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…he’s actually a past guest, his name is Ted Luymes who is an attorney, he helps Amazon sellers mainly with hijackers but he also knows about intellectual property and some of the laws and regulations and all of that stuff. I wanted to have him come on really not to give us legal advice because he isn’t really in a position here to give legal advice but he is a friend of mine that is willing to come on and really answer some questions and he is found since the last episode, the last episode that we had him on was 152, which was a great episode by the way, and if you guys want to go check that out it’s all about hijackers and how do you really address them and get them off your listing and all that stuff, that’s episode 152 so theamazingseller.com/152.
Now, again, he’s been kind enough to come on as a guest and really talk about these three topics, patents, trademarks and copyrights but I do have to put this disclaimer in there, he wants me to put this disclaimer in there, so I’m going to put it in here, okay. The information contained in this podcast is not intended to and does not constitute legal advice and no attorney-client relationship is created. Consult a qualified attorney concerning any legal matters that you may have. Okay.
That right there, let’s get that out of the way. I want to be clear on that, that if you are at all in question, hire an attorney. Okay. Like I said, we’re going to go ahead and dive into these three topics and he is really going to shed some light on this for us, not just for ourselves as far as like seeing if we’re violating a patent but also if we have a patent, maybe some of you listening has patents already and you have someone is going against your patent or trying to rip your product off.
Now, most of the time that’s not the case, a lot of times it’s a bigger brand and you are private labeling a product and then they’re sending you a cease and desist letter. He’s going to talk about what we should do if that letter comes and kind of what happens in that process and just some really good stuff. I’m going to stop talking now so we can go ahead and listen to this interview with my good friend, Ted Luymes.
[00:02:45] SV: Hey Ted, welcome back to the show, how’s it going, man?
[00:02:49] TL: Hi Scott, doing great.
[00:02:50] SV: Doing good, I heard you just were skiing, you told me, with your kids, how was that?
[00:02:54] TL: Oh my God, spring skiing is the best, isn’t it?
[00:03:00] SV: Well, you know what, we haven’t had hardly any snow here, so in order to get to snow we would probably have to travel about an hour and a half, I would think north, whereabouts are you located again, Ted?
[00:03:10] TL: I’m in southern California, but the kids are in Utah and the snow there was pretty good.
[00:03:16] SV: Was it nice?
[00:03:16] TL: Yeah.
[00:03:17] SV: Yeah. Here we don’t have much at all which I’m not complaining about I got to be honest, I’m running from the snow that’s why I’m moving south but I would occasionally like to, like you said, if I was still skiing, I don’t ski anymore, but if I was and when I did, spring skiing is just awesome, it is totally awesome. That’s cool, spending some time with family that’s always a good thing. Let’s kind of give people a little bit of a recap I guess or maybe we can catch them up to what’s happened since you’ve been on the show. You were on the show episode 152 and on that one there, the title of that one was, How This Attorney Removes Hijackers and Protects Amazon Sellers, and it got a really great response. I guess I wanted to get your feedback and kind of what happened since you’ve been on the show and maybe how you’re working with people and how that has brought us to today’s topic which we’re going to be all talking about patents, trademarks and copyright.
[00:04:15] TL: Yeah, Scott, I want to thank you in the couple of months that I’ve been on the show I’ve had quite a response from the TAS community and a lot of them have been calling me and emailing me not only with questions about hijackers but just setting up their business or dealing with cease and desist letters or sending out cease and desist letters and it’s been a really welcoming response.
[00:04:45] SV: That’s great.
[00:04:45]TL: I think it’s a lot of fun working with these folks. Some of them are very experienced business people, some of them are just getting off the ground and it’s a lot of fun to be able to help them. I’ve seen a lot of confusion out there about intellectual property or what we call IP issues, that’s patents, trademarks and copyright. Of course, you don’t expect lay people to have a clear understanding of these things. Hopefully today, I can clarify that and call to the attention of your listeners some of the issues that I am seeing over and over again.
[00:05:30] SV: Yeah, I know and I think that’s important because these are issues that I think that do come up and I don’t think anyone has a real clear answer as to how we can fix this issue. Now the other thing that I did want to again before we move into this, the patent, the trademark, the copyright and all that stuff is let’s just kind of go back. How are things with hijackers right now, since we last talked, is it pretty much the same, is there any other little tidbits that we can give people that we might have learned of, is there anything that’s changed in that particular problem?
[00:06:06] TL: Well, the hijackers are always going to be there and the more successful you’re listing is, the more likely you’re going to have hijackers on your listings. I’ll tell you what I’m seeing a lot more of though recently are these … Remember when we talked about the high hanging fruit hijacks? Or as I like to call it, the parasites?
[00:06:29] SV: Yeah.
[00:06:29] TL: I don’t know if they all held a conference or something but it just seems like there’s a lot more of them out there and they’re more of a nuisance than anything. Technically, they’re not really violating Amazon’s rules so you have to be creative to take them down. I have been successful in taking those off of my client listings because a large part, they’re not invested in your product or the ASIN and even though they’re selling your product also so you’re getting a sale, the customer service is not going to be nearly as good. Most of my clients do like to eliminate those parasite sellers or the high hanging fruit guys they’ll wave your price.
[00:07:18] SV: Yeah and I think what we’re talking about too for anyone that didn’t listen to the episode which I think all of you guys should because it was a really good episode, that was 152, so theamazingseller.com/152. Really, what you’re talking about here is people coming on, a hijacker, and they’re not undercutting you on price, they’re actually making your price higher and in this case if someone is foolish enough to buy that at that price, then they can just buy your product and ship them your product just at that higher price.
Now the other thing I think that … They’re going out and doing this not just with one listing, they’re doing this with like a 100 or a 1,000 listings and they’re just trying to find a few that are going to actually not pay attention to you. The other thing that I’ve been noticing, if someone goes out of stock immediately they’ll go in and take the buy box now, that’s another part of their strategy, if you run out of stock they’re instantly going to fill the buy box you’re not going to go out of stock and then they’re going to start showing up on your listing. Is that what you’re seeing?
[00:08:17] TL: Yeah, they don’t have a product themselves, they’re just riding on the float and waiting for people to run out of stock to get the buy box or occasionally, they just get the buyer who’s interested in paying a lot more for the product.
[00:08:32] SV: Yeah.
[00:08:32] TL: It’s not merely as pernicious as a true hijacker which is usually a Chinese seller that’s coming in and selling a counterfeit product or a knock-off. That’s much worse because they’re driving down your buy box and really destroying your brand but these folks are sitting there, they’re actually selling your product that’s not a counterfeit and they’re just hoping to, every once in a while, get a bite at their very high price and they do. Apparently, it’s a business model that works for some people.
[00:09:08] SV: Yeah, yeah, it’s sneaky and it’s underhanded but there are people out there doing it, it’s part of that ecosystem but we just got to deal with it and be able to try to get them off and I actually had someone that I told you. Actually I followed up with you to let you know that I had that and used a cease and desist letter that I publicly put out there and you said, “Yeah, go ahead, use it, see what happens,” and it actually worked. Sometimes it will work, sometimes it won’t but it did work for me.
Let’s go ahead and let’s dive into this because the real reason why we wanted you back today and you actually emailed me and said, “Scott, there’s three things that we should really discuss that people are confused about and I think it could be helpful and that’s really about the patents, the trademark and the copyrights. I’ll let you kind of kick it off and kind of educate us on these three key points to selling on Amazon.
[00:09:55] TL: There’s a fundamental difference between the law of patent, trademark and copyright. The thing that your listener should be aware of is that there’s a lot of overlap between these two and in fact, we lawyers sometimes are not entirely sure whether a certain item falls between a patent issue or a trademark issue. Usually a copyright issue we are able to tell, it’s generally more distinct but sometimes, something that’s trademarkable is also copyrightable or vice versa.
There should be no confusion as to the basics between these three legal concepts, patent, trademark and copyright. With regard to your listeners or private label sellers, I think it’s important to at least have a basic understanding of it.
[00:10:54] SV: Sure. I think it’s really important and I get a lot of people that say, “Scott, how do I know if a product has a patent or how do I do a search?” What would you tell someone that would ask you that question? Just as a friend, not even as a lawyer but just as a friend, hey, what would you do if you were launching a product today, to make sure that you weren’t violating anything or at least doing your best job to make sure that you weren’t?
[00:11:20] TL: There’s a real issue out there, with regard to patents because they are very difficult to search. Yes, you can go online and you can … As a layperson, you can go online and do some searches through the patent and trademark offices files. The truth is there are specialists out there who charge quite a bit of money, anywhere from $2,000 on up to do patent searches and even then they’ll tell you, “ Well, we’re not 100% sure that your product isn’t going to violate some patent.” It’s difficult because there are millions upon millions of patents out there having to do with what we call design patents that is the overall shape and features and appearance of your product. Or it can be a patent that the people mostly think about which is sort of the new innovation, a new way of doing things or a new mechanical piece.
It’s difficult to know whether you’re going to run afoul of somebody’s patent. I’ll tell you this, what I’m seeing a lot with the TAS community and the private label sellers is that often they’re sourcing a product and it’s a product that is possibly a design patent infringement. For instance, pick any product right? I don’t want to be specific, because I don’t want to disclose any client’s information but let’s say that it’s a national brand and they have a certain shape about their product. Let’s say it’s a kitchen, something in the kitchen that sits on the counter and it’s got a certain shape, a certain feel, a certain look to it.
Well, a lot of times, the folks that you’ll be sourcing from as a private label seller will sort of knock off that shape, they’ll make it similar in size, similar in looks, similar in feel and then they’ll put your brand name on it, of course sell it to you then you get a cease and desist letter because it looks like a national brand’s product. I guess, getting back to your question, what would I advise a private label seller is be careful to do your own research.
With Google and Google images, you can look around online and see products that are similarly shaped, that may be branded, that may be patentable and you should check into those and also talk with your supplier, ask them specifically, “Are you aware of any parties out there who are issuing cease and desist letters because of the look or shape or feel of this particular product?” You got to do your own research on this because it’s pretty expensive to actually hire a lawyer or hire one of these firms to do a patent search for you.
[00:14:46] SV: Yeah, I mean one of the things that I’ve … Again coming back to good old fashioned common sense, if you’re looking at a product that is out there and a major brand is creating this product or selling this product. Then I would definitely say look for patent pending somewhere too or just patent it. That’s clearly, going to tell us if it’s been patented at least that design, style, whatever and right away, if I seen something like that, I would go the other way. That’s me personally and that’s kind of doing that top-level stuff and most bigger companies, at least that I’ve seen, I’ve always seen that patent pending or patented and then they’ll have their patent number and all that stuff. Would you say that that would be good advice or do you think that that’s too basic?
[00:15:31] TL: It’s a little basic because a lot of companies don’t put any patent information on their packaging or on their websites. That’s just the way they do it but obviously if you see that that’s a big red flag.
[00:15:46] SV: If they have a patent, do they have to put that on the product itself or they don’t have to?
[00:15:54] TL: They don’t have to do that. It’s a violation if you wind up infringing upon their patent but I’ll tell you this also Scott, I’m seeing a lot of cease and desist letters coming in from national law firms where they’re trying to bully or scare off private label sellers, “Beware we have this patent or we have that patent.” But me as an attorney, when I take a closer look at it I think, “Wow, wait a minute this is really a questionable call, these people are over reaching and claiming that their patent is broader than it really is..They’re just trying to scare off little guys, little private label sellers who are undercutting their business on Amazon or elsewhere.” I’m seeing a lot of that too. Just because you’ve received a cease and desist letter does not mean that it necessarily has merit.
[00:16:54] SV: Okay but at that point in time when you do receive that and when you do receive that, then your next step is to go to a patent attorney, is that what you would do?
[00:17:04] TL: Well, yeah, you call somebody like me or any IP attorney to take a look at the letter.
[00:17:11] SV: Okay, so it doesn’t have to be a patent attorney or a specialist, it could just be an attorney that can look at the paperwork and see if it holds water?
[00:17:20] TL: Correct. It should be an IP attorney, somebody who has some understanding about trademark,
[00:17:25] SV: Yeah, you wouldn’t want to ask a real estate attorney right?
[00:17:29] TL: Correct, correct.
[00:17:30] SV: All right. That makes sense. All right cool, you have to do your own research, you got to use your head, you got to be smart about it but I will tell people this too. We can go out there and we can do all of your research and we still may violate something or get scared by a letter that we received. Me personally, I’m not going to let that scare me in a sense and if it happens then I’ll deal with it but I will do my best in the beginning to make sure that I’m not going to be violating any patents. Again, it comes down to if you’re sourcing a product, if you can see that there’s specialty to it or specialty design or specialty fabric or certain types of print, then yes, you got to be really careful and that’s stuff I might even stay away from right?
We’re looking at sometimes a generic item that you can find in, I don’t want to say The Dollar Store, but something that’s in a generic form that would be kind of basic, that would be kind of even hard to patent because it’s pretty generic.
[00:18:36] TL: Right, it’s sort of broadly used but again, we’re talking about the overall look, feel of a product. If it’s something that is a unique design or that is part of a national brand, sort of signature look, you want to avoid those.
[00:18:54] SV: Totally, all right cool, that’s patents. Now let’s move into trademarks,
[00:19:01] TL: Well, one other thing before we move on, let me tell you, I’m seeing some of the private label sellers putting on their listings that they have a patent, that it’s patent pending. People, don’t do that. If you don’t have a registered mark, if you don’t have a patent or if no patent is pending do not put that in your product description, that is illegal, I don’t know if you’ll get into trouble with Amazon or if they are patrolling that. If somebody calls you on that it could create problems for you.
[00:19:35] SV: Yeah, that’s good advice, you don’t want to be doing something that’s not true, just to scare other people off.
[00:19:42] TL: Right.
[00:19:42] SV: Totally agree with that, yeah, good point. Can we move into trademark now?
[00:19:48] TL: Yeah
[00:19:48] SV: Okay, cool, so why don’t you kind of run us through trademarks, maybe start really at the high levels as far as what is a trademark and how do you get a trademark and what does it mean?
[00:19:59] TL: Yeah, the trademark is your brand and it’s usually a combination of your brand name and there’s some kind of symbol or a particular script or font that you’re using in connection with your brand name. It’s what we think of as your mark which is often why we call this a trademark. It’s how you are known in the marketplace by consumers of your product or prospective consumers. Different from patent and also different from copyright and also different from Amazon Brand Registry.
A trademark of course is something that you can register with the US Patent Trademark Office. I certainly do recommend if your listeners are going to be in it for the long haul, they are going to be serious about selling on Amazon and building a business that you definitely want to register your trademark but you don’t have to if you’re a little guy and you’re getting started, that’s a lot of money and perhaps your money would be better spent developing a website and doing those things that you need to get to brand registry on Amazon, which is what I would suggest that you do before you register your trademark with USPTO.
[00:21:32] SV: Yeah, that’s good advice and trademark is a longer process too. I actually went through that a couple of different times and it’s a longer process. For me it was about an eight-month maybe a little bit longer for that process to be official. How does that work though like when you first register your trademark, does that kind of trademark you in a sense to where it’s at least in motion?
[00:21:59] TL: Yeah the good thing is, you don’t have to initiate your registration in order to have trademark protection. There’s common law trademark as well and as soon as you start adopting a brand name or a logo. The common law automatically starts protecting you. The great thing about registration is that there is now a date certain where you can point to people and say, “Look, I have a trademark application in the process, as of this date, I have been using this trademark in commerce as of this day.” All that is now out in the open, it’s searchable, much more searchable than a patent for instance. It puts everybody on notice as to what your trademark is, when you started using it and it sort of establishes your claim. Plant a flag on a desert island.
[00:23:02] SV: Yeah, yeah, totally. It’s your stake and you’re going to claim it. I guess the other thing was how do you protect that? Is there any symbols or anything that you would advise putting on, once you do get that trademark?
[00:23:13] TL: Yeah, you can use the TM symbol at any time, even without having initiated registration. You can put a TM next to your brand name or your symbol or both. You can do that on your Amazon listing, you can do it on your product packaging and I recommend that you do that. It sort of just a … Again, it puts people on notice, that you’re claiming this is just your common law trademark.
The little circle R symbol though, that’s different. You do need to have a registered trademark in order to use that and it’s illegal to just put the little circle R on things. Again, I see that sometimes with some of your listeners, they’ll put patent pending or they’ll use the circle R and I ask so what’s your registration and they say, “Well, I don’t have one or it’s still in the process.” You actually have to have gone through the process and received your registration certificate from the USPTO before you begin using the circle R.
[00:24:24] SV: Okay, yeah, that makes sense. The TM we can kind of use as common law, the R is basically saying that you’ve got your stamp of approval.
[00:24:32] TL: Yes.
[00:24:32] SV: Okay, cool. What are some other problems that you’re seeing with trademarks, like violations and stuff like that?
[00:24:40] TL: Well again, we’re seeing people … I’ve had a lot of clients recently come in with what we call trade dress violations. Kind of a subspecies of the trademark law or something that we call trade dress and as a private label seller you need to be aware of the trade dress law. Trade dress is essentially the overall look of the product. It’s packaging, it’s design, it’s colors, they type of fonts that’s used and the key here is, if your product is confusingly similar to a reasonable consumer then that can be what we call a trade dress violation.
You might have a product that you know is similar to some other national product that is trademarked. You never want to, in your listing, say anything to the effect that well, this is similar to such. Or for that matter, you never want to identify any other product or brand that your product is like or similar to or that it’s associated with in anyway, that’s a big no-no, it’s going to get you to a cease and desist for trade dress violation.
[00:26:18] SV: Got you, okay that’s interesting and it makes sense because you’re trying to capitalize on that brand name. Now my only question to that would be what if you had something that was an accessory to a major brand and you said works well with this?
[00:26:35] TL: That’s okay but again you’ve got to be really careful how you deal with that and how I would handle that in your product listing or your product description is you can use the brand name of that product but I would make a notation somewhere that X name is the trademark of so and so company, no affiliation. It’s important to have that sort of fine print somewhere.
[00:27:08] SV: Little disclaimer, yeah.
[00:27:09] TL: That way, you’re not going to piss them off. It makes it clear that you’re distinguishing your brand from theirs, that you’re not abusing their brand but that your product is an accessory or some kind of compliment to their product and nothing more.
[00:27:26] SV: Yeah, I like that, that’s great advice and I think that you could put that fine print in there somewhere and most people aren’t even probably going to see it but if you ever needed to call it out you could. That’s good advice. What else do you see in here that we can discuss on the trademark? I’m reading some of your notes here, we’ve got counterfeit sellers, hijackers on your brand and listing, cut and pasting and using the ad copy and even sometimes the images which we can talk about in copyright here in a minute. What else did you want to talk about with the trademark with counterfeit sellers, like hijackers and such?
[00:28:01] TL: The hijackers again, they’re always going to be there and if they are doing, they’re using your trademark, using your brand name to sell counterfeits of your product then you got to shut them down. It’s not always easy to do that but we talked about that in our previous podcast. One other thing I want to mention though are these what I call cut and paste sellers.
These are folks that literally steal your ASIN, they copy everything. Often times they copy the photos, they copy your product description and they just create a new ASIN, which of course violates all kinds of Amazon’s rules and of course is stealing both your trademark and your copyright and these people actually do it. I don’t know where, often we don’t know where they are sourcing their product, if they are just getting some kind of counterfeit or some kind of knock-off product but I have seen this and it’s important that your listeners be aware of this.
Something else is often this will happen on foreign Amazon sites. I had a client recently who does business on a number of Amazon sites all over the world and they had their US listings, about 100 of their US listings completely cut and pasted and put on Amazon India. I contacted the operator, the seller and they said, “ Well, we’re selling a legitimate product, we’re actually sourcing through your client in the US and importing it here to India,” and they jacked up the price by three times which was amazing to me but they had this whole business model going on.
Of course I had to inform them, “Look, we have a trademark that is ours, we have a copyright that concerns that are ours, you can’t just cut and paste our listings and put them up somewhere, you just can’t do it.” It took a lot of effort to get those down but we managed to do that. That was kind of a large scale problem but individual ASINs that do well, sometimes, they just get ripped off entirely, they’ll just steal them.
[00:30:41] SV: Yeah, yeah, no that’s definitely something we don’t want to happen and we got to definitely be on the lookout for that stuff but also know how to deal with that. Again, contacting those sellers and trying to be, like you’d say before, trying to be polite and all that but if you can’t get anything then you got to actually hire an attorney or something like yourself to go ahead and address that.
[00:31:05] TL: The good news is, if you can point out to Amazon’s catalog department that there is a duplicate ASIN like that. Usually they’ll delete the other ASIN but you don’t … One time that happened, they just went ahead and merged the two ASINs, this guy is now selling on my client’s ASIN and of course we can’t have that either because we knew in that case at least he was selling some knock off for a cheap product to drive down the buy box, so that became another issue.
[00:31:40] SV: Oh boy, okay, well that’s why you do what you do. You’re good at it now, you’re getting a lot of practice. Okay, cool so let’s move on to copyright. I am an ex photographer. I still I’m a photographer, my wife’s a photographer, we just don’t do it for money any more but I know a lot about copyright as far as like with pictures, that’s one of the big things for us because people, what they would do is they would take our pictures and bring them into CVS or Walgreen’s or whatever and they would copy our pictures and not pay us for our pictures because those pictures were copyrighted by us because we took the pictures right? We had a thing there that said the only people that can print this is us. That’s a little different but it’s still the same idea with copyright because they’re our property because we took them. How does that kind of relate to copyright with your images, your copy, kind of all that stuff in your Amazon business?
[00:32:36] TL: In the Amazon world, again we’re mostly talking about photos here and you’re right, the private label sellers need to be clear that the ideal situation is that they would take their own photos or they are going to hire a professional to take the photos and they’ll get a writing from their photographer that says, “I’m turning over all rights, all of my copyrights to you,” because when a photographer takes the picture, he or she owns that copyright, it needs to be transferred to you, to the person who paid for it. There is something what we call the work made for hire doctrine that I’m sure you’re aware of, which is that if you hire a professional photographer or they are your employee, they’re on your staff, then there’s an assumption that the copyright already belongs to you but it’s a good idea that the professional photographer has this forms to actually get it in writing that you own that copyright. You don’t necessarily need to register it, there’s a common law copyright law that as soon as an expression is made, that is as soon as the photograph is made or something is written down or a musical performance is made, the copyright law automatically attaches to that work. It doesn’t have to be registered.
[00:34:11] SV: Totally. We would always have our clients sign even, we’re not talking about model releases or anything like that but that was part of our process. We had to have some of these things signed. We didn’t register them but we needed the things in writing. I think a good thing to do here too, as an extra precautionary like you had said was even the photographer that you hired to take your pictures just to let them know that they are kind of handing off the rights to you. This way here, you’re able to go if you wanted to print some or if you wanted to just use them on your website or other places because technically if you didn’t have that they could say, “Oh no, every time you post it, we need to get paid.” You don’t want that to happen either.
I think we’re talking more here about people stealing your stuff and then being able to say, “Hey look, they’re mine, they’re copyrighted, I’ve purchased them, I’ve had them professionally shot, they are mine.”Is that correct?
[00:35:04] TL: Yeah, absolutely and you’d be surprised how often Amazon sellers would just steal photos and just modify them a little bit. It’s still your copyright even if they modify things. One of my garment industry clients has a very large catalog of photos that frequently get ripped off and what we often find is that these hijackers will just switch the face out of the model. It will be my client’s photo and garment and everything but the face will be completely different.
[00:35:40] SV: Oh, gosh, no.
[00:35:40] TL: That’s very, very common. Somebody else will put their watermark on your photo. You still have that copyright. My recommendation to all my clients is use the circle C liberally, you don’t have to register your copyright in order to use the little circle C and put on there a copyright and your name. Amazon really doesn’t like watermarked photos but if you put a discreet watermark on a photo, I think that’s a good idea and put it on your product listing and on your product packaging itself or if you have some kind of insert, instruction manual or anything like that, that’s some kind of printed paper, a diagram put that circle C on there as well.
[00:36:35] SV: Yeah. I think that’s a great bit of advice there because if you put it on there, you’re marking it it’s yours and if someone sees that they’re probably going to think twice about doing that. Not saying they won’t, but it’s at least there and I would also say probably to is to … Obviously your pictures are going to be timestamped and all that stuff but that would be even down the road if you had to go that extreme, you can at least show that every that everything is kind of like the time that they were shot and the time the person came online and all that stuff.
A little over the top but that’s something that I even consider, I even take pictures, screenshots of my listing so I could basically have a record of what it looked like now and then if a hijacker comes on and tries to take over I’ve got that as, “This is what the listing is supposed to look like,” and that type of stuff. Okay, let’s wrap up here and I know you have a couple of other notes here, the main problems that Amazon sellers are facing I think is with the copyright, not just copyright, but everything. It’s like everything from content theft and then unauthorized use of the photos. What would you say in closing that we can do to make sure that we’re on the up and up and that we’re doing the best that we can to follow these guidelines to protect ourselves, and our brand, and our products?
[00:38:03] TL: Well, other than the common sense that you mentioned Scott, it’s important for private label sellers to have a good conversation with the people that they are sourcing from because often the folks that you’re sourcing from have been doing this for a while, they’ve been making product or they’ve been printing a product insert and they may be aware of someone who is claiming a patent or trademark or copyright infringement but they’re not telling you that.
They’re over in China or India or wherever they are, they’re not likely to get sued but you are because you’re putting your private label brand name on that product and you’re putting it out in the Amazon.com marketplace and you are most likely based in the US, although not always, and you would be subject to a lawsuit here in the States or at the very least, you’re going to get a cease and desist or they’re going to report you to Amazon. We all know that Amazon is not terrific about responding to IP complaints but when they do comedown it’s like lowering the boom, they’ll suspend your account or even ban you from Amazon.
Have a good relationship and a good conversation about these IP issues with whoever you’re sourcing your product from and if you don’t feel comfortable with who you’re working with and that they’re being above board with you, then you might want to avoid them and go with a different supplier.
[00:39:57] SV: It’s good advice, it’s really good advice and I think a lot of times it comes down to that relationship you’re building with your supplier, your agent and letting them know that you are questioning that. You can feel people out, not saying that it’s always going to work but you can feel people out and get a gut feel if they are on the up and up and doing stuff that’s kind of on the down low. In a couple of maybe a minute or two, if we can cover these last little bits because we’re running a little bit late but what do you do if you find someone that’s exploiting, that’s infringing on your own product and your property?
[00:40:33] TL: Then you need to write a cease and desist letter and of course I’m biased, but I think that we lawyers write better cease and desist letters than lay people do. By hiring a lawyer and going through that process and doing a proper cease and desist letter, it really tells the other side, the people who are infringing that you mean business, you’re not just sitting on your computer and shooting out an email. I think it’s much more effective and you’re going to get the results that you want, namely, that they stop using the product and in appropriate cases, that you’re going to get some kind of settlement, some kind of compensation for the use of your IP.
[00:41:22] SV: Then the last part of that one, let’s flip that around, what do you do if you’re accusing someone else of doing that to yourself?
[00:41:29] TL: Don’t stick your head in the sand and think it will go away. You need to be proactive, you need to address it immediately. Again I think it’s a good idea for, especially if you are getting a cease and desist letter from an attorney not just from a lay person but from an attorney or especially some national law firm is sending you a cease and desist letter, you really need to get professional help from an attorney to advise you about whether or not there has been an infringement and then to respond formally to that complaint. You don’t want to just let it go by the by and again, you don’t want to be bullied either, which is why it’s a good idea to seek the counsel of an attorney and they can tell you whether or not that letter has merit.
[00:42:20] SV: Just one last quick question, if you do receive that cease and desist letter, is it typically that company, their attorney or whatever, or maybe not a company, it’s a small seller with a small brand but they have it patented and whatever and you get that. Is the first step usually for them to send you the cease and desist and then have you just stop selling it or do they like say, “Stop selling it we’re going to sue you for the past use of our product,” I mean what do you typically see there, if you see any type of trend there at all?
[00:42:55] TL: Most cease and desist letters that are written by lawyers, they usually conclude with the following, “We want you to stop selling the product and withdraw from the market entirely and stop using their brand name or their photos or whatever it is.” They also want to know who your supplier is so that they can go after them although in most cases your supplier is going to be beyond the jurisdiction court. They also want to know how much you’ve sold, how much you’ve profited from the use of the product and usually conclude by saying, “We will negotiate some kind of settlement with you or something like that.” Which is again why it’s a good idea to hire an attorney because a lawyer can gauge whether you really have violated the law or whether they are overstating their claims.
If they’re overstating their claims, I usually tell them either pound sand or yeah, we’ll stop doing this but we’re not going to pay you any money. There’s also the question of just how much inventory you have left. Let’s say you get that cease and desist and you got 4,000 units on a ship coming from China that you just paid for, you have a lot of money invested in that product, what’s going to happen with that run out? Is it all going to be destroyed? Well it might have to be if there’s serious violation of intellectual property laws but if they’re overstating their claim, you might say,” Well fine, we’ll change this but we’re not going to be do it until after our existing stock is all sold out.”
[00:44:50] SV: It really comes down to how severe the claim is?
[00:44:55] TL: It really does, the merits of the claim. If it’s a very meritorious claim then I advise my clients to take it seriously and they’re going to have to take a hit and they might even have to pay some modest settlement which you will negotiate but if it’s a claim that’s marginal or absolutely bogus then we treat it accordingly.
[00:45:20] SV: Sure, okay, good, good. Okay, that’s good advice and I’m glad I had you back on to get caught up to where things are now but I think this is important and I think not to scare people but to make people aware and to do the best job they can when looking at products that they might want to private label. It’s important and also not to mention not going out there and claiming that you have rights that you don’t necessarily have because we want to be as honest as possible too because we want to have a brand that’s not just out there one day and gone the next, we’re building something that we can potentially either build bigger or sell in the future, I think this is good stuff. Is there anything else that you want to close with Ted before we wrap this up?
[00:46:05] TL: I hope that’s it Scott, I wish your listeners well and I really enjoy working with them and if anyone has specific questions I’d be happy to entertain them. I just want to underscore I’m an attorney and I value my law license so nothing that I have said here today should be construed as legal advice. If you or your listeners have any specific questions they should address them to a qualified attorney.
[00:46:32] SV: Yeah, that’s great and again if anyone wants to get a hold of you what is your website again?
[00:46:37] TL: It’s tedlawfirm.com and you can always email me at firstname.lastname@example.org.
[00:46:46] SV: All right cool, and I’ll put them in the show notes as well, so anybody that wants to head over to this episode can check that out and we’ll definitely link that up in the show notes. This has been great, Ted I want to thank you again for going out there and helping people just like this coming out here. You didn’t have to do this but you did and there’s some of the listeners that are going to need your help in the future, whether it’s battling a hijacker or maybe a patent issue. I think it’s good to have someone that’s in his space and you do specialize in private labelers currently. I think it’s really, really good stuff. Once again I want to thank you man, appreciate it and keep doing what you’re doing.
[00:47:27] TL: My pleasure Scott.
[00:47:27] SV: Okay, so there you have it. Hopefully, hopefully, this didn’t scare everyone off because this can be scary. I mean when you think about it and you’re saying to yourself, “Oh my gosh I didn’t know that I was violating a patent.” You definitely want to do your research but me personally, I’m going to do my best to make sure that I don’t violate a patent and that could be talking to the supplier, trying to get a little bit more of a relationship there, hearing if there has been any claims, doing that type of stuff and then if I really want to go after this product and I think that there’s a bigger brand right now selling something identical to that, then I’m probably going to want to back off and I’ll go in another direction.
Again I just wanted you guys to be aware of this, Ted had contacted me and said, “I’m getting a lot of questions about this, it’s a little bit unknown to most people and I really wanted to give some clear guidelines as to what you can do to prevent this and at least set yourself up so you don’t fall into having any type of legal issues hopefully down the road. If you do, knowing also what kind of actions to take to move through that as well. The last thing I want to do real quick is just remind you guys that if you wanted to download the show notes to this and the transcripts, you can head over to the blog post that accompanies this podcast episode. We’re starting to include them and I’ve mentioned this before.
It’s the transcripts and this one here will probably be a good one because there’s a lot of things that we talked about, it will be kind of nice to go through that and even download it and keep it as a little cheat sheet. You can head over to theamazingseller.com/186 that’s the episode. You could also find the contact information to contact Ted if you’re interested or if you get in a jam and you want to reach out to him. He’s so giving, he’s an awesome guy and he is definitely, definitely, someone that you are going to want to reach out to if you ever have any questions so definitely, check out Ted’s website. Again I will put all the information, the contact information in the show notes to this episode.
Once again, that’s 186, so theamazingseller.com/186. All right guys, that is going to wrap up this episode, I want to remind you guys one last time, I’m here for you, I believe in you and I’m rooting for you but you have to, you have to … Come on, you guys know the drill, say it with me and say it loud, say it proud, let’s do it, “Take action.” Have an awesome, amazing day and I’ll see you back here on the next episode.
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