Small Business

M-Edge Files Lawsuit Against Amazon For Patent Infringement, Fraud

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 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."