Court refuses Amazon arbitration bid against Israeli gun parts maker
A Virginian court has denied Amazon’s attempts to compel arbitration, dismiss and venue transfer in a suit accusing the online platform of counterfeiting and infringement.
Late last week, the US District Court for the Eastern District of Virginia rejected Amazon’s bid to dismiss a copyright, trademark and patent infringement suit brought by Israeli manufacturer Maglula.
In a claim filed last December, Maglula alleged that Amazon knowingly sells counterfeit products, “leaving US consumers and IP owners to suffer while Amazon profits handsomely”.
Maglula, which makes firearm accessories, said that it had found numerous counterfeit versions of its UpLULA product (a pistol mag loader) on Amazon, but despite its “extensive and repeated requests” over three years, Amazon has failed to take reasonable steps to prevent the infringement.
“Amazon has become so overrun with counterfeit products—and its meagre efforts to address this problem have been so ineffective—that counterfeit products are now leaving Amazon warehouses all over the US at an alarming rate,” alleged Maglula.
Amazon responded with the filing of three motions: to dismiss the case, to transfer the suit, and to compel arbitration. But, on April 9, District Judge Liam O'Grady rejected all three motions.
To support its motion to compel arbitration, Amazon asserted that Maglula was bound by Amazon’s business solutions agreement, which Maglula agreed to when it opened its seller’s account on the platform. The agreement states that any dispute with Amazon will be resolved by “binding arbitration”.
Siding with Maglula, O’Grady concluded that the parties were not bound to arbitrate and denied the motion.
Denied transfer
Amazon—which is headquartered in Seattle, Washington—also attempted to transfer venue to the US District Court for the Western District of Washington.
O’Grady noted that Amazon had offered “minimal or no deference” to Maglula’s choice of venue, arguing that the cause of action isn’t uniquely related to the Virginian district and that Maglula is “not at home” in this venue.
“As such, Amazon cannot in good faith represent to the court that the Eastern District of Virginia is an undesirable or inconvenient location to operate and do business. Litigating should not be an additional significant strain,” said O’Grady.
He added: “What is more, Maglula is a small company of ten people, and the east coast is significant—approximately 3,000 miles—closer to its Israeli base than the west coast.”
Amazon also claimed that Maglula’s filing was “undeniable forum shopping”, while Maglula claimed that choosing the “rocket docket” in Virginia was in the interests of justice.
According to the court, the average time from filing to final disposition for cases that go to trial is approximately seven months longer in the Western District of Washington, than in the Virginian venue.
In denying Amazon’s motion, O’Grady noted that while docket considerations can’t be a primary reason for retaining a case in the district, it makes “perfect sense” to want to resolve the case quickly.
Finally, Amazon also attempted to dismiss the case, arguing that Maglula had failed to notify which allegations are directed at which defendants. Amazon.com and Amazon.com Services are named in the suit.
“Amazon does not offer any binding law for the proposition that a complaint naming multiple defendants must specify which defendant is liable for each allegation therein,” said O’Grady. However, he added that allegations against a group may be considered adversely in the court’s plausibility analysis, but it was not prohibited.
Amazon’s argument that Maglula’s induced patent infringement claims are devoid of allegations of intent was also dismissed.
Amazon must now file an answer within 14 days.
Maglula is represented by Finnegan attorney Danny Awdeh, while Amazon is represented by Justin Wilcox of Desmarais.
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