Tuesday, June 5, 2007

What Every High Risk Merchant Should Know About Intellectual Property Rights

Intellectual Property Rights: An Age-Old Trouble

Legal battles are not uncommon. Throughout the history of mankind, people have fought for their intellectual property rights and won and lost and paid for damages. In fact, its history dates back to the medieval ages when Gutenberg has invented the printing press. During this time, social information is distributed exclusively by the scribes. Gutenberg has opened a world of possibility when it comes to public distribution of text.

As mass reproduction of books could not be curtailed, the British government during that time (circa 1500s) sought solace with regulating it through license. Eventually the writing and printing of books became a liability for the authors whose names were bound on books as copyright. The true reason is to control the content of material being published, not to give credit to the author. The Licensing Act became obsolete and it was replaced by the Statute of Anne, which turned the tables for the authors. Authors were then given the exclusive right to publish under their own copyrights for up to 14 years and renew it. It has become the precursor of modern intellectual property ownership that we know today.

What You Can and Cannot Do

Now, in the world of online merchants, owning intellectual property rights is considered one of the most troublesome issues. Most local merchant account providers would not admit violators of intellectual copyright to own even a low risk merchant account. The reason is obvious enough. Selling digital items may cause infringement on merchants' intellectual property. Digital items fall into high risk merchant account category as the products are intangible and are likely targets of fraud. This is the reason why intellectual property right ownership is something online merchants should never take for granted.

The good news is that as long as your products and services are registered as copyright, trademark, or patent, you can legally sue anyone who infringes on your intellectual property rights. This can be done under certain provisions, of course. However, it may not be 100% successful. As infringement of digital property cannot be avoided, many so-called "violators" may still get away with it. Consider the following:

  1. You cannot sue if the other party used it for non-profit or educational purposes.

  2. You cannot sue if the copyrighted item you sell doesn't fall on the level of worthiness. Some items are more "copyrightable" than the others.

  3. You cannot sue if the other party merely used an excerpt to illuminate a matter (if it was text, e.g. e-book), or simply did not use the entire item for their commercial purpose.

  4. You cannot sue if the copyrighted item posed a neutral effect on the market in general.

What do these all mean for the high risk merchant? Simple. You can still sell digital items, have them copyrighted, and sue if certain provisions have been violated in your intellectual property rights contract. But the key is to prevent rather than find a cure. It would be distressing to pay for lawyers if you soon find out that the website who copied your Biological Warfare e-book only took an excerpt and used it to teach junior high school students. Preventing the infringement in the end is more cost-effective than going through court sessions and paying exacting attorney fees.

Fixing Before It Breaks

Prevention will require you to go through several avenues, depending on the product or services you sell. High risk merchants should be aware that digital items have special ways to be protected. E-books have to be registered for a copyright. Instead of pushing for sales on downloadable material, it would always be better to ship them via CDs. It then becomes less likely for fraud to happen.

Brand names have to be registered for trademark rights. If you own an imaging company that sells stock photos, it would be wise to put watermark seals when you publish them on the web. When other websites use your photos by the bulk and post them without your permission, you can legally sue (as long as you have registered for the trademark rights).

Music and videos have to be registered for copyrights as well. Tangible products such as a new adult toy with unique features must be registered under a patent right. Adult products and pharmaceuticals always fall under the high risk category. Fanatic high risk merchants may even employ a commercial anti-copycatting and security software.

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