The E-commerce Leader

[00:00:30]Intro: [00:00:30] Welcome back to the e-commerce leader, the place for people who want to be the best e-commerce leader they can be. And if that’s you, then today, we’re in the middle of a very important topic, which is intellectual property. Now that’s not a sexy thing in a sense that law is normally seen as something we don’t want to deal with, or it’s going to be painful if we do the truth is that if you get it dealt with upfront, Will not be painful later.
[00:00:53] And that’s the main thing, I guess, that we’re trying to get across. We’ve been talking about trademarks in, in depth and intellectual property in general. Today we’re going to cover copyrights and patents or patents, whichever way you want to pronounce them. And it’s all much more doable than you think is what I would say.
[00:01:08] So if you have any interest at all in this, I’d encourage you to educate yourself and we’ll do our best to give you not a lawyers angle, which we are neither of us, Jason or myself. Are qualified lawyers, but we are entrepreneurs who can give you that sort of angle. So worth educating yourself about enjoy the show.
[00:01:24]Michael: [00:01:24] So copyrights, Robert Wright’s favorite, thing. And as I say, he’s a man who likes to keep it as simple as possible, which by the way, unique in a lawyer, as a lawyer sign and know a few lawyers, through business dealings never met one.
[00:01:33] He likes to keep it simple. So this is a wonderful piece of news, I think. So the first thing about copyright, like a lot of other things, if you create a work of some kind of like you take a photograph or you write some copy for your listing, or you create a beautiful box design, or you do some infographics, all of that is automatically copyrighted under common law in the UK and the U S as I understand it, and, There is a nuance there, which I ought to mention, which is if somebody else creates it on your behalf, just because you own, the photos doesn’t necessarily mean you own the rights to use the photos, or you may implicitly, you have rights or whatever, and it can get very, very nuanced very quickly in a way you didn’t don’t want.
[00:02:06] So the first thing is, make sure you’re getting writing from anyone who creates anything for you. The fact that they’re assigning all rights to you. Some of the platforms like Fiverr recognizes the fact that this is an issue and it’s part of its standard agreement between anyone who hires for people in the platform and the gig workers there that unless otherwise stated that you get all the rights, unfortunately, Upwork and other such platforms, don’t automatically do that.
[00:02:28] And if you hire somebody through a friend or whatever, or you go through. Broad hiring process. That’s not necessarily the case. So that’s one thing to just nail down that is very quick and easy, and you don’t even need a lawyer. It doesn’t need to be notarized, but if you don’t have that, then five months, five years down the line like this, us from that, that Robert was helping with their intellectual property.
[00:02:47] They were trying to, sorry, you’re an Australian company. They’re trying to sell a $2 million business. They hadn’t documented some rights to use some photos that were done on Upwork five years before they couldn’t find the guy. And it nearly scuppered the deal, except that the people buying it realize that they were probably going to lose a good company for silly reasons, but it certainly slowed things down.
[00:03:03] So that’s something you want to avoid, just get it all in writing.
[00:03:06]Jason: [00:03:06] There’s a lot of nuance here. I think for creators, you know, all asked the question as it relates to, registration and, and trademark and as it relates to handmade items and that kind of thing, and this is the space we’ve operated in for.
[00:03:17] I guess since 2007, one of the things that’s important to understand for creative work is,
[00:03:23] when you’ve created concepts, intellectual property and you’ve published them and you own. Legally or formally or informally there’s process for both steps, but either way, it’s your content and your intellectual property. What you don’t want to see happen is people make money on the back of your intellectual property.
[00:03:43] And frequently we have this all the time. This happens all the time on marketplaces like Etsy or Amazon handmade, where it’s like, oh, I’m making the baby Yoda. Shotglass Disney, doesn’t sell baby Yoda shot glasses. So that should be fine. Right. And w what you as a creative, like a craft seller frequently, you can think my product I’m making is the thing I’m selling.
[00:04:08] But as soon as you use someone else’s copy righted or, or, concept, to make the sale occur or to make the item. Appealing. You’re camping on someone else’s intellectual property and you’re really stealing from them. And that’s an important concept to think through because the shot glass with no baby Yoda on it is not valuable in the same way with the baby Yoda shot glass.
[00:04:34] And as a, and you just have to learn that as you get into the craft and handmade and those kinds of industries, and the biggest problem we’ve seen over the years is people will copy other people. That are not, that are, that are breaking the law. And so basically what you’ll see is a lot of people will come in and be like, oh, I’m doing this.
[00:04:54] And we’re like, yeah, that’s illegal. Well, tons of other people do it. Like, yes, that’s true. And they haven’t gotten caught, taken down yet off the websites and they haven’t gotten busted yet. And their products are being listed and sold. But nonetheless, it’s still a copyright infringement and that nuance is super important to understand.
[00:05:13]And you, you, it becomes clear to you when you get a cease and desist letter from a big company, but it should become clear to you. Well, before that, where you ask honest questions about how you’re monetizing and making money with your products and whether you’re in essence, stealing from someone else in that process,
[00:05:32] Michael: [00:05:32] Yeah, that’s a very, very good point.
[00:05:34] And I guess another way of looking at is to assume it’s a bit like the land. I mean, in the U S is such a big country. This is probably less of a thing, but you’re, it’s very, very, very crowded. It’s been in the landscape in the UK was changed by humans 10,000 years ago. It’s just human modified. There’s no piece of land in the UK that isn’t spoken for.
[00:05:50] So if you come across a piece of land and start building a house on it, randomly the chances, I exceptionally high that at some point, someone’s going to come off and, and force you to take it down and be in possibly a rescue of you don’t because everything is owned by somebody. So the simple question I would ask is who owns this?
[00:06:05]If it’s nobody, it’s probably because you made it yourself and in which case. You need to find the right kind of protection. Just, just this more nuance here. And this is why it’s worth going to lawyers to get clear about stuff. I guess I would say if you’ve got a baby Yoda, that’s a trademark infringement.
[00:06:18] If you’ve got a picture of a baby ADA that somebody else took, that would be a copyright infringement. So that’s a neutral example, but if you own, if you made something like a baby Yoda or whatever it is, baby something, that’s acute kind of thing that people love and it causes products to sell. You could own the trademark in that you could own the copyright in the image.
[00:06:34] You could own the copyright in the, the actual sort of a graphic of, of a cute little thing. You could own the copyright in the way that a photograph was made of a mug with that on it such as. So you can wrap yourself in layers of protection. The flip side, as you’ve just mentioned is that you could be breaking about 10 different intellectual property laws at once.
[00:06:54] If you just copy somebody else. So again, it’s, it’s two sides. So.
[00:06:58]Jason: [00:06:58] I always encouraged people to just create their own unique concept, their own unique animal, their own unique, you know, named thing or, or a design idea. And so I think that’s, that’s, the encouragement is come up with your own novel, you know, intellectual property idea, if, and, and, and that’s the, that’s the best answer.
[00:07:16] And don’t. Make sales in the back of other people’s. So that’s one piece of this. There are a lot of other slivers of this or other topics to, you know, to discuss, but yeah. What else is top of mind for you on
[00:07:28] Michael: [00:07:28] the simple thing is this, I mean, get great photographs done for your products, which you absolutely should do.
[00:07:34] You spent money and time, and then I’ve just went through a process with a client who’s worth launching his first product. I try not to work with new clients because it’s exhausting because not only if you’ve got to teach them everything, but you got to do it as well, but we, we spend a lot of time and effort on it.
[00:07:45] It’s taken I 50 man hours in the end or personnel hours. Now that’s worth protecting for that reason. And it’s also worth protecting because it will help sell the product. You should copyright all of your images. And in fact, the whole listing, including the copy as well. On my understanding in the U S is that it’s the easiest way to do that to go.
[00:08:01] You can use a lawyer or you can go direct to the us copyright office. And for a couple of hundred dollars, you could probably protect the, the, intellectual property in a listing. Which for me sounds incredible value because great photographs will make a huge difference to the sale of a product over the period of its lifetime.
[00:08:17] And for me, that’s, that’s a no brainer to get that done because quite often, what you’ll find is that if people are copying your product, particularly in China, that you’ll see not only where they copy the product, which is a patent infringement, but if you don’t have a registered painting, that’s a bit hard to deal with, but they will often, yeah.
[00:08:33] Make it easy for you to take them down because they’ll copy your images as well. So quite often, even though what you’re concerned about is somebody on Alibaba selling your product or the product design you’ve uniquely made the way you might actually take them down is much more straightforward. You look at the images, you compare them to yours, you register a complaint with Alibaba and you say, here’s my copyright number with the U S office.
[00:08:53] And that’s a pretty straightforward route to just get that taken down.
[00:08:55] Jason: [00:08:55] Yeah. The, the international, challenges of this are, are hard to deal with. The reality for a lot of people is if you have intellectual property that you’ve, that you own, the simplest way to have enforcement occurs when you see the malpractice occurring on marketplaces, because the marketplace to the DMCA take down process is responsible.
[00:09:18] And so that’s why if you see people selling your stuff wrong, On eBay. And we, this is true for our business. We, we do this. This is, this is real for us, not, not theoretical. If you see people, selling wrongly on the big marketplaces, you, you can work with the marketplace to get it resolved. The bigger challenge is if you see people selling your stuff wrongly on their own website, or in ways that you can’t, easily remedy without like real lawsuits and that kind of thing.
[00:09:45] And then it always comes down to, a cost benefit analysis, like is the juice worth the squeeze to pursue this stuff? And it can be very hard, but if you have an IP attorney who can. Issue a letter for you to people that’s helpful, but there’s, you know, that’s the challenge. Now, there is a couple of categories of, copyright and intellectual property that are ungovernable or an, controllable, public domain is one.
[00:10:09] So things in the public domain and then utilitarian items. And so there are things that are, you cannot own a copyright for because they’re referred to as utilitarian, items. And so, you know, you just have to work with an IP attorney to understand those nuances. A lot of times people think, well, I can use public domain items and make money, and that can be true, but you want to look to see how that’s, doable and to make sure that actually there isn’t, claims made against those items already, but you’re not aware of aware of, but there are those categories where there’s more nuance and gray area where it’s like, okay, you know, the law doesn’t apply to these areas because of certain specific reasons their age or their.
[00:10:48] Categorized as utilitarian for the public good or that kind of thing. So
[00:10:52] what
[00:10:52] Michael: [00:10:52] I think’s interesting is, is, There are certain stages of business growth where certain things are appropriate. And what I think is that the startup mentality, which means you just do stuff there, just do it, quote unquote, where I’ve just infringed by the way, on a trademark, by, by Nike, by not asking them for permission.
[00:11:06] There’s an example of how easily it’s done. If you take that mentality at the beginning, you’ll get started. If you, if you go to lawyers and accountants, before you do anything, then you’ll probably scare yourself out of doing anything. However, if you’re serious about building a significant brand, I think what you’ve just said is really important that it’s very amateurish way of building a business to build on it’s a bit like buying a house or, or building a house online with you.
[00:11:29] Haven’t got a professional surveyor in it’s just it’s foolishness. It’s a foolish way. As a penny wise pound stupidest thing, as they say here now it’s fullest way of saving money. What you’ve just referenced by the way. I think we also discussed, which is. Enforcement it’s as, as Robert Wright said, and this is incredibly simple, but profound point is it’s one thing to create intellectual property in sense of registering things with the government.
[00:11:50] It’s another thing to enforce it. You see, I have to budget and make your, you get your head around and make your peace with the fact that you will have to enforce this stuff. If people are using images on eBay or Amazon is no good copywriter, you know, registering your copyright. If you don’t then have somebody look for it.
[00:12:05] Now you don’t necessarily need a lawyer for this. I know somebody who’s got a VA whose job is to simply spend their life on eBay, looking for people, copying their product images. And, sometimes on Alibaba now, although Alibaba is a kind of foreign entity, but it’s actually also got a us, company listed on the NASDAQ or the New York stock exchange.
[00:12:23] So from that point of view, they will actually respected. From intellectual property law, but you have to have somebody looking for it. And that is a job in itself. And you have to make your peace with the fact that when you get something wonderful, people want to copy it. And therefore you have to spend time, not only creating the legal right to do that, to defend yourself, but then you actually need to make the effort.
[00:12:43] So it’s a bit like having a, a law in a country. That’s no good without the police to enforce the law. So those are your police, you know, police in the internet for you. And that’s actually a big job that you need to think through. Yeah.
[00:12:53] Jason: [00:12:53] And, and sometimes you just realize that there’s areas of your business, that you have unintended consequences.
[00:12:58] Like, you know, our pixie Faire site has over 3000. Pattern designed, you know, patterns documented that’s all intellectual property. But when we first noticed that Chinese manufacturing companies were buying our patterns and then literally making the garments and selling them through their supply chain, we realized, oh, okay.
[00:13:17] So they’re taking our intellectual property and then monetizing it through their supply chain in a way that we’re not, we don’t, we don’t manufacture at scale. And that was an unintended, outcome for us. And we had to grapple with, do we care? Do we act, do we not act, do we benefit in any way? Do it, does that hurt us?
[00:13:36] Does it help us? So there’s nuance in this stuff. That’s sort of weird. So, okay. Let’s move on to the third and final category, which is really interesting one as well. And that’s the issue related to, Patents for your, your work. Right? And so let’s talk through that one
[00:13:51] Michael: [00:13:51] yes. So they seem great. They sound very expensive, difficult to get because a lot of people confuse two types of patterns or paint it. So the first one is a utility Peyton. That, that is very broad. And I understand it can take tens of thousands of dollars, maybe $10,000 and maybe up to five years to get.
[00:14:06] And, but it can last for 20 years. Have you managed to get one? That’s incredibly valuable that as Robert writes says, he’s never really seen anyone in, in the e-commerce space that he’s come across, do that. It may be there’s the odd person that does that, but that’s probably the reason most people are put off patents as an entire class.
[00:14:19] And that’s a shame because design patents are much easier to get. It can take, I understand in the USA one, one to one and a half years average, I suspect the UK is probably quicker just because us everything’s bigger and more complex. You’ve got the federal lawyer, you got state law. You’ve got goodness knows what, but it can cost really.
[00:14:37] The budget that, that Robert Wright will give is about 1500 to $2,000. So actually we talked about that before, didn’t we, that that’s actually, if you’re selling a product that can make you $60,000 in profit over the course of its life, that’s pretty well spent money, I think. But there is a. So, as you said, if you register a Peyton, what you’re basically doing is publicly registering and telling the world how to make something very deep in a very detailed way.
[00:15:02] So there is no point, not only is there no point in doing that, if you’re not going to enforce it in the way, we’re just talking about policing, but you’re actively creating a problem for yourself that you’re then going to have to go out and policemen force very rigorously. So really you need to decide if you’re all in or all out on that one, because registering a patient and then not, not only, you know, checking whether people are infringing it, but not actually being willing to do what you need to do to take them down, you’re actually damaging your business more than, than you’re helping it.
[00:15:28] So that was a very interesting new asset. I thought that, you know, in sexual property creation and enforcement, two sides of the same coin and the enforcement is just not something that occurs to you unless you’ve been through it. Yeah. Yeah.
[00:15:39] Jason: [00:15:39] Chris, my business partner, Kyle, has a brand. He runs with his, with his business partner and a guy named Gary and, did design patent work on their packaging actually for one of their products and because it was a really novel, packaging concept.
[00:15:53] And, you know, to me, as I think about that, first of all, it was really interesting packaging and, and it was, you know, unique to them and, and their category, no one else was doing it that way. But I think as I reflect on how they did that to me, the, the value is. In the total asset control that’s of what they’ve created so that they could, you know, in, in the future, sell that and say, yeah, we have a design patent on this interesting part of our, of our, product.
[00:16:22] And that makes them more valuable just that it makes their, if they ever wanted to sell that makes it, I think more valuable to say, yes, this is novel. This is interesting how we’ve done this. And here’s the design patent to, you know, to document the fact that it’s you, you know, ours that’s that to me is interesting work and, you’re right.
[00:16:41] I think it does imply an opening. To the universe in terms of how something’s been done. Of course, there’s beyond, you know, patents there’s open source work deliberately is done sometimes, in intellectual property space. You know, I mean, some people are open sourcing their code or their, you know, system or process for the betterment of humanity because they want to spur people on to do similar things.
[00:17:06]And so, I mean, that’s an intro. Angle as well. It’s where it’s like, you could get the patent, but you don’t, but yeah, open source it, meaning you put it all out there for free for any anyone else to see how you’re doing something. That’s a unique case maybe, but you know, Elon Musk is in that category in a few ways.
[00:17:21] And other people, Jack Dorsey is doing that with, crypto, businesses building. And I think it is a very interesting space to think through when you do want to have something be a secret or private or. Protected. And when you want it to be open and public and other people know what you’re doing, you know,
[00:17:38] Michael: [00:17:38] by the way, there’s the third category, which is when suddenly was protected and then it isn’t anymore, which is why fidget spinners became incredibly popular in 2016, because they’d been under a design patent.
[00:17:48] I think probably I’d imagined the utility patent because it’s quite broad. So, and then after 20 years elapses, and obviously the lady who did it either didn’t want to bother or died and her estate wasn’t interested or they didn’t know what they had. And that’s why suddenly everyone in the world studies selling fidget spinners.
[00:18:05] So that’s a, that’s a third version where somebody created it possibly for the betterment of humanity. I think it was for autistic kids, wasn’t it. And then it gets commercialized to the nth degree. But again, that kind of proves why. You want to have something unique and then protect it. Because actually that was an example of everyone copying something that was no longer unique because everyone had the right to do.
[00:18:24] They did because that’s what Chinese factories do. They all copy each other. And so that these twist of race to the bottom very quickly. So I guess that’s part of the, sort of, sort of drawing this to close it. It’s part of the mentality you have of creating something unique. Going to that trouble. And because it’s more, unique from the marketing perspective and then protecting it legally, which means you can take down to the competition.
[00:18:46] So anything that your ideal buyers can see your competition can see. And the only way to square that circle is really to intellectually property protect things so that your, your buyer, your competition can see this desirable product brand, color, scheme, whatever it is, photography, but they’re not allowed to copy it.
[00:19:06] And you’re willing to get your hands dirty and enforce that in whatever ways you need to, whether it’s just writing on the Amazon platform and getting it taken down very easily, or whether you even occasionally perhaps take somebody to court. So I think it’s as much a way of looking at business as it is anything else, really?
[00:19:22]Yeah.
[00:19:22] Jason: [00:19:22] What you just mentioned about the fidget spinners is interesting to me because it kind of creates the entrepreneurial mind in me says, you know, there are probably a lot of people who have done work to create original concepts to have them. Documented who maybe haven’t commercialized as well as they potentially could have.
[00:19:43] And, you know, the exploration of, you know, kind of the patent allows for a broader commercialization, but I would just say there are a lot of businesses. That are closed every year. There are a lot of businesses that are for sale. And if you’re thinking with your, you know, acquisition hat on, you really want to look through what’s out there and what could be potentially for sale that somebody just never re made revenue off of, but was actually an interesting or good idea that has maybe gotten the opera.
[00:20:16] You could have an opportunity to commercialize something where someone else. Wasn’t able to do it. Maybe they were the, you know, the mad scientist who maybe just didn’t have the sales and marketing chops. And you know, I think those are interesting opportunities as well. So a hundred percent
[00:20:30] Michael: [00:20:30] agree. I mean, I know a couple of examples is that one of the members of the mastermind Ashley is currently looking into buying a websites because he’s getting big into SEO and he’s starting to do that for the moments of the mastermind, but that’s part of then suddenly gets you into the intellectual property area very quickly.
[00:20:45] And as part of that, he’s starting to realize this the same thing as somebody else. I know, Dana derricks, who’s sold on Amazon for a while and was an Amazon copywriter, bought a formulation for some kind of animal kind of supplements. You happens also to be a goat farmer, go figure he’s a unique human being.
[00:21:02] And so he kind of knew a bit about that and he realized the value of that and that he knew about animals and how you should treat them. And that he can monetize that on Amazon. And I think he bought the formula for $3,000, which means he can go straight to a contract manufacturer. It’s probably got the right certification, everything else, if you’re lucky, which could cost you thousands to get and say, make this it’s already certified is unique.
[00:21:20] He owns the patent on it and the formulation, probably some kind of trade secret, I guess, but. Which way you can then use that to fend off the competition. So you’re absolutely right. I think right now is an amazing opportunity for that with a lot of businesses that have, they’ve built a lot of, whether it’s brand equity.
[00:21:37] So it could be a trademark, whether it’s formulations, like we just said, where they’ve got beautiful images, you could use them by the copyrights to that. There is an amazing opportunity there. If you, if you get outside the box and start, you know, really looking broader, I agree entirely
[00:21:49] Jason: [00:21:49] back to the title of this, you know, conversation, how to build an intellectual property empire.
[00:21:54] Some empires are built from scratch. And, novel, original creation, others, you just buy and buy and buy you acquire companies, even small companies that you can make big. And, there are many ways to approach it. So I think getting really good at this set of topics, the, the IP issues allows you the ability to then operate in the space, in one or the other or both, and, and, cinnamon.
[00:22:18] And I have purchased, I think, 12 companies now in the last two years where our purchasing was all about the intellectual. So that, I mean, that I’m speaking from, you know, I’ll ask 24 months of work, and that’s that, that is what we’re doing, in addition to creating our own intellectual property. And so that, that could be a whole different podcast,
[00:22:40] Michael: [00:22:40] but just about to say, you’re not getting away with that.
[00:22:42] And we’re going to definitely have to talk about that in survivors. You’re able, if you’re, you can’t, you don’t have to shoot me afterwards for revealing, you know, secrets under NDA. That, that sounds fascinating. So, absolutely right. That’s part of the bigger picture. And as you say, the more you look into intellectual property just to sort of bring this home really, the more exactly as you said, I think of it as a very overarching knowledge set and understanding that whilst you should never substitute for getting a good lawyer in, I think this is why I justify talking about it as a non lawyer, because as a, as the entrepreneur, I think you have to have a firm grasp on finance and that’s a really, grown-up people.
[00:23:18] They start off by thinking marketing’s everything. And then you realize you can sell them. Lots and lots of money and give a hundred percent of it to Amazon and your supplier and whoever else is involved or Shopify. And then the next level of sophistication is finance obsession. And the really smart people I know are obsessed with that, but where you are to get by is another layer of sophistication, I think, which is understand the legal thinking and understanding the landscape, which then I think goes into being entrepreneurial.
[00:23:43] It’s not just a specialist thing. You hand to a lawyer and forget it’s part of your strategy and are super smart. And I’m definitely going to really honor our off-air about those acquisitions. I had no idea you’d been doing that.
[00:23:53] Jason: [00:23:53] That’s super cool. That’s an interesting hierarchy. You just outlined. Yeah, that’s very interesting.
[00:23:58] So we, okay. We just unlocked several open loops for four potential. Yeah. Let’s wrap this up. So if you’re listening to this, live with us, thank you again, it’s always an honor to be able to chat. And for those of you listening via the podcast recording, we’re grateful for your subscribership and your reviews and all that stuff.
[00:24:16] We did run a contest in the month of July, and we are going to announce the winner next week in our live podcast. And we’re grateful for everybody who entered the contest. And so, and we, it’s fun and we’re going to probably continue to do that. So we’ll kick one off here, in the next, you know, a few weeks or so, we’ll see, but maybe we’ll skip the month of August, and, and go for one in September, but it’s a, it’s an honor to be able to have people participate.
[00:24:41] It’s an honor to people have, have people jump into our contest. If you’re listening to this live with us, of course, we’d love to have you check out the podcast on your player of choice, and subscribe, Spotify. Player of choice. I don’t know. Michael, do you have a player of choice that you use?
[00:24:54] We’ve never really asked. I
[00:24:55] Michael: [00:24:55] tend to use apple podcasts. I don’t think any podcast player has really cracked, the way that you discover things in a very good way compared to Google or anything really it’s. So, yeah, podcasts because I would kind of apple loyalist, but actually that, yeah, it doesn’t really matter.
[00:25:09] They’re all kind of the same. So I would say whichever system you’re on. We’d love to get you subscribe. Although I would just say from the selfish point of view, if you’re on apple podcasts, you can give us a rating with stars, which I don’t know if it’s possible in most platforms. So for that reason, I didn’t go into you to give us a rating on apple podcasts.
[00:25:26]Jason: [00:25:26] Awesome. As always man, fantastic conversation really, really loved this one. And thanks everybody for hanging out with us today and, subscribing and listening to the e-commerce leader with us. Thanks so much.
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