Navigating Copyright and Trademark Law in the Handmade Marketplace

In the age a technology, creating professional quality handmade items is at its peak.  The internet is a glorious tool, and I've spent many hours on Pinterest, pinning away good intentions and pipe dreams on to cleverly named boards (my favorite was a Christmas board I aptly named "Ho, Ho, Ho and a Bottle of Rum"). All too often, I hear reports of people stealing other's ideas and work, or infringing on copyright or trademark law. It's frustrating for the creators, as can be navigating the laws when starting a new business.  Ignorance is not a legal defense, so I decided to write this post as a general overview on the topic.
Disclaimer: I'm not a lawyer, nor am I giving legal advice.  Use this post as a reference or resource, but ALWAYS defer to a lawyer when dealing with legal issues.  
Recently, a dear friend, and fellow handmade shop owner, came to me looking for advice. She was dealing with some pretty major copyright infringement issues, as well as idea poaching.
So what is copyright law, and what does it protect?
Copyright is a form of intellectual property law that protects original works of authorship: This means things you write, draw, compose, and design.  This encompasses literary works, dramatic works, musicals, recorded choreography, and artistic works. Sewing patterns and computer software have copyright protection.  
The Scales of Justice- way more intimidating that my bathroom scale.
Copyright law is automatic and lasts for a limited time.  You write something original, that document is protected in country of origin, and you are granted the exclusive rights for its use and distribution. The exclusive rights are not absolute- they are limited "by limitations and exceptions to copyright law, including fair use,"  The moment you put your original work into fixed form, it's protected by copyright law.  Neat, huh?  You can grant the right for others to use the work (you need to put it in writing), but others cannot legally use your work without your expressed written consent.
Copyright vs. Patent vs. Trademark protections
Copyright: original works of authorship
Patent: inventions or discoveries
Trademark: protects words, phrases, symbols, or designs identifying the source of the goods or services of one party and distinguishing them from those of others (ex. Disney, Daniel Tiger, Kleenex, Cheerios).
Sewing patterns (the physical paper or digital file) are protected under copyright.  However, the design is not.  
You do not need to register your trademark in order to receive protection; however registration is required if you need to protect your work in court.
Copyright is essential to the free market, and especially that of the handmade market. It protects the hard work and ideas of creators.  Without copyright, anyone can take anyone else's intellectual property, slap on some fancy marketing, and claim it as their own.  If you are going to use someone else's work, you MUST be sure that the item is for commercial use, and it's either free domain, creative commons, or you have purchased the rights to use it commercially.  
So what happens if you steal copyrighted work? 
If you don't get caught, nothing (aside from the weakening of your moral conscious and ability to sleep at night). But the same can be said about robbing a bank, and that is also ill-advised and NOT recommend.
Want to know a great way to never get caught red handed?  Don't break the law in the first place. 
If you do get caught, you are going to be in a heap of legal trouble. You will likely first be sent a cease and desist letter, which is a legally binding document that basically tells you to knock it off.  If you ignore the letter and continue, you will be taken to court.  Sometimes no c&d letter is sent, and you are just taken to court. Womp womp.
 How strong is your moral compass?  If you can't look Sister Margaret in the eye, you probably shouldn't do it.
So let's go back to my friend.  She found someone took a design she created, imposed their own shop name on it, and used it for their own purpose.   Below, my friend's original design is on the left.  The image on the right is an example of someone downloading the design on the left, and imposing her shop's name on it and rearranging the artwork. (Please note that this is not the actual work, just an example created specifically for illustrating this point.)  Though it is different, the original artwork IS protected under copyright.  Unauthorized duplication, in part or in whole, is illegal.  Not cool, man.
Since then, she has sent a cease and desist letter, demanding the work be taken down. She plans on taking further legal actions if necessary- let's hope for everyone's sake that it doesn't resort to that.
More recently, she had an issue with a competitor taking a part of her work and using in a design. (This is a big annoyance with digital shops- it can be very difficult to protect your livelihood.) Here's an example of what it looked like (please note that this is not the actual work, just an example created specifically for illustrating this point):
Her work is on the left, the copy is on the right.  As you can see, the fonts and words are different, but the dolphin artwork is the same. My friend created the dolphin, so she owns exclusive rights to use the image. Anyone using this image must either own the rights, a license to use for commercial purposed, or expressed written consent from the owner of the rights.  
If the dolphin image was not hers, there isn't a basis for copyright infringement.  It's just a shitty, and unoriginal, move.  
The consequences.
If the case goes to trial, and the defendant is found guilty of copyright infringement, the punishment can be steep, ranging from $2,000 to $150,000 per work, plus all court fees. The amount is based on the amount of lost profits from the infringement and the number of times you infringed on the copyright. Typically, damages about $30K are only awarded to "willful" infringement.
Trademark infringement is similar, and includes both an injunction requiring the defendant to stop producing/using/distributing goods with the trademark and seizure of goods that use or incorporate the unauthorized trademark.  
So all those Disney princess items you see on Etsy?  That's infringing trademark. The crocheted Minion cap that is being sold at the craft fair?  Also trademark infringement if the seller has not purchased the right to sell.  Selling photocopies of a Moana coloring book?  Copyright infringement.  Copying and pasting an image off the Paw Patrol website to print on an invitation that your selling in a handmade shop?  Copyright infringement, AND trademark infringement if your selling under the Paw Patrol brand name.  
What should you do if you catch someone stealing your copyrighted work or infringing on your trademark? 
Step one- get proof that includes a timestamp.
Step two- contact a lawyer.  Getting legal counsel is essential to protecting yourself and your work.  It's worth every single penny.  
But... but... Fair Use!
There are limitations and exceptions to exclusive rights.  I'm going to go into great detail here, as it's a complex issue.  There are Supreme Court judgements and lawyers who make entire careers out of this, so I'm going to sit here and pretend I'm an expert.  But here's a quick outline.
The four factors judges consider are:
  • the purpose and character of your use.
  • the nature of the copyrighted work.
  • the amount and substantiality of the portion taken
  • the effect of the use upon the potential market.
Fair use can be challenging to prove in court (which means lots of lawyer fees), and if you're going to use it as a defense you should run it by a lawyer first.  Otherwise, you risk getting yourself in a whole heap of trouble later on.
The bottom line: copyright infringement hurts creators.  Whether it's a small shop, and individual, or a big corporation, there is a brain behind the idea.  It is a real human, a person, who thought, visualized, designed, edited, refined, developed, and cultivated.  Hours, days, even years go into the creation of copyright works.  When you take copyrighted work and sell it, you are stealing from others' livelihoods.  
But the corporations make millions!  
Every corporation began with one person with an idea.  Exercise some empathy, put yourself in the situation of the owner of a large, successful business that started with YOUR idea.  A business that you painstakingly grew from nothing, marketed, invested in. Examine how you would feel if others stole your ideas, piggybacking on your years of hard work, in order to turn a profit. I know I would protect my work and company.
So this leads me to....
How do you compete with sellers who copyright infringe?
This is tricky. It is tough, because people go GAGA over certain brands, and it's tempting to jump on that bandwagon and make some money.  Some people turn a pretty penny selling Elsa this and Daniel Tiger that- but in order to do it legally you MUST obtain the proper rights from the corporation holding trademarks, which is expensive (and some people do!). Otherwise, you are putting yourself at risk.
But coming up with my own ideas is HARD.
YUP. That's the whole point. Making something from scratch IS hard.  Don't steal other people's hard work.  
Creating a business is hard.  Creating and developing ideas is hard.  And stealing is wrong. If you develop a business or brand one stealing as your foundation, at some point it's going to bite you in the ass. 
The truth is, you MUST do you due diligence of creating your own products and designs that people love.  Check the United States Patent and Trademark Office database first. Register for your own trademark to protect your own work.  
Your mom was right- honesty is the best policy.