The Cold, Cruel World of Selling Online: How to Keep the Boy Bands at Bay

As sales at smaller, niche-oriented online retailers continue to grow, above-board online retailers must carefully navigate the treacherous waters of intellectual property infringement. By asserting broad and vague intellectual property claims, aggressive boy bands, TV and movie stars, and the media giants that promote them can crush an entirely reputable business that may be using their likenesses. A small amount of up-front preparation can help a viable business avoid being bled to death by baseless litigation.

Statutory damages relating to copyright infringement can be as high as $150,000 per violation, but are much less if a court finds that the infringement wasn't willful. The Online Copyright Infringement Liability Limitation Act (OCILLA), part of the Digital Millennium Copyright Act, provides a safe harbor under which companies meeting certain criteria can avoid liability for copyright infringement relating to materials posted on their websites.

To qualify, companies must have explicit OCILLA statements on their websites, file registration statements with the U.S. Copyright Office and not have actual knowledge that the materials on their sites are infringing. If a company meets these requirements, the third party alleging infringement must follow very specific notice procedures before the company has to respond and, significantly, must identify where, specifically, on the company’s website the allegedly infringing materials reside. This limitation can shift a huge portion of the administrative burden to the party alleging infringement and greatly limit the ability of an aggressive plaintiff to cripple a company by inundating it with costly and time-consuming demands.

Similarly, damages for alleged trademark infringement and use of name or likeness can be limited if an online retailer can demonstrate that its role is more passive than that of a traditional company. For trademark purposes, the “innocent infringer” defense can eliminate the possibility of monetary penalties and limit remedies to an injunction on future distribution of the materials. For personality purposes, a company can reduce risk of infringement by structuring operations to conform to the “single-publication rule.” In both cases, determinations are highly fact specific. Understanding the dispositive factors can go a long way in protecting a company from future allegations of infringement.

Conducting a vibrant online business while, at the same time, shielding oneself from claims of intellectual property infringement is possible. Consult legal counsel, create a specialized monitoring and compliance plan, and stick with it closely. The online world can be your marketplace and you can keep the boy bands and starlets at bay.

Daniel T. Janis, Esq., practices business law at Davis, Malm & D’Agostine, P.C. Daniel can be reached at djanis@davismalm.com.