Shoe Store DSW Sues Zappos For Activities Of Affiliates

Legal Issues

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.

Filed Under: affiliates, e-commerce, lawsuits, shoes, trademark, twitter
Companies: dsw, zappos