Etsy, the online e-commerce website focusing on handmade goods, crafts, and vintage items, has continually come under fire due to incessant copyright infringement found in its marketplace shops. This shouldn’t come as a surprise. Etsy has over 5 million sellers that are mostly individuals or small businesses that don’t have legal counsel that they can regularly consult. As such, many Etsy sellers are unaware of copyright laws or neglect to do their due diligence when purchasing wholesale goods from companies located in countries that don’t enforce copyright laws, such as China.
The result is that many Etsy stores contain items that are likely cases of copyright infringement, with many artists claiming Etsy sellers are ripping off their designs.
Here is a typical scenario:
An artist is surfing through Etsy looking for a Mother’s Day gift when they are confronted with their own artistic work adorning a t-shirt, a hat, or a nice fluffy pillow. Outraged, the artist contacts Etsy to ask for the removal of the item. Etsy complies, sometimes even removing the store due to its many infringing items.
The artist, knowing that there could be more infringements, scours Etsy to find similar items being sold by other Etsy sellers. The infringing products are removed but pop up later by new sellers, or are added again by existing sellers. The artist continues to request removals but it is like playing a game of Whac-A-Mole, leaving the artist feeling helpless and frustrated.
Unfortunately, while Etsy has become more aggressive in dealing with unscrupulous sellers, the Etsy copyright infringement problem is far from resolved. Is there any recourse for the content creators to stop these infringements?
Is Etsy Safe?
First, to better understand Etsy’s responsibilities regarding infringing content on its site, let’s review the basics of Copyright law and the rights given to creators of artistic works. Copyright is available for any :
- Original works of authorship,
- Fixed in a tangible medium (meaning more than just an idea in your head) and
- with a minimal degree of creativity.
The bar for the degree of creativity required to receive copyright protection is set pretty low, so generally, as soon as your creative idea is made tangible, whether as a painting, photo captured on a camera sensor, or even a drawing on a napkin, the artist has automatic copyright protection for the work.
Registration with the U.S Copyright Office is not required (although copyright registration does provide many benefits), nor does the work need a © symbol or other ownership markings on the work.
As the copyright holder, U.S. Copyright Law affords certain exclusive rights regarding the use of artistic work. Only the copyright holder can decide who can:
- reproduce (i.e., make copies of) the work;
- create derivative works based on the work (i.e., to alter, remix, or build upon the work);
- distribute copies of the work; or
- publicly display the work.
More importantly. copyright is a “no-fault” law, so if any one of these exclusive rights is violated, it is considered an infringement. The reasons for the infringement have no merit. Even if the Etsy seller legitimately purchased the items from a wholesaler or distributor, if they show the infringing artwork in the Etsy store, they are infringers.
The seller’s lack of knowledge that the goods were infringing doesn’t matter. So while artists often disparage these sellers and crooks and thieves, very often, they are actually unaware that they are infringing, having purchased the goods in what they presumed was a legal manner from a reputable seller.
Can I Sue for Copyright Infringement?
There are three potential defendants, 1) the Etsy seller, 2) the wholesaler where the seller bought the goods, and 3) Etsy However, there are a few things that make suing any of these parties difficult.
Suing the Etsy Seller
While anyone can initiate a lawsuit, it may be difficult to sue an Etsy Seller. First, the lawsuit may not be profitable. In a standard copyright infringement lawsuit, the copyright holder can only receive the profit from the sales made by the seller. Most Etsy sellers don’t sell in high volume, so there is often little profit from infringing goods. Plus, you won’t know how much they sold until you initiate legal action and request the sales figures as part of the lawsuit. So the copyright holder would have to spend money on a lawyer just to find out if the lawsuit is even worth it.
For example, let’s say you discover someone selling your artwork on a t-shirt. Each shirt sells for $20, and you hire an attorney to initiate a lawsuit. Just to get to discovery where you can find out the sales figures could cost several thousand dollars. Let’s say you find out that about 300 t-shirts have been sold. $20 x 300 = $6000, which could potentially be yours. But since you are only entitled to the profit, you have to remove the costs from the $6000. If each shirt costs the seller $8, and then they add in other costs like shipping and marketing expenses, the profit on these shirts can easily come down to $3000. Any lawsuit would cost you far more than that in legal fees.
Even more problematic, if you were to sue, many of these sellers have likely spent the money or taken it as salary, leaving little within the company to grab. And, many of these sellers have formed LLCs or other corporate entities which protects you from getting them to use their personal assets to pay you. Or, they seller may be located in a foreign country with different laws, making it even harder or more expensive to sue. In many cases, it is easy for the seller to just close the company if the penalties are too high. Then they can just open another one and start a new Etsy store.
So, in most cases, there may be little you can do other than to have the work removed and continue to play the game of Whac-a-Mole for every infringement.
Copyright registration, statutory damages, and legal fees
One thing that can make handling the problem a bit easier is to register your artwork with the Copyright Office. As mentioned earlier, copyright registration is not required but has several benefits. Any work registered with the U.S Copyright Office prior to an infringement (or within three months of the work’s publication) is entitled to statutory damages, which range from a minimum of $750 to a maximum of $30,000 per infringement, with the specific amount being determined by the court. More importantly, reasonable legal fees will be paid by the infringer if you win.
Remember that copyright infringement is a no-fault law, so if the seller put your work on Etsy without your permission, you win. The question becomes how much you win. That means your legal fees would be paid for, making any lawsuit easier to manage. In fact, most copyright litigation attorneys would be willing to take a statutory damages copyright lawsuit on contingency. In that case, you would only be responsible for the hard costs, like filing fees, but don’t have to pay for the lawyer’s time. The attorney’s fee comes out of the final settlement or award.
Still, you cannot get money from a small company that doesn’t have any cash on hand. If that happens, then you would still only have paid for the hard costs, so the investment in the lawsuit would be minimal, even if it turns out that the seller closes the company to avoid paying you.
Etsy Copyright Infringement and China Wholesalers
As mentioned earlier, the vast majority of sellers in the Etsy marketplace are small mom-and-pop stores that generate profit in the tried and true method of buying low and selling high.
Etsy provides the infrastructure which helps the sellers limit their expenses, enabling them to sell goods at reasonable rates, often below prices found on competitors’ sites outside of Etsy. How do Etsy sellers buy such cheap products? They buy from China through online wholesalers, such as Alibaba.com.
Consider this: When most Americans think of copyright infringement or knock-off items, they think of China. China has been very laissez-faire in its protection of international copyrights. Factories that produce large amounts of goods are more than willing to circumvent licensing due to the large fees that would entail.
Consider a t-shirt factory making hundreds of different t-shirts with individual designs. The cost of licensing fees, the time necessary for developing those agreements, and accounting requirements for payment to the licensees, amongst other monetary considerations, provide a real incentive for these factories to avoid the whole licensing process.
Combine that with the lack of copyright enforcement by the Chinese government, and there becomes very little reason for a Chinese manufacturer to pursue licensing agreements with U.S. artists. And, with so many artists showing off their artistic creations in high resolution on their websites, it’s easy for a Chinese manufacturer to download all the works of a particular artist and apply them to various goods.
Etsy sellers buy from these online Chinese wholesalers assuming that the company has the legal right to sell the goods when, in fact, they are infringing. As soon as the goods are made available for sale in the seller’s Etsy marketplace, they are infringers even though they paid for the products legitimately.
In a traditional purchasing workflow, there would be recourse. A retail seller of infringing goods sued by a copyright holder would likely have had an indemnification clause in the purchase order requiring that the wholesaler be responsible for any legal action due to copyright infringement for items purchased. But if the wholesaler is in China, the small Etsy seller is not going to be able to hold it responsible for selling infringing goods. And so, the seller remains responsible.
So, if you can’t sue the Etsy seller and you cannot sue the Chinese wholesaler, then what about Etsy?
Suing Etsy
As a major online marketplace, one would hope that Etsy would be responsible for infringing items sold on their site. However, Etsy is protected by the “Safe Harbor” provision of the Digital Millennium Copyright Act (DMCA) as long as Etsy is merely a passive conduit for user-generated content. Etsy is providing the forum but does not take part in the manufacturing of any of the goods sold. As such, they have the benefit of the “Safe Harbor” and cannot be sued for infringement. Why would the government let companies like Etsy off the hook?
Well, given that copyright law is no-fault, then anytime a user uploads infringing content to companies like Etsy, YouTube, or Vimeo, they could be sued. There is no way a company could operate under those conditions, so Congress carved out an exception so these companies could exist. In return, however, the online provider, such as Etsy, must implement and follow certain procedures.
You may have heard of these procedures under the moniker “takedowns.” If a copyright holder finds their work on Etsy, they can make a takedown request, and Etsy is required to remove the infringing work from its site unless the uploader, which in this case would be an Etsy seller, makes a counterclaim stating that the work is not infringing. At that point, Etsy can allow the work to remain on the site until the case is resolved in court.
At Etsy, anyone can make a store. There is little preventative due diligence on Etsy’s part. A person can just sign up, give the store a name, and they are now a purveyor of goods. Creating the shop is free, although there is a small charge for a listing, and each listing will have a shelf life of about four months or until a product is sold. Etsy takes 3.5% of each sale. The problem for creators is that while Etsy must takedown infringing work on request, they have no requirement to monitor or be proactive, only reactive.
So, if a person or company wants to sell your infringing work, they can just sign up, give the store a name, and they are now a purveyor of goods. Creating the shop is free, although there is a small charge for a listing, and each listing will have a shelf life of about four months or until a product is sold. Etsy takes 3.5% of each sale. So if an item is selling well for a particular seller, and they lose it due to a takedown request, they may just put it up again, so you have to issue another takedown.
Eventually, if you stay on top of the seller issuing takedowns continuously, putting the item back up would be pointless for the seller. To their credit, Etsy has gotten a lot better about dealing with repeat infringers, often taking the store off the Etsy marketplace, but the seller can just open up a new account under a different name and start selling the items again. So the copyright holder must maintain vigilance and constantly check to make sure that the infringing items are not added again. That is not a great outcome for creators.
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So, there are a few situations that warrant legal action, and for those cases in which legal action is appropriate, suing Etsy sellers is the best option. However, legal action would be much easier if you register your work. You can then can invoke statutory damages, which may provide an opportunity to sue in many more cases than without it. You can also use online monitoring services like ImageRights, to track your images on Etsy and across the web.
At least this way, you won’t have to continually search through Etsy, hoping to find your work in one of the millions on sale. While not the perfect solution, at least you will always be notified when someone uploads your work without permission. Then you can issue a takedown notice and keep the infringer from benefiting from your creativity.
Have you had any run-ins with an Etsy copyright infringement? What’s your story? Tell us in the comments!
Firstly, thanks for writing this – although I’d give it another proof read – bit of duplication towards the end.
I know you are trying to help but you’ve restricted the scope of this article in relation to the IP problems over at Etsy. By far the biggest IP issue is trademark infringement. Because it is not policed actively the site is swamped in Disney, Warner Bros, all sports leagues, DC and Marvel characters. New members see it, think it’s okay to do after seeing so much of it – then get surprised when Disney does a “sweep” and Etsy deactivates their listing, or worse, shuts down their store. Etsy does give sellers a few warnings before shutting down stores.
Secondly, many new sellers think they have “copyright” because they put a mass produced charm on a mass produced chain (legal under Etsy’s “handmade” rules). Copyright on jewellery and other utilitarian objects is very limited and many don’t understand that. No wonder Etsy doesn’t have a phone help line – can you imagine the nuisance calls? “She copied me!” Many also think that Etsy’s legal department will weigh into a situation between two sellers!
Finally – you are wrong about the ease at which a banned member can “just reopen” another store. Yes, etsy tracks IP but they take a lot of other information as well. Unless you are prepared to wade into the murk of proxies, fake SSN, DL, passports or burning a relative’s ID, you are going to have a lot of problems. It is very difficult, if not impossible to just “reopen” a store once you are in Etsy’s bad book. The assumption that it’s just a different email address also feeds the confidence of people who are knowingly breaking IP laws.
I’m glad Etsy has safe harbor because I love selling on the platform and hate to see it melt under the glare of thousands of lawsuits. They have to be so careful, so arm’s length, and that creates a problem. When the topic is raised in the forums Etsy tends to shut down the thread. It’s in Etsy’s TOUs but many (the majority) don’t read them before they start selling the Star Wars fabric they have made into a shirt. Many don’t even realise the differences between trademark, copyright and patent, with the terms being used incorrectly all the time.
Thanks for your comments! There are a host of trademark issues with Etsy as well – we’ll likely cover that in another post.
You could definitely see your skills in the article you write.
The arena hopes for more passionate writers like you who aren’t afraid to say how they believe.
At all times follow your heart.
Just skimming thru this and I couldn’t not comment on the statement “follow your heart”. Never follow your heart. It will deceive you almost every time. Take the road less traveled and follow wisdom, reason and discernment. Not your whimsical feelings.
Yes! Finally something about Law Cases.
[…] the fact that the infringing posters, particularly any from movies, are likely to be eligible for statutory damages, which are available for works that are registered with the U.S. Copyright Office prior to an […]
While Etsy does have bug problem with trademark and copyright infringement, it has a bigger problem with false infringement claims. A lot of Etsy sellers have learned you can eliminate the competition by filing a false claim of infringement. Example, a lot of Etsy sellers license images from graphic designers on websites such as Creative Market, then they turn around and file and infringement claim on another shop who also licensed that image. Too much false information on copyrights and trademarks are flying around in Etsy seller groups on Facebook. Stay at home moms who want to be Etsyprenuers with little to no work history or education are turning to Facebook groups for legal advice instead of IP attorneys. Almost on a daily basis I am banging my head against something from horrible IP advice being spread around Facebook Etsy groups for sellers. Etsy sellers have also started the practice of trying to register trademarks on words they intend to use for ornamental purposes-which is a no no. Without a registration and before the examiners can shoot down the application, they use the advantage of it showing up in a TESS search to say “You’re infringing” and BOOM, shops are getting shut down left and right! The Etsy seller accused of infringing doesn’t understand how to examine a pending application for validity and simply thinks it’s valid just because it pops up in the TESS search while pending. People with supplemental Trademarks are also forcing infringement claims on sellers who do not understand supplemental is not exclusivity of the registered trademark. We need more education and more pressure on Etsy on both sides of the spectrum. Right now there are a ton of stay at home moms with no business or IP knowledge and background saving pennies to buy a Cricut or Silhouette machine so they can sell trademarked and copyright items on Etsy they can now easily make with their machines. Go into any Cricut or Silhouette group and see all the trademarked items being tossed around such as NFL logos, Disney, etc…. Vinyl cutters are the biggest infringers on Etsy. It’s getting out of control.
i stupidly put a Got Milk tee (vegan) on Etsy- okay, up front, i said i was stupid- but, why did Etsy allow one of its members- who happens to be lawyer for the trademark for California Dairy threaten me over Etsy- when i complained to Etsy that one of its members was on their site solely for the purpose of- i guess trolling its site- they did nothing-he’s an Etsy member- but he doesn’t sell and he isn’t buying
I actually started selling on etsy and made around 40 sales. Then started getting hit with a copyright infringement in regards to a trademark. The trademark does not show up on my item. Now after a few reports they closed my store. They then reopened it up again saying “sorry the report was fake” blah blah blah we have now reopened your store.
Fast forward 5 days later your store has been permanently closed due to copyright claims this was on 3 of my items 2 not having anything to do with the copyright at all. I mean seriously they were plain wooden boxes! But Again the same god damn claim that does not exist on my item.
My problem here with this is that etsy do not look into these claims. They get a message and take your listing down simple as. I have been back and forth with emails about this and they won’t budge. They are holding £200 worth of funds of mine for 6 months! They said it is in case someone opens a case…. sure, tracking provided customers happy what’s the problem. It’s utter bs. Great way to store cash for a ROI right? If anything the funds would be held for the copyright owner if this was genuine. I broke no laws. Their legal team is amateur at best. All they need to do is look at my photos and look at the trademark number, it would take 2 seconds to find that their is no ground to issue a trademark infringement claim on my items.
My last email was simply “we will not reply to anymore of your emails on this matter” Yes you bloody well will they seem to think they can brush it under the carpet. Any fool can clearly see these are reports from my competition heck the reporting party doesn’t even exist anymore! It’s utter bs.
I will just have to seek legal advice in regards to this issue, because quite frankly it is not on, not on at all.
First off, you’r not going to get any answers, simply because 99% of these “copyright flags” are automated. You almost never deal with an actual human being; and if you do, they’re not people who can actually help you. This copyright is a real problem. I have a classic music blog, and Google doesn’t want to approve Adwords because of my Spotify links. It’s really out of hand, and it discourages REAL ARTISTS and creatives.
So here’s my frustration. I would happily pay a royalty the the IP holder if it were possible for the little guy. If I could create a piece of fan art based on Harry Potter and I submit a form and a scan of the artwork for approval and a royalty fee I’d do it.
But this is impossible. Warner Brothers won’t even talk to someone without a lawyer and a promise of a huge advance.
Has anyone ever seen how much Disney product’s that are for sale on Etsy? I hope Disney doesn’t want to make an example of these shop/store owners.
Etsy does nothing to stand by it’s legitimate artists. My wife created a particular image and posted it on Etsy three years ago. We had read that once something is posted, the artist has a copyright. Unfortunately, we did not take the step of registering it (given she has many unique items she created, the cost of registering them all would add up). We then found another vendor who had stolen her image and was selling it. We filed a claim with Etsy. They then allow the thief to simply swear that he created it, and they will do nothing if we do not take the violator to Court. So, in short, you can steal the work of artists, and if you are challenged, and they do not have it registered, there is no recourse without actually going to Court. Once the thief sees that we do not have it registered, all he has to do (and he did) was lie and say he created it. So, in short, as an artist, you must spend the 35.00 on each item and get it registered.
This is an old comment I know, but this has happened to me many times. I finally did fork out the money and registered my products with the copyright office. Guess what though! Etsy doesn’t care. I literally have a copyright registration number to prove I own it (lots of other proof too) and they said I still need a court order to shut down the person doing the counter claim. Which is great, since their across the world and no American court would do me any good. Etsy is pathetic at protecting its Artists. Once someone does a counter, they wash their hands. So now I get to go report that sellers disney and pokamon products until their shop gets shut down. One look at both of our shops and you can instantly see who is stealing and who is original. The only thing that has worked with me is to be so annoying to the lying sellers that they give up on my designs.
I’m a crafter and I buy a lot of svgs from your site and recently I had someone come at me and say that they were going to report me because I was using a Disney SVG to make characters I’m still very confused and if I’m allowed to make things with a Disney SVG that I paid for and am I allowed to sell it is there anyone out there that could give me a very straightforward answer I’ve also used other characters from different svgs to make things also so if I can buy the SVG why can’t I make something with it and sell it.
Unfortunately, there is no straight answer to this. It depends on many factors and in particular, what the Terms of Service or the licensing agreement from the place you bought it says about how you can use it. And who is making the claim to report you as well. Only the copyright holder or legal representative can make the claim against you. Without knowing all the details and doing an analysis of the situation, I cannot give you a straight answer.
However, In general, buying a thing, like a painting for example, only gives you the right to that thing you bought, not the underlying image. The copyright holders still own the image and can decide how it will be used. The license from your purchase should explain it. More importantly, only the copyright holder has any right to tell you whether you can or cannot do something with their image. Also, keep in mind that Disney is extremely litigious, so they want to protect their brand and income stream. If you do something that Disney thinks requires a license that you do not have, then they may ask for a takedown or stop you in some other way. I don’t know who is making the claim to report you, but how do they know what license you have or how what you are allowed to do with the image unless it is Disney. Maybe it is just someone who has no business making demands or threats and you can just ignore them. I don’t know but I would try to determine what rights you were given as part of the purchase.
Buying an SVG file, unless you pay considerably more for commercial use, is usually always for personal use. And I’m sure Disney isn’t licensing anything for commercial use by the public.
Actually the ones selling you the SVGs of copyrighted and trademarked characters broke the law, even though you paid for them, you bought them from someone they didn’t belong to. Just like if someone was selling a stolen tv and you bought it, if the original owner can show its theirs they get it back, and you as the buyer of stolen goods are out. If your going to buy svgs and images, make sure the person selling them actually owns rights to them, or else your actually participating in infringement when you try and sell something with that image. No seller on etsy owns disney, and therefore every disney product on etsy is illegal. As a safe rule, never purchase or sell any images or svgs that are characters from movies or books or anything copyrighted or trademarked. Just cus you paid for it, doesn’t give you the right to use it, because it never belonged to the person who sold it to you.
As a designer and someone who has been working hard to earn an income from my work and sell through print on demand, I can tell you that the theft of designs being resold, especially on Etsy is a tremendous problem. And this is especially true now that the thieves are selling svg bundles for as little as $3 containing 40 or more designs created by hard working artists. Do you have any suggestions on what could be done about this?
Additionally, a lot of these thieves are outside of the United States. So when you report the copyright infringement to Etsy, the person you are reporting files a counter claim and then there is nothing you can do. Your only recourse is to take them to court which is impossible. A lot of people have stopped creating and selling online because of this. They feel it’s hopeless as they watch others steal and then sell their work and there is nothing they can do about it. I always include a copyright within my design, but companies like Etsy don’t care. They can see my copyright within the design on the thieves Etsy page but still tell me that my only recourse is to sue them.
Ugh, YES. Why does Etsy not protect its very obvious original artists in favor of lying foreign thieves! My stuff has been stolen so many times, and counter claims to my reporting (even when I can show registered copyright numbers) make etsy wash their hands of it. There is no recourse other then to be so annoying to the thieves (which is effective, just time confusing). Its so wrong.
I ‘m starting an artisanal creative stage, and I have been very interested in this post. It has interested me a lot, because my passion is to reproduce the world in miniature, and this has a clear drawback. In most cases, miniature lovers look for and I look for reproductions of everyday objects (A bottle of a brand of Wine, a hair accessory, a bracelet …). Although I have specialized in vintage objects for my collection, I would like to reflect on your comments.
I think that a valid option would be that;
1.- No one sells counterfeit objects in marketplaces (Bags, Toys, Music) I am inflexible on this point.
2.- Handmade artistic reproductions based on trademarks, new or vintage, but if they have copyright, pay a percentage of their price to ETSY so that ETSY pays it to each corresponding brand.
It would be a solution to benefit creativity, to protect copyrights and to continue with part of the marketplace activity that makes the creative world an incentive to develop it.
I think that the party that owns the image rights should be able to choose to accept or deny each work that is proposed.
I confirm how difficult or impossible it is to be able to contact the DMCA of large commercial brands to propose an artisan work done by hand. It is impossible…
It’s hard to come by educated people about this subject, however, you seem like you
know what you’re talking about! Thanks
One big thing Etsy could do is not allow anyone to setup an account and sell without some verification of their details such as real name (not store name), address, phone number and email. When a Seller provides a counter claim to an IP infringement claim, they usually provide false information. Therefore there is no way to file a suit against that Seller. If Sellers had to provide legitimate details, just as they do on Amazon, that would help solve a lot of problems.
How are these sellers providing fake information on the counter claim? The takedown form on Etsy is linked to the name you used when you opened your shop. As in your real name, not the shop’s name. Even if I am using a shop name on Etsy, Etsy still needs to have a the name of an actually, real human associated with said shop And you also have to provide either an ss# or ein# to open an Etsy shop.