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Is dropshipping legal? Why did some people get sued when dropshipping?
Of course, dropshipping itself is legal because it is perfectly legal to resell items as long as they are from legal sources. And the biggest reason for being sued is likely to be copyright infringement.
In this article, we will tell you how to avoid copyright infringement in dropshipping from the following aspects.
It is illegal to sell fakes anywhere and sell imitations of brand products because brand products are highly protected by copyright. If you dropship imitation brand products, you will face the huge risk that your products being detained by customs and being sued, causing huge losses to you.
The following are some example products that imitate well-known brands. Please be sure to avoid all products imitating copyrighted brands when dropshipping.
For real branded products, you must provide an authorization letter from the brand supplier when dropshipping, otherwise, customs will not allow these products to pass.
About which brands and related imitation brand products may face the risk of copyright infringement, you can refer to the copyrighted brand list provided by our partner shipping companies.
“Can I dropshipping products with movie characters, such as a phone case with Spiderman printed on it?”
It is illegal to use copyrighted characters, movies, comic book pages, music, images, charities, sports logos, or as such to create and sell custom products without permission from the copyright owners.
For example, many Amazon sellers have received hundreds of copyright infringement warnings for selling unauthorized Squid game merchandise.
But you can dropship as long as the products are from a legally licensed and authorized supplier who obtained the products from the copyright owner’s manufacturer.
There are many stores that legally sell copyrighted goods on Amazon and Etsy. But suppliers on AliExpress are rarely allowed to use copyrighted characters, images, etc of large, well-known works. So please be cautious when dropshipping AliExpress products.
Many products on AliExpress have brand names that you’ve never heard of, and these are usually the supplier’s own brand name. Are these products legal for dropshipping?
Of course, it is legal to dropship supplier’s brand products as long as the supplier is the rightful owner of the copyright for the brand. Because the supplier legally makes their own branded product and legally sells it to you, you can legally continue to resell it.
But you can’t destroy the supplier’s brand logo or put your own brand logo on the product without permission and resell it. You know that is absolutely illegal.
One issue that most dropshippers ignore is copyright infringement of product images or videos. It’s not surprising that the product images, videos, and even descriptions you are using in your own store may be at risk of copyright infringement.
Most dropshippers use the supplier’s product images directly. Or just remove the supplier’s brand information on the image through PS. These actions may be infringing the intellectual property rights of product image photographers and the copyright of the brand owner.
Therefore, the best way to avoid the risks of being sued is to buy product samples and take photos of products yourself. This is also good for improving your customer experience in your store.
In dropshipping, you should not only avoid infringing the copyrights of others but also pay attention to protecting your own copyrights. Especially those dropshippers who have established their own brands should apply for copyright protection for their brands in time.
Copyright infringement – it’s something that dropshippers often don’t think about until it’s too late. No one sets up their dropshipping business thinking they’re going to get sued for copyright infringement. After all, dropshipping is amongst the most popular forms of e-commerce stores and can easily go from side hustle to a full-time job. If you’ve put the time and effort into building a dropshipping business, the last thing you want is to be buying hundreds – or potentially thousands – of dollars for a copyright infringement.
Whether you’re a beginner to the world of dropshipping or someone with multiple stores, you want to be aware of copyright infringement and how to avoid any issues. With the dropshipping industry expected to be valued at almost $560 billion by 2025, brands are starting to actively look for potential copyright infringements.
At Doba, we help dropshippers scale their business by giving them access to high-quality suppliers and products. Our platform makes it easy for you to add products to your website while syncing orders efficiently. We’ll help you find the right products for your business, without breaking copyright.
We’re sharing our top tips on how to avoid dropshipping copyright infringement so that you don’t jeopardize the success of your business. You could end up paying anywhere from $500 – $30,000 for each copyright infringement. Don’t put your dropshipping business at risk. Instead, follow these tips to avoid receiving a copyright infringement that could cause you to lose your profits and even close your dropshipping website.
What is copyright infringement?
Copyright infringement is when you use works that are protected by copyright law without receiving permission from the rights holder. If you don’t receive permission, you’ll be infringing the exclusive rights of the copyright holder, who is able to control how the copyrighted material is reproduced or distributed.
As you’ll usually pay a fee and royalties to get rights to use copyrighted material, rights holders invoke legal action against those using their materials without permission. Depending on the severity of the copyright breach, you may receive a takedown notice to remove the item from your dropshipping website or may be subjected to litigation through the civil courts.
Copyrighted products and images
Counterfeiting is one of the most serious copyright breaches and can even lead to prosecution through the criminal courts. When you’re dropshipping, you want to make sure that your chosen vendors are not selling items that breach copyright. Some dropshipping manufacturers – like Alibaba – are known for their copyrighted items, particularly from brands like Disney.
You also want to be careful about which photographs you use in your dropshipping store. You might think that attributing a photo to its owner and giving them credit is enough, but it’s not good enough for copyright law. You’ll need explicit permission to use their photograph, and it’s a moral rights infringement if you alter the image in any way.
Here are our tips on how to avoid receiving a copyright infringement for your dropshipping business.
1. Only use authorized distributors
You can find dropshipping vendors who have permission to use copyrighted materials. If your vendor is licensed and an accredited distributor, you shouldn’t have any issues adding these products to your dropshipping website. You can also find dropshipping vendors who get their products directly from the manufacturer of the copyright holder.
You’ll come across Chinese factories that are producing items that infringe copyright and trademark legislation. Copyright laws are virtually non-enforceable in China, with illegal items being the norm across the country.
You can still sell licensed or branded items on your dropshipping website if you have them coming from a vendor who legally has the license or is an accredited distributor. If your products are coming from a legal source, you can resell them through your dropshipping store.
2. Research the factories
As a dropshipper, you want to do everything you can to be confident about the products you’re adding to your website. It’s always a good idea to approach every situation with an air of auction. You might find fraudulent authorized distributors. These are vendors who claim to be an authorized reseller but have forged their licenses. They may also claim to distribute ‘overstock’ directly from the manufacturer, often stating that they have a ‘cosmetic defect’.
You’ll often see the term ‘cosmetic defects’ used for unauthorized copies and counterfeit items. It’s a term used to disguise imperfections that would otherwise point to the item being an unauthorized version or copy.
If you’re adding an item to your store that you think might be subject to copyright, find out where the company has its factories. If the vendor claims they are selling ‘overstock’, ask for proof from the distributor that the products are coming from the distributor’s factories.
3. Write your own product listings
It’s not just the product images that you need to be careful with, you also need to consider the text of your product listings. It’s a copyright infringement if you copy and past product listings from another retailer’s website without their permission.
Even if you’re dropshipping merchandise from an authorized distributor, you won’t have permission to use their product descriptions in their entirety. Writing a product description can be time-consuming and difficult if you struggle with writing engaging copy. You might decide to hire a professional freelancer to write original and engaging descriptions for your website.
4. Photograph the item yourself
The best thing that you can do for your product listings is to buy samples of the products you’re offering and take photos yourself. You can use these photos for your product listings and social media accounts, making it a win-win for creating organic content. Having the product on hand means you can write a more accurate product description, including a ‘how to use’ section if applicable. You can also check the quality of the item and take your own photographs, which you’ll hold the copyright for.
5. Consider selling white label products
When you’re choosing which products to sell on your dropshipping website, consider using white label products. These are products that the manufacturer allows other companies to rebrand and sell with their own logo on them. White label products can be sold either in their original form or rebranded without any copyright issues. Personalized items such as mugs and t-shirts are an example of this, along with customizable items like makeup bags.
6. Learn the basics of copyright law
Claiming that you don’t know anything about copyright won’t be a defense if you find yourself being sued by a copyright holder. If you’re serious about your dropshipping business, you should be proactive in learning about copyright law. Government websites – like the U.S. Copyright Office – will cover all the basics that you need to know to understand how copyright works.
7. Don’t forget about trademarked names and products
Just like copyrighted items, you can’t forget about trademarked names and products. Copyright and trademark work hand in hand. You can usually spot a trademark by the ® symbol next to its name or TM. Trademark is intellectual property that is protected under law.
A perfect example of this is Disney’s ‘baby Yoda’ character who went viral after the release of The Mandalorian on Disney+. Keen entrepreneurs quickly jumped on the trend and began making everything from stickers to coffee cups and t-shirts – until Disney stepped in.
Disney took action against trademarked items, including ones that used terms like ‘The Mandalorian’, ‘baby Yoda’, and ‘Star Wars’ in their keywords. These Etsy vendors had their listings deleted and, in some cases, had their stores removed from the platform. Disney is one example of a brand that is actively taking action against vendors and dropshippers who are selling trademarked and copyrighted products.
If you’re selling a mouse-shaped bowl or dish on your dropshipping website, you can’t call it a “mickey mouse bowl” without breaking trademark law. While it might seem innocent enough, it’s one way to guarantee you’ll receive a takedown notice from Disney.
If you’re concerned about copyright infringement, the best thing you can do is to avoid branded products entirely when choosing which items to sell on your dropshipping website. At Doba, we can help you find authorized branded items to sell on your dropshipping website to keep you in control of your business.