What is VeRO, Ebay’s Intellectual Property Protection System?

I just got busted by VeRO, for using a trademark on an item that wasn’t produced by the trademark’s owner, Lego. I was in the wrong, and they were well within their rights to report it. What is Ebay VeRO?

I’m not a lawyer, so don’t construe this as legal advice. I just have some personal experience with some of these issues.

VeRO is Ebay’s way it’s defending trademarks. Trademark owners have the right to prevent competing products from using the trademark in listings.

My title included the words “Lego-like” to describe the item, because that’s what it was – some pieces that were compatible with Lego, but contained electronics to make the item light up.

Copyright and Trademark Violations

There are two categories of intellectual property that VeRO deals with: trademark and copyright.

I allegedly infringed a trademark, using a trademark to describe a product not made by that company. My use was in a gray area, according to When Trade Mark Use is Not an Infringement, but I’m not going to fight it.

Also, the existence of a compatible or comparable product is totally legal. Look at video game controllers for consoles, chemically similar drugstore-brand drugs, or compatible printer cartridges. The court said in Elecs. Corp. of Am. V. Honeywell that advertising with the competitor’s trademark is also legal.

The other type of intellectual property violation is a copyright infringement, where a company’s text or photos are used without permission.  This is actually a gray area, because the first sale doctrine allows you to post a photo of an item you are selling, to allow the commerce to happen — the photo would contain the copyrighted artwork on the packaging.  See Rosen v. Ebay, where a rights holder was not allowed to remove a listing.

The Digital Millennium Copyright Act

When the online bulletin boards, a kind of popular predecessor to the commercial Internet, were becoming popular, people routinely violated copyright laws by duplicating copyrighted material, both to pirate software, and to discuss texts. Copying couldn’t be helped, because the online medium operates by copying data, not moving it. (There is no way to move the magnetic particles that are the physical copy, into your CPU, and then over the wires and fiber optics, to deliver them to the reader. Everything happens by copying.) Additionally, the doctrine called Fair Use  protects speech about a copyrighted work.  So, initially, copying was allowed, except of material that explicitly disallowed copying in their contract.

The Digital Millennium Copyright Act (DMCA) defined laws to allow service providers to allow users to easily post materials, and allowed copyright holders to quickly demand removal of the infringing materials.  Prior to the DMCA, the copyright owner would contact the infringer, and tell them to take down the copyrighted work. The person posting the work could either remove it, or not, and if not, could face a lawsuit.

Additionally, anyone assisting in the infringement could also be sued, meaning an online service provider, like Ebay, could be sued.

The DMCA’s Safe Harbor provisions allow the copyright holder to demand that the service provider delete the files.  As long as the service provider does so within three days, they are free of liability.

VeRO Follows the DMCA Practice for Both Copyright and Trademark

Ebay’s VeRO allows an intellectual property owner to register with Ebay, and then report infringements of both trademark and copyright.  When the listing is reported, Ebay, acting as the online service provider, will remove it quickly.  This follows the DMCA law for alleged copyright infringement, but they also apply it to alleged trademark infringement, which is a different thing.

The Difference Between Trademark and Copyright

There are a lot of people online confusing copyright for trademark. Using the brand name is not a copyright infringement, it’s a possible trademark infringement.

A copyright infringement is when a copyrighted work, which is a specific expression, like a song, photograph, written work, or computer program, is copied without authorization.

A trademark infringement is using a trademark to confuse the buyer into thinking that you are selling something fake. For example, someone selling a fake Luis Vuitton purse is infringing a trademark.  Someone selling a fake Supreme branded shirt is infringing a trademark.

Someone selling the fake Supreme shirt may also be copying the artwork for the logo, and the graphic on the shirt. That would be a copyright infringement.  (Of course, Supreme famously uses other people’s work on their graphic shirts, so they are infringing other people’s copyrights.  Their red box logo looks like a Jenny Holzer artwork, so, the entire company is a little suspect, but, there you go.)

So What do Sellers do?

Avoid both kinds of infringement.

  • Don’t use a brand name unless it’s the brand name of the product being sold.
  • Don’t copy stock photos from some online department store’s website.
  • Don’t copy text from online reviews.

There are some gray area infringements that I see all the time, and are probably low risk. If you use the manufacturer’s text description of their product, I don’t think they would report you.  If you use the manufacturer’s stock photos, they may hold off on reporting you.  (If it’s a pre-owned item, you must use your own photos, of course.)

Both uses are copyright infringements, but the manufacturers aren’t complaining.

There are other sources of free text, however. Wikipedia is the best one.  They have descriptions of many products, and their copyright agreement allows replication and modification.

The other option is to learn to write quickly, and use brief descriptions.

Ebay sellers shouldn’t engage in inaccurately using trademarks. That only serves to dilute the brand.  On a brand-dependent marketplace, it’s a losing strategy to harm the brand.

My Other Removal

I’ve had two things removed. There’s the “Lego-like” item, above, and another was an “RC” plate that I associated with “Noritake”.  I don’t recall if the RC removal was an Ebay or VeRO removal.

The RC plate was also a gray area. When I made the listing, I said it might be from the same company as Noritake. That got the listing removed.

Later, I did more research, and found out, from a Noritake collector site, that “RC” was a mark that Noritake was using in the 1950s, when they had temporarily retired the Noritake brand, and shifted to using “RC” for Royal Crockery, during the occupation of Japan.

Noritake used the RC brand for domestic sales (within Japan), before and after WW2.  The company’s “real” name is Nippon Toki Kaisha, or NTK, but they have multiple marks: “Noritake” for sale abroad mainly to the United States, “RC” in Japan (and also abroad), and “NTK” and “Nippon Toki Kaisha”, and “M” for Morimura.  These marks were registered separately in different countries.

What about Fake VeRO?

Imagine you sell something from Lego, but  you are not Lego.  You could try to register as Lego in the VeRO system, and then report violations from competing sellers.

I don’t think that’s what happened, but it’s possible.

Brands Matter

In an online marketplace, a brand is a kind of proxy to represent quality. Long-term sellers should seek to preserve a brand’s value.

However, it’s also important to recognize that a brand name is a kind of intellectual property monopoly. The online sale of only Lego-made items under the “lego” keyword effectively closes off the online marketplate to Lego-compatible parts.  This is a kind of anti-trust issue, and the courts have said, correctly, that it’s a gray area, and it’s legal to make compatible parts for not only Lego, but all kinds of products that interconnect.

See Also

Online Retailer May Use Manufacturer’s Trademark…

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