Monday Makeover Challenge

Today's Monday Makeover Challenge is a little off-beat and not your typical "makeover challenge," but concerns a very important topic. Kelli of Accessories by Kelli has written a very informative article about the importance of avoiding trademark infringement and we are asking all members to review their shops for trademarked items.

Also this week, we will continue the Banner Challenge from last Monday and will post some before and afters next Monday.

 HEADS-UP ON TRADEMARKS

Every few days, it seems, another thread is created on Etsy dealing with trademark infringement. Either someone has had an image or design copied or stolen, or someone has a question about another shop’s trademark image item listing, or a seller asks for opinions as to whether a product s/he made would be considered infringement of a major trademark holder. Search on Etsy using the Discussions section in the drop-down search menu, type in trademark, and you see a long list of threads dealing with trademark infringement. In reading those threads, it seems to me that most of the infringements are unintentional, but they have unpleasant consequences if discovered by the trademark holders.

One of the most costly (in time, money and reputation) things that a craftsman/woman can encounter happens when s/he makes a product that uses a trademarked image, and offers it for sale , and the trademark holder sees it and takes legal action against the maker-seller. A legal liability is created when recognition of the trademark holder is not adequately given in the advertisement of the product that you have made using their image. Here is an example:

Becky just started a cake shop. Her slogan is "We Bake Them, You Take Them" and she has registered it as her trademark. If another cake business uses the same slogan in their TV commercial or as their shop name on Etsy, Becky could file a lawsuit for trademark infringement against the other cake business.
(link)

Another example: If Sally Bagmaker uses a piece of solid blue fabric to make an iPad™ case, and lists it on Etsy as “Blue iPad Case”, and she fails to have a disclaimer in that listing saying that iPad™ is a trademark of Apple and that the item is not an official product or in any way associated with them, she can be accused of infringing on Apple’s trademark. Apple’s website states that sellers of items showing their trademark are supposed to point out that the cases that they (Sally B. and others) make and sell are not official nor are they made by Apple. If Sally calls it a “Blue Case for iPad”, then she may not be infringing on Apple’s trademark. Ref: section 2 of this. However she is still vulnerable to action by Apple if she fails to show the TM symbol, like this: “Blue Case for iPad™” or “Blue iPad™ Case”, anywhere that the word iPad is used in the listing. (link)  In any case Sally Bagmaker would be well advised to consult an IP (Intellectual Property) attorney before making iPad cases to sell.

These are two examples of trademark infringement that we may encounter as makers of handmade items.
Another kind of trademark issue has to do with First Sale Doctrine. First Sale Doctrine situations have to do with buying supplies, like fabrics, that have a licensed trademarked logo on it, making a clothing or accessory item out of the fabric, and listing it for sale in such a way that it could be misconstrued by a buyer as having been made by the logo owner or a company licensed by the logo holder.

An example: If I buy fabric at a store that has the Hello Kitty logo on it, and make a child’s hat with the fabric, how is that infringement, since I bought the fabric from a licensed vendor and I made the hat myself? While the doctrine of First Sale gives the purchaser of the fabric the right to make it into a child’s hat and sell it, the listing of the hat can be considered infringement if it is listed as “Hello Kitty child’s hat”, because a reasonable person could misinterpret the listing to believe that they are purchasing an authentic hat made by a “Hello Kitty” licensed maker. To protect myself from legal action by Sanrio, the trademark holder, I could list the hat this way: “Child’s hat made from Hello Kitty cotton” or “Hello Kitty theme child’s hat”. Even then I would need to consult an IP attorney for help in wording the listing correctly, and if I forgot to add the TM symbol to the “Hello Kitty” phrase I could still be vulnerable to action by the trademark holder. So, with the approval of my IP attorney, I would list the hat as “Hello Kitty™ theme child’s hat”.

“So what If I don’t pay attention to trademark infringement”, you may say, “I see it all the time on Etsy and elsewhere…..How bad can it be??”

Well, to begin with, whether intentional or not, it can be misleading to buyers. Then there are the potential legal and financial consequences if a trademark holder notices that you are infringing on his/her trademark.

The trademark holder can send you a Cease and Desist letter, requesting that you cease and desist from advertising items for sale with their trademark. If you fail to respond to this letter and/or do not comply with the Cease and Desist request, the trademark holder can sue you for compliance and monetary damages.

The trademark holder can also contact Etsy and request that your listings which infringe on their trademark be taken down. Etsy can/will only do this at the trademark holder’s request. When they get such a request, they will ask you to take them down, and if you fail to comply, Etsy will take them down and may close your shop. The cost in time and money to defend against a trademark lawsuit can bankrupt a business, and even if you can keep your business open, the resulting tarnishing of your reputation as a seller will surely impact your sales and will very likely spill over, causing collateral damage to the positive image of handmade crafts, and to other seller members of teamhandmade and of Etsy.

Trademark infringement is a significant concern. Here at teamhandmade, where our mission is to raise awareness about the importance and value of artists' handmade products, to promote and support handmade artists and to provide assurance to our buyers that purchasing from a team member is purchasing authentic handmade directly from the artist or artists, we feel that there is no place for trademark infringement. As a result, when we see something in a teamhandmade member’s shop that might be viewed as trademark infringement, we will give the shop owner a heads-up so that s/he can take remedial steps. We do this in an effort to protect you from costly and time-consuming legal action, and to protect the reputation of teamhandmade and its members.

The information in this article was compiled by Kelli from accessoriesbykelli, from postings in forum threads, and the sources listed below. Kelli is not an attorney. It is recommended that you contact an attorney for advice in individual circumstances regarding trademark law.

Resources

You can read more about trademark law here: www.uspto.gov.

You can also find Etsy's Copyright and Intellectual Property Policy here.

And what can happen if a trademark holder discovers a possible infringement of his trademark in your shop? We obtained the following guidelines for a trademark holder on what actions they can take against an infringer, quoted below directly from this site: http://www.nolo.com/legal-encyclopedia/enforcing-trademark-rights-29902.htm You can scroll down to the lower section of page 1 to see these two sections.

How to Stop Others From Using a Trademark

Typically, you begin by sending a letter, called a "cease and desist letter," to the wrongful ("infringing") user, demanding that it stop using the mark. If the wrongful user continues to infringe the mark, you can file a lawsuit to stop the improper use. The lawsuit is usually filed in federal court if the mark is used in more than one state or country, and in state court if the dispute is between purely local marks. In addition to preventing further use of the mark, you can sometimes obtain money damages from the wrongful user.

Damages for Trademark Infringement

If you can prove in federal court that the infringing use is likely to confuse consumers and that the[sic] business has suffered economically as a result of the infringement, the infringer may have to pay you money damages based on the loss. If the court finds that the infringer intentionally copied your trademark, or at least should have known about the existing trademark, the infringer may have to give up the profits it made by using the mark as well as pay other damages, such as punitive damages, fines, or attorney fees. On the other hand, if your business has not been damaged, a court has discretion to allow the other company to continue to use the trademark under limited circumstances that are designed to avoid consumer confusion. ]