Kindle case maker MEdge sues Amazon for patent infringement unfair competition

first_imgThe Kindle e-reader has been a major success story for Amazon. The device not only made e-readers popular, it also brought Amazon millions of hardware sales and associated e-book purchases through its online store. But it has also shown Amazon to be a threatening, deceitful, and interfering big brother figure according to a lawsuit filed by M-Edge Accessories.M-Edge will probably be known to anyone who owns a Kindle and has searched for accessories. The company offers a range of cases and jackets for every generation of Kindle, and their design and functionality has proved popular with consumers. So popular in fact, that Amazon took notice and signed them up as “special partners.”M-Edge’s success and recognition by Amazon should have been news to celebrate, but a lawsuit filed by M-Edge paints a very different picture. Here’s the background information summarized from the lawsuit:October 2008: M-Edge start selling Kindle jacket paying Amazon’s standard 8% commissionFebruary 2009: M-Edge enter “Kindle Compatible” agreement with Amazon taking their commission payment to 15% in return for featuring in the Kindle Store.May 2009: Amazon want M-Edge to sell directly to them. M-Edge refuses due to poor termsNovember 2009: M-Edge signs 3-year contract with Amazon at 15% commission rateJanuary 2010: Amazon demands M-Edge pay 32% commission. M-Edge refuses and Amazon threatens delisting the company’s products.February 2010: Amazon demands back payments at the 32% rate, meaning M-Edge owes Amazon $600,000. M-Edge refuses pointing to their existing 3-year contract. Amazon threatens “ramifications.”April 2010: Amazon re-demands direct sales agreement, M-Edge refuses due to no guaranteed minimum volumes.May 2010: Amazon demands new 25% fee agreement applied retroactively. Refusal to sign would incur delisting, a change in product pages to make it difficult to find M-Edge products, and no pre-launch access to the Kindle 3 meaning M-Edge wouldn’t have jackets ready for the launch.July 2010: M-Edge succumbs to Amazon demands in order to secure sales (90% of M-Edge sales came from Amazon). M-Edge is now paying a 32% commission to Amazon for every product sold and sells directly to Amazon.July 2010: Amazon only give M-Edge one day of pre-release access to the Kindle 3. M-Edge accuses Amazon of then “knocking off” their case designs and copying colors.January 2011: Amazon demand larger share of M-Edge sales and that they pay a $150,000 Amazon executive’s salary. Refusal would mean delisting.March 2011: Amazon withholds $2 million in back payments to M-Edge who has yet to agree to the new terms put forward in January.July 2011: Amazon tells M-Edge of new Preferred Vendor Program that would see the company pay 10% of RRP for every Kindle accessory sold to other retailers. It also saw Amazon increase the commission M-Edge paid for direct sales by 34%. M-Edge did not sign up to the program.August 2011: Amazon says M-Edge owed fees for products that did not carry the Amazon logo. M-Edge stated no such fees existed.September 2011: Amazon leaves M-Edge off the list of “Amazon Approved Accessory Vendors.” M-Edge reports customers no longer wanting to deal with the company “fearing repercussions with Amazon” if they did. M-Edge is also told by Amazon that their existing agreement did not allow the sale of Kindle accessories as a third-party on Amazon.com.October 2011: Amazon refuses to discuss relationship with M-Edge, but does demand $953,000 is owed them. M-Edge states Amazon actually owes it $40,000.November 2011: Amazon sends M-Edge a letter terminating their 2009 agreement. Amazon states this is due to “repeated failure to perform its obligations under the Agreement.”There are some serious claims made in the lawsuit against Amazon, all of which seem to be backed up by letters, emails, and hopefully meeting agendas and summaries. M-Edge then goes on to claim Amazon has committed patent infringement in the design of some of its Kindle cases. The company also accuse Amazon of using fraud, deceit and coercion which classes as unfair competition based on the events that happened between 2009-2011. Finally, the lawsuit accuses Amazon of false advertising and intentional interference with contracts in an attempt to extort increased commission rates from M-Edge.If M-Edge win, they want damages relating to the patent infringement and an injunction stopping further infringement, which would likely mean Amazon having to remove its Kindle jackets from sale. M-Edge also demand further damages and compensation relating to the charges of unfair competition and contract interference.If there is enough evidence to support the claims made by M-Edge, then Amazon could be facing a large payout, some major questions regarding its business practices, and the sale of some Kindle accessories blocked.m-edgevia GeekWirelast_img