With the COVID-19 pandemic sweeping through the United States, traditional shopping experiences have become few and far between. Instead, consumers tend to choose online shopping platforms that offer shopping experiences from the safety of a house. In addition, it’s tempting while working from home or working fewer hours, to make and sell items on the internet. One of the most popular sites to buy and sell homemade goods is Etsy, which has grown in popularity over the past decade. With necessary items such as masks in short supply, Etsy users have been making up the shortfall. However, selling patterned masks on Etsy presents the risk of trademark infringement if a crafter does not obtain prior permission to use a pattern.
One particular Etsy user, Kim Schultz, made and sold masks including popular patterns, such as sports team logos. The patterned fabrics often cost more as a raw material due to licensing fees paid to the rights holders. As a result, the patterned masks tend to cost more than plain masks; however, consumers prefer patterned masks to show individuality on a necessary clothing item. At times during the pandemic, Schultz made thousands of dollars per day selling masks online.
Trademark Infringement: University of Iowa vs. Etsy User
However, Schultz recently received an email from Etsy informing her of a trademark infringement allegation. One licensed pattern Schultz used was that of the University of Iowa; the University objected to Schultz’s use of the fabric for profit. While any copyright the University may claim in the fabric was likely exhausted when Schultz purchased the items, the University claimed trademark infringement of the Hawkeyes logo.
The main issue from the University’s perspective is policing its trademark from counterfeit goods. Under the Lanham Act, Schultz’s goods that include the University of Iowa Hawkeye logo likely constitutes trademark infringement by way of counterfeiting. In other words, a member of the public is likely to confuse Schultz’s masks with the University of Iowa, such that confusion exists between the source origin of the goods. At its heart, trademark law protects source recognition for consumers. Counterfeit goods confuse the source origin, leading to trademark infringement.
For online retail stores, it is important to vet intellectual property issues before placing items for sale. As noted above, selling items of Etsy presents trademark infringement risks without prior permission. Making sure a product does not constitute trademark infringement can save a lot of anxiety and money down the road.