SHOP SAFE Act of 2021

To amend the Trademark Act of 1946 to provide for contributory liability for certain electronic commerce platforms for use of a counterfeit mark by a third party on such platforms, and for other purposes. 1. Short title This Act may be cited as the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2021 SHOP SAFE Act of 2021 2. Contributory liability for electronic commerce platforms (a) Platform liability Section 32 of the Act entitled An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes Trademark Act of 1946 15 U.S.C. 1114 (4) (A) Subject to subparagraph (C), an electronic commerce platform shall be deemed contributorily liable in a civil action by the registrant for the remedies hereinafter provided for a case in which, without the consent of the registrant, a third-party seller uses in commerce a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods that implicate health and safety on the platform, unless the platform demonstrates that the platform took each of the following steps to prevent such use on the platform before any infringing act by the third-party seller: (i) Determined after a reasonable investigation, and reasonably periodically confirmed— (I) that the third-party seller designated a registered agent in the United States for service of process; or (II) in the case of a third-party seller located in the United States, and if the seller has not designated a registered agent under subclause (I), that the third-party seller has designated a verified address for service of process in the United States. (ii) Verified through governmental identification or other reliable documentation the identity, principal place of business, and contact information of the third-party seller. (iii) Required the third-party seller to— (I) take reasonable steps to verify the authenticity of goods on or in connection with which a registered mark is used; and (II) attest to the platform that the third-party seller has taken reasonable steps to verify the authenticity of the goods under subclause (I). (iv) Imposed on the third-party seller as a condition of participating on the platform contractual requirements that— (I) the third-party seller agrees not to use a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods on the platform; (II) the third-party seller consents to the jurisdiction of United States courts with respect to claims related to the third-party seller’s participation on the platform; and (III) the third-party seller designates an agent for service of process in the United States, or, in the case of third-party seller located in the United States, the third-party seller designates a verified address for service of process in the United States. (v) Displayed conspicuously on the platform the verified principal place of business, contact information, and identity of the third-party seller, and the country from which the goods will be shipped, except the platform shall not be required to display any such information that constitutes the personal identity of an individual, a home street address, or personal contact information of an individual, and in such cases shall instead provide alternative, verified means of contacting the third-party seller. (vi) Displayed conspicuously in each listing the country of origin and manufacture of the goods, unless such information was not reasonably available to the third-party seller and the third-party seller had identified to the platform the steps it undertook to identify the country of origin and manufacture of the goods and the reasons it was unable to identify the same. (vii) Required each third-party seller to use images that the seller owns or has permission to use and that accurately depict the actual goods offered for sale on the platform. (viii) Implemented at no cost to the registrant reasonable proactive technological measures for screening goods before displaying the goods to the public to prevent any third-party seller’s use of a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods on the platform. (ix) Implemented at no cost to the registrant a program to expeditiously disable or remove from the platform any listing for which a platform has reasonable awareness of use of a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods. Reasonable awareness of use of a counterfeit mark may be inferred based on information regarding the use of a counterfeit mark on the platform generally, general information about the third-party seller, identifying characteristics of a particular listing, or other circumstances as appropriate. A platform may reinstate a listing disabled or removed under this clause if, after an investigation, the platform reasonably determines that a counterfeit mark was not used in the listing. A reasonable decision to reinstate a listing shall not be a basis for finding that a platform failed to comply with this clause. (x) Implemented a policy that requires termination of a third-party seller that has reasonably been determined to have engaged in repeated use of a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods on the platform. Use of a counterfeit mark by a third-party seller in 3 separate listings within 1 year shall be considered repeated use, except when reasonable mitigating circumstances exist. A platform may reinstate a third-party seller if, after an investigation, the platform reasonably determines that the third-party seller did not engage in repeated use of a counterfeit mark or that reasonable mitigating circumstances existed. A reasonable decision to reinstate a third-party seller shall not be a basis for finding that a platform failed to comply with this clause. (xi) Implemented at no cost to the registrant reasonable technological measures for screening third-party sellers to ensure that sellers who have been terminated do not rejoin or remain on the platform under a different seller identity or alias. (xii) Provided a verified basis to contact a third-party seller upon request by a registrant that has a bona fide belief that the seller has used a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods on the platform except that the platform is not required to provide information that constitutes the personal identity of an individual, a home street address, or personal contact information of an individual (in such case, the provider shall provide an alternative means of contacting the third-party seller). (B) In this paragraph: (i) The term counterfeit mark (ii) The term electronic commerce platform (iii) The term goods that implicate health and safety (iv) The term third-party seller (C) This paragraph shall apply— (i) to an electronic commerce platform that has annual sales on the platform of not less than $500,000; or (ii) to an electronic commerce platform with less than $500,000 in annual sales 6 months after the platform has received 10 notices (in which there is a reference to this paragraph and an explicit notification to the platform of the 10-notice limit), in aggregate, identifying listings on the platform that reasonably could be determined to have used a counterfeit mark in connection with the sale, offering for sale, distribution, or advertising of goods that implicate health and safety. (D) Nothing in this paragraph may be construed to limit liability in a context other than that outlined in this paragraph, including any cause of action available under other provisions of this Act, notwithstanding that the same facts may give rise to a claim under this paragraph. . (b) Effective date This Act, and the amendment made by this Act, shall take effect on the date that is 1 year after the date of enactment of this Act.

Summary: Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act of 2021 or SHOP SAFE Act of 2021 This bill makes an electronic commerce platform liable for infringement of a registered trademark by a third-party seller of goods that implicate health and safety unless the platform takes certain actions. Specifically, the platform may be contributorily liable if the seller uses a counterfeit mark in connection with selling, offering, or advertising such goods on the platform. The platform may avoid such liability by taking certain actions before the infringing act, including (1) requiring the seller to have a registered agent or a verified address for service of process in the United States, (2) verifying the seller's identity and contact information, (3) requiring the seller to agree to not use counterfeit marks with goods sold on the platform, (4) implementing technical measures to prescreen listings on the platform and remove listings for goods being sold with a counterfeit mark, and (5) implementing policies to remove and ban repeat offenders.