IP Law Daily, TRADEMARK NEWS: Spicy seasoning company may be in hot water over complaints to Amazon, (Apr 17, 2024)

By Matthew Hersh, J.D.

An online retailer claims the company falsely accused it of selling counterfeit products.

An Arizona company that manufactures hot chili-based seasoning products falsely accused a retailer of “moral turpitude, dishonesty, and poor character” by selling counterfeit products over an online storefront on Amazon, a new federal lawsuit contends. The lawsuit seeks a declaratory judgment that the storefront operated legitimately and also seeks damages for trade libel and interference with business expectancy (Renex NY Corp. v. Kreativa Gourmet, LLC, April 16, 2024, Hinderaker, J.).

The dispute involves products made by Don Chilio, a Tucson-based company founded by two brothers from Mexico City. The company, which markets a type of seasoning consisting of chili peppers crisped in olive oil, allegedly took to Amazon over three dozen times to claim that a New Jersey-based retailer was selling counterfeit products through the online storefront. As a direct result of those reports, Amazon allegedly removed the retailer, Renex NY Corp., from any listings of Don Chilio products.

The retailer took to the courts as a result, filing this lawsuit. The lawsuit contends that the retailer was in fact authorized to sell the spicy crisp products through a distributor, which it described only as “Distributor 1” in the complaint. (Nothing in the complaint or other court records appeared to explain why the distributor could not be named in the lawsuit.) Moreover, the lawsuit contends, after accusing the retailer with selling counterfeits over Amazon, the Arizona company did not file any lawsuit against the company. Thus, the retailer contends, it was forced to file this lawsuit.

The lawsuit emphasizes the harm suffered by the retailer as a result of the allegedly false complaints. Amazon has developed an automated process for addressing complaints by trademark owners that allegedly infringe its trademark rights, that are counterfeit, or infringe on other intellectual property rights. Under that process, the complaint explains, Amazon will “often act without notice and delist specific product listings and/or suspend all selling privileges of a [s]eller about whom such complaints are made”—which is exactly what the seller alleges happened here.

Moreover, the complaint notes, the Arizona company did not merely assert that the retailer was selling products that infringed its trademark. Instead, the complaint alleges, the company accused the retailer of selling products that were counterfeit—“a term of art that connotes goods that are false or fraudulent copies of legitimate goods.” Unlike general assertions of trademark infringement, the complaint notes, trafficking in counterfeit goods is a crime and also implies “a degree of moral turpitude, dishonesty, and poor character.”

The lawsuit brings claims of defamation and trade libel as well as tortious interference with a business expectancy. The complaint also seeks a declaratory judgment that the retailer has not committed trademark or copyright infringement.

The Case is No. 4:24-cv-00207-JCH.

Attorneys: Marc J. Randazza (Randazza Legal Group, PLLC) for Renex NY Corp.

Companies: Renex NY Corp.; Kreativa Gourmet, LLC

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