A small company has filed a lawsuit against Amazon, accusing the online giant of patent infringement, fraud and coercion.
Odenton, Md.-based M-Edge, a popular manufacturer of e-reader accessories including cases for Amazon's Kindle, filed the suit in Maryland federal court last week, stating, "M-Edge developed a very successful product line: personal electronic device jackets with multiple features for the Kindle and other e-readers. Amazon thereafter repeatedly sought to hijack the product through threats, deceit, interference with M-Edge's customer relationships, and patent infringement."
The 15-page filing documents Amazon's deteriorating relationship with M-Edge. The sales relationship, which began in 2008, took on the traditional standard reseller contract, which garnered Amazon an 8 percent commission on M-Edge's products.
After a mention on "The Oprah Winfrey Show" in October 2008, M-Edge's products quickly became top sellers on Amazon. Three months later, Amazon issued the first reassessment of its contract with M-Edge, which would promote M-Edge to a "Kindle Compatible" agreement, requiring the company to pay an additional 7 percent in fees to Amazon.
Over the next few years, Amazon continued to revise M-Edge's contract and increase its fees on the company's sales, totaling 32 percent in commissions and fees by a contract signed July 2010. Between then and January 2011, M-Edge -- whose sales through Amazon.com accounted for 90 percent of the company's revenue -- reported negative repercussions after refusing to accept new terms and conditions proposed by Amazon. The company claims Amazon began manufacturing its own lighted e-reader jacket, which was a direct knock-off from the company's patented design, and went as far as "de-listing" M-Edge, making the company's product less visible on the site and tampering with M-Edge's relationships with other retailers.
Amazon has yet to comment on the suit, which requests a trial by jury, but Devon Mish, a spokesperson for M-Edge, told The Huffington Post, "We believe in our intellectual property rights and will vigorously enforce them when we feel they are being infringed upon."
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more