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Licensing for Amazon Software Sellers

Intellectual Property Complaint

Is a brand manufacturer accusing you for infringing on their Intellectual Property (IP) rights by using their images on a listing?  You’ve come to the right place.  As a software seller on Amazon, you have rights, but also responsibilities and rules to abide within.  Today, we’re going to discuss those rules and how a license agreement can help you keep your Amazon account alive and well.  But first, let’s discuss how the problem starts, and why you need a license agreement in the first place.

 

Why Do Amazon Software Sellers Need License Agreements?

Let’s say you’re selling accounting software on Amazon.  And you’re not the only one–there are 6 other sellers on the listing, all selling the same thing at various price points.  The software you’re selling is brand new, but other sellers might be offering “Open Box” software, which is technically allowed by Amazon as long as requirements are met.

One day, you get a message from the brand manufacturer of the original product, asking you to cease and desist from listing their official branded images of the software.  According to the brand’s lawyer they consider what you are doing as an Amazon seller as a violation of their IP rights.  The thing is, you didn’t create the listing. Another seller did. You’re simply listing there. Are you in the wrong?  And if you are, how can you combat this in the future to avoid being suspended? We’ll address that a little later on.

Let’s say the brand is the one that created the listing.  However, they’re still sending you a cease and desist letter for being on their listing and “using their images.”  In this case, typically, the brand’s lawyers are unaware that the brand waived all of their rights to the images and verbiage per the Business Solutions Agreement with Amazon. This is the governing contract that all Amazon sellers have with Amazon.

In case you’re wondering, here’s what the Business Solutions Agreement with Amazon says (2015 version):

You grant us a royalty free, nonexclusive, worldwide, irrevocable right and license during the term and for as long thereafter as you are permitted to grant the said license under applicable Law to use, reproduce, perform, display public communication, distribute, adapt, modify, reformat, create and exploit derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of your materials, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties.

Technically, as long as the Trademark symbol isn’t used fraudulently for a different product than the brand’s own, the brand agreed to this when they signed their contract.

 

When is an Amazon Seller is in the Wrong

If you create a listing and copy verbiage or images from a brand and post them without their consent, you are in violation of their IP rights.  In addition, if you are selling a prohibited type of software, you are definitely in the wrong.

Here’s what Amazon prohibits, according to their Selling Software Help page:

  • Duplicated or copied software: Software that has been copied onto CD-R, CD-W, floppy disk, or any blank media by anyone other than the original software manufacturer.
  • Academic editions: Software sold to students, academic faculty, and educational institutions expressly for use by students and educators. Since Amazon has no way of verifying that a seller or buyer has an academic connection, we prohibit the sale of this type of software on Amazon.
  • OEM software: Original equipment manufacturer (OEM) software comes bundled with, installed on, or packaged with computer hardware. You cannot sell this software on Amazon unless you are also selling it with the associated hardware and listing it against the hardware ASIN.
  • Promotional software: Software distributed freely by manufacturers to promote their products.
  • Beta (pre-release) versions: Software distributed for the purpose of troubleshooting, testing, and evaluation.
  • Freeware and shareware: Software distributed free of charge by the copyright owner.
  • Expired subscription-based software: Software that is no longer usable because it has passed its subscription time period.
  • Back-up copies: Copies that are made to protect the purchase of a software title. This software cannot be distributed, shared, or sold.

Tips for Amazon Sellers

Make sure you stay within these guidelines if you plan to fight back or negotiate with any brand to save your Amazon account and maintain profitability.  Then, make sure you take appropriate steps to protect yourself with a licensing agreement. And if you’re already embroiled in a war with a brand, a license agreement can help you too.

Here’s how….

 

How a License Agreement Works

License agreements are a great way of settling a dispute between a seller and the brand or rights’ owner.  Let’s say you’ve proven that you’re able to sell the accounting software and you want to continue doing so. After all, it could be one of your most valuable SKUs.  At the same time, the brand wants to regain some control and maintain prices, and keep selling as many units as possible.

This is where a license agreement comes in.

Here’s what the seller might offer the brand:

  • Brand policing
  • Purchasing directly from rights’ owners distribution network
  • Agree to maintain MAP pricing

The agreement could include other stipulations, as determined by the brand. The key is to maintain your profitability without making too many sacrifices.  If all goes well, the brand owner may retract the complaint, enjoying brand policing as well as continued profits, and you can continue to sell the software.

At the end of the day, it’s a win-win situation for both parties.

 

How License Agreements Can Protect Listings

An End User License Agreement (EULA) is a contract that establishes the purchasers right to use a piece of software–as long as they abide within the author or publisher’s set agreement (the EULA).

EULAs are a great way for sellers and brands to build an IP right into their products because licenses are treated differently than products. 

For example, a supplement company can include a license to visit a private website or portion of a website and nobody else will have the right to sell that with the product.

If another seller attempts to sell that product on that company’s listing, then the company will have leverage and can do several test buys that prove the seller is offering a fundamentally different product.

Simply put, it’s a great differentiating factor that could mean the difference between maintaining control of your product or watching another seller drain your profits.

 

Amazon Sellers’ Lawyer Conclusion

If you’re in the middle of a dispute with a brand for an IP violation, it’s important to make sure you know every possible right you have as an Amazon seller. What you don’t know could result in an account suspension or lawsuit–neither which are good for your bottom line.  Looking for more help with an IP violation accusation? Reach out to our team directly, or check out our other resources:

This article was researched and written by Anders Jorstad.  Anders is a content creator for Amazon Sellers Lawyer. Anders will be earning his degree in journalism from Hofstra in the fall and has five years of professional journalism experience. He has written for numerous online and print publications including SB Nation and The Hofstra Chronicle. 

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