EP #290] [ENG] - Why you must have a trademark & how to leverage patents - Jeff Holman

EP #290] [ENG] - Why you must have a trademark & how to leverage patents - Jeff Holman Unknown Speaker: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 2: Hello, guys. Welcome to another episode of the eCommerce Lab by eCommerce, the place where everything related to Amazon FBA, private label, and eCommerce. My name is Vincenzo Toscano, founder and CEO of eCommerce, and today we bring another special guest. His name is Jeff Holtman, and he's the founder and CEO of Intellectual Strategies, where they specialize on everything that has to do with the legal side of scaling a brand. We know that we always talk here sometimes about marketing and the branding, but at the end of the day, if all that is put on, but you don't have your brand protected, it can be very dangerous down the line. And we have seen that many times, especially the ecomcy brands that have put so much effort into creating their brand. And because they didn't spend time with experts like Jeff, then they have a very hard time. And that's why I wanted to bring Jeff to the episode today. I want to discuss around, you know, typical questions that Amazon sellers may have when it comes to protecting their brand. What are some of the best practices when it comes to moving forward to ensure that as you scale the brand, you don't encounter obstacles that can make your life very difficult. So Jeff, a pleasure to have you on the show today. How are you doing? Speaker 1: I'm doing great. It's my pleasure to be here. And if I can just say, first of all, Jeff doesn't sound nearly as fancy as So, you know, I might have to work on that. Speaker 2: Yeah. I think I need to put a patent on that. Good. So pleasure to have you, Jeff. I guess for those that don't know you, just give us a quick intro by yourself and your company. And then of course we dive into the topic. Speaker 1: Yeah. Let me go surface level. Cause there's a lot of twists and turns in my path that I've been on, but I, I basically started out as an engineer. I went to law school, worked on a bunch of patents and stuff for people, decided to go to business school because I wanted to work on broader types of things with my clients than just the invention. So now we've got a small law firm. We have what we call a fractional legal team that is essentially an in-house legal team for startups and scaling companies. And it's been a fun ride so far with a lot of neat little things that have happened along the way. Speaker 2: Awesome. So, yeah, I mean, as I was saying, and first of all, before I jump into the topic, it's so interesting that you as an engineer, I'm an engineer as well. I'm an aerospace engineer. Out of curiosity, what kind of engineer are you? Speaker 1: I am an electrical engineer. Speaker 2: Okay, cool, cool, cool. That's nice. Actually, it's funny. I was having a conversation with one of my mentors a week ago, and he was saying that usually the most successful businessmen are usually engineers, and then down the line they become entrepreneurs. So, you know, you are going for a good trade. Speaker 1: Well, I've enjoyed my path so far, for sure. Speaker 2: Cool. So let's dive into the topic, which is, you know, figuring out all the legal kind of sort of things of scaling a brand. I would like to start with, you know, some of the basics and then of course we can go into the more complex kind of areas of protecting a brand. I would say one of the first questions that people tell me when they start their business on Amazon is, You know, at what stage throughout their journey they should start diving deeper into, you know, having a trademark, having a patent, when they should start looking into protecting it. Because some people might say, I don't know if this is going to go, you know, into a big scale that might need some protection, or I don't know if I would like only to stay as a side hustler. You know, there's always that uncertainty, especially when you're getting started as an entrepreneur. But at the same time, I have seen also, unfortunately, the situation that If you don't take action early on, people can take advantage of you. So tell us what are some of those criteria or maybe some recommendations you would give to Amazon sellers to take when they're getting started with a brand. Speaker 1: Yeah, I'd love to. Let me back up one step from there because I kind of look at all this stuff in layers, right? You've got the patents and the trademarks of different layers of IP. You've got your own IP. You've got other people's IP. And so everything is kind of these layers. And so when I, when I first have conversations with clients, the first thing I want them to know about IP is that you can own your own IP, but other people have their own IP too. And so there's really kind of two sides to one, to the coin, right? It's how do I protect my invention so that, or my brand so that people don't come and, you know, leverage what I've built for their own I'm the CEO of Ecommerce. But at the same time, how do I make sure that I'm not accused of infringing somebody else's brand and leveraging their brand and then them trying to shut me down? Because we see both sides of that, right? People launch products and get shut down and people launch products and then they get overtaken by competitors because they haven't protected themselves. So important to look at both sides of that. Speaker 2: Yeah, I would say actually that's a very interesting point that you bring to the table A lot of times people think that the legal side of things is only to protect yourself, but sometimes out of, you know, not because you're doing something with bad intention, but because you just don't have the knowledge around that specific category or what some of the competitors are doing. It's very easy to, you know, break essentially some other trademarks or patterns because you just are not aware of them. And that's where things can get very messy as well. So I guess we can start with that one because a lot of people actually skip that step. When getting started, which is making sure they're not infringing in other people's trademarks and patents. So I guess what is usually your recommendation as a first step when you're looking to get started? Speaker 1: Yeah, so I often have people call me. We're gonna talk about a few steps down the line. So I'm glad you're asking about the first steps, because the people who call a few steps down the line, they're calling because they've already got a problem, right? That's when they reach out and they say, hey, I found this piece of jewelry or I found this toy or whatever, and I've been selling it, I've been making a lot of money, but now I've got someone who's sent me a letter saying that I'm infringing and they're shutting me down and I can't get my store back or all those problems, right? And so if you do this upfront, what you wanna do What types of product are you looking to launch, right? And then does that product... Here's kind of one of the keys. If you have found your product by going out and finding the most successful products out there, you definitely want to go and see if that product is covered by a patent because a lot of those products are covered by patents. When the copycats come up, and if you're one of them, these guys go out and they just shut everybody else down. And so that's on the patent side. And on the trademark side, the same thing can happen. And of course, patents are kind of the protection for the thing, whereas trademarks are protection for the branding, the name, the logo, things like that. So same thing on the branding. When you go out and you say, hey, I'm going to start my search selling this product, you know, if you're buying somebody else's and reselling it under their brand, that's one issue. If you're buying a product and then putting your own brand or label on that product, you want to do what we call a clearance search. And this is good for both protecting your own brand, but also Investigating whether or not you might be accused of infringing somebody else's. You want to do a clearance search where you say, if I launch this brand for this product, is there somebody else in this same market, this jurisdiction that is potentially going to come after me and say that I'm infringing? So a little bit of searching, a little bit of research can go a really long way, especially when you're launching with a $100,000 purchase of inventory or whatever it might be. Speaker 2: Yes, I think that that search kind of service that most people should be taking is something that I recommend so much because unfortunately it once happened to me. I got into a trendy product and I thought like, yeah, I'm killing it. I'm making so much money and invest so much money in inventory and everything. And then it happens a lot. Usually these trendy products or things are very innovative. Usually it's something that, yes, for a few months you're going to make money, but then the guy that actually invented the product is going to come against, you know, all these sellers and it can be very costless. So very good recommendation when it comes to that. I guess out of curiosity, when you do these searches, because I know some sites might have this question, Is this a search that usually you recommend for people to do only under specific kind of country that they're looking to sell? Or is it recommended to do like a global kind of search because maybe you're looking to expand and there could be a roadblock down the line? What is your recommendation? Speaker 1: That's a great question. We typically want to know with our clients, you know, what is your roadmap? Where are you headed? If you're going to sell just in the U.S., you know, we have a lot of U.S.-based clients who say, if I can just sell in the U.S., I'm fine. In that case, we'll probably just look at the U.S. markets. But if they're manufacturing overseas, we might look at the countries where they're manufacturing. Or if they're overseas people, we have a fair number of people who come to us for their U.S. IP and business needs, and they're from, you know, New Zealand or Australia or places like that. And so if they're coming from overseas and they're planning to sell, well, I'm going to sell in the U.S., I want to sell in Canada, and I want to sell somewhere else. You really want to look at the places where Your product or your brand is where it's made, where it's shipped through, and where you're ultimately selling it. So those are kind of the key places. Speaker 2: Nice. Now, when it comes to, we briefly mentioned trademark and patents, right? So I know when it comes to usually registering a trademark tends to be sometimes cheaper than having a patent registration. But I would like to briefly touch on, you know, what is usually The priority here in terms of decision-making because I don't know what are very important, right? So when it comes to a practically having like I guess a timeline in terms of should I do this first or this first? What is usually the chronologic order like where you always first for the trademark because that's the image and then focus on the pattern or vice versa like is there like a right way of doing it or it doesn't really matter when it comes to it? Speaker 1: There are a lot of ways that people will do it depending on their own circumstances. There's not necessarily a right way to do it but there are some factors you want to keep in mind. Let me add one more element to this because when we say patents, there's really two types of patents that are applicable to a lot of ecommerce products. You've got your utility patents. You've got design patents that protect the structure and the function of something, but then you've also got design patents that protect what we call the ornamental design or really the look of the product as opposed to how it's made and how it operates. And so you've got two types of patents and then you've got trademarks that protect the brand. Here's how those differ, right? There's not a right way or a wrong way, a right chronology for filing these, but what you need to keep in mind is that on the patent side for both utility and design patents, You have some, some deadlines, right? Because as soon as you disclose your invention, and that means you tell people about it, you publish it online, you sell it on Amazon or on your own website, you offer it for sale, even any of those things act as what we call a bar of it, meaning you've told the public about your invention. And at that point, the government has no incentive to give you patent rights and protect it because you've already disclosed it. And that's what they're really trying to get you to do. So filing for patent protection before you do any of those disclosure types of events is super important. If you don't, then you're going to end up in a lot of countries just being prohibited from getting a patent because the second you do that, These countries say, nope, that's a bar event, meaning you can't file a patent in this country. Some countries like the US, they'll let you do a disclosure event and then you have like a 12-month grace period. So you can kind of get back into the process sometimes. But for a lot of our sellers, that's not what they're intending to do. They want to maybe start in the US and then expand into other countries. So they want to preserve all their rights. specifically, the opposite because on trademarks, you might want to get your application filed sooner and you want to do your clearance searching sooner, but you don't necessarily have to file the application because of the same reasons that you would have patent. You actually, in order to get through the entire trademark process in the US and some other countries, you have to show that you're already using And today we're going to be talking about how to get that branding, you know, logo mark in commerce before they'll finish the process for you. So, so using it sooner, using your, your branding elements, your branding assets sooner is, is, is a lot more acceptable than disclosing your invention sooner. Right. And so those, those are kind of the two key elements for, for the difference between patents and trademarks and what you might think of when you're saying, well, when should I do these? Speaker 2: Yes, nice. I think on the patents, I think that's very good that you mentioned that because I have seen certain scenarios where people have done things with even Kickstarter or things like that and they show the product and they start doing crowdfunding and they think they can patent it afterwards. And a lot of those ideas, unfortunately, on Kickstarter get stolen because they don't patent it soon enough. And it's something that you have to be very careful when it comes to that. So thank you for pointing that out. And now you mentioned design pattern and utility pattern. And I would like to go deeper into this because from what I've been here and what I have experienced, it seems like design pattern, if your competition is very clever, like they can get around very fast. It seems like it doesn't protect you as much as utility. So what is your point of view on that? And what are some of your experiences there? Speaker 1: Yeah, you're right in that design patents are typically more narrow. They're interpreted more narrowly than utility patents. That's because the way that you, what we say claim your invention in a design patent is very different from how you claim your invention in a utility patent. In a design patent, you actually draw pictures, right? Or you present perhaps photos. You present some images. What's that? Speaker 2: The model. Speaker 1: The model, yeah. You show the front, you show the back, you show top, bottom, sides, and you show what the visual appearance of your device is, and then you elect which parts of that appearance you're actually claiming because you show some solid lines, you show some dotted lines, and you get to pick which parts of those you're claiming. In a utility application, while there are oftentimes drawings, Those drawings are just to help explain what the invention is, but the actual claims, the legal claims you're making, don't have anything to do with the drawings directly. What they have to do with it are these written, kind of really formalistic, legal-sounding claims. You know, I claim an apparatus for, you know, whatever, and the apparatus comprises this and this, and that's connected to that, and it's, you know, and so you're using these words to claim your invention. The effect of that is when you have these words, there's a lot more room for interpretation as to what those words mean. So utility patents, in effect, they're more expensive to get. They're harder to litigate and enforce against other people. But if you do go down that path, you have oftentimes kind of more Flexibility is to how you say that your patent covers this other product. Whereas a design patent, it's a picture. Does this picture look substantially similar or in legal terms, confusingly similar to someone else's product? If it's confusingly similar, then you could potentially shut them down for infringing your design patent. So they're very different. And a lot of times people will get both, right? They'll get a utility patent. Speaker 2: I was going to ask you that, if you can have both in the same product. Speaker 1: Yeah, you can. And the real difficulty with this, which I'm sure a lot of your listeners deal with, is budgeting. It's like, well, okay, Jeff, you want me to get a trademark, you want me to get a design patent, you want me to get a utility patent. You just want to charge me $30,000 to go through. And I haven't even made a product yet or sold anything. And I get it. You've got to do what's best for you. The business and making money has to be higher priority than the legal. All of the IP stuff that we do, for the most part, is speculative. We talk about gambling or whatever. We talk about investing in stocks and hoping that they go up in value. Patents and trademarks are very similar. There's a very speculative nature because you have to write and file and commit to what your invention is and hope it works before you even tell anybody and before you determine if the market wants your product. And so it's a tough, you know, I know why it works that way, but I also understand why it's kind of this tough, expensive decision people struggle with a lot of times. Speaker 2: Yeah. Now, another thing I would like to bring to the table is I have heard from some people when they do patents in the U.S. that then sometimes there could be, you know, a competition, specifically sometimes you manufacture, let's say in China, that even if you have like a patent in the U.S., a design or utility patent, they could be very sneaky and then also do a patent in China, something like that, and maybe sometimes block you from manufacturing in China. I'm here to talk to you about unblocking operations. I want to bring that to the table because I know a lot of Amazon sells manufacturing in China as well. So have you experienced that? And so what is your recommendation to combat this kind of issue? Speaker 1: Yeah, I've seen a little bit of that. It's not very common, but when it happens, you do feel like you're being held hostage. And it could happen with the patents. It could happen with trademarks and other things, right? It could happen because you haven't put the right in an agreement in place with your with a trading company and not directly with me. All these things could play into scenarios where somebody in China says, I'm going to file a patent and then I'm going to, if you don't continue working with me, I'm going to sue you for infringement or I'm going to file a Chinese trademark on your US trademark. And same thing, if you don't manufacture with me, I'm going to shut you down in China. You have to go somewhere else. So it does happen. It's very rare. Well, I say it's very rare. It's very rare that you hear about this. It happens sometimes. It's not the majority of times, but when it happens to you, it means the world because, you know, your business gets put on hold. That's why there's a bunch of other kind of business aspects to setting up these relationships in China that go beyond just the legal. And you need a lot of other experts, perhaps people in your network and your audience who can step in and be like, well, let me tell you how to find a trusted source so that these legal issues are less likely to happen. Speaker 2: Yeah, yeah, the reason why I wanted to bring the initial example to the table is because I know when it comes to patents and trademarks, sometimes they're not global coverage. So maybe we can use this initial example to start a conversation, like how much protection you get if you get, let's say, a utility patent or a design patent in the States. Does it only protect you in the States or you can enforce this in other regions, for example? Speaker 1: Yeah, great question. The patent systems are jurisdictional based. So every country and sometimes regions of countries have patent systems. And in order to get rights in one country, you have to have a patent in that country. So I can't take my patent in the United States and go enforce that in China or Vietnam or Mexico or Canada. Right. I can only now I can use it to stop people from making, selling, using, importing into the United States. But that's the extent of it. So There's all sorts of systems, a couple of different kind of formal systems that have been adopted over the years. There's something called the Patent Cooperation Treaty where several countries, not all of them, but many countries have said, okay, we're going to all adopt this treaty and we can then recognize that a patent filed in the United States can be used to then launch a patent, a corresponding patent in another country, for example. But you still have to get the patent in China. You can't just use the US. So we have a lot of clients who, in addition to saying, I need to file a utility or a design patent or a trademark, I then need to link that U.S. application to a Chinese application. And now I have to get a translated version of my U.S. application in Chinese and pursue that there. And so it kind of, you know, it becomes this web or this system of IP, these layers of IP. And so you have to be very strategic because It is expensive. I've had clients in the past, they're like, Jeff, I want to protect this thing in the whole world. I'm like, no, you don't. The biggest clients, when I did patent work for IBM, IBM would choose, for their most high priority patents that we worked on, they'd choose two or three countries where they wanted to protect that, not 25 because each country charges you for the process. And then a lot of countries outside the United States charge you every year just to continue to have that. It's called an annuity. They charge you just to continue to have that active. And so the costs just skyrocket if you do that. Very fast. Yeah. Speaker 2: Okay, cool, cool. Now, I guess to start coming to a conclusion on today's episode, what other things besides trademarks and patents may you like to bring to the table as a recommendation, as an insight, anything else you've been seeing in the space that you feel Amazon should be aware of? Speaker 1: For what we do with a lot of clients, those are the major points. We see a lot of clients who we're helping them on the business side where they're finding investors and they're getting partners or founders and they're working together. I think maybe related but outside of Amazon is a lot of your vendor agreements. That's where you want to be really careful with those because we've seen vendor relationships that Just like getting shut down on Amazon, if a vendor relationship goes south, goes sour, you can really be shut down, impacted quite a bit. So not specifically Amazon, but very related. So we help people with kind of start to finish in their business, but from an e-commerce standpoint, those are The IP at the Amazon, on the Amazon platform and the brand registry, things like that. That's probably the main point and the main kind of powerful lever that we see our clients use. Speaker 2: Awesome, Jeff. So it's been a pleasure to have you on the show. Thank you so much for your time. And I'm sure there's so many people that most likely want to reach out to you, have a more in-depth conversation. So tell us how people can find you and get more in-depth with this. Speaker 1: Yeah, thanks for having me. I've enjoyed the chat. We do a lot of free strategy calls for clients. Just check out, see if this is something that's good for them, good for us, if there's a good working relationship to be had. So if people are interested, they can go to find me on LinkedIn or find me on my website. Intellectualstrategies.com and you can see my calendar and you can sign up for a free 30 minute strategy call. In that call, we'll talk about your business, talk about what you're doing, maybe what messes you've made that need to be cleaned up and talk about, kind of roadmap out your big major business milestones coming up and which legal types of things you should be thinking about with those major business milestones. Speaker 2: Awesome, Jeff. So, thank you so much. I'm going to put all the information for people to find it and it's been a pleasure and hopefully I see you soon. Yeah. It'd be great. Speaker 1: Thanks so much, Vincenzo. Speaker 2: Bye-bye. Speaker 1: Thank you. Thanks for listening to The Ecommerce Lab By Ecomcy. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify, or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? Visit our website at www.ecomcy.com where you can get your first consultation for free or find us on Instagram, Facebook and LinkedIn at Ecomcy.