Initiating Litigation for Amazon Sellers for Baseless IP Complaints – Is the Investment Worth it?

Taking the leap

You appealed on Amazon, and you finally received an Amazon ASIN reinstatement notification reinstating your ASIN. It was a long time coming but your ASIN is finally back up and you can continue selling your authentic products that are in complete compliance with Amazon’s policies.

Suddenly, you receive another performance notification from the same person who filed an intellectual property complaint against the same ASIN you spent a lot of time appealing (and this is not the first time). This ASIN makes you the most money, and it being down is causing you to lose money, the money needed to pay for inventory, employees, and costs needed to sustain your business.

At this point, you need to think about whether it will be a good idea to pursue litigation & sue the person continuously filing baseless complaints against you.

Cost-benefit analysis

Before deciding to pursue litigation against the person filing baseless complaints against you, it is important to know whether the case will result in a profit.

It would be a pyrrhic victory if you won the case, and there were no profits to be drawn from your case, as well as the fact that you lost more money from attorney fees than the account is worth. Generally, you want to ensure the case can return three to five times the return on your investment. Litigation is generally hard to forecast but there is a way to calculate the cost-benefit analysis.

Glass half-empty vs. glass half-full

If you proceed to file suit against the complainant who continuously sends baseless complaints your way, at worst, you can expect to be in court for 18 months to a year. It does not mean all those months in court will be costly. During the lifespan of litigation, there are points in time where motions and other documents are awaiting the review of the court. At this point, attorneys are checking in for decisions and updates which will not run the bill up.

On the other hand, there are months where attorneys are actively drafting documents, responding to attorneys, and requesting action from the court. The combination of busy months to less busy months can average out to $2000 to $5000 a month. Overall, it can cost you 30, 40, $50,000.

If you believe the cost of your Amazon business is more than the overall cost of litigation and your ASIN nets you more than that overall cost, then litigation is right for you. The litigation can also result in recovering money from the complainant who made baseless complaints against you.

The choice is yours

Nobody can urge you to pursue a lawsuit against the complainant, but it is imperative to weigh out the pros and cons.

At Rosenbaum, Famularo & Segall PC, we will always go over the pros and cons of initiating litigation with you. We are here for sellers, and we want you to make the best decision that suits your business.

Call today for a free consultation 1-877-9-SELLER or submit a case to us online here.