158 Amazon Legal Issues with CJ Rosenbaum Part 2 of 3
A lot of us sellers do while label existing products. It’s important that you don’t inadvertently break IP laws and get into Amazon legal issues.
The best option is to hire a lawyer to run a search on that product. They will give you an opinion as to whether or not that product is likely to be problematic. To further protect yourself you want to add in a feature that no one else can deliver. For example, a membership program. If you’re selling a generic product, every quarter your members will get a newsletter where they can log into a system and get exclusive content. If you’re selling yoga pants, you can include a fitness routine. While the pants may be generic, that fitness routine is copyright.
Avoiding Patent Issues
There is a general rule that if you take a patented product, change something about it, it is no longer covered by the patent. For the most part that is true, at least for simple products. For more complex products, it may not hold up. An example is that Apple and Samsung have been battling for years over patented technology. While the phone was different, Samsung had used some patented technology in their phones. Be sure to consult an IP attorney on your products to avoid legal issues.
Amazon Legal Issues
Having a Limited company in the UK offers protection against liabilities. It prevents your personal assets being used to compensate legal issues for your company. If you’re doing business in the US, you’ll want to register your company in at least one US state. This should offer you some legal protections for your UK based company.
It is highly recommended that you have a general liability policy to protect your company’s’ losses should your product hurt somebody. If your company is a legal entity, like a Limited company or a LLC in the US, this will protect your personal assets.
Product liability insurance is always a good idea to protect you from Amazon legal issues, but how vital it is depends on your product. If you’re selling t-shirts, the likelihood of somebody getting hurt is pretty low. However, if you’re selling those hoverboards that blew up, then the risk is much higher.
Amazon Account Suspension Insurance
There is a new type of insurance that is coming onto the market that protects you in case you run into Amazon legal issues and are dealing with account suspension. There are three types of insurance dealing with the different types of Amazon sellers. That is private label, wholesale, and retail arbitrage. There are different rates for each type of seller. It helps cover money lost when your account is suspended. They give you $500 to pay for Amazon Sellers Lawyer or another attorney to help with your plan of action. If you don’t get reinstated in 120 hours, they start paying your lost profits.
Risk vs Reward
One mistake people often make is that they don’t take the need of insurance seriously. The chances of your product injuring someone or of your getting sued is slim. However, if it were to happen, the reward for having insurance is astronomical. These insurance policy protect you in two ways. The first is that they cover the cost of the liability called indemnity. If your product were to burn someone’s house down like the hoverboard did, insurance would cover that payout. They will also provide a lawyer to defend you. These legal fees can become tens of thousands of dollars in the blink of an eye.