Etsy is a place where creative people can go to showcase their talents and earn money from their creativity. It has grown at a steady pace has even the starting off point for many businesses to make the move from Etsy to an official online store based on customer interest. Because the online marketplace is an extension of creativity and intellectual exploration, many entrepreneurs and artists find themselves losing their brand presence just as they're breaking out of the gate. The intellectual property that is exhibited and sold using Etsy requires no less protection of items you would sell through a website or Amazon store.
What is Intellectual Property and How is it Protected
Intellectual property (IP) is a legal umbrella term that is used to describe those creations of the mind or intellect that can have potential commercial success. That includes fiction, art, designs, music, film, etc. Each “type” of IPhas its own types of protections. Trademarks protect logos, designs, or symbols, while copyrights protect expressions of creation like a song, work of fiction, paintings, etc., while patents protect innovations.
Copyrights are natural and exist from the moment the idea is expressed until 70 years after the death of the creator. Whether the item is registered with the Office of Patents and Trademarks or not, the item is wholly yours from its creation. These protections are added value. However, being registered certainly helps should there be a dispute over the creative expression in a court of law. The ability to sue and have adequate protections is very important when placing your expression in the public realm.
Etsy and You
Several Etsy merchants in Tennessee and Georgia have had their items taken down and their store suspended for copyright infringement on items their creators had no idea were copyrighted or trademarked. This often happens when a seller reports on a competitor who is doing well, ostensibly at the seller’s expense. There are copyrighted or trademarked items you may not even realize can be trademarked or copyrighted; making a painting of a green and yellow tractor, for example. It doesn't even have to say John Deere. They patented a specific shade of green and yellow for tractors. An “M” drawn in a certain way is trademarked by Madonna. Usually, Etsy merely shuts down your store, but depending on your sales, you can be liable for money damages. Conversely, the same can be true of you if you see your copyrighted expression being used by other sellers.
Although the legal principles may be straightforward, applying the law to the particular situation may be tricky and costly.
Etsy may sometimes shut-down-first-ask-questions-later. In Websters Chalk Paint Powder, LLC v. Annie Sloan Interiors, Ltd. (N.D. Ga. 2014), the plaintiff and defendant fought over the use of “Chalk Paint” in their respective logos and advertisements. Plaintiff sold its products on Etsy. The defendant sent notice to Etsy of the potential trademark infringement. Etsy’s response was to unilaterally take down the part of plaintiff’s Etsy store content relating to the Chalk Paint. The federal district court ultimately ruled that the plaintiff did not have jurisdiction over defendant in the lawsuit and dismissed the plaintiff’s lawsuit. Nonetheless, the defendant had lost sales and prestige from losing that part of its online store.
For further reference, you may want to check out Etsy’s information on copyright. Also, YouTube has a well known “Copyright School” that provides a good introduction+ to copyright in the online context.