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Small Business News

Fighting Back (and Winning) in Trademark-land

Might doesn't always equal right and microbusinesses can fight back against the legal heavyweights

July 14, 2003 -- The Digital Millennium Copyright Act (DMCA) was supposed to answer the needs of new technology, offering intellectual property holders a means to protect themselves against infringers in a virtual world. Most people have heard of it in the context of file-sharing technologies such as Napster, or anti-circumvention cases (in which people work to circumvent technological content locks to prevent unauthorized copying).

Among other things, the DMCA also very cleverly allows service providers such as web hosts, ISPs, search engines and the like, to avoid liability for infringements while encouraging them to cooperate with those intellectual property holders. Under this law, if a service provider is notified by a copyright holder of a possible infringement by one of the service provider's customers, then they can avoid liability by pulling the plug on that customer.

There have been plenty of complaints about this law among music fans and computer programmers, but very few people realize the way this law has given large, branded companies a club with which to beat up small businesses -- sometimes even when they have no right to do so.

More often than not, an online microbusiness that is presented with a cease and desist letter from the attorneys for some corporate giant will opt to comply rather than take on a protracted legal battle. In fact, more often than not, the small business owner will assume that the lawyers know what they are talking about and that the big company is within their rights.

But sometimes, corporate attorneys pick fights with the wrong people. Some small business owners get mad, and then they fight back.

One such microbusiness is Tabberone (www.tabberone.com), an online retailer of handcrafted fabric products operated by Karen Dudnikov and ably assisted by her programmer spouse, Mike Meadors. Without benefit of legal counsel, Dudnikov and Meadors have tangled with corporate giants such as Disney, M&M, Mars, Warner Brothers and, most recently, Major League Baseball. What's pretty cool about all this is the fact that the proprietors of little Tabberone keep winning.

I bet you're wondering what all the fuss is about.

Basically, Dudnikov and Meadors have been taking these companies to court in order to win the right to sell what they make out of what they buy.

Karen Dudnikov purchases licensed fabrics bearing trademarks of all those companies, and uses them to make everything from aprons to eyeglass covers. She sells them from her web site and from eBay. After eBay closed a number of her auctions upon receipt of DMCA notices from the relevant trademark holders, Dudnikov and Meadors got fed up.

After learning just how expensive legal representation would be, they decided to represent themselves in court. Meadors started doing research online and put together a legal case that seems to be cowing corporate attorneys left and right.

Their basic argument is essentially the same legal case for selling used books or other reproductions of copyrighted items. "The law allows a lawfully acquired copy of a copyrighted item to be sold or given away -- because its your property," Meadors told me in a telephone interview.

They have been to court facing off against Disney, M&M and Mars. All three backed down within one month, with Disney's legal counsel going so far as to candidly admit to Meadors that they did not want to be the test case here. They have had out-of-court confrontations with Warner Brothers and Precious Moments, and neither of those companies were willing to cross the line they drew in the sand, either.

At the moment, they are involved in a lawsuit against Major League Baseball Properties, the latest company to object to their use of licensed fabrics to make the items they sell. Within the standard one month, they wanted to settle out of court, too, but by then the Tabberone team had had enough.

"We want a federal court judgement," Meadors says.

So, Major League Baseball was forced to file a response to the original complaint late last month, and Meadors promptly moved for summary judgement. He expects a decision sometime in mid-August.

In the meantime, Dudnikov and Meadors are also doing what they can to educate other small business owners so that they needn't feel that rolling over is the only thing to do in the face of unfriendly legal attention from large corporations. "Big law firms are telling small businesses that they are breaking the law. They intimidate people into not doing things that they have a legal right to do," says an indignant Meadors.

Small business owners who need information on their right to sell their property in the face of corporate displeasure will find a veritable legal library posted at the tabberone.com web site. Additional information on this and other digital rights issues is available at the Chilling Effects Clearinghouse at www.chillingeffects.org.

(MicroEnterprise Journal editor-in-chief Dawn Rivers Baker will be discussing online microbusinesses and intellectual property issues, including this case and the EMI versus Scott Smith case, for Business Owners Idea Cafe during a segment of The Mary Goulet Show on Internet Radio July 24, 2003. For more information on our Internet Radio broadcasts, check out details and get access to all archives here.)

Copyright 2003 by The MicroEnterprise Journal
All rights reserved.

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