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Etsy & Etsy News
Hall Of Shame Members
This Page Added September 11, 2009





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Last Updated September 29, 2009

You will note that there are a lot of pundits who will tell you what you can and cannot do with patterns, licensed fabrics, embroidered images, pictures of products, and descriptions, but none can point you to specific court cases or federal law that supports their claims. Etsy is one of those web sites. Etsy joins our list of moronic and self-serving corporate attitudes all in the name of big bucks and the seller be damned. We rank them just after eBay on the stupid scale.




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The Etsy News makes the "claim" in its Mission that it is the "Unofficial news for Etsy's buyers and sellers" and that "UEN's editors are NOT employed by Etsy or affiliated with Etsy; we just care about the community". However, we believe that in order to use the "Etsy" name they have either official permission or implied permission, and therefore Etsy News has more than some responsibility. Also, a certain "Sarah" appears to have strong ties to Etsy from comments on the site (FYI - "Etsy" rhymes with "Besty"). These strong ties refute the presented appearance of no affiliation (or sponsorship) with Etsy.

Seems "Sarah", who appears to be one Sarah Feingold, Esq.: Attorney and Jeweler (Sarah is Etsy's in house attorney), posted what we consider inaccurate statements on "site terms" and "copyright-branding" concerning copyrights and the format appears to give these statements credibility, thereby ushering Etsy and Etsy News into the Hall of Shame. Sarah's claim, "the First Sale Doctrine does not typically apply to a product created out of the licensed character. Therefore, it is unlikely that the First Sale Doctrine will protect a product created out of a licensed character" is directly refuted by Precious Moments vs La Infantil, 971 F. Supp. 66 (D.P.R. 1997), where the federal court denied an injunction to stop La Infantil from using licensed Precious Moments fabric to make and sell bedding.
Sarah


It is alo refuted by LEE v A.R.T. Company, 125 F.3d 580 (7th Cir. 1997), where the 7th Circuit Court of Appeals stated that when A.R.T. Company, bought and then mounted the works of art sold by Lee on ceramic tiles (covering the art with transparent epoxy resin in the process), and then resold the tiles, is was not infringing upon the copyright by Lee. See also Gracen v. The Bradford Exchange, Inc., 698 F.2d 300 (7th Cir. 1983), supporting the claim that the mounting process cannot create a derivative work because the change to the work "as a whole" is not sufficiently original to support a copyright.


Sarah, did you even take trademark and copyright law in law school? Or did you sleep through those classes as well? Your statements, as Etsy's in house attorney, defy logic and comprehension.




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Sarah's next statement, "When you buy a copyrighted good, for example licensed beads or stickers that have a character on them, you are only buying the physical object and not any of these exclusive rights" is refuted by the Supreme Court:

"The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution."
Justice Stevens, delivering an opinion for a unanimous Supreme Court in the case QUALITY KING DISTRIBUTORS, INC. v. L'ANZA RESEARCH INT'L, INC. (96-1470), 98 F.3d 1109, reversed.


Her next statement, "When you take a licensed character and create a product, for example a necklace or a bag, you are transforming the good, and most likely creating a Derivative Work" (emphasis added) is refuted by the Precious Moments case and by:


In order for a work to qualify as a derivative work it must be independently copyrightable. Weissmann v. Freeman, 868 F.2d 1313, 1320-21 (2d Cir.), cert. denied, 493 U.S. 883 (1989); see also L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2d Cir. 1976).


Sarah, do you really have any idea what a derivative work is? Perhaps Sarah could explain how taking a piece of fabric and making a bag from it qualifies the bag to be copyrightable? It isn't and never could be. A derivative requires the "transformation" of the copyrighted image into something new. The simple act of cutting and shaping fabric with a licensed image on it does not transform the copyrighted image. Sarah needs to take a close look at these two decisions from the 2nd Circuit Court of Appeals where the court states that "clothing is not copyrightable". Since the bag cannot be copyrighted, where is the infringement you claim? Since the fabric wasn't copied, or the characters on the fabric copied, there is no copyright infringement. There is no trademark infringement because you are not counterfeiting a product; you are using genuine material.


Her last statement, "For example, if I make and sell a quilt from licensed fabric, a consumer may assume that the quilt is an officially licensed product" ignores the requirement under trademark law, the Lanham Act specifically, that the seller must do something to deceive the public into believing that the quilt was manufactured by the trademark owner. This is why we suggest crafters use the Tabberone Disclaimer. Sarah, you are a moron who is spreading the false assumptions upon which many people labor. It has been our experience that far too many people on the Etsy.com web site believe you. You are doing a lot of harm.




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Etsy was originally on the Craft Sites Hall of Shame page which was added July 7, 2007. On September 11, 2009, this page was expanded, given its own page listing and the following was added:



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Etsy could, like eBay could (but does not), demand a detailed explanation of alleged infringement and examine that explanation to determine the validity. Neither the DMCA or federal law holds the IP provider accountable for refusing to remove objectionable material, it only provides a "safe harbor" for those that promptly removed allegedly infringing material. It would still be up to the rights owner to prove contributory infringement which would be very difficult if the IP provider had a reasonable doubt as to the validity of the alleged infringement. Etsy does not demand a detailed explanation of alleged infringement nor does it appear to care. The only plus we see in the Etsy cowardice is that unlike eBay, Etsy mentions the counter notice in the take down and will use it for trademark and patent claims whereas eBay does not.
Etsy has joined eBay in telling lies and fabricating information. Caving to Marvel's letters of intimidation, Etsy is terminating lawful auctions for items made from licensed fabrics sold by Marvel. Why? Because, according to Etsy, some yoyo named Gregory Pan, Contracts Manager of Marvel Entertainment, has claimed certain items are "not authorized". What a bunch of wussies.

Etsy can't give a better and more accurate description of what is meant by the comment from Gregory Pan, Contracts Manager of Marvel Entertainment, because Esty does not ask for one. Could Etsy require more detail and then could Etsy make a determination if the claim were prima facie valid? Etsy could but like eBay, Etsy is afraid of lawsuits. Etsy is more concerned about lawsuits that would not happen than protecting the rights of the Etsy sellers, who like the eBay sellers, are the primary source of revenue for the site.

And Etsy is lying about liability. In Etsy's Copyright and Intellectual Property Policy (http://www.etsy.com/copyright_policy.php), Etsy falsely asserts to the rights owner, or to the seller who might challenge the takedown,


"If you materially misrepresent that a product or activity is infringing your intellectual property, you will be liable for damages (including costs and attorneys' fees)."


According to whom? The DMCA states the requirement is that they "knowingly materially misrepresent" the facts (emphasis added). Etsy left out the word "knowingly". That is also trumped by the low standard of the DMCA for a "good faith belief" for issuing a takedown. If the rights owner has a "good faith belief" then there is no way that they can "knowingly materially misrepresent" the facts. Even in cases where the courts have found the rights owner knowingly lied, damages have not been assessed. That statement is a lie.
If the courts will not hold the rights owner liable, how many times do you think they have held the alleged infringer to be liable? First, how many rights owners have actually sued after receiving a counter notice? Very few. Why? Because most legitimate infringing activities will be stopped with a lawsuit, not with a takedown. Going after small sellers is nothing more than resume enhancement.












Rebuttals
In an effort to provide a balanced view, we make the following offer to anyone who feels they have been wrongly accused on this web site.

If you, or your company, have been referenced on these pages, and you would like the chance to post a rebuttal, we will post your rebuttal (provided it is in good taste) so others can read it. The rebuttal must be submitted in a format that can easily be converted into HTML. We reserve the right to alter the rebuttal to make it more readable. However, we will not alter the content (unless there is offensive material to be removed). We also reserve the right to comment on any rebuttal received. Emails protesting the content of this web site may be treated as rebuttals by us at our discretion.



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