Safe Harbor? or Shady Harbor?

Disney sells. Even copyright-infringing Disney. And on Etsy, especially copyright-infringing Disney. And for the many shop owners selling Disney items on Etsy without proper licensing, they are breaking the law. But what about Etsy? Is it breaking the law by allowing the sale of illegal goods on its site?

Etsy claims safe harbor status under the DMCA,  which status relieves the company from liability for copyright infringement by its’ users. There are several requirements that must be met in order for Etsy to qualify and maintain this status. You can find those requirements here.

According to the linked FAQ (in part, emphasis added):

Question: What does a service provider have to do in order to qualify for safe harbor protection?

Answer (in part) …Finally, the service provider must not have knowledge that the material or activity is infringing or of the fact that the infringing material exists on its network. [512(c)(1)(A)], [512(d)(1)(A)]. If it does discover such material before being contacted by the copyright owners, it is instructed to remove, or disable access to, the material itself. [512(c)(1)(A)(iii)], [512(d)(1)(C)]. The service provider must not gain any financial benefit that is attributable to the infringing material. [512(c)(1)(B)], [512(d)(2)].

According to one attorney (emphasis added):

In addition, if the service provider has the right and ability to control the infringing activity and if the service provider receives a financial benefit directly attributable to the infringing activity, the service provider will not be protected by Section 512 of the Digital Millennium Copyright Act.

So, I don’t know. Is Etsy protected by Safe Harbor or not?  I suppose we will only find out when the company is challenged in court and claims Safe Harbor as a defense.

In any event, since copyright infringement is illegal, it seems ethical business practices would dictate that Etsy at least discourage the unlawful sale of copyright-infringing items on its site. Does it do that?

Nowhere does Etsy policy state copyright-infringing items are prohibited; the only copyright-infringing items prohibited are those for which Etsy has received a takedown notice. Etsy seller policy states: “…. items that violate our intellectual property policies are not allowed on Etsy.”  The link goes to a notice of Etsy’s take down policy, which notice is one of the requirements for Etsy to qualify for safe harbor status.

Rusetsy has found nothing on the site stating that one cannot sell copyright-infringing items, and nowhere does Etsy make any attempt to dissuade sellers from doing so. In fact, Etsy even goes so far as to shut down forum threads where sellers point out copyright infringement. But then. Why would Etsy discourage the sale of something it profits from? Listing fees, transaction fees, direct checkout fees, and…. don’t forget search ads

Look at this list of search ad keywords. Every time a buyer searches for one of these items, Etsy profits from the paid ads using these tags. Isn’t the word “Disney” a trademark, and does Etsy have a license to profit from the “Disney” brand?? I don’t know the answer to these questions, but that harbor where Etsy is anchored seems more shady than safe.

disney  $0.000502       $0.50
disneyland      $0.001191       $1.19
disney applique $0.002312       $2.31
disney apron    $0.003786       $3.79
disney bow      $0.001697       $1.70
disney brave    $0.001263       $1.26
disney car      $0.000908       $0.91
disney christmas        $0.002084       $2.08
disney clothing $0.001489       $1.49
disney countdown        $0.005000       $5.00
disney couple   $0.005000       $5.00
disney cruise   $0.001061       $1.06
disney dress    $0.000973       $0.97
disney earrings $0.001629       $1.63
disney fabric   $0.002181       $2.18
disney font     $0.005000       $5.00
disney frozen   $0.001249       $1.25
disney halloween        $0.004411       $4.41
disney jewelry  $0.001217       $1.22
disney lanyard  $0.001238       $1.24
disney magnet   $0.002638       $2.64
disney ornament $0.001249       $1.25
disney plane    $0.001507       $1.51
disney poster   $0.003131       $3.13
disney princess $0.000733       $0.73
disney ring     $0.001889       $1.89
disney shirt    $0.001210       $1.21
disney stitch   $0.001329       $1.33
disney sweater  $0.001570       $1.57
disney sweatshirt       $0.002396       $2.40
disney tom      $0.003401       $3.40
disney up       $0.001175       $1.17
disney villain  $0.001293       $1.29
disney wedding  $0.001436       $1.44
disney world    $0.004525       $4.53

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4 thoughts on “Safe Harbor? or Shady Harbor?

  1. I believe that as a group – we need to start reporting Etsy’s offense to the individual trademark holders.

    I know to make use of the word “Firefly” is a serious no-no to Fox – who was trademarked the show and any products, fan fare and definetely a company like Etsy who is profitting off the use of the show in their search ads.

    So is the NFL, BBC, Adidas, Aerosmith, Galaxy Samsung, Macbook and Apple… just go look at the A’s alone and you’ll see tons of trademarked names that Etsy is profitting off the use of.

  2. The Disney Key words has left me speechless. I no longer report counterfit or copyright to Etsy I go directly to the brand. I have a form letter stating that Etsy once a global market place for unique handmade is now a harbor for counterfit and trademarked items and supply the link and shop.
    I guess it will take one lawsuit to get them to wake up and smell the roses.

    • But in doing that – all we are merely accomplishing is having disney contact etsy to say “please remove the offending listings” — they are unaware of the fact that Etsy’s own search ads keyword list has tons of disney references; thus providing direct revenues to Etsy.com on a trademark infringement.

      Etsy has been removing those shops and listings who carry any of the trademarks. Not a single one of these trademark companies know etsy itself is selling the words through their sponsored ads.

      • It wouldn’t be too hard to have a program search for the word Disney to prevent it from being used in the ads. They choose not to do so as this would cost them revenue.

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