Online Retailer Says Amazon Defamed It

MANHATTAN (CN) - Sellify, an online retailer of used electronics, claims Amazon.com has sponsored a "vicious and false advertising campaign" to damage its reputation, compete unfairly and abuse its trademark.

Connecticut-based Sellify says its Web site, OneQuality.com, has built a good reputation since its 2007 launch, garnering more than 7,400 positive reviews on Ebay and a 100 percent positive rating. Patent on the OneQuality trademark, which identifies a service rather than a product, is pending, according to the federal complaint.

When potential customers Google the company's brand name or URL, however, Sellify says they find Amazon's "strongly implied statements that plaintiff's business is a scam."

Sellify says Amazon, the Delaware-based online superpower that reported $19 billion in revenue in 2008, uses an affiliate program to drive advertising. Affiliates buy online advertisements that link to Amazon's page, and receive commissions when Web users click on the ads and buy products from Amazon.

One affiliate bought Sellify's Web address as an advertising keyword, but the ads do more than direct potential customers to Amazon, the company claims. Alongside search results that link to Sellify's Web site, a Google query of OneQuality brings up Amazon ads that state, "Don't Buy from Scammers" and "Beware the SCAM Artists," according to the complaint.

Sellify says the same ads appear for the full URL and various misspellings.

"It is beyond dispute that these keyword buys were intended to convey the clear impression that plaintiff is a 'scammer' or a 'scam artist,' and that customers purchasing camcorders from plaintiff are at risk of being ripped off," according to the complaint.

Sellify says that after it complained, Amazon waited more than 5 months to take down the advertisements.

"If the ads had been the work of an overzealous or rogue marketing employee, they would have been taken down immediately," the complaint states. "It became clear that the type of false advertising that targeted plaintiff was condoned, if not planned, at the highest levels of the company, as a matter of corporate policy."

Sellify says Amazon lends credibility to the advertisements since there is no mention of the affiliate on the ads, which appear to come from the prestigious and reputable Amazon.

"In the Internet age, dissatisfied customers can quickly destroy a business," Sellify says.

Sellify seeks $6 million in punitive damages, alleging defamation, trade libel, false advertising and unfair trade practices. It also seeks an injunction and disgorgement of ill-gotten profits.

Sellify is represented by Francis X. Dehn with SmithDehn.

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