Intellectual Property in e-commerce

If you’re the owner of an e-commerce store, you deal with intellectual property everyday. However, IP in e-commerce is perhaps the most neglected, yet the highest value-bearing component of e-commerce. That is either because it is less understood, or the important connections to e-commerce are not apparent.

How is intellectual property important to e-commerce?

IP law protects against disclosure of trade secrets and, as a result, against unfair competition. That makes IP a business asset that is perhaps worth more than any tangible asset. This can be seen most clearly in relation to today’s technology and the digital economy.

Without IP practices and laws, hard work can be easily stolen and spread around the whole internet without paying the autor for their intellectual creations. Technical security is necessary to deter the less proficient thief and IP laws are required to deal with the more serious crimes.

Besides safeguarding your own IP, which we already covered in our previous articles, violating someone else’s intellectual property poses an equal risk when managing an online shop.

Violating someone else’s intellectual property

Your e-commerce website contains product description and images. Do you have the legal right to publish those descriptions and images? What about all those logos, videos, photos, icons, sound effects, and background music? They sure make your site more engaging, but, once again, do you have the right to use them?

We have heard about many small e-commerce entrepreneurs who disregard IP issues using the dictum whatever is available on the Internet is free for use. The fact that they seem to get away with such IP violations makes the rest of us wonder whether we are spending our money in the right way.

The fact is that when you are really small, you might be able to fly under the radar. But as you grow, your IP violations will stand out. If you are not a fly-by-night operation, you need to address IP issues seriously.

An intellectual property audit

An important administrative task for an e-commerce website is to take stock of your intellectual assets. Although these are intangible assets, they are often more valuable than the tangible ones. An IP inventory will consist of any designs, sketches, artwork, website designs, photos, music, scripts, unique alterations of your product, new processes developed for your services, etc.

You can start by listing any symbols, names, mottos, or slogans you use to identify your business. In some territories, you do not have to register to enjoy protection, but it is advised to register whenever you can.

Next, you should take inventory of your trade secrets. Whatever information contains commercial value, is not typically known, and the average Joe cannot just figure it out on his own, is a trade secret. You might not even be able to place a value on it, but you realize it has commercial value. Think customer lists, strategies, designs for technical improvement, etc.

Lastly, you should document all contracts that could have any sort of impact on the IP you have listed above. What we are talking about are contracts with design companies (think logos and websites), non-disclosure agreements, and agreements signed with any employees you might have. Do not forget those pesky licenses on the materials and programs you used to build your own IP.

Only by respecting IP and fostering the development of IP rights that are effective in fostering online trade can we achieve high-performing, competitive markets. The issue of IP protection in e-commerce is a complex challenge, especially when tackling the online sale of counterfeit products. This is why a serious approach is essential if we are to make a real difference, achieve mutual benefit and ensure that e-commerce continues to thrive.