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Intellectual Property Pointers for Enterprising E-Tailers

By Vivian Wagner
Oct 23, 2008 4:00 AM PT

The Internet has opened up information sharing in unprecedented and ever-expanding ways. This new world is great for creativity and communication, but it's also brought intellectual property rights into question.

Intellectual Property Pointers for Enterprising E-Tailers

It's vital that online retailers understand intellectual property law so that they don't find themselves infringing on others' rights and possibly facing lawsuits and fines.

"IP enforcement and the allocation of resources for that has really skyrocketed in the last decade," Eric Syverson, an Internet attorney specializing in intellectual property, told the E-Commerce Times. "Intellectual property is the most difficult thing in the world to create, but in the world of the Internet, it's the easiest thing to steal."

With that in mind, here's an introduction to intellectual property law for e-tailers who want to stay legal.

Domain Names and Trademarks

The first thing most e-tailers must decide on is their domain name. They'll want to make sure when choosing a domain name, however, that no one else has trademarked the domain that they want. Even domain names that just resemble trademarks might infringe on the rights of others.

"You need to make sure your domain name doesn't infringe on someone else's trademark," Steven Rinehart, a patent and IP attorney based in Salt Lake City, told the E-Commerce Times. "Make sure that no one has the domain name you want trademarked."

Trademarks are names and marks that identify the source of a product as a particular company. So, for instance, if you're name is Macy, you won't want to open up a store called "Macy's," or even "Macy's Store," because you'd be infringing on the trademark of the well-known department store.

E-tailers can do a preliminary search for trademarks and names on the Web site of the U.S. Patent and Trademark Office, but for a more thorough search, they might want to hire a search company or an attorney specializing in trademarks.

"Hire an experienced trademark lawyer, and get your trademark registered," Syverson told the E-Commerce Times. "You can do it yourself, but can you do it well, or do it efficiently?"

Checking out trademarks ahead of time can save e-tailers time and money.

"If someone's got prior rights to a mark that you're using, you might find yourself getting a cease and desist letter," Carl Davis, an Atlanta-based intellectual property attorney with Baker, Donelson, Bearman, Caldwell, & Berkowitz, told the E-Commerce Times. "You don't want to be a few months into a marketing campaign and find out that someone has superior rights to you."

Avoid Inadvertent Piracy

If you're opening a store, you also want to make sure that the products you're selling are legit and not infringing on anyone's copyright.

"You want to be wary of selling pirated or infringing goods," Syverson said. "If you're getting a price from a wholesaler that's too good to be true, it's too good to be true."

What this means is that e-tailers have to do their homework in order to protect their own interests.

"If you're buying from a wholesaler, ask for verification that they're a licensed wholesaler," Syverson said.

Patented Processes

Finally, if you want to have a "1-Click Ordering" or "Buy It Now" button on your site, you might want to make sure that you're not infringing on the rights of Amazon or eBay. Many companies have patented elements of their sites, and e-tailers need to avoid infringing on these rights.

"Many companies have patents on the ways their Web sites work," Rinehart said. "If they have a unique way of doing something, they ought to patent it."

Hiring a patent lawyer to do a complete patent search might seem expensive, but it's an expense that could be well worth it in the long run.

"Claiming simple ignorance is not going to get you out of hot water," said Syverson. "You have to do due diligence if you're an e-tailer."

Many site elements are so common that they are not patentable, so e-tailers and their attorneys need to evaluate how commonly used the elements.

"You can't patent something that everyone is doing," Rinehart said.


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