Drop Ship Articles
By Jeff Knight, Vice President of Marketplace
IP, or Intellectual Property according to the World Intellectual Property Organization, "refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce." There are two categories of IP: Industrial Property and Copyrights. Industrial Property largely refers to inventions, or patents, trademarks, designs, and other works used in commerce. Copyrights are focused on literary and artistic works.
As the Internet has grown and become important part of how information is disseminated and shared – IP has become an ever-increasing issue. As an eCommerce retailer, IP and the regulation of IP rights effects all aspects of your business. For this article, I am going to give a brief and general overview of IP issues and how they affect your business.
Before starting, I want to emphasize again that IP is very complicated and a heavily debated area – and this article will only provide a general overview. I will provide URLs at the end to assist with gathering additional information. Second, there is a lot of debate over how to regulate IP, the value of the regulations, and the motivation behind IP laws – we will only skim the outsides of the debate. Largely, for our purposes (i.e. Doba, retailers and suppliers, and IP regulators); we all share a common goal even if at times we are inconvenienced by the regulations.
What are examples of IPs in your day-day business?
Most of the images, copy, brand names, MAP policies, channel restrictions (no eBay, brick and mortar only, etc) – are all examples of IP. Every item that you list on eBay or place on your website, is subject to IP regulations. For most retailers, they are only aware of how IP affects them when they are notified they are in violation. The report is usually followed by the eBay listing being removed, a legal cease and desist letter or in most cases, an email explaining whose IP rights are in question and what you must do to be in compliance.
Truthfully, very few retailers using Doba's platform have had this experience. Before the product is added to Doba's platform – agreements over the supplier's rights and responsibilities are in place to help proactively alleviate questions. Even with the best efforts of Doba and the suppliers, however, there are still situations that arise. Why does this happen? While Doba is authorized to provide you with the product information and images – we couldn't possibly inform every brand/manufacturer of every retailer on Doba's platform.
In addition, within a manufacturer's organization are different groups selling to different channels and at times, there can be overlap and even conflicting policies.
Digital Millennium Copyright Act
In 1998, the United States Senate passed the Digital Millennium Copyright Act (DMCA). The DMCA criminalized the act of using technology to circumvent access control protecting IP, as well as the creation of technology or devices that are used to circumvent control. An important aspect was that the DMCA criminalized the act whether the copyright was infringed at all. In addition, DMCA steepened the penalties for copyright infringement on the Internet. DMCA enforcement has ranged from catching pirating (music, software, etc) to frivolous patent lawsuits of large retailers over common use technology like shopping cart processes. Criticism has focused on the concept of a government, albeit briefly, granting a monopoly over technology thus inhibiting enterprise. Other critics argue that DMCA discourages research and other non-commercial activities. Finally, and most important to Doba users, the DMCA has made it extremely easy for IP rights holders to force websites and retailers to remove content. If a website receives a notice that it is in violation, the website can remove the content or link without being held liable. Essentially, there is no incentive for the website to question the notice, even if the rights are in question, because the website's liability is limited by the removal.
From eBay to Google, the largest technology websites have developed similar polices – if a violation is reported, remove the content and let the publisher of the content work it out with the assumed IP rights holder.
What should you do if you are notified?
Chances are that every retailer will face a situation where IP rights will be in question. What should you do if you are notified? While you may wish to push back or fight the report – Doba would recommend suspending the listing while you gather more information. Next, contact the party and ask for specifics on what content is in violation, how you can verify it is violation and if it is in violation, how can you correct the violation. In addition, please let Doba know so we can work with the supplier to resolve ongoing issues.
Understand that very few IP rights holders will contact you directly. Larger manufacturers will use a third party enforcement agency or a legal firm to monitor and protect their IP. One of the largest companies in the online space is NetEnforcers. Doba has had many positive interactions with them and we have found them to be a reputable company genuinely interested in protecting their clients and helping retailers in violation get back in compliance. There are many other companies and each will take a different approach. It is important to understand that while the tone of their correspondence may be very accusatory and cold – in the end, the company has most likely not singled you out.
I think the positive to take out of a situation is, if a manufacturer cares enough to protect their brand and retailers to hire a third-party; you should look into possibly becoming one of their approved dealers. Overall, getting manufacturer authorization is a good idea for brands you intend on focusing on - many manufacturers have additional marketing and incentives for retailers who comply and meet their program requirements.
eBay and IP
If your eBay auction is suddenly canceled or you receive a cease and desist letter, don't panic. Look at the global situation; contact the people reporting the violation and move ahead. eBay created its VeRO program to help IP rights holders and sellers manage and proactively solve issues. On the VeRO program pages, eBay gives details of how to be in compliance and even lists all manufacturers who do not allow their goods to be sold on the eBay platform.
Here are some places to visit for more information Intellectual Property:
The eBay VeRO program is located at:
Google's DMCA policy:
World Intellectual Property Organization:
About the Author:
As the Vice President of Marketplace, Jeff Knight is responsible for all aspects of the merchandising strategy, supplier acquisition, and vertical category management and fulfillment operations of Doba's marketplace. Prior to Doba, Jeff was Director of Merchandising for Overstock.com where he developed the growth and management of the Computer and Home Office category. Jeff's background includes merchandising and technology leadership roles at DealDeal.com and BCI International. He earned Bachelor and Masters of Arts degrees in Communication from the University of Wyoming.