as a shield against liability, alleged secondary trademark infringers, like eBay, have no such sanctuary.   This unfortunate void has forced eBay to fashion a self-help remedy called the Verified Rights Owner Program (“VeRO”),  which essentially deputizes the rights owners themselves to police infringing listings on eBay.  But just as the fox has little incentive to act prudently while guarding the henhouse, rights owners have routinely overreached when armed with a quasi-official infringement enforcement badge. " [section 512 begins on page 8)
eBay's VeRO program has been a problem for sellers from its creation and though I have had no exposure to the program since 2006, I did deal with VeRO issues for my entire time at eBay. In the early days though, few manufacturers knew much about the program and even fewer organized to abuse the situation. 

We are in a completely different environment today, then when VeRO was created. Today entire organizations have been created to abuse the system and manufacturers are getting even more aggressive with the program. eBay continually falls back on the "our hands are tied" defense which, I guess is sufficient for many, but not for me. 

My main point in recent posts, that apparently wasn't clear enough, is that manufacturers are now going after sellers who are breaking MAP (minimum advertised price) or who sell product on eBay when the manufacturer has expressly told them not to. While they have the right to protect the value of their product and their pricing, using VeRO to do that is an abuse of the program and has nothing to do with intellectual rights or copyright. It is my position, that if eBay wanted to stop it, they could. So the "our hands are tied" defense is poppycock. They would rather get the PR benefit from a Dog and Pony show in Washington DC standing up for the rights of sellers.

How can VeRO be fixed? Mr. Pilutik has some suggestions"
"eBay similarly lacks any incentive to protect its sellers.  As a result of its virtual monopoly on the online auction market,  sellers have few alternatives to eBay’s sizeable market and are forced to sue the complaining rights holder if they wish to reinstate their listings.   eBay punishes sellers who have had listings removed under the VeRO Program, and it has scant oversight in place to rectify wrongful listing removals at the hands of overzealous rights owners.
This inequity could be cured legally in one of two ways: eBay could modify its VeRO Program to account for the due process it owes its selling community,  or Congress could enact a safe-harbor provision for online service providers under the Lanham Act similar to section 512 of the DMCA"
The point I have been trying to make regarding VeRO and I apologise if I was unclear, is that eBay has the resources available to fix the problems with VeRO, instead they tie the manufacturers abuse of VeRO into their PR campaign against MAP because it adds weight to their argument. "see what these bad, bad manufacturers are doing, they are abusing our poor little VeRO program to force seller compliance of MAP, we need to overturn MAP because we are powerless to change VeRO"  I say, fix the damn VeRO program and protect your sellers from the abuse of that program, then you can go attack MAP  -- MAP has enough complexity on its own. If some people don't grasp this distinction I can't help that.

I believe VeRO and MAP are basically two separate issues. I want sellers to be protected from abuse and I want Manufacturers to be able to protect their brands, but because of the abuses of VeRO in regards to fixing prices", and eBay's looking the other way, the two have become one for me. 

I don't want eBay fighting a battle for me on one front while they let manufacturers shutdown businesses through VeRO by way of the backdoor that eBay has left wide open. 

One more bit of info on VeRO: The Reason Codes
A VeRO member can get a listing taken down for any of these reasons. All they have to do is site which one. eBay does nothing to verify if they are accurate or not. Yet a seller with 5 or more VeRO notices in a month can get suspended.

Trademark - Item infringement
1.1. Trademark owner does not make this type of product
1.2. Item(s) is unlawful replica of a product made by the trademark
1.3. Item(s) is unlawful importation of product bearing trademark
Trademark - listing content infringement
2.1. Listing(s) contains unlawful comparison to trademark owner's brand
2.2. Listing(s) contains unlawful use of trademark owner's logo
Copyright - item infringement
3.1. Software offered for sale in violation of a license
3.2. Item(s) is a bootleg recording of live performance
3.3. Item(s) is an unlawful copy of media (software, games, movies)
3.4. Item(s) is unlawful duplication of printed material
3.5. Item(s) is an unlawful copy of other copyrighted work (paintings,
sculptures, etc.)
Copyright - listing content infringement
4.1. Listing(s) uses unauthorized copy of copyrighted text
4.2. Listing(s) uses unauthorized copy of copyrighted image
4.3. Listing(s) uses unauthorized copy of copyrighted image and text
Other infringement
5.1. Item(s) infringes a valid patent (requires patent registration
5.3. Item(s) violates a celebrity's right of publicity
5.4. Listing(s) content violates a celebrity's right of publicity 
6.1. The Kitchen Sink - Sorry, I couldn't help myself.

Just my 15%


Ginny said...

I'm not sure if this is on the same topic but I think it is related. It is something that I think about frequently after learning about it back in August. The following is from a post written on the Powersellers Discussion Board back in August. I post it to show ebay's attitude about what is being listed and their lack of true concern about fakes. The powerseller who wrote this was not really interested in selling fake iPhones.:

"We got a little exasperated recently and thought we'd hop on the fake iPhone bandwagon... so we called up powerseller support and said~ HEY! Are these unlike the iPhone enough to sell them? 'Cause we keep reporting them and they never go away... Certainly it's because they're NOT violations??

They said that we can sell all the fake iPhones we want! She actually acknowledged that they were violations, but said we can still do it! Because it's up to Apple to pitch a fit. And then it's up to Apple to go through and report every single listing. Well, good luck guys! According to, 2,078 fake iPhones were sold from August 13-19. 5,853 were listed."

Patricia said...

Bottom line now and always has been "is this of benefit to Ebay"? Not to buyers, not to sellers or copyright holders but only to Ebay. Once you understand that the rest is easy. You know what they'll support and what they'll ignore.

At one time I was a member of ebay's arts community watch program. We checked listings and we reported fraudulent listings such as fake Picasso, etc. We also turned in the fake artwork stolen from other artists that were printed on canvas and sold as originals. These sellers often listed hundreds of works at a time and there was a definite ring of them. At first, Ebay would suspend sellers until they got their act together but as we went on it became very evident that Ebay really didn't have its heart in straightening out the problem...they only wanted to appear as though they were doing something about it! After awhile we began to drop out of the program once we realized we were only spinning our wheels. Ebay treats all fraudulent activity in the same manner. They don't protect the buyers, sellers or manufacturers - their bottom line is their own revenue and nothing else.

I don't know whether what they're trying to do with maps is good or bad. It really means little to me. I simply detest that they are using the small sellers they've been kicking in the gut since January as some kind of weird crying towel!! If they continue then I'm sure enough small sellers will write to Washington to straighten that out. Ebay has absolutely no conscience! There is no level to which they won't stoop to safeguard their own revenue. Its this attitude that has made them the most detested company on the internet.

Henrietta said...

If you allow your hatred for eBay to blind you to strategic alliances you are just cutting off your nose to spite your face.

To join in this issue, which does and will affect you because the manufacturers don't care if the item is used or not, they simply want to prevent you from selling their product online, period, doesn't mean you have to go to bed with eBay.

Get real. eBay has plenty of money (your money) to fight their battles. In this case your interests coincide with theirs. Get off your butt and write to your representative.

Once that battle is over then turn your attention to what really bothers you.

Prioritize people!

2009 or Bust! said...

VeRO is a charade. And VeRO is the most frightening part of selling on eBay because in no-uncertain terms, a VeRO member can just claim trademark infringement with a "come sue us and we will see you in court in 7 years" approach.

VeRO really will be the death of smaller and mid-size businesses on eBay

Rich said...

What Carl says always makes good sense and can usually be taken as good advice.

Patricia said...

Henrietta - since I make everything I sell, I have no dog in this fight. However, using small sellers to plead your case after you've tossed them off the site left and right is something I feel is unconscienable!

nadine said...

Does eBay think that they are fighting MAP in order to help their new Diamond sellers? The irony is that it's unlikely the new Diamond sellers want any such help. Or if one does, five others don't.

The funny part is that, having alienated all their small sellers, eBay is now well on the way to alienate all its favored new large sellers as well.

Like Ms. Pat says, it's all about eBay's revenues. The infuriating thing is, if only eBay could look beyond the end of this quarter and use some business sense, they could arrange situations where they were cooperating with their customers instead of trying to manipulate them.

Does eBay understand that the Diamond sellers do not need to put up with eBay's nonsense? If eBay is not profitable for them, they will leave. (I wonder if eBay thought ahead to contract them for a certain period?) Watch who stays and who goes among the Diamond sellers after the holidays. This could get interesting.

Anonymous said...

Ebay sellers can bring an end to manufacturers heavy handed use of the VERO program.

For every Vero take down, leave a couple dozen reviews on the web about that manufacturer's products or services. Or a couple hundred.

When Ebay sellers learn to play as dirty as the Big Boys, maybe they'll approach more cautiously.

Maufacturers have lawyers and lobbyists, but they'd better bring a mighty big legal/advertising/public relations budget if they're going to match my determination and anger.

Howard_Metzenblogger said...

Let me offer another perspective here, that of the Verified Rights Owner. I participate in EBay’s VeRO program, where I have taken down hundreds of EBay auctions, and identified dozens of sellers who I believe are mostly selling either stolen or counterfeit merchandise.

While EBay claims that its VeRO program provides a safe harbor, protecting it from the law-breaking activities of its sellers, EBay is in fact adversarial and uncooperative towards the VeRO rights owners who, in good faith and under possible penalty for perjury, report violations of copyright and trademark laws to EBAY.

If you are not as big and as profitable as Tiffany, EBay will often ignore your claims of trademark violations, by responding with endless form letters and “requests for more information” even when you send them obvious evidence of trademark or copyright infringement.

I am often forced to send several increasingly threatening letters to get a copyright or trademark infringer taken down. EBay punishes its sellers when they copy from each other, but looks the other way when they copy from legitimate vendors with registered copyrights.

Although their auctions expire in as little as 24 hours, it is difficult to get them to act promptly. They present endless stumbling blocks to safeguard their sellers. They never seem to sanction a seller for copyright violations, even after many repeated takedown notices.

Although EBay often stalls in taking action against trademark and copyright infringers, they do provide the private account information of their sellers to VeRO participants. They do so quite promptly. Never mind that many of these sellers provide false names and account information. The use of PayPal generally insures that there is a long paper trail for illegal activities.

As a VeRO program participant, I have sometimes sent the names (real identities) of EBay sellers on to their local police departments. U.S. Police Departments simply send back form letters telling you that they don’t believe the case is in their jurisdiction.

GOD BLESS CANADA. When I sent information to the Edmonton (Alberta) Police Department about EBay seller ProRSumGurl, she was immediately busted, ending a four year crime spree against her employer. A police detective from Edmonton called me up and thanked me for my help. ProRSumGurl’s account on EBay has been inactivated, but you can still see that she had 100% positive feedback on EBay and was a Power Seller. According to the Edmonton police detective, she is a first offender, but is likely to serve time in prison.

Although I have heard nothing from EBay to confirm this, my activities to identify sellers of stolen and counterfeit art materials on EBay seem to have brought some action from EBay itself. Since the arrest of ProRSumGurl in October of 2008, many of the largest sellers of art supplies on EBay, sellers who I believe are running large fencing operations, have disappeared from EBay listings. I believe that my identification of this Canadian seller and the cooperation of Canadian law enforcement prompted EBay to pay attention to my claims about other EBay sellers of art materials.

I have observed the virtual collapse of market prices on EBay for one popular brand of fine artist materials. Recently, a set of six tubes of "Series IV" oil paint that would sell for over $100 if they were real, and sold by a legitimate merchant, sold for only $15 on EBay. By now, potential buyers seem to realize that this is a product that is easily counterfeited, as in print your own labels and fill an expensive looking tube with some cheap paint.

Anonymous said...

A very simple solution. The abusers do this because they can, implement a counter notice for trademark issues and let the seller become responsible for the outcome. Currently there is a counter notice for copyright only so the abusers turn to trademark violations instead, why, because they can and nobody will do anything about it.

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