Christopher Heer
November 19, 2020

Ecommerce Marketing Strategies That Will Not Get You in Trouble With The Law

Don't Fall Foul Of eCommerce Marketing Law

The Internet is No Longer Lawless

Online commerce is the new norm and every business wants in. However, businesses looking to expand their online presence must be familiar with how intellectual property rights exist online and how some online marketing strategies are regulated by anti-spam legislation. Falling foul of the law, even innocently, can land you in a heap of trouble.

How Do I Avoid Infringing Intellectual Property Rights?

Intellectual property rights include:

  • Copyright (for written materials, drawings, and computer code)
  • Trademarks (for brands, logos, words, slogans, and jingles)
  • Patents (which protect technical inventions like machinery and pharmaceuticals)
  • Industrial designs (for visual features of shape, configuration, pattern, or ornament or any combination thereof)
  • Trade secrets (for information known only to select individuals), among others.

Consider Whether Your Promotional Materials Use Copyrighted Content That It Does Not Own Or Did Not Acquire a License To

Copyright protection is created automatically in original creative works, and the registration of copyright provides evidence of copyright ownership. When developing any online marketing materials, it is important to ask who created the literary, musical, and artistic works that will form the foundation of your online presence.

Do you have in-house artistic talent, or did you hire, say, an external graphic designer? Especially in the latter case, it is important that the language of the contract governing the relationship unequivocally assigns copyright or sufficient use rights to your business. Otherwise, the use of such literary, musical, or artistic works may infringe copyright and you may be liable for monetary damages.

Also, consider that it reflects poorly on a business’s online reputation when prospective clients recognize copyrighted content as belonging to someone else. That is, infringement can also damage your reputation in the market with consumers.

Consider Whether Your Marketing Strategy Incorporates Trademarks Owned by Other Parties.

Trademarks are materials that identify the source of a product or service and which protect the market reputation of the owner. Conversely, trademarks protect consumers from being confused as to whether a product or service came from the lawful owner of the trademark, or that of a competitor who is looking to piggyback off of the owner’s reputation.

For example, counterfeiters may use the trademarks of high-end fashion brands like Louis Vuitton to help facilitate the sales of inferior products to unsuspecting purchasers, including online retailers looking to sell brand name products.

While prudent shoppers may be able to differentiate between a genuine and fake product from an in-person inspection, checking whether an allegedly brand name product is legitimate is especially difficult where the only point of contact with a supplier is online. Consequently, it is important to thoroughly vet any prospective business partners to ensure that any products or services they offer are, in fact, genuine.

Consider Whether Your Marketing Materials Inadvertently Disclose Confidential Information

Confidential information can take many forms. To start, it is helpful to consider whether your business is privy to any confidential information that has commercial value.

This can include:

  • A list of suppliers that offer preferential pricing
  • The finer details of a business solution your company has either created in-house or purchased from a third party
  • The personal information of your clients.

At times, it may seem advantageous to use these types of information in online promotional materials to help persuade prospective customers to choose your products or services over a competitor’s.

However, it is important to understand how the commercial interests of third parties may be involved.

For example, publishing pricing information that details the pricing model of one of your business partners can inadvertently harm the ability of that partner to negotiate fair prices for their products or services in other transactions.

Non-disclosure agreements (NDAs) and privacy policies are widely used to inform parties to a transaction of what uses of confidential information are permissible and impermissible, and what legal consequences follow from misuse.

It is also important to review any laws applicable to the personal information your business collects and uses in its day-to-day operations. Some examples of these statutes include the Personal Information Protection and Electronic Documents Act (PIPEDA), the European Union’s General Data Protection Regulation (GDPR), or the Freedom of Information Act in the United States.

Operating Outside the Scope of Anti-Spam Legislation

In addition to understanding intellectual property rights and avoiding their infringement, it is crucial to understand anti-spam legislation and how it governs your eCommerce marketing strategy.

For example, Canada’s Anti-Spam Legislation (CASL) aims to stop harmful eCommerce marketing practices that:

  • Distribute unsolicited electronic messages (i.e., messages that the recipient has not provided consent to receive)
  • Distribute messages that do not adequately identify who sent the message or that do not set out information enabling the recipient to readily contact the sender
  • Distribute messages that do not provide an unsubscribe mechanism
  • Alter transmission data
  • Install computer programs on another person’s computer system
  • Cause an electronic message to be sent from another’s computer system
  • Aid, induce, procure, or cause to be procured any of the above, or
  • Do not adequately describe the purpose for which consent is being requested from a person or which does not clearly identify the person seeking consent.

Avoid the Pitfalls

Overlooking whether your marketing materials only use lawfully acquired intellectual property risks infringement, which can lead to paying monetary damages to the intellectual property owner in excess of the cost of lawfully acquiring use rights. Anti-spam legislation is similarly targeted at curtailing other bad marketing behaviors under the threat of monetary fines.

Consequently, researching and understanding how the law governs your marketing strategy is paramount in avoiding an ongoing risk of legal trouble. And being proactive rather than reactive in your investigation can help your marketing team proceed with confidence.

This article was co-authored by Christopher Heer and Dominic Cerilli

Christopher Heer is the owner and founder of Heer Law. He is an intellectual property lawyer, registered patent agent, registered trademark agent, and is also certified as a specialist in intellectual property law (patent) by the Law Society of Ontario. He believes that intellectual property rights add tremendous value to businesses by enabling them to raise capital, build asset value, and grow faster under the protection that these exclusive rights give them. You can follow or tweet him @heerlaw

You may also want to read: Be Bold: Key Strategies to Secure and Protect Your Start-up’s Brand

Dominic Cerilli pursued a career in law to help innovators protect and commercialize their IP business assets in an increasingly knowledge-based economy. As a former scientist, Dominic understands the importance of not only generating new and innovative creations, but also identifying value-generating IP and leveraging a business’s assets to attract investors, generate revenue, and grow one’s business.

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