Last Friday, Williams-Sonoma took Amazon to court, claiming one of Amazon’s private label collections, Rivet, was selling nearly identical product to some popular West Elm furnishings. The suit also contains claims of dilution and unfair competition, reported Furniture Today:
The suit, filed last Friday in U.S. District Court’s Northern California district, said an “unauthorized Williams-Sonoma branded store on (Amazon’s) website” that “falsely claims these retail services are ‘by Williams-Sonoma,’” which has led to misdirected consumer complaints to Williams-Sonoma that actually concern Amazon’s retail services.
Williams-Sonoma’s action—Williams-Sonoma Inc. v. Amazon.com Inc., 18-cv-07548—also alleges that Amazon has infringed “upon a wide spectrum of WSI intellectual property rights in also setting up competing Amazon brands that sell knockoffs of WSI products.”
On Wednesday, suspicions increased. Two chairs mentioned in the lawsuit were removed from Amazon.com, including Rivet’s modern upholstered Orb office chair and industrial Slope top-grain leather swivel office chair, based on West Elm’s Orb dining chair and Slope leather swivel chair, both launched in 2016. “After a recent search,” reported Furniture Today, “neither item could be found on Amazon’s website under the product names cited in the suit.”
“Amazon can have manufacturers make something just close enough for a consumer to buy it and sell it for 30 percent less while making it just different enough to not violate a patent,” James Thomson, a former Amazon executive, told The Seattle Times. “If someone searched Amazon for a Williams-Sonoma chair and couldn’t find one, they will market to them when they make a cheaper chair.”
This litigation is part of an ongoing atmosphere of tension between Amazon and other mega-retailers. Ultimately, Amazon often serves as both partner and competitor, which can put these companies in a bind. If a brand’s product isn’t on Amazon, it likely won’t sell as well, but if it is, then Amazon can collect data on the product and create its own cheaper versions.
“The complaint underscores Amazon’s power as a product search engine, which can glean insights about products customers want that it doesn’t sell based on the searches of hundreds of millions of customers,” wrote Spencer Soper of The Seattle Times. “It can offer similar products and promote them on its site, and even advertise them on Google using the same keywords shoppers use on Amazon. Amazon’s private label products pressure brands to sell and advertise their goods on the web store, lest their customers start buying similar products Amazon is making.” With more than 120 brands, some directly associated with Amazon’s name and others private label, the e-commerce giant’s rapid expansion and monopolizing moves are drawing widespread scrutiny and censure from critics who argue that Amazon exploits consumers and bullies competitor brands.
On Black Friday, Amazon outdid its rivals by buying stock in their adwords on Google, a common corporate practice that Amazon has masterminded. “Amazon's brand bidding rate over Black Friday weekend came to 182.18 percent, meaning an Amazon ad was 1.8 times more likely to appear on a competitor’s brand term than in searches for Amazon itself,” reported BuzzFeed, describing the strategy as “an effort to win, or perhaps hijack, your click.”
Even comedian Hasan Minaj dedicated an episode of his Netflix show, Patriot Act, to how Amazon’s history of devastatingly undercutting competitors, as well as the retailer’s reportedly poor treatment of employees. Though studded with jokes, Minaj’s report concluded that none of Amazon’s competitors can even touch its “dominance in the marketplace (49 percent of all U.S. e-commerce),” recapped The Hollywood Reporter.
Patent law is the most expensive and effective protection over the designs that Williams-Sonoma could have. A Business of Home feature from our Spring 2018 issue, titled “Knock It Off,” tackled the complex issue. It’s on the patent holder to defend their patent, said June Lockhart-Triolo, marketing manager and art director at London-based design firm J. Robert Scott. At the time, the company had patented more than 150 of founder Sally Sirkin Lewis’s designs since its launch in 1972. “In some cases, the offending company may be ordered to destroy any inventory that has been built and not sold,” said Lockhart-Triolo. “A judge may also subpoena sales records, which can lead to compensation for every piece they did sell. But if you have to go down that road to protect your design, you should expect that there will be a sizable legal expense.”
Both Amazon and Williams-Sonoma declined to comment for this story.