Protecting Your Brand From Online Merchandise Infringement

Protecting Your Brand From Online Merchandise Infringement

[Detroit, MI].   In this episode of Tech Law Radio, Online Brand Protection Attorney Mallory King talks about why policing online merchandise infringement of your brand is important and provides insight into ways you can both prevent and remove such infringement. (Keep reading for a FREE list of online monitoring tools to help protect your goods)

Interview Highlights:

  • Proactive policing of online brand infringement in merchandise is important to maintaining the quality and integrity of your brand.
  • Engaging an Intellectual Property law firm to assist with monitoring efforts can help catch infringement early and often.
  • Registering copyrights and trademarks related to your brand is key.  A lot of online brand infringement can be prevented by protecting your brand up front to help facilitate removal of infringing merchandise.
  • Online forms and more formal cease and desist letters can be utilized to effectuate removal of infringing merchandise.
  • Researching the infringing company and/or website is important to gauge accurate tone for a removal demand as well as to potentially identify non-legal leverage.


[Rough transcript of this show]

Enrico Schaefer: This is Enrico Schaefer. Today on Tech Law Radio, we’re going to be talking about online brand protection, and for our long-time listeners, and I want to thank our long-time listeners for making this one of the top podcasts in the legal space.

For our long-time listeners, you know we’re always covering issues related to tech and Internet for companies that are having to deal with tech issues or having to deal with intellectual property issues, this is a great resource for you to be able to educate yourself, grow your brand value, understand how you are going to exit your company with the highest potential valuation possible either on an investment round or a sale.

That’s typically what people are trying to achieve, and to see if you could actually maximize your gross revenue. So, as a founding attorney of Traverse Legal, that’s been the premise of our law firm since day one, and we really try and make sure we are putting the business issues first and advising on the legal issues, which brings us to our topic today, which is really online brand protection, and it’s an issue that virtually every company has to worry about.

If you’ve got merchandise that merchandise can be counterfeited. Your trademarks could be violated. Your copyright-protected photos can be reused in order to create consumer confusion as to the source and origin of goods. So, today, we’re going to be talking to Attorney, Mallory King. Mallory is an attorney with Traverse Legal, and she specializes in online brand protection. Welcome to the show, Mallory.

Mallory King: Thanks for having me, Enrico. It’s a pleasure to be here.

What Does It Mean to Police Online Merchandise Infringement?

Enrico Schaefer: So, give a little bit about your background and your role in helping these merchandise or these brands protect themselves online.

Mallory King: I’ve got a variety of different projects that assist companies with monitoring their brands anywhere ranging from is there a domain name that incorporates a companies’ trademark that we need to acquire for our client? Or is there a T-shirt that has our client’s face on it that needs to be removed? So, the spectrum is quite broad, and I’m in every single level wherever you or the other attorneys at Traverse Legal need assistance.

Enrico Schaefer: So, give us a sense of what it means to police online merchandise infringement.

Mallory King: Policing online merchandise infringement means that you or your intellectual property attorney – such as the ones at Traverse Legal – are actively searching for and monitoring unauthorized use of your intellectual property across various online retailers in order to eliminate those uses that infringe your IP rights by submitting take-down notices or cease and desist letters.

And because there are a lot of retailers online these days that allow for users to directly design, upload, and sell their own merchandise on websites, the risks of having your IP infringed are even higher because sometimes these users are unsophisticated in intellectual property law and are unaware of what they can and cannot legally sell.

Enrico Schaefer: Sometimes, the issue is you’ve got an intentional willful infringement of someone that’s full-on attacking your brand, but more often than not it’s someone that is — doesn’t fully understand and appreciate, your intellectual property rights as a business and thinks that they can do what they’re doing or may not be sure but maybe that they won’t get caught, and so, sometimes, it’s an educational notice letter. Sometimes, it’s a threat letter that you’re sending on behalf of your client.

And it all depends on who the other side is, who’s doing the infringement, and what is going to accomplish your client’s goal the fastest. Let’s talk a little bit about this concept of actively searching for unauthorized uses. A lot of the clients who find an attorney for online brand protection end up having an issue brought to them someone sends a complaint, and it turns out that it’s not your product that you sold.

Or you see something online when you search your trademark that’s not you, and there is that piece of it, and a lot of our clients end up coming to us because of a specific problem that exists. I want to talk a little bit about this concept of being proactive and the types of things that you do day-to-day for brands in order to identify issues for them and put the fires out before they’re blazing hot.

Why Should Companies Be Proactively Monitoring For Online Infringement?

Mallory King: Well, as you mentioned, a lot of times companies are proactive in their monitoring. So, they’ll come to us and say, “Hey, we didn’t authorize this piece of merchandise to be produced. What can we do?” And so, in that scenario sometimes they’re able to accomplish it themselves. Other times they’re going to want to bring in the attorney to file a cease and desist letter with the website in particular.

Something else that can be done is we can utilize monitoring companies in which you submit your intellectual property such as your trademarks to, and then they run monthly reports that give you a sense of not just online retailers that are using your trademark but potentially anywhere on the Internet that your trademark might be popping up that you did not authorize.

Sometimes these are innocent and nothing that the company needs to worry about, but other times they’re active infringers and we want to address those as quickly as possible.

Enrico Schaefer: Mallory, let’s say there’s an Amazon store that’s selling an infringing piece of merchandise, and oh, okay, I lose that sale. No big deal. Right? But it’s more than that. Isn’t it? Why should companies and founders and brands be policing for infringing online merchandise?

Mallory King: I can think of [a few] big reasons why companies need to be doing this type of monitoring. First, under trademark law, trademark owners have an actual duty to police and enforce their trademarks, and a failure to do so can result in weakened rights or a loss of rights altogether.

Second, infringing merchandise can oftentimes be lower in quality than officially licensed merchandise. So, this could tarnish your brand and/or your name, and the third biggest reason is that this unauthorized merchandise can just generally create confusion in the marketplace as your affiliation or association with a particular online retailer, and that could be good or bad for your brand.

How Can Infringing Merchandise Be Monitored and Removed?

Enrico Schaefer: And one of the things that we’re always talking about, of course, is just your valuation, what is your — what is your asset value as a company? What is your IP value? 50 percent of Apple’s entire valuation, of it’s entire market cap is it’s trademark value. Intangible intellectual property.

If you’re not policing and enforcing your rights online, when you go to exit your company you’re going to have a much lower valuation that if you’ve got a whole notebook of enforcement and IP protection activities that you’ve been engaged in, and your brand is well protected online. So, it does become important for a lot of day-to-day reasons but also for long-term reasons. So, how is infringing merchandise monitored? How does that even work?

Mallory King: As I mentioned before, sometimes companies do monitoring themselves [or we use third-party monitoring companies that] then send us reports, but there are other ways to get the actually the monitoring and have it be removed. So, those are things such as the Digital Millennium Copyright Act, which many websites have policy for where you can submit a claim, and [the DMCA] provides that website with a safe harbor if they followed the DMCA procedures.

So, if you submit a [DMCA] notice, they’re going to notify the user who uploaded the content and then allow them some time to respond to your notice, and if they don’t respond or if they don’t have a valid defense, your content is going to be removed. But if they do proffer a legitimate defense, then that content will remain restored.

Other ways that monitoring can be effectuated are just through intellectual property claim forms on websites. A lot of times, these websites know that they’re going to be exposed to intellectual property right claims, and they’ll provide a form for users to fill out their intellectual property rights and why it’s a violation, [which] is another way that things can be monitored.

Overall, though, if you can’t find a DMCA policy; you can’t find an intellectual property [claim] form; you’re having a hard time finding even an email address for a particular company, that’s when you definitely need to enlist the help of an intellectual property attorney, so that we can locate a contact for you and send a cease and desist letter on your behalf.

Enrico Schaefer:  A copyright is going to be attached, for instance, to a photograph or a particular design element, anything that is going to be original work, which is captured in a physical media. So, you’ve got copyright protection for all sorts of things related to your business whether or not it’s the depiction of your products on your website, which sometimes get copied and used elsewhere or different imagery and logos that are being used on your website.

Tell us a little bit more about how the DMCA works in order to help you as a brand owner quickly remove stuff from the web . . . So, let’s say I’ve got a product that is infringing that’s on a website, Amazon, or Etsy, and someone’s selling a product that competes with mine, but they’re using the photo from my website, that I took, in order to sell their products.

Mallory King: So, if you don’t have a registered copyright to that particular image, you should have common law copyrights to a photograph. So, any image that any of us take automatically has copyright rights that you then could assert against someone utilizing that on a platform such as Etsy or Amazon, but, most websites won’t be responsive to take downs unless there’s a registered copyright.

So, for instance, this is slightly different, but for trademarks, Amazon won’t even take down infringing merchandise unless there’s a registered copyright, whereas some companies will be responsive to serial numbers for a pending trademark application. So, it all depends on the website and their policies and how much robust trademark rights or copyright rights they want to see before they take it down.

Enrico Schaefer: What I’m hearing here is all these different layers that you need to be aware of as a company, one of which is you need to make sure you own the copyright. So, if your web developer or your graphic designer or your employee or your contractor is involved in a photograph or a design element of your website, what do you do to make sure that you are in a position to wield the DMCA in order to get web pages or websites or particular elements of a website taken down?

Mallory King: Honestly, the best advice that anyone can take is to register your copyrights. It’s becoming more and more commonplace for registered copyrights to be a necessity, and so, any picture you have on your site register the copyright for; however, if, you’re dealing with a situation where it’s a picture of a person or it’s an image or a likeness, there may be another avenue via the right of publicity to get that removed from a website.

Right of publicity is only recognized in about half the states. Some of those states allow common individuals such as you or I to have certain rights to their name, likeness, persona, image, but most of the time, this is applicable to celebrities or, someone who has already made money off of their name or likeness.

And so, you may be able to allege that this website is misappropriating your name or likeness, and violating your right of publicity in the event your copyright and trademark avenues are dead ends.

Enrico Schaefer: A lot of people have a lot of goodwill built up in their image, and people know who they are in their industry. There’s definitely value in your own personal brand, and so that right of publicity can be a pretty important weapon to wield, and people sometimes fail to realize that they do have rights in how their likeness is used, especially if the third-party use is a commercial use.

So, make sure you file that away if you’re a brand owner or a company owner and you’re trying to protect yourself, but also, if you’re a performer or entertainer or celebrity, and someone’s using your image related to their product, and you haven’t authorized it, that’s going to be a right of publicity claim. It may also involve some copyrights as well.

What Defenses Do Online Retailers And Other Third-Parties Have to Claims of Infringement?

Enrico Schaefer: Let’s talk a little bit about the defenses that a third party user or online retailer might have in response to a claim of infringement.

Mallory King: The most common defense that would be proffered against any claim of copyright or trademark infringement would be fair use, and fair use is a very heavily fact intensive and is considered on a case-by-case basis and could be the topic of an interview in and of itself. However, in a nutshell, fair use protects use of copyrights that are transformative in nature such as those that comment upon, criticize, or parody a copyrighted work.

Fair use of trademarks is [a bit different], with one example being descriptive fair use, which permits use of another’s trademark to describe the user’s products or services rather than as a trademark to indicate a source of products and services.

So, a big take away on this is that it is very important to consider whether fair use might potentially exist before you submit a take down, particularly a DMCA take down, as that law does subject the IP owner to liability if they aren’t submitting that take down in good faith. So, if you believe barriers might be occurring, you could be liable for falsely accusing someone of infringement.

Enrico Schaefer: Nice. Well, all really important stuff, and you can see why you need a little bit of expertise to be able to navigate a lot of these things because it does get complicated. There are definitely some self-help things that you can try, but at a certain point, you’re going to need expertise in order to navigate this.

One thing that I see come up sometimes is that self-help can sometimes work against you as a person or company that’s trying to protect your IP online because you only get one chance to fire that first bullet.

And if you take it, and you don’t get the leverage lined up correctly, you lose that opportunity. What I find is that psychologically once an infringer starts to get embedded in their approach that they did nothing wrong or the other people are doing it or that they’re not going to take it down, it’s very hard psychologically to move them off that place.

That first contact with the infringer, making sure you’re exerting your maximum leverage, and you’re being strategic about it can really make the difference in the outcome.

How Can Companies Prevent Online Merchandise Infringement?

Enrico Schaefer: Let’s talk a little bit about best practices. What do you think the best practices are to help prevent online merchandise infringement?

Mallory King: The best practices would be number one, ensure you have a registered trademark or copyright for your intellectual property. This makes removal and enforcement so much easier. If they see a number that you’re registered, they will almost always take it down. [That scares websites], they don’t want liability. They will remove it.

Another thing you can do is to license out your intellectual property rights to reputable online retailers to help ensure quality control for products that feature your IP. This is also helpful when leveraging take downs for other online retailers, as it demonstrates a legitimate use of the trademark or copyright on goods. For instance, I’ve encountered intellectual property claim forms that have a spot to show a location of a legitimate use of your goods.

I’ve linked to stores that my client has licensed their intellectual property to [in order to] show this is what a licensed product looks like [and] that you cannot be doing this on your website. And another thing you can do is engage with an intellectual property attorney early and often to assist you with monitoring and submitting take downs related to this online infringement because it will most likely help expedite and smooth the process.

Enrico Schaefer: Yeah, it’s funny because, a lot of folks don’t pay attention to these issues until there’s a problem, and really once there’s a problem, it oftentimes can be much harder to deal with it, much more expensive and time intensive, resource intensive in order to try and resolve it.

It’s better to find these things early rather than late, and part of the dynamic there is, of course, is you’ve seen, and I’ve seen all the time, is once someone becomes invested in their infringement, it’s much harder to convince them to stop. They typically say two things, one of which is, “Well, I’ve been doing this for a long time. You should have said something earlier.”

Mallory King: Yes.

Enrico Schaefer: Or two, “I’ve got $100,000 invested in this domain name or this website or this product or whatever it happens to be, and I can’t, you’re shutting me down.” Like they may as well fight to the death because at this point it’s all or nothing. And so, if the problem had been caught at the beginning, it would have been no problem for them to rebrand or to devote their resources to something that was lawful. So, be proactive about these things. An ounce of prevention is worth a pound of cure.

And we really do see it in online brand protection. Sometimes we’re negotiating deals which allow the infringer a transition period in order to make sure that they do cease and desist but also allow them to get to the next point in their business model, which is lawful, which is not infringing on our client.

How Aggressive Should Removals of Infringing Merchandise Be?

Enrico Schaefer: The other thing I wanted to talk to you a little bit about is something that you and I see all the time is sometimes a client will call an attorney and say, “Someone’s violating my intellectual property rights,” and the attorney immediately goes into top gear, and without even thinking about it, they just send out the most aggressive threat letter that they’ve got on file.

And the client’s happy because they wanted it stopped, and they wanted an aggressive attorney, and the attorney doesn’t know any other speed except aggression, and so, they just go ahead and send out that aggressive threat letter. Tell us a little bit about the nuance of this, Mallory, and why it’s important to make sure you get the right tone and that you consider how you are going about convincing that other person to cease and desist or to accomplish your client’s goal.

Mallory King: Well, it is true. You need to really finesse it, and a lot of that has to do with review of the website that is featuring the infringing content. For instance, you’ll see some fan sites that genuinely are a fan. They create merchandise out of being a fan for a particular person or a particular product.

And when you encounter websites like that, an educational letter is most likely the best approach because you could have a client that doesn’t want to lose fans, doesn’t want to lose consumers that purchase their products, and if you’re going around sending super-aggressive cease and desist letters to every case of infringement no matter how egregious it is or not, you’re going to make some enemies, and your client is going to lose some fans or some consumers as a result of it.

So, you really want to reserve your super-aggressive take downs for the websites that are just featuring your intellectual property all over the place left and right. It’s clear that they are only trying to exploit you. So, you really have to just take the temperature of what that website is doing and [determine] how you want to approach that.

Resources for Monitoring Online Infringement to Protect your Goods and Services:

  • Use artificial intelligence to protect your brand, trademark, content and other intellectual propertyMonitor the Internet. IPHawk monitors the internet, looking for your trademark, content and other Intellectual Property (IP).

What Non-Legal Leverage is There Against Online Merchandise Infringement?

Enrico Schaefer: We are talking today on Tech Law Radio with Mallory King who is a attorney who specializes in intellectual property and online brand protection issues and really this has been informative. I have one more question for you, and it’s based on some of the things that I’ve seen in your practice in the way you approach these problems, Mallory, which is, the non-legal leverage versus the legal leverage.

Sometimes, because these infringers are uninformed, and sometimes because they are informed, it’s not actually the legal leverage that ends up accomplishing the client’s goal. It’s something else. It’s something you learn from the website.

Or it’s identifying other domains that they have that are infringing that they don’t want anyone to know about or that you’ve identified something online that they’re involved in that makes them look bad. Right? And so, sometimes it’s something your client knows about this person that no one else knows that becomes the trigger to be able to accomplish results for the client.

So, talk a little bit about the importance of actually digging into the matter and finding all the different types of leverage before sending that first letter.

Mallory King: We do conduct a lot of background on the [infringing] company itself  to see how aggressive they are in IP. Do they own any IP themselves? How sophisticated are they? We’ve had leverage over infringers by just the sheer fact that they’re hosted by a third-party such as Shopify, who has very robust IP policies that they don’t want to host an online retail store that is infringing.

If you send a letter, maybe your IP rights aren’t the strongest part on that letter, but say the threat of being kicked off Shopify might be, and so, put that in the letter and [indicate that in the event . . . ] there is no cooperation with this letter , we will then notify Shopify of the infringement occurring, which could result in the removal of your website altogether.

Enrico Schaefer: That really raises kind of an important issue, which is, we are often times talking about the big dogs, Amazon, Apple, Google, Shopify, Etsy. All of these companies have a process, a very defined process that you have to navigate if you want to accomplish the result and if you don’t understand how each one of those platforms works what each one of those platforms policies are then you’re going to have a challenging time actually enforcing your intellectual property rights. It’s a lot to get your brain around and it’s a lot to know. You do it all the time so you’ve got more insights than most, but even you, even I, there’s always more to learn, there’s always more to know. So you want to be able to leverage that expertise.

Mallory King, intellectual property, trademark, copyright, right of publicity attorney for Traverse Legal PLC, www.traverselegal.com.  Thank you so much for being on the show today and thank again to all of our listeners who continue to support us in the podcasting space as we grow and expand our content.  Thank you, Mallory.  We’ll see you next time.

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