Shoe Store DSW Sues Zappos For Activities Of Affiliates

from the safe-harbors... dept

There’s an interesting lawsuit coming out concerning the popular online shoe store, Zappos, that has built up a large business in part by being extremely focused on providing an excellent customer experience. DSW is a large shoe retailer with many brick and mortar stores and also (not surprisingly) an e-commerce operation (Update: the e-commerce part just launched recently, which has many thinking that this whole event appears to be something of a reverse Streisand Effect situation, where it’s suing Zappos to get media attention). Late yesterday, DSW filed a lawsuit against Zappos, charging the company with infringing on DSW intellectual property. What was odd, though, was that DSW never contacted Zappos at all — preferring to inform it of the lawsuit via press release. Zappos CEO, Tony Hsieh, explained all of this via Twitter, which he’s used (quite successfully) to connect and communicate with fans of Zappos.

What came next is quite interesting. Various Twitter followers began investigating the matter, and noticed that a guy using the Twitter name SEOColumbus was defending DSW for filing the lawsuit, while also raving about how much better DSW was than Zappos. Carlo Longino responded to those claims, and then did a quick search discovering that the LinkedIn page of the guy said that he just happened to be DSW’s E-Commerce Operations Manager — something he declined to mention. Soon after Carlo called him on it, though, Carlo noticed that he deleted his LinkedIn profile. The guy claims that he just contracted at DSW for a few months — but it still seems like he should have disclosed that while bashing Zappos and praising DSW. Update: This part of the story is getting even more bizarre, with claims that the SEOColumbus Twitter account is actually controlled by someone else (which doesn’t make much sense, given what the accountholder was saying). And, on top of that, the SEOColubmus Twitter account has now been shut down (temporarily?). Update 2: I’ve removed the guy’s name from this post following a polite request, claiming that the Twitter account really was controlled by someone else. There are numerous inconsistencies in his story that are hard to square up, but at this point we’ll take him at his word and thus have removed his name.

As for the lawsuit itself, from the information provided by whoever owns the Twitter account, it seems like it’s not due to any actions by Zappos, but by a Zappos affiliate. Just like many e-commerce companies, Zappos lets affiliates sign up and basically drive traffic to Zappos. One of those affiliates set up a site called dsw-shoes.net — which pretty clearly does infringe on the DSW trademark (which, again, is really about consumer protection, not ownership). It seems reasonable to think that dsw-shoes.net could create some confusion in the customer’s mind, even though it has (in tiny print, at the bottom of the page) a note claiming it’s not affiliated with DSW. It does, however, link to Zappos using an affiliate code. Given the various safe harbors out there, it certainly seems like DSW went after the wrong target. The complaint should be against whoever operates the affiliate — not Zappos. An affiliate linking to Zappos should not create liability for Zappos itself. It appears that in DSW’s rush to sue Zappos, it didn’t bother to understand Zappos is protected against the actions of its affiliates, as it most certainly was not encouraging them to pretend to be DSW. A quick call or letter to Zappos probably would have educated them on this (though, honestly, it should have been obvious from the website in question), but instead, DSW just rushed into a lawsuit, informing Zappos by press release.

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Companies: dsw, zappos

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Comments on “Shoe Store DSW Sues Zappos For Activities Of Affiliates”

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24 Comments
Jason Phillips (profile) says:

Perhaps...

This may be a simple case of Safe Harbor — unless it turns out that Zappos knoew about the website name DSW-shoes. I submit that if they are an affiliate, that Zappos certainly know that a website called DSW-shoes was taking part. I’m sure that you have to give your website name when you fill out an affiliate request form. Zappos should have rejected the affiliate claim, and never allowed them to become an affiliate. This time, I think, it’s not a Safe Harbor case.

Dave Zawislak says:

Re: Perhaps...

Zappos should have rejected the affiliate claim, and never allowed them to become an affiliate. This time, I think, it’s not a Safe Harbor case.

How? Any site with DSW in the site name? And then be subjected to no safe harbor protection. It is up to DSW to police its own brand and trademarks correctly.

Joe (user link) says:

Re: Re: Re: Perhaps...

Correction: Their site is only a few weeks old. It’s so obvious that they are picking on Zappos.com to get free press for their website.

They didn’t even tell Zappos.com, they just told the press first. That right there proves they just want media attention and are not actually interested in solving their “claim”.

CE says:

Re: Re: Re: Perhaps...

I don’t understand way everyone is so quick to the defense of Zappos. Their marketing reputation is not exactly spotless.

For several years they have undertaken strong-arm & sometimes questionable tactics. Zappos seems to have cleaned up their act recently, but it is hard to believe they had no knowledge of this affiliate infringing on on the DSW trademark. In good faith, they should have proactively taken action to have the affiliate removed from their program.

Anonymous Coward says:

Re: Re: Perhaps... To Dave Z.

How? Any site with DSW in the site name? And then be subjected to no safe harbor protection. It is up to DSW to police its own brand and trademarks correctly.
Hell yes any site with “DSW SHOES” in the name! http://www4.law.cornell.edu/uscode/17/512.html
Safe harbor has nothing to do with business relationships of this type. The ad seller does not qualify because they have to approve the affiliate. (See the president set by the Roommates.com case) The service allowing an affiliate should have known that a website named DSW-shoes (the NAME and major PRODUCT of a competitor) would confuse even an “idiot in a hurry” their process should have weeded out this affiliate before they were allowed to advertise.

Kristen Grace (user link) says:

A simple email...give affiliates credit!

You can nurture and guide your affiliates 110%, but some of them may not follow. I’m sure Zappos wouldn’t encourage their affiliates to buy up competitor domains and drive opposing traffic. If you’re truly confident in the brand your company has built, affiliates will be happy to promote it. If they try something sneaky, it’s only fair to clue all parties involved.

jfouts says:

Shop at Zappos

See, that’s what I think. DSW is just trying to stir up some press. Any idiot can look at the site and see that is not built by Zappos, but even if they did that, they chose to issue a press releaseinstead of contacting Zappos?

Cowardly press mongering in my humble opinion. I say we should all go buy something from Zappos and shun DSW for the corporate minded slugs they seem to be.

Adrian in Dallas says:

Dallas Shoe Warehouse can suck ZAPPO's toes...

I hate it when clueless company officials get all hot & bothered by imagined infringements by other, better-established competitors. DSW (formerly called “Dallas Shoe Warehouse” and still based here, I think) is nothing but what the name says: a warehouse of clawing women desperate to spend money on more frivolity in their empty lives.

I think we can all agree: Women don’t have enough choices when it comes to shoes…

Miso says:

Re: Dallas Shoe Warehouse can suck ZAPPO's toes...

Not to get technical but they started in Dublin Ohio (Columbus) and are still headquartered in Columbus Ohio (Google is great). I believe DSW stands for Designer Shoe Warehouse not sure if it stood for that back when it started or if it stood for Dublin Shoe Warehouse.

I am kind of in agreement with others that this is more of a publicity stunt, but it will also garner some more publicity towards Zappo’s as well so it is sort of a win win situation.

I also do not know about you but if I could start a business that sounds like “a warehouse of clawing women desperate to spend money on more frivolity in their empty lives” sounds like a good business idea to me 😉

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