Why Ebay doesn't sell anything
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Or: The reality of protecting intellectual property for an SME
The UK’s economy is driven by intellectual property, but it can be hard for SMEs in particular to enforce their IP rights when challenged.
Pure patent sales alone account for an estimated $10 billion plus internationally, but even bigger benefits are seen when companies build and sell the products they have designed.
Sadly, it’s not uncommon for a company that makes this move from design to manufacturing to see its products copied all over the world unbelievably quickly. This is something we’re only too familiar with at my company, Moixa.
One of the most annoying issues is that leading sites such as Ebay, Amazon and Alibaba apparently prefer to classify themselves as ‘listing sites’ that don’t actually sell anything – thereby sidestepping any responsibility for any suspect products that might be ‘listed’ on their sites.
Here’s a typical response from Ebay about alleged product infringement in their listings: ‘As you may know, Ebay does not manufacture, sell, or offer for sale any of the products referenced in your Notice of Claimed Infringement. To the extent such items may be listed on ebay.com, they would be listed by third-party sellers, not Ebay.’
This sounds like passing the buck, or rather cashing in the buck by charging listing fees, commission on sales, and even taking the payment. But at no point ever apparently being involved in the sale or offer for sale.
So now you know, such global websites don't actually sell anything. What unexpected good news for the high street. After all, website buttons and menus like Buy, Sell Now, Sell it for Me, Checkout and Shop Now aren’t apparently about selling or offering to sell anything, neither are website adverts, or newsletter offers, or emails for discount of the month. Websites aren't actually selling you things, they’re really just hyperlinks to third parties or something that at no point in the process has any responsibility or rarely a local taxable event.
Of course it then usually falls upon the company to spend precious time filing injunctions against individual listing companies (though websites rarely give you direct contact details – as that would be a breach of confidence), or sign lots of additional statements and legal documents per listing, to eventually see a take-down, only to see a similar listing pop up or automatically reappear later, causing the whole process to start again.
Perhaps the Chancellor should take issue with such web conglomerates that stand in the way of his vision of a bright future for UK manufacturing. After all they are often located off-shore, or round-trip their revenues via Ireland or some Nordic vehicle, so that very little money ever goes back to the treasury in the form of UK VAT receipts or corporate tax. This is even more annoying when such sites list products or adverts targeted specifically within a geography, such that the majority of adverts are only ever displayed using UK based physical hardware monitors or UK electricity. This domestic presence apparently avoids local tax, unlike paper-based material or bill boards that attract VAT revenue or tax on local profits. All sounds very Greek to me.
So should a UK company bother to make and sell any products if the investment and effort of manufacturing, protecting with quizzillions of costs on patent filing an prosecution, can be so easily ignored by companies, or passed back as a administrative burden to small companies?
Perhaps the most odd but revealing email we got once from a seller in Australia once, was ‘what gives you the right to own this product anyway?’ Then there was the ‘what is a patent?’ email from China. This is worrying after spending time, money and effort creating, designing and inventing products like USB Cell. We also once collected a three-page brochure at a Hong Kong tradeshow that featured a clone of our AA USBCELL battery alongside clones of iPods and iPhones – though we actually quite liked the juxtaposition, having just won an iF gold design award alongside Apple.
Lessons learned I suppose are: buyer beware, if you are a consumer – or as they used to say in the X-Files, ‘trust no-one’, not even so-called global sites. If you are the manufacturer, then perhaps think very carefully about whether it is worth manufacturing at all.
If you really want to protect products, then patents are the core foundation, but they are expensive and take years to grant. And as we’ve just seen, unless you’re a mega-brand they are difficult to enforce against the idiot, Del Boy or smaller lister on web sites. What is perhaps more effective are photographs and copyrights, which are faster to argue. A middle ground is design rights, or utility patents, which can be granted very quickly in Asia and can be of some initial use in stopping products at source, on export or import. This is partly because many fake manufacturers tend to copy everything about a product, such as the packaging, look and feel, and sometimes even packaging copy and brands. Another option is customs notices, as once executed the threat or risk to importers or exporters of losing entire shipments tends to flush out those unwilling to risk non-delivery.
But if ultimately you can’t beat the fakers, maybe it is better to help them. For some of Moixa’s more complex future products, we’ve considered publishing as much detail as possible in patents – including actual instructions on how to build products. When these are inevitably copied by some fraudulent or entrepreneurial factory in China, it effectively saves you the bother of making expensive tools or establishing manufacturing lines, as you could just negotiate with the factory as a supplier. After all, IP rights should at least protect exclusive sales in major markets and with major real-world physical store channels.
P.S. The US operates a so-called ‘safe harbour’ system if content is rapidly removed under DMCA (Digital Millennium Copyright Act), allowing a get-out-of-jail-free card for the site operator. If you persist on chasing, and double-tick all the paperwork, most global sites do eventually take down listings. I was pleasantly surprised today, after escalating concerns to eBay’s Trust & Safety team, that a real person actually phoned me back and managed to untangle some of the processes on using their automated VERO (Verified Rights Owner) service, allowing emails or online complaints, rather than antique fax and post use. So now we can happily go back to the daily space invader game of firing off take-downs against infringing listings.