The facility of modern digital commerce has led to an increase in entrepreneurs and new businesses selling products and services online. The internet has opened up the global marketplace, but with increased economic freedom comes a significant amount of risk.
It’s surprising how many ecommerce merchants ignore the necessity of trademarks, patents, and copyright — dismissing them as too expensive or complex. After all, imports of counterfeit and pirated goods are now worth over half a trillion dollars per year (or 2.5% of imports) — with US, Italian, and French brands hit the hardest. Surely being more vigilant and protective would help secure the future of the marketplace for everyone?
So, how exactly can new online businesses protect themselves against IP infringements? What do new ecommerce merchants need to know about protecting their own, and other’s, IP?
What risk does intellectual property theft pose to online merchants?
Ultimately, if your intellectual property isn’t adequately protected, your brand’s data could be exposed to the world, leaving your products and services open to being copied or replicated. In a competitive marketplace where differentiation is key, this could prove devastating to brand success and business longevity.
IP theft is particularly dangerous if you are developing new products and have not yet patented them – there could be little legal protection for you in this instance. It’s important to balance product development and market research with protectionism.
Ecommerce marketplaces often struggle to deal with IP issues, so marketplace sellers should be mindful of the potential risks that come with selling on sites like Amazon and Ebay.
Remember — your products aren’t the only things open to opportunists — your brand and digital assets could also be jeopardized — from logos and slogans, to artwork and videos.
Pursuing perpetrators with a cease and desist letter and eventually prosecuting them can be extremely challenging, costly, and time-consuming. That doesn’t mean you shouldn’t try to intervene if you catch someone stealing your IP, but you are probably better off operating in a preventative, rather than reactive, way. If you do not protect your business’s IP from an early stage, you run the risk of losing the ability to do so altogether. Once taken, intangible property is almost impossible to get back — the ensuing legal battles are often too expensive for a growing business to consider.
Online business owners need to ensure the future of their brand by proactively exercising their legal rights. When it comes to IP, prevention is better than prosecution.
How to protect your online business from IP infringement
Sometimes it can be as simple as making it clear that something belongs to you — a direct statement of ownership can act as an effective deterrent. Referencing your copyright, pending patent applications, registered trademarks, and watermarking visual assets are all simple ways to protect your IP.
You don’t have to register everything for a copyright to exist — it can often be implied — but it’s safest to trademark your logo and business name, patent any unique products, and copyright important assets. That way, there is no legal ambiguity, and you can fully exercise your rights if you get stung by a copycat.
In the UK, you can register trademarks or patents nationally through the Intellectual Property Office (IPO). In the US, you can register trademarks or patents in specific states or across the whole of the US at a federal level through the United States Patent and Trademark Office (USPTO). It’s a good idea to protect your trade secrets by patenting product ideas or design processes, but getting a patent isn’t always easy, as shoemaker Crocs found last year.
Protect yourself when it comes to your website domain name — it makes sense to buy up any available generic top level domains like .net or .info (gTLDs) and redirect them to your main site. This stops copycats from springing up and selling knock off versions of your products.
Ensure that your business structure is set up for handling legal issues, and don’t give out sensitive information about your business or its products lightly.
What about the risk of you being accused of stealing someone else’s IP?
If you are re-selling goods online, it’s your responsibility to ensure product provenance. Selling fraudulent goods online can be legally expensive, and very bad for your brand.
You must also ensure that any designs or artwork you use are copyright free — don’t try to short-change an artist or creative, as it’s much better to just strike a commercial deal with them. In 2016, Tuesday Bassen made headlines for taking down big brands for IP infringement — you don’t want to end up on the receiving end of that kind of action. Remain accountable and transparent, and don’t replicate other people’s designs on your products without permission.
To protect yourself from any IP disputes with staff, you must clarify in their contracts that anything they create or design when they are working with you belongs to the company. Be clear on the boundaries between work and home, and always get things in writing if you can.
The online world is rife with opportunists and chancers, so you can never be too careful when it comes to protecting yourself and your business. Ecommerce merchants are right to adopt automation, but that shouldn’t mean bypassing legal requirements and advice. Make sure you are clued up on IP, and understand how to protect your own IP and respect that of others.