402: How To Stop The Counterfeiters And CopyCats In Their Tracks With Steven Weigler

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You’re listening to the My Wife, Quit or Job podcast, the place where I bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. Today I have Stephen Weigler on the show and Stephen is the founder of Emerge Council, which is a law firm that specializes in intellectual property protection. Now, if you sell on Amazon, you know that counterfeits and knockoffs are still a very serious problem on the platform. So today, Stephen and are going to talk about low cost ways to protect your IP from the counterfeiters and the copycats.

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But before we begin, want to thank Klaviyo for sponsoring this episode. Always excited to talk about Klaviyo because they’re the email marketing platform that I personally use for my ecommerce store and it depends on them for over 30 % of my revenue. Now you’re probably wondering why Klaviyo and not another provider. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores and here’s why it’s so powerful. Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send out an email to everyone who purchased a red handkerchief in the last week. Easy.

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Let’s say I want to set up a special autoresponder sequence to my customers depending on what they bought, piece of cake, and there’s full revenue tracking on every email sent. Klaviyo is the most powerful email platform that I’ve ever used. You can try them for free over at klaviyo.com slash my wife. That’s K-L-A-V-I-Y-O dot com slash my wife. I also want to thank Postscript for sponsoring this episode. Now if you run an e-commerce business of any kind, you know how important it is to own your customer contact list. This is why I focus a significant amount of my efforts on SMS marketing.

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SMS or text message marketing is already a top five revenue source for my ecommerce store and I couldn’t have done it without Postscript which is my text message provider. Now why did I choose Postscript? It’s because they specialize in ecommerce and ecommerce is their only focus. Not only is the tool easy to use but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that but it’s price well too and SMS is the perfect way to engage with your customers.

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So head on over to postscript.io slash Steve and try it for free. That’s P-O-S-T-S-U-I-P-T dot I-O slash Steve. And then finally, I wanted to mention my other podcasts that I released with my partner Tony. And unlike this one, where I interviewed successful entrepreneurs in e-commerce, the Profitable Audience podcast covers all things related to content creation and building an audience. No topic is off the table and we tell it like how it is in a raw and entertaining way. So be sure to check out the Profitable Audience podcast on your favorite podcast app.

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Now on to the show.

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Welcome to the My Wife Quarter Job podcast. Today, my friend Stephen Weigler back on the show. And Steve is an IP protection lawyer and he’s an expert when it comes to fighting the counterfeiters and the copycats on Amazon. And in this episode, we’re going to talk about exactly that. So Steve, welcome back to the show. Steve, it’s always good to hear your voice and I look forward to seeing you soon. And it’s been a while. It has been a while. And I know you’ve been on the show before, but just in case.

03:00
Someone out there is listening who’s not heard of you before. Just give a quick like 60 second background. Sure. So I am a professional. I’m an attorney and I focus on intellectual property and business asset protection. And so in intellectual property, we do a lot of trademark, copyright, trade secret, and sometimes refer to patent attorneys for intellectual property protection. Also when infringement occurs, we get involved and

03:29
assist in taking down the infringer either on Amazon, or sometimes we even need to go to court. Yeah, and I know you have a good pulse on what’s going on in that department of the world. So let me ask you just this just right off the bat. How is the counterfeit problem on Amazon? Is it getting better? Or is it getting worse? Or is about the same? I’d say it’s the infringers are getting a lot more creative on and a lot more educated.

03:58
on how to infringe without raising huge red flags. For example, right now we have a book series that an infringer copied one by one by one by one by one. The moment it was released, the infringer would copy it, et cetera. But they did it in a very smart way that would not kind of raise red flags immediately by fights. For example, tracking service, and it took almost years for the

04:28
party, my client, the party who was infringed on to figure out that was even going on. And so you have some, the cat is out of the box and you have some really interesting case scenarios on infringement. Okay. mean, years, I mean, that sounds expensive. We’ll get into prices in this episode for some of these things, but I wanted to start with, I guess, a mutual friend of ours. She’s a designer, a very creative person.

04:58
And let’s just say that she designs her own art or or cards. She she’s been having a lot of problems on Amazon where someone will just literally copy her exact design and then sell it as their own. And the problem is, is whenever she gets one of them knocked off like five more pop up, how would you fight against something like that? Sure. So the the first and most obvious

05:27
thing is everybody that sells on Amazon has either most likely a good, something that they’re selling, and a marketing plan, and a product development plan, etc., etc., to figure out how someone’s going to buy that product and build their company. And so I always look at it like this should not take up all your time. It shouldn’t even take up most of your time. It shouldn’t take up very much of your time nor money.

05:56
but you need an IP protection strategy from the very get-go. You need to figure out what you have, meaning what is it? it, for example, cards or is it, are you selling machine parts? What are you selling? What are the potential aspects that can get taken or infringed on Amazon or any other e-commerce platform? And then how are you gonna protect that? And so the first step is to always, you know, see, make that

06:26
analysis and we offer free basic analysis of what we need. Almost everyone that sells a product needs a trademark registration because you’re selling a product under it’s a good or service and you need to protect the brand. In this case example, that person had a lot of unique artwork. Well, artwork is number one, it’s in a fixed media and number two, it was original artwork and that could be protected by copyright.

06:54
And if you have registered copyright, it’s easy to get the infringer taken down on Amazon. In this case, she had a lot of different designs, like hundreds and hundreds. She hadn’t filed for formal copyright registration. so we were, in that case, we were behind because we didn’t have an IP strategy. We didn’t have any of these copyrights registered. And so it was impossible to

07:24
go to Amazon and prove a registered copyright. And I can put a placeholder in that because I want to explain why a registration in copyright is important. We also had, in that case, we had an issue that the infringer was coming from Canada. our theory was, and we knew that the paper it was printed on was from China. So the distribution channel that the counterfeiter was using was going from China to Canada, across Canada, because it was coming in through Vancouver.

07:54
to Toronto or Hamilton and across the United States and Buffalo. And so we had some international border issues. Now, again, all that could have, if we would have known, protected early, the price tag, would have gone way down because number one, we would have had the adequate protection. We would have had a labeled for protection. We would notified Amazon that we had protection and it would be easier to take down and not have to go through that nasty customs trace.

08:22
All right, so give me an idea of let’s say I got 100 designs. How much would it cost to register that copyright? Sure. So copyright again is anything that’s a fixed media and creative. reason, and a quick aside, is the reason copyright registration is important is you can’t, there’s no threat. You can claim copyright, but there’s no threat unless you have a registered copyright. You can’t take the infringer to court. And if you

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register it before the infringement happens, you get something called statutory damages. You don’t even have to prove your damages. So it’s very important to do copyright early. you could file, so for a hundred, say we had a hundred cards, you could file a hundred different copyright applications at 60 bucks a pop. And that could be time consuming and laborious. What we do as trained copyright and IP attorneys is we take them, work with the client to group them into groups.

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of in this case we were grouping them into groups of 30 and we were submitting only three applications, three and a half. Why 30 and not 100? Yeah, yeah, yeah, because you there’s all these arcane rules about how you can group groups of art to get it through the copyright office. So you don’t want to copy a copyright one by one. You need a just like trademark, just like patent, you need a strategy. And that’s what we’re glad to provide and make it really

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the filings efficient. What’s the difference between grouping them in 30 versus all of them in one group? You can’t because it’s like there’s there’s all these circulars that it’s it’s it’s you need coffee to get through them. OK, we we a while back mapped out like if you have for photography, you can go in groups of 100. I think if you I see if you have groups of artwork, you have to go through groups. If you have groups of books, it’s a different rule, etc, etc. So the idea is to maximize your file.

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and minimize your price. That’s our motto. So we have to map this all out. if we have, for example, if we have one brand, but you have a logo and you have, you know, 800 photographs, know, of the product, et cetera, we want to like really take that, figure out what’s going to get your best bang for the buck and do the minimum we can to maximize that protection. So let’s say I’m an artist and I’m churning out designs literally every day.

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Like am I gonna have to worry about this copyright for every one of those designs or before I sell them or do I? a point. Yeah Steve. Um, no, I mean there’s That’s why you need a strategy You need a complete product review and usually we get that like just send us the stuff and we sit down and figure out what? Which pieces of this are gonna be the most important pieces of intellectual property in the to protect that because

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protecting everything can be very, very costly and not particularly have a good bang for the buck, especially if you’re selling internationally or you’re trying to protect at the source of manufacture, which a lot of times is China, because you’re going to have to file there and you’re going to have to file here. So we take all these factors, have to put them together, and then we come out with a strategy again that’s the most cost efficient and the least expensive. And we kind of map it out for the client so they don’t have to worry about it because these

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Again, I think my philosophy is, and Steve, you know this because you’re like a seminal figure in it. There’s a lot that an e-commerce seller has to do to be successful. Most of it has to do with getting inventory, marketing it the best way they can, keeping their margins, and creating a home run. Protecting intellectual property is not something they should be reading about or, I mean, they should have basic knowledge, but it’s something that we can do professionally.

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at a fraction of the cost that it would if you look at time as money that somebody else could be. Let me ask you this. Let’s say I create 100 designs or let’s say a thousand. I don’t know which ones are going to sell well, but you mentioned earlier that you want to protect it before you start selling it. But let’s say 10,000, 10,000 designs. It’s going to be expensive to protect all those. Right. Well, what do I do then? I have no idea. you have to you have to look at even a large

12:46
I think if you had a greeting card company, that’s kind of an odd example. Usually, you’re going to have common elements in your designs that can be protected. So for example, if every design has a crest in the crest series, every design in that series has a crest, we would only copyright the crest. We wouldn’t copyright the rest of the things. Then you’re seeing the crest in

13:15
So we’re looking for elements that have some commonality in them. then sometimes you can have your watermark element of it protected and it could be kind of a hidden watermark. So the infringer doesn’t even know it is the protected element of the mark. So there’s so many things we can do that are cost effective. What is not cost effective is to not do anything. And then after the infringement happens, try and figure out how to…

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take all this down. So in this person’s case, would you have suggested like an invisible watermark that you would then? Yeah, that what we knew because we group them. The first thing we had to do in that case was the infringement was by one infringer, but a sophisticated infringer. We knew that if we didn’t get the registered copyright, there was nothing we could do. And so we had to group them, you know, in thousands.

14:14
to get protection on the commonalities. And so we did exactly that. So she did in that case have some commonalities in her designs and we grouped them accordingly. ultimately, mean, if you have a greeting card company, we should talk about a specific strategy because you’re changing the design all the time. But adding some commonality to do your designs, we only wanna protect that commonality because we don’t wanna waste money. Right, no, that makes sense. So what about when they figure out

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what that commonality is and they just change that one little thing that doesn’t really affect the design. You mean the infringer? Yes. Yeah. Well, then so we’ve been talking about two things is is the answer is it depends. The one thing is, is if it still looks like yes, copyright infringement really focuses on on the original design. If you see some

15:13
something that could confuse the marketplace. It’s something called trade dress, unfair. It’s called trade dress infringement or unfair trade competition. So if they’re trying to confuse, if we believe they’re trying to confuse the marketplace, we would probably send a cease and desist letter and also work with Amazon to say that their design is so similar that the marketplace is getting confused and they’re trying to do what’s called initial interest confusion, that they’re trying to confuse the market.

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And so that’s how we would threaten both the infringer and use some elements on Amazon on brand registry protection to show that. So assuming that they say no and they’re not afraid of your letter, does that mean you have to litigate at that point or? Well, my strategy and I don’t want to disclose it too much in case you have other lawyers listening now. and it’s not it’s not a it’s not a unusual strategy.

16:12
It’s you have to, the market is not going to police your intellectual property for you. And so if you have a case where you tried a cease and desist letter, you tried working with Amazon, you tried and you have protection and they’re not backing, even if you don’t have protection and they’re not backing down, you have to take baby steps into litigation if it’s

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a positive cost benefit analysis for you. Meaning if it’s like, this is just bothering me, my sales are up to the roof and I can’t tell that they’re for real or not, well, then maybe you just have to be like, there’s a lot of things unfair in this world and maybe I’ll just focus on another thing that’s unfair to me. But if it’s something that’s really economically affecting you, then or you believe it could economically affect you,

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in the future because you want to sell this company, et cetera. And if you show the acquirer that, yeah, I’ve had issues of infringement. Well, what’s been done about nothing? Well, your price of your acquisition is going to go down and they might even walk away. So if you think that none of those are good things that are going to be issued, don’t worry about it. But otherwise, we baby step into litigation. We prepare a complaint, usually in a forum that’s not convenient to them, to the infringer.

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and we send it to them, we send it to their attorney, they usually get an attorney, we try and work it out. We take baby steps, we threaten a preliminary injunction. There’s a lot of baby What if they’re in China? If they’re in China, that’s sometimes the same strategy because they have a nexus to the United States because they’re selling their product in the United States. we also, that can be a cheaper strategy because we have Chinese console.

18:09
They have offices all over that country and they’ll go and knock on the door. They’ll do a literal door knock or a virtual door knock and read them the equivalent of the Chinese riot act. again, China is a huge country, a huge infringer on American intellectual property. It’s a problem. the actual, first of all, China, it’s also a totalitarian state or a

18:39
one party state. And so they listen to, they tend to pay attention to their own laws. And when a Chinese attorney is knocking on the door, they tend to go and find someone else to bother. The other thing that’s important on a Chinese strategy is once you protect the IP in the United States, you also make that evaluation in China, if it’s worth protecting the intellectual property, the trade dress, the trademark, the copyright, and sometimes if you have a unique design, the patent in China.

19:09
Also, there’s international enforcement of trade secrets. So if you’re a Chinese manufacturer your design, I’ve been involved almost three times in the last three months in negotiating intellectual trade secret agreements with Chinese manufacturers. And again, as long as you have a Chinese attorney working with you, you translate it into Mandarin, and it’s a legitimate cross border agreement.

19:37
relatively easy to enforce that agreement. It’s not if you did nothing and you hope that they’re gonna listen to your American legal case. It seems like in this case of greeting cards, it’s probably not gonna be economical to do all that stuff because the designs are just coming out fast and furious, Well, right. And so you’re looking, but in that case, she had a pretty vibrant business in her unique greeting cards.

20:07
And she was losing, at least reported losing market share. she could, and it was, you know, it wasn’t, it wasn’t easy. And it wasn’t, I mean, it’s not how we would usually like to do it, but it is, it was worthwhile. Um, because of the, two reasons, number one, it was just an obvious over copy. number two is it was a fairly robust business.

20:37
Yeah, it just seems like if you fight back, then that might deter them from doing that again, or maybe copying someone else. well, in that case, too, we had that cross border issue and you can take a federal. There’s ways to notify customs and then customs that they know the name of the infringer.

21:03
And next time that infringer is trying to get something across the board, because they don’t even know that you’re doing this, their name comes up on a manifest, like, this is a known infringer in the United States. But that took some investigative work, because they’re not out there putting a triptych or the MapQuest on how they got it to Buffalo. honestly, I did.

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know, because a lot of stuff from China comes into the ports in Vancouver. And so they were very creative all the way around. And this was coming into the United States, the Buffalo.

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So, and it wasn’t that hard to find, again, we’d be better off if we started early on and said, hey, here’s our basic IP strategy. Let’s see the elements that need to be protected every once in a while, give us a call, do a data dump. We’ll get those additional elements analyzed and really do it strategically, which ends up because everything’s protected to begin with, you see much less infringement. And you also don’t run into like this.

22:13
Oh my God, everyone has to put down whatever they’re doing and focus on this. So Steve, from a non-lawyer perspective, this all sounds kind of intimidating, right? So let’s say I sell greeting cards. What should I have done? I don’t even know if these are going to sell yet. So would you recommend me selling them first? And then as soon as something has traction, then come to you and do. No, think that. So I think the thing to do is so, for example, Steve,

22:43
If you’ve been selling greeting cards for two years and you didn’t do anything, don’t have that you don’t even trademark the name of your product, your brand, cetera, is a very basic IP plan where you look at the hundred or so greeting cards that you have, figure out a very low cost strategy. Like we’re talking 300 to $600, including the filing fees to get that protected, to get your name protected.

23:12
um, your trade name or your trademark, um, one trademark, which is, you know, roughly runs about $1,300, um, including the filing fees, including everything with our total TM. And you’re looking at like a $2,000, such a low effort, such a low budget and rest assured. Um, and then always, if you have a question, um, even if you’re not a client, just call me and run it by me for nothing, because I really want to, it shouldn’t be intimidated.

23:42
But, infringement can happen. And if you don’t have a strategy and you don’t have a plan and you never thought about it until you’re way deep in the water, then it becomes a problem. It’s like, you know, same with taxes, you know, you pay them every year, but, you get them ready around, around now. And so, but if you blew it off for a bunch of years and you, you’re way behind, well, you’re going to take up a lot of accounts time.

24:09
You probably not even have the money to pay the back taxes. It becomes a problem. prevention, mean, it’s more expensive. is so cheap and so easy, especially if you work with console, whereas dealing with infringement isn’t. It’s really, it is very tough. It’s hard enough to get someone that hit you in a car wreck to get that resolved, let alone a piece of intellectual property. So it’s of going to the dentist, right? Getting your It very much.

24:39
I try and make it a lot more pleasant. But you know, my dad was a dentist, anyway, yeah, us waglers seem to enjoy inflicting pain. No, I’m just kidding. right. Let’s, change the scenario a little bit because I know not everyone’s like churning out designs and whatnot. I did have an episode on the podcast. was Kevin Williams. He had this product brush hero. What ended up happening was, and you guys can listen to the episode. I’ll maybe I’ll link to it in the show notes.

25:09
but he had a bunch of Chinese manufacturers literally knock it off, including the box with his picture on it, everything, and sold it under his listing. And every time he got one of them knocked off, a new one popped up and it was like playing a whack-a-mole. How do you prevent that from happening? He had a presumably, I think he had a copyright, but yet he ended up spending like seven figures fighting this. Yeah, so…

25:38
Again, it’s important first you analyze what you got. If you’re selling widgets and you never branded them and you don’t really have it, so there’s no distinct brand, there’s no distinct anything, there’s no distinct design, etc. That’s one scenario. But if you have elements of things that you protected or you could protect, what I’ve learned and this is a change since the last time we talked, Steve, is

26:07
There’s some really powerful AI out there that focuses on Alibaba and AliExpress and the places that these people are selling. If you work with these AI companies and report what intellectual property you have and the potential infringement you’re looking for, they’ll do a series of takedowns much deeper and much more cost efficiently than any human being could ever do.

26:37
And so that’s number one is the easiest and cheapest is, right, you think that you spot infringement that going on. Well, let’s try AI, artificial intelligence strategy, where we work with one of these companies and see what they can get taken down on Alibaba or whatever, AliExpress or whatever the sites that we’re seeing the infringement. Because usually if there’s infringement with the manufacturer and they’re in China,

27:05
Well, they don’t have marketing strategies in the United States. They’re usually doing it, you know, putting it on Ali and then somebody else will not buy it. So that’s number one. Number two is, before you go past number one, how does this AI company work? Like, how do you find them? Sure. What do you need to show them? How much did cost? I’ve vetted them for about two or three years. So I’ve talked to, um, about three or four of them. There’s, there’s a strategy.

27:34
And I’d rather not say their name, but there’s one company that’s willing to do one and done, meaning you subscribe. It’s mostly a subscription service. So they say, Hey, we’ll do this for $900 a month per product. Well, there’s, there’s a few that say, well, you have to sign a long-term agreement, you know, multi-year agreement. that becomes very expensive if you’re policing all the time. Plus we’re talking each one that you choose to monitor and take down.

28:04
is a different cost. So if you want to do it, Amazon, eBay, all of them, it would be very costly. But sometimes you have, I look at this like you sometimes you have to clean the air conditioning vent or something. It’s like, you don’t have to do this all the time. You could do it once a year or when you notice the infringement. And one of these companies is willing to do it on a monthly contract. So that’s what I’m looking for. My assumption is all the AI is relatively comparable.

28:33
for the bigger companies that are doing it. What do need to provide them? We provide them the protectable elements. So a picture of what you used, for example, as a specimen on the, when you filed your trademark, what the product is, what the name of the product is, what protectable elements, and an example of the infringement. And then they’ll program it in their AI and they’ll start doing takedowns

29:03
Um, um, you know, and then those, what to take down? they, do they actually send a letter or what does it a complaint to, to, Allie in Mandarin and, um, that will usually take care of the issue. And the thing is that I learned and why I’m so into this, um, is that a lot of times a client will call me and they’re like, Hey, look at this picture. They they’re seriously knocking me off. like, yeah, that’s terrible. Let’s like,

29:32
let’s do a cease and desist letter, et cetera, et cetera. Well, what we’re seeing as far as the infringement doesn’t go, it goes like waist high. Whereas in other words, we know that there’s infringement out there. We know that it’s on Amazon or eBay or Etsy, whatever. But then we don’t know the depth. We don’t know that multiple, multiple times that this product might be showing up in different iterations because

30:00
Most humans aren’t conditioned that way. Like we can’t, we’d be searching until the cows come home. And so, you sometimes the infringement is much deeper than any Amazon seller knows. And this, this, this products, these products can search that through AI. So they’re policing Alibaba or they policing Amazon or policing. Well, whichever one you want. How much does it cost approximately? Yeah. So I’d say, you know, for a good.

30:29
monitoring service, we’re talking about $1,200 a month per site. Okay, so if your product is doing like tens of thousands of dollars a month, it might be worth it to take these guys out. I mean, in the case of Kevin, with his brush hero,

30:48
It implies that it could have been nipped in the butt at the source, at least to first order with a service like this. Yes. mean, it’s in a… Again, you have to look at the totality of your circumstances. So if you’re a new seller, you see this going on, you have a trademark, for example, and you see it once, well, another strategy is…

31:18
to use and you’re on the brand registry site, well then just file a take down on Seller Central. It’s pretty easy to do on Amazon brand registry and chances are and show your trademark certificate and chances are they’ll take it down. So if it’s super, not superficial, but if it’s not like a huge problem in your small seller, take it down. Again, I don’t.

31:47
It’s kind of a specialized area of law for sure. so you’re, you’re, and I’ve always told you this, Steve is like any of your clients that are people that listen to you are free to call me. I don’t charge for this type of stuff to tell you what my opinion is on, on the easiest and fastest way to take it down. But a lot of times you’re, looking at kind of like, well, what is, if it’s, if it’s a huge deal, like this is a Chinese manufacturer that leaked your unique product.

32:16
design on the web and is selling it as a one-off, well, that’s a big problem. If you’re talking about somebody that is just was looking to make a buck and came up with an iteration of yours and is up there and that’s all we can find, that’s it. That’s another much easier problem to deal with. And that sometimes involves like I’ll write a letter, know, takes half hour of my time.

32:45
write a letter saying, you know, knock it off. And a lot of times I’ll call and say, you know, beg for mercy. So it just depends on what the nature of the infringement is. It’s very difficult to do any of this if you didn’t get the brand, you didn’t get the, if you have copyrightable material, you didn’t get the copyright. Or if you’re one of these unique individuals or unique companies that has a patentable design or something that fits that box.

33:14
that you’re showing that. All right, Steve, a common question I get asked is I have like an invention or something relatively new that I need made and I want to get it made in China because it’s more economical. How do I prevent or what steps should I take to prevent that manufacturer from selling it to anyone else or just even copying the design outright for their own?

33:37
Well, you have to look at your product and say, what are the protectable elements? So in this case, the protectable elements, if it’s some unique product and you haven’t gone to market yet, the unique, because you’re hiring a manufacturer, the unique elements might be a design pad, the way the product is designed. Like for example, the Apple iPods are a design pad. They’re designed so unique that you look at them and you know,

34:06
wow, that’s unique design. And then something like the Louis Vuitton bags, if everyone could picture the LV and the brown bag, that’s called trade dress because it’s not that the bag is unique. The bag usually looks like any other bag. It’s the trade dress, it’s the thing around it. The LVs and the alligator stuff look is called trade dress. So you have to get that protected.

34:34
and in the United States. then it’s suggested to get, and this is all very low cost, suggested to get it protected in China. And you can take the American application, move it over to China. And then you would do one of two things. You would either do a door knock, have a Chinese console do a door knock and say, hey, you’re gripping off protected stuff. No, no, no, they haven’t ripped it off yet. You’re just worried that it Yeah. Yeah. Yeah. So that would be, that would be number one is you just, even if, even if you’re not worried, protect your stuff.

35:04
have an analysis of protection. The second thing is, if you’re working with a manufacturer and it’s a big enough order, you need to look at those terms because sometimes the terms which they might send you in Mandarin allow them to do that. And so you have to pay attention to the terms of the contract. And one thing you can add is in the contract, or if you even have one, is that they’re not gonna do that. And so I’ve been involved a lot lately

35:33
on doing Chinese American contract review. And so it’s very cheap because a lot of times it’s like, I’m manufacturing for this price, this price, et cetera. The terms are usually normal, but there’s these terms of intellectual property, which is, one or two paragraphs of the contract that no one’s ever reading. So if they have a contractual right to take it, well, you have no rights to be concerned about it. And so you really have to look at what your terms are with the Chinese provider.

36:02
The third thing is, and I used to say, go and break bread with your Chinese manufacturer, like go over there. It’s very hard now to do that, but it is not that hard to still develop a relationship. Asian cultures in Asia are very relational based, and it’s important to build that relationship and that trust, just like you wouldn’t write a check for 300,000 or whatever your order is to anyone else.

36:31
So, you know, it’s very important to build that trust element. So those things combined, protect it, look at your contract terms and build a meaningful relationship with someone that, long-term relationship, someone that you’re thinking about working with are the important elements. Sure, that’s fine and good. But so you want to protect in the US, we already kind of talked about that, right? Trademark plus maybe copyright. What about the, what do I tell the manufacturer? Don’t do this. For what their manufacturer,

37:01
terms are, see if they have any and look for that if there’s any intellectual property terms in the contract, if it’s a big enough order, insist on them that you hold intellectual property and here’s the intellectual property that you have. so fine, let’s say I do that and then they start selling to somebody else. How much does it cost for me to go after this or can that be automated or cheaper to enforce?

37:30
When you’re at that point and you’re in good shape, and then we would work with a Chinese console. And again, I worked with the same console all the time that would write them a letter in Mandarin or door knock, like literally go and knock on their door. usually they would see that you built this fence and they would either go away or you don’t want them to go away.

37:59
they’d stop doing what they’re supposed to that they’re doing. the situations in China usually go like this. And again, I’m not trying to be like I don’t, I’ve not had like hundreds, but it usually is. Well, no, that’s my brother’s company. That’s doing that. I don’t know how my brother got it, but I’ll talk to my brother and that will stop.

38:21
How much does it cost to do this part of it? It’s usually like about, that’s usually about a $3,000 project. That’s $3,000. Okay. Do you have someone knock on the door? Yeah, I mean, literally, because at that point you have the wall is built. You’re protected, you’re protected contractually, you’re protected and you’re protected through, you know, trademark trade secret copyright and or Pat.

38:48
Sorry, one thing I wanted to mention, the trademark and the copyright, does that have to be filed in China also in order for this protection to take place or just in the US is sufficient? Each one has its own different rules, but the patent and trademark should be filed in both. In both, okay. Yeah. But it’s very low cost to move an American trademark over to China. Low cost, meaning like a few thousand dollars or less? Less.

39:17
About a thousand dollars. a thousand. Okay. All right. That doesn’t sound… So, know, it’s like, here’s how I look at a lot of this. It’s like, each little step is a thousand dollars, a thousand dollars, a thousand dollars. It really rarely varies from that. Okay. I know you’ve been involved in some litigation, which you probably can’t discuss in detail, but I just want to get an idea of what’s been going on in your world and what you’re fighting. What are some of the battles that actually make it to litigation?

39:45
that’s what scares me the most. Once you get into litigation, it’s expensive, right? It’s expensive and it’s really hard to predict and the courts are really backlogged. And so we were talking a little bit about this before the show. So the way I look at intellectual property protection is you got to build some kind of barrier or some kind of wall to protect. And then if they don’t, you know, but no one’s taking a gun to their head and making them adhere to your

40:15
your wall. And so they can still try and scale your wall, even if it’s huge. And so sometimes they do. sometimes you have to. So the idea is to if you’re not getting any compliance by sending them the trademark certificate, whatever, and a cease and desist letter, you have to ratchet it up a little bit where you threaten to sue or you sue. When you sue, usually both parties are trying to resolve it very quickly.

40:45
Because the infringer generally is not a huge company, and they’re not going to have the resources to defend against a well-built fence, especially. And so generally, we’re going to get it into dispute resolution within, meaning mediation or something. The judge is going to demand it within 30 to 60 days. If right now the cases I have are all

41:14
clear cases of infringement, but some of the stuff is not easy to explain the protection. It’s a lot like the case we were talking about before, Steve, where we have like greeting cards and they changed its books, but they changed the, a little bit of the look and feel, but they would advertise the same book, basically the moment our guys would advertise. And to make it worse, they were, the infringer was the printer.

41:41
So these guys brought the books to the printer and the printer was ripping them off the whole time. So in that type of case, it doesn’t seem to review resalving too quickly. And it can be, so far we’re at least $20,000 into it. And I don’t see this resalving for another month or two at least. And we’re looking, because the judge has to decide a motion.

42:08
And so we’re looking at probably 50, $60,000. But the alternative is to either, at that point you either have to walk away and say, this isn’t worth it to me because I can do something else with my life and I’m just going to take this as a business loss or you really have no choice. It’s like the infringer is infringing on everything you’re doing and thinks that they have a right to do it. And so it’s an unfortunate situation to be in. We always try and…

42:38
There’s two sayings in any kind of litigation. Never act scared. So if you have an attorney that’s really super cautious, that’s not usually a trait that we look for. And number two is sometimes you have to do that cost benefit analysis. Maybe it was a $5 million play that ultimately is going to be a $4.5 million play because you have to get rid of these people. So yes, it’s scary. But again, I think a lot of your clients

43:07
I’m sorry, a lot of your listeners and a lot of my clients are looking at e-commerce as a growth industry and ultimately selling, being able to have the company acquired. If you have infringement going on and you didn’t do anything about it, well, when it comes time for an ad due diligence merger, acquisition due diligence, they’re not going to be happy that there’s infringers out there and that you didn’t do anything about it. And so sometimes it’s very much

43:37
It’s not my favorite call to have, it’s a litigation call, but sometimes it’s part of business and it has to be a business decision. I’m pretty confident that 98.8 % of your listeners are not gonna be in that situation. Can we just talk about some of the timeframes? Sure. How long does it take to register a copyright, get the trademark, the basic protections of you? Sure. So keeping in mind that the rights issue at the time you create them,

44:06
And same with the trademark at the time you claim the use of trademark and commerce. takes the registration process in both of them is taking about a year. That’s why it’s a really important to have a good strategy, including like a search, especially for trademark upfront, because we know the process is taking a year. We want to make sure that it makes it through, that you really do have legitimate trademark copyright. And so we’re going to do a thorough search at the beginning of the process.

44:36
that kind of gets in the minds and the heads of the USPTO examining attorneys to make sure that really you’re never going to get delayed. Never say never, but rarely get delayed because we really have thought it out long before they’re even going to look at it. Because you don’t want that one year to be two years or three years or even worse. Like you file a terrible application or application that’s not going to make it through. And then your year later, you have the product out in market, your sales have doubled and you have a trademark.

45:06
How long does it take to knock on like a Chinese manufacturer’s door? That can be very quick. Yeah, very. So it’s getting that cut. They’re much it’s much quicker. China’s very quick. And I don’t know, like 24, seven months or well, assuming that the protections in place are the filing for the protections in place. We’re talking minutes, not minutes, days.

45:36
Really? So if that’s the case, then it’s totally worth it. I like the strategy. I do. I it’s always I just can’t think of a time it hasn’t worked for us for my clients. But what about the AI stuff? Are they pretty quick? There? Yeah. So that again, it’s kind of like a sign up for a monthly as soon as you work with the rep to get it programmed. It’s instantaneous that they’re going to start the process of the scrub.

46:06
And then they’ll give you a report. that seems to me. me of this service that always gets pitched to me. So I run a course and of course there’s piracy of the course and there’s a service that offers to take down all the people who are selling the knockoffs, so to speak. It’s the same thing, same principle. I always wonder where the company that’s preventing the knockoffs are the guys who are generating the knockoffs in the first place. Yeah. It’s a, know,

46:35
I gave it no credence at the beginning, but then when I saw like, sat through a presentation on the depth of the infringement is rarely going to be what we notice or the client. Like no one necessarily can go in and figure that all out. So you need, and then I found this company that will do it, you know, again, sign up for a month, cancel, a year later, sign up for a month. You know, it’s really like,

47:04
That sounds cost effective to me. Sitting on a multi-year contract with them that you can’t get out of, and you’re not sure if there’s even a lot of infringement, that sounds like a dog. Right. Okay. Interesting. at least with this episode- And keep in mind, I have no affiliation with these companies. Sure. Of course. I’m feeling a little bit more comfortable, like if I had like some invention that if I took the proper precautions,

47:34
I could take down someone in China, assuming I have the protections in place, for relatively low costs, like in the thousands of dollars. Is that all accurate? You’d have a good shot. Good shot, right? Okay. think the infringers are not used to that happening. They’re not used to a Chinese attorney being involved and they’re looking for low hanging fruit. And if you’re not it, there’s thousands of others that didn’t use that strategy.

48:02
Because the general thought, at least in the community here, is that there is no policing that takes place in China. See, and I just, I can get where people would think that, and certainly the newspapers and the reporting about Amazon, you know, that’s, I wouldn’t say encouraging it, but they’re not, there’s some participation. I can see how that could be, but China has,

48:32
They pride themselves on a pretty strict intellectual privacy, intellectual property policy and their courts, you you don’t want to be in trouble in China. I certainly know is a, it’s a pretty strict court system and it’s pretty regimented. And so, but no one ever looks at it like, well, they’re not going to enforce American law, but they’ll enforce our own. you’ve successfully gotten some of these. mean, okay. More than more than.

49:02
the fingers on my hand. Right. And what is your hit rate? It’s been, I mean, you know, I can’t say that every resolution has been the same, but it’s been outstanding. Okay. You know, because it’s like, the theory is, is, and, know, maybe combine it with do your own Alibaba take down, you know, but the, the, um, having the, putting the ammunition in the Chinese consul’s hands.

49:30
meaning getting the Chinese copyright or the Chinese trademark or whatever, and then having them quickly implement through letter writing or even better knocking on the door and do it really quickly, tends to throw the imprinter off. They can’t even believe that that happened. And they know, you know, if someone enforced in China, there are serious penalties to pay. There is no doubt about that. Probably more serious than here. Well, that’s good to know, Steve.

49:58
Yeah, it’s really interesting. And again, we’re not Chinese counsel. I’m constantly going to conferences and things. met the Chinese counsel I used. I met, she was part of the largest, I think the largest Chinese law firm. And then they split off. And so it’s been really nice because it’s probably 20, 30 attorneys, but it’s very customized service. She lives in San Francisco. She speaks English. So it’s good.

50:29
So if anyone is worried about any of stuff, where can they get ahold of you? You mentioned you’d talk to them, right? Just. Yeah, absolutely. Just schedule. The easiest thing to do is either email me at S Yler W E I G L E R at emerge E M E R G E console. C O U N S E L dot com. Or look at our website. There’s a scheduling link. It says free consultation.

50:56
If it’s a matter of just referring you to Chinese Consul, glad to do that. And they offer free consoles too. So, you we tend to discharge for the work and we want to, my goal is to build meaningful relationships and help companies grow in the e-commerce space. I love when one of my clients gets to merger and acquisition. I love it. In fact, that’s my, the rest of my day is going through an M &A deal and I’m so excited about it. They’re going to make a lot of money. I wish I would make that money, but anyway, it’s not what I chose to do. Cool.

51:25
Well, Steve, hey, thanks a lot for coming back on. Sure. Always good to see you, Steve. see you virtually.

51:33
Hope you enjoyed that episode. Now, I hate counterfeiters and the copycats, and the thought of investing any money to fight them just makes me angry. But fortunately, there’s some relatively low-cost ways to fight the bad guys. For more information about this episode, go to mywifequitterjob.com slash episode 402. And once again, I want to thank Post Group, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is an ex-bake-owned marketing platform, and you can sign up for free.

52:02
over at postscript.io slash Steve. That’s P-O-S-T-S-U-I-P-T dot I-O slash Steve. I also want to thank Clivio, which is my email marketing platform of choice for eCommerce merchants. You can easily put together automated flows like an abandoned card sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifecoupterjob.com slash K-L-A-V-I-Y-O. Once again, that’s mywifecoupterjob.com slash K-L-A-V-I-Y-O. Now we talk about how I these tools in my blog,

52:32
If you are interested in starting your own ecommerce store, head on over to mywifecoderjob.com and sign up for my free 6-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.