
Amazon Seller Can't Pursue Trade Libel Claims in TM Dispute - ikeboy
https://www.law360.com/california/articles/1256607/amazon-seller-can-t-pursue-trade-libel-claims-in-tm-dispute
======
ikeboy
By Tiffany Hu

Law360 (March 25, 2020, 5:08 PM EDT) -- An Amazon third-party seller who was
booted from the platform for allegedly selling counterfeit network products
can't bring trade libel claims against a Wi-Fi device maker after a California
federal judge found that "even fraudulent, deliberately false" statements may
be protected by state law.

In an order Tuesday, U.S. District Judge Josephine L. Staton granted Wi-Fi
device maker TP-Link USA Corp.'s bid to throw out counterclaims brought by
Brooklyn-based Careful Shopper LLC after it was sued by TP-Link in early 2019
for trademark infringement.

Careful Shopper had contended that TP-Link pursued a "maliciously and
intentionally" false complaint with Amazon, even after the seller told the
device maker that its products were authentic. The "scheming accusations"
against Careful Shopper counts as libel, the seller said.

But Judge Staton was unmoved, finding that TP-Link's statements to Amazon were
protected by litigation privilege under California state law, which covers
certain communications that are relevant to the present case.

"Even fraudulent, deliberately false, or other types of tortious communication
must be susceptible to coverage by the litigation privilege; if that were not
true, the privilege would be unable to achieve its purpose of ensuring that
fear of being subjected to derivative tort suits does not prevent open
communication and the “utmost freedom of access to the courts” and other
channels of redress," the judge wrote.

"Defendants cannot avoid the litigation privilege by alleging that TP-Link
engaged in knowingly false, prelitigation communication," she concluded.

Judge Staton also struck down Careful Shopper's counterclaim for interference
with the seller's business relationships and per se violation of the antitrust
laws, though she gave Careful Shopper 21 days from the order to amend its
antitrust claim.

Counsel for the parties did not immediately respond to requests for comment
Wednesday.

The companies' dispute started in 2016, when Careful Shopper sued TP-Link in
New York federal court over claims of libel per se and defamation. According
to Careful Shopper, its "commercial and financial ruination" was brought by TP
Link's false report against it though Amazon's internal process for
adjudicating disputes with third-party sellers.

Careful Shopper had notified TP-Link that the products were authentic and
bought directly from Amazon, but the device maker chose not to withdraw its
complaint, leading to the seller's expulsion from the platform, it said.

In January 2019, TP-Link lodged its own lawsuit against Careful Shopper,
claiming that it has been using its trademark to sell networking products
since at least 2008. Careful Shopper began selling products beginning in 2016,
it said.

TP-Link's lawsuit was put on hold pending the resolution of the device maker's
bid to dismiss the New York case for a lack of personal jurisdiction, which
the court granted in September 2019, according to court documents.

TP-Link is represented by Heather F. Auyang, Joe H. Tuffaha and Prashant
Chennakesavan of LTL Attorneys LLP.

Careful Shopper is represented by Mark Schlachet of the Law Office of Mark
Schlachet and Christopher J. Hammond of LA Law Group APLC.

The case is TP-Link USA Corp. v. Careful Shopper LLC et al., case number
8:19-cv-00082, in the U.S. District Court for the Central District of
California.

\--Editing by Alyssa Miller.

