If imitation is the real trick, InstaTrim owner Greg Amundsen wishes the business wasn’t so impressive.
More than a decade old, the Minnesota-made packaging grew to more than $3 million in sales last year.
This year, however, sales are down 35 percent.
Amundson and his lawyer have claimed that the counterfeiters, mostly Chinese, have posted about 30 similar products on Amazon.com over the past several months, citing patent infringement. InstaTrim relies on its e-commerce platform for 80% of its sales.
“It’s amazing how quickly the counterfeiters are eroding our sales with fake and copycat products,” Amindsson said last week.
“Now you see all the copycat products that completely fill the front page pushing us down. Fair competition is fair. But not the way they’re doing it.”
In the year Amundson, a former homebuilder who came out during the 2008 housing downturn, spent years building Scandi-based InstaTrim, a growth company that grew from idea to cash flow.
Amazon has long been criticized as an easy place for counterfeiters to knock off everything from soap, baby formula, clothing, appliances and toys to auto and airplane parts.
According to the business magazine Fast Company, researchers estimate that nearly $1 trillion in counterfeit goods flood the global economy. Many are similar to those produced by the original brand, but are typically made with cheaper materials.
Robert Handfield, a supply chain expert and North Carolina State University professor who has studied Amazon, says there is a real “underground economy” of counterfeit goods that fill the e-commerce platform used by small businesses around the world.
According to Hadfield, online counterfeiters are often replacing retail stores with defective goods. According to Hadfield’s analysis of reports from U.S. Customs and Border Protection, 80 percent of counterfeit goods enter the U.S. from China and Hong Kong.
“Someone who works in a legitimate factory can run a fake business and start their own business,” Handfield told Fast Company. Sometimes they copy it using cheaper materials and sell it through the same channel.
Amundson and his lawyer don’t care about Amazon. Indeed, complaints from manufacturers using Amazon’s streamlined complaint and removal system, launched this year, have grown in volume with copycat products.
Amundson claims that several of his patents have been repeatedly infringed.
Lauren Hansen, Instatrim’s veteran patent attorney, and Amundson researched infringers on trademark paper and Amazon tracking numbers. Some questionable manufacturers use brand names similar to InstaTrim’s.
“Traditional options for enforcing patents through federal courts and the International Trade Commission … are time-consuming and expensive,” he said.
“You spend a lot of money on lawyers,” Hanson said. Amazon’s new process from April is great. [counterfeit] If they don’t respond, the seller.
Companies with trademarks like Instagram can participate in Amazon’s “Apex” program, according to law firm Baker Botts. Failure to participate during a challenge will result in the immediate removal of the alleged infringing products from Amazon. An independent patent attorney reviews each case and issues an infringement decision within 16 weeks.
The first of the patent infringement sources targeted by InstaTrim is required to file an initial response to InstaTrim’s patent infringement claim next week.
A major competitor, Art 3D, which found its goods in China, said it would stop ordering the product after it still sells it on Amazon, according to an email to Istastream this month.
“No one is talking to Amazon, but we estimate there are 32 sellers, all with different names,” Amundson said. “A couple of them called their product InstaTrim. So we sent cease-and-desist orders. One took it down quickly. They admitted they got everything from China. There’s a lot of layers there and it all happened in the last three or four months.”
