INTELLECTUAL PROPERTY

July 28, 2020

At GearLaunch, our priority is providing services that best support sellers in building successful e-commerce businesses. Part of our efforts involve informing our sellers about intellectual property and how to respect the rights of others.

What is Intellectual Property (“IP”)?

Intellectual Property is a type of intangible property that relates to invention or creation. Elements such as design, description, shop name, and logo can be considered intellectual property. The law protects IP in a variety of ways. For example, an inventor can get patent rights on a novel invention, a business might get trademark rights over its name and logo, and an artist is entitled to a copyright on his or her original painting. Here are two ways IP is relevant to a seller’s business:

• A seller is alleged to be copying, modifying, reproducing and/or distributing someone else’s IP, either in whole or in part (i.e. the seller is alleged to be “infringing” someone else’s IP).  The owner of the IP may take legal action against the seller and, if a court finds that the allegations are true (no matter whether the infringement was intentional or unintentional), the owner may be entitled to money damages or injunctive relief (for example, a court order prohibiting the seller from selling certain designs).
• A seller thinks someone else is violating his or her IP rights. If it turns out to be an infringement, then whether the infringement is intentional or not, it means the seller’s  rights have been violated and the seller’s business could be negatively impacted. The seller may take legal action against the infringer and may be entitled to money damages and/or injunctive relief.

In either scenario, knowing the law and abiding by the rules can help better protect a business.

As IP laws may be unfamiliar to some businesses, below is some basic information about them. We focus primarily on United States intellectual property law, but this information may also apply to countries that have similar laws or related treaties with the USA.

This is very high-level information. Please note that the information we provide is not the same as legal advice – legal advice is the application of law to an individual’s specific circumstances.  Also, we are not lawyers. If you are unsure of whether or not your business is compliant with IP laws, it is your responsibility to consult an attorney.

What is a copyright?

Copyright is a type of protection given to authors of original works for exclusive control over the reproduction and distribution of their original work.

It is important to note that copyright protects only the form of expression– not the underlying idea or subject matter. There is no copyright protection for ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries. For example, an artist could receive copyright protection over her photograph of a boat in a harbor – including her particular choices regarding colors, composition, and perspective, but could not receive a copyright for her idea of photographing the boat in the first place. Anyone copying her photo (for example, by putting it on a website or on printed flyers) could be liable for infringement, but someone independently photographing a similar boat in a similar harbor would not.

Generally speaking, it is illegal to copy, modify, reproduce, or sell a copyrighted work that you do not own or have a license to.

What is “fair use” of a copyright?

The “fair use” privilege is perhaps the most significant limitation on a copyright. At its foundation, fair use ensures that there are some uses of copyrighted material that otherwise would be considered infringement but that do not require permission or payment to the copyright owner. What can be deemed as fair use?

• Criticism and comment: quoting or excerpting a work in a review or criticism to elaborate or comment.
• News reporting: summarizing an article with brief quotations in a news report.
• Research and scholarship: citing a short passage in a scholarly, scientific, or technical work.
• Non-profit educational uses: creating limited photocopies of written works for classroom use.
• Parody: imitating well-known work in a comical way.

In most other situations, copying is not legally “fair use.”

It is up to a court to decide what constitutes a fair use.  The court must consider a number of factors including the type of use, the nature of the copyrighted work, the amount and importance of the work used, and the effect on the potential market for the original copyrighted work.  As such, sellers should not assume their use of any particular work is acceptable under fair use.

What does this mean for businesses using GearLaunch?

As outlined in our seller agreement, sellers using the GearLaunch platform agree not to use third party copyrighted works, in whole or in part unless they have permission or are otherwise legally permitted to do so.

For more information on copyright, please visit copyright.gov

What is a trademark?

A trademark is a word, name, sign, or design that represents a company or product and helps consumers easily identify the source of goods.

Trademarks typically cover assets that define a brand. The importance of protecting these assets lies in protecting a brand’s public image. If consumers associate a company with positive feelings and memories, a trademark can achieve a similarly powerful effect when used. Trademark rights prevent others from copying a mark and/or using a confusingly similar mark. However, trademark does not prevent others from producing or selling similar goods under a clearly different mark.

For example, a (hypothetical) national car company named “NXTWheels” promotes its brand using a green spiral logo.  NXTWheels owns a trademark on both its name and logo.  A seller offering a teeshirt with the NXTWheels name or logo who did not get permission from NXTWheels to use that name or logo would be infringing NXTWheels’ trademark rights and could face legal liability.

What is “fair use” of a copyright?

Courts may allow “fair use” of a trademark in two instances:

• Descriptive fair use: Use of another’s trademark to describe the user’s products or services, rather than as a trademark to indicate the source of the products or services.
• Nominative Fair Use: Reference to the owner of a trademark. Accurate reference to a trademark owner or to goods or services sold under a trademark constitutes as fair use. However, it cannot be misleading or defamatory, or imply endorsement or sponsorship by a trademark owner. Additionally, only minimal reference to the trademark to identify its owner is allowed.

As with copyright, it is up to a court to determine what is considered fair use.  Sellers should not assume any particular use of a trademark that isn’t theirs (that they don’t have permission from the trademark owner to use) is acceptable under fair use.

What does this mean for businesses using GearLaunch?

As outlined in our seller agreement, sellers using the GearLaunch platform agree not to use third party trademarks, in whole or in part, unless they have permission or are otherwise legally permitted to do so. Even when making changes to a logo or omitting part of a trademark altogether, sellers still risk infringing on trademark laws when making allusions to the brand and/or using a brand’s assets (e.g. team colors).

For more information on trademarks, please visit uspto.gov/trademark

What is the right of publicity?

The right of publicity is different from the legal rights of trademark and copyright. It is the inherent right of every human being to control the commercial use of their name or likeness.

For example: Unauthorized use of Stephen Curry’s image on a t-shirt violates his right of publicity where the purpose is the commercial gain for someone else’s benefit (without his consent).

For more information on the right of publicity, please visit law.cornell.edu/wex/publicity

What does this mean for businesses using GearLaunch?

As outlined in our seller agreement, businesses using the GearLaunch platform agree not to use a human being’s name or likeness without their explicit permission.

What are the consequences of violating IP laws?

GearLaunch takes IP laws very seriously. Sellers are owners of their individual businesses and are responsible for ensuring they have full rights and permissions to any images, logos, slogans or other designs used.

Consequences that any seller who violates the IP rights of others (including violating the non-infringement obligations set forth in our seller agreement) may face include removal of products, campaign shut down, termination of access to the GearLaunch platform, monetary damages, and potentially even lawsuits by rights holders.

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