9 powerful legal ways to protect your eCommerce products from copycats

It’s incredibly frustrating to pour all your effort into market research, verifying suppliers, lengthy back-and-forth design iterations, endless strategy sessions, and setting up shop – only for someone else to come in and try to benefit from your hard work by copying your product and business model.

While “imitation is the sincerest form of flattery,” seeing all your hard work go down the drain is not amusing. 

In this guide, we share 9 proven and powerful strategies you can adopt to protect your brand and products. Sellers implementing these strategies can gain long-term business sustainability and a competitive edge. 

1. Register your trademark

Trademarks are legally recognized symbols, image-based marks, names, or phrases that distinguish your products from others. Securing a trademark can protect your intellectual property (IP), ensuring your brand and products remain unique and shielded from imitation.

Trademarks serve as a deterrence to potential imitators. When they know your brand and most valuable assets are legally protected, copycats are less likely to infringe on your trademark in fear of possible legal consequences. 

Where copycats still pursue imitating your products and likeness, you can address them through various legal weapons such as cease and desist letters, lawsuits, and seeking damages for losses incurred due to stealing from you.

Registering a trademark puts you in a position of strength during such disputes with other brands.

Amazon brand registry – not just for Amazon sellers

After your trademark registration with the United States Patent and Trademark Office, monitoring and enforcing trademark law is another challenge. 

Amazon Brand Registry is a free resource offering IP protection, even if you don’t sell with Amazon. It offers features like automated protections and reporting trademark violations, which give you more control over your product listings and protect them from counterfeiters and unauthorized sellers.

To enroll in the Amazon Brand Registry, you must meet the following eligibility criteria:

• Have a registered trademark or have applied for one.
• The trademarks must fall within text-based marks like brand names and slogans or image-based marks with words, letters, or numbers, such as your logo and visual elements associated with your brand.
• The trademark registrations must be domiciled with the trademark office in any of the following countries: United States, Brazil, Canada, Mexico, Australia, India, Japan, France, Germany, Italy, Turkey, Singapore, Spain, Saudi Arabia, the United Kingdom, Egypt, Sweden, Poland, Benelux, the European Union, and the United Arab Emirates. 
• Your product and / or its packaging must carry the trademark. 
• You must provide the product categories under which your product falls. 

2. Get copyright protection

Copyrights are another way to protect your intellectual property. While trademarks protect elements like your brand names and logos, copyrights serve as a tool to safeguard your creative works from being copied or misused. 

Original works you author, like written content, images, videos, music, and software, fall under the category of intellectual property you can copyright. As such, eCommerce sellers can use copyrights to protect their digital assets and products, including product descriptions, photos, instructional videos, unique web copy, and more.

Copyright protection helps you preserve your creative works’ originality and uniqueness. This is crucial in differentiating your online store from competitors and copycats, as well as maintaining a distinct brand identity and voice.

Copyrights are protected throughout the author’s lifetime and an additional 70 years after the author’s demise. It’s also important to stress that when you create original written and artistic works, they automatically become protected under copyright laws. 

However, registering the copyright for that work grants you more exclusive and enhanced rights on how that work is used and distributed. 

You can register copyrights with the United States Copyright Office.

Implementing digital rights management (DRM)

While not perfect, DRM tools give you greater control over what others can do with your assets. They minimize unauthorized copying, distribution of, and access to your copyrighted digital works.

Have you ever tried copying a sentence from a blog and were unable to do so? That’s DRM technology in action. 

Users of Netflix will also know this feeling too well when trying to capture a screenshot or screen recording of any scene. You simply can’t due to copyright issues and DRM implementation by Netflix. 

In an era with plenty of tools to extract all the data from your online store in seconds, DRM adds an extra layer where imitators may have to manually copy or download product descriptions and other assets one after the other. 

3. Secure your trade secrets

You can also protect your intellectual property by maintaining trade secrets. In simple terms, trade secrets include confidential business information that gives any company a competitive edge. 

Examples of trade secrets include proprietary algorithms, product formulations, recipes, and even your customer list. Guarding this information ensures that competitors cannot easily replicate your success or processes.

For any information to qualify as a trade secret, it must:

• Be proven to be commercially viable, either by being licensed or sold;
• Only known to a select number of people and not available in any public medium;
• Remain a secret – the seller needs to take adequate steps to ensure its secrecy.

Trade secrets are not filed with any official office but are backed by the United States Economic Espionage Act of 1996 and the Defend Trade Secret Act of 2016. Hence, any theft of your trade secrets is punishable in court. 

Measures to protect trade secrets

As outlined above, the value of trade secrets lies in their confidentiality and the steps taken to protect them. So, it behooves you to adopt measures to defend your trade secrets. Here are a few strategies:

1. Implement confidentiality agreements

One of the most effective ways to protect trade secrets is through confidentiality agreements, such as non-disclosure agreements (NDAs) and non-compete agreements (NCAs). 

You should require employees, contractors, suppliers, and partners to sign NDAs that legally bind them to keep important information about your competitive advantages confidential. Ensure that these agreements clearly define a trade secret and outline the consequences / penalties of unauthorized disclosure.

2. Secure your IT infrastructure

Protect your computers and online stores from unauthorized access and hacks by paying for top-tier security software and applications. In addition to protecting your IT system against external breaches, such applications must also support version control so you can track who made changes or retrieved data from the system.

Also, consider training and educating your staff on handling confidential information and adopting proven online etiquette – it could come in very handy.

3. Adopt best practices

Adopt best practices, such as using multi-factor authentication and strong passwords, regularly updating operating software and applications, and implementing tiered access to information. 

It’s also vital for small online business owners to invest in the security of the physical space where their computers and cabinets are located. 

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4. Leverage contracts and agreements

We’ve briefly discussed how contracts and agreements are potent tools for maintaining trade secrets. In this section, we’ll elaborate on this strategy further. 

Contracts and agreements establish clear, specific legal boundaries and expectations. They provide a framework to protect your products, IP rights, brand, business relationships, and trade secrets.

NDAs and NCAs are two of the most common confidential agreements. Still, eCommerce sellers can also use employee contracts, vendor agreements, and licensing agreements to protect their products from nefarious actors. 

Non-disclosure agreements (NDAs)

An NDA is an agreement that restricts what information the involved parties can share with others. NDAs typically contain the following:

• An explanation of what information qualifies as confidential.
• Information not covered by the NDA or under what conditions require disclosure. 
• Obligations required of the other party. For example, what must they do with any confidential information after interfacing with it? 
• The period the confidential agreement will last or how long the information remains confidential. 
• Additional details on what happens when the contract is breached, as well as stipulations like the choice of law and potential arbitration routes, are needed. 

Non-compete agreements (NCA)

In simple terms, NCAs are agreements barring employees from starting a similar online store to yours or working with competitors for a specified period after leaving your company. This prevents employees possessing valuable knowledge about your business operations, customer base, and marketing strategies from sharing with others who may profit from it.

Please note that the Federal Trade Commission has passed a final ruling prohibiting non-compete agreements and nullifying existing contracts for companies operating in the United States. This rule is effective September 4, 2024.

This new ruling highlights the need to ensure your NDAs are water-tight and that you adopt measures to preserve your trade secrets. 

Supplier and vendor agreements

These agreements have clauses that prevent suppliers and vendors from sharing details about your intellectual property. You can call them NDAs in a way, but they sometimes contain provisions that provide additional terms about the business relationship. 

For example, you can include provisions prohibiting manufacturers from producing similar products for your competitors. This is especially important when you have exclusive ownership of the design and concept. 

Licensing agreements

There are situations where you may deliberately allow others to use your intellectual property, such as when you’re expanding to new markets or partnering with other brands.

Licensing agreements provide information on how third parties can use your IP. They set clear guidelines to prevent misuse or unauthorized reproduction by your partners. 

A key benefit of licensing agreements is ensuring the other party maintains your brand’s standards. 

Agreement type	Purpose	Key elements	FTC ruling impact
Non-disclosure agreements (NDAs)	Restrict information sharing and define confidentiality terms	Define confidential information, disclosure conditions, obligations, duration, breach consequences, choice of law	Ensure NDAs are robust to compensate for prohibition of NCAs
Non-compete agreements (NCAs)	Bar employees from starting similar businesses or working with competitors	Restrict post-employment activities to protect business knowledge and strategies	NCAs prohibited and nullified as of September 4, 2024
Supplier and vendor agreements	Prevent suppliers / vendors from sharing IP details and prohibit production for competitors	Include provisions on IP protection and business relationship terms	No direct impact but reinforces the need for strong NDAs
Licensing agreements	Allow third parties to use IP under clear guidelines and prevent misuse	Set usage rights, guidelines, and standards for IP use	No direct impact but emphasizes clear guidelines

5. Implement digital watermarking

Online stores produce many digital assets, such as instructional videos, marketing videos, product images, and audio files. Without adequate protection, copycats can copy and reproduce such assets to advance their cause. 

Digital watermarking is a powerful tool for helping eCommerce sellers safeguard their digital assets and deter unauthorized use. According to Digimarc, one of the pioneers of digital watermarking, “it is the science of hiding information about an item in the item itself.” It simply embeds visible or covert information in an asset. 

One of the primary benefits of digital watermarking is that it deters unauthorized use of your content by copycats, protecting your intellectual property. 

Digital watermarks also make it easy to track your content across the web. This is also useful in protecting your trade secrets, as you can know when your employees leak sensitive documents. 

When potential imitators know that an image or video is watermarked, they are less likely to steal it due to the risk of the files being traced back to you, the original owner.

Types of digital watermarks

There are two types of digital watermarks, namely: 

• Visible watermarks: An example is adding your logo or brand name to a video or image. These are more common and can be embedded with tools like Canva and Photoshop. 
• Invisible watermarks: These use complex technology like stenographic techniques to embed the data. 

The information added to digital watermarks includes the copyright holder’s identity, usage rights, and tracking data. Invisible digital watermarks do not distort the asset and are difficult to remove without destroying the original file. 

6. Register similar domain names

Imitators can build an online store similar to yours and make slight adjustments to the domain name to redirect customers to theirs. Registering similar domains to your original brand name is a simple yet effective way for deterring copycats. 

For example, while your store may be ‘actualfit.com,’ a copycat may use actualfit.net or aactualfit.com. While inherently different, they are similar enough for unsuspecting public members to fall prey to the hoax. 

Proactively registering similar domain names prevents cybersquatting and copycats from impersonating your business. At the very least, we recommend registering top-level domains (TLDs) such as .com, .net, .org, and country-specific TLDs (.co.uk, .ca, etc.)

In addition to registering similar domains, it’s also advisable to use services that help monitor domain name registrations and alert you if someone registers a domain name identical to yours. 

While this strategy does not prevent the other party from registering similar domains, it provides a way to monitor what they do with them. If necessary, you can then take legal action. 

7. Monitor and enforce infringements

In the eCommerce ecosystem, where copycats and knockoffs are rampant, eternal vigilance should be a watchword. Market data shows that “counterfeit products account for 3.3% of world trade.” 

For this reason, ongoing monitoring and enforcement are essential in safeguarding your eCommerce business from imitation and unauthorized use of your IP.

You can pay for trademark and copyright monitoring services to automate the monitoring of brand and product infringements. While these automatic services offer tremendous value, there’s still room for manual tracking. Regularly check popular eCommerce platforms like Amazon, eBay, Temu, and Alibaba, as well as social media channels, for any signs of infringement.

8. Adopt high-standard quality control measures

Implementing robust quality control measures such as utilizing unique serial numbers, holograms, and QR codes, as well as adopting distinctive, secure packaging, are effective strategies to ensure product authenticity and deter counterfeiting. 

These measures significantly increase the cost of counterfeiting, making it less attractive for copycats due to the high-quality standards they can hardly replicate. For example, creating a hologram replica without access to the original is challenging. 

Assigning unique serial numbers to each product unit helps track and verify authenticity. Serial numbers can be recorded in a database, allowing sellers and customers to confirm a product’s legitimacy. 

This system also helps inventory management and can provide valuable data in case of recalls or warranty claims.

Adding QR codes to product packaging can also help customers confirm product authenticity. Customers can easily scan the QR code using a smartphone to access information like origin, manufacturing details, source, and other product details. 

Furthermore, investing in distinctive and custom packaging helps differentiate your products from those of counterfeiters. Going this extra mile makes it harder for copycats to create convincing replicas.

9. Take appropriate legal actions

Following the abovementioned strategies ensures you can take legal action to enforce your IP rights. You have multiple avenues, depending on the severity of the infringement. 

We advise utilizing lawyers experienced in trademark and copyright matters. Present the evidence of the breach to them, and they can recommend the next best steps. 

Legal actions can be pretty expensive and time-consuming; that’s why it’s imperative to implement other strategies that actively deter counterfeiters from copying your products. 

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Legal strategy	Protection scope	Ease of implementation	Cost	Effectiveness
Trademark registration	Brand names, logos, symbols	Moderate	High	High
Copyright protection	Creative works, digital assets	Moderate	Moderate	High
Securing trade secrets	Confidential business information	Difficult	Variable	High
Contracts and agreements	Business relationships, IP rights	Moderate	Variable	High
Digital watermarking	Digital assets	Easy	Low	Moderate
Registering similar domain names	Domain names	Easy	Low	Moderate
Monitoring and enforcing infringements	IP rights, brand integrity	Moderate	Moderate	High
High-standard quality control	Product authenticity	Difficult	Moderate	High
Taking legal actions	General IP enforcement	Difficult	High	High

Conclusion

Protecting your eCommerce products from copycats is essential for maintaining your brand’s integrity, competitive edge, and revenues. 

Implementing the above strategies, such as trademark registration, securing copyrights, and guarding your trade secrets, can significantly deter potential imitators. 

Remember – monitoring and enforcing legal actions when necessary are crucial to safeguarding your business. You can protect your hard work by taking these proactive steps.

8fig helps eCommerce sellers with $100K+ annual revenue grow through equity-free, customizable funding and expert input. Get a funding plan tailored to your needs, and start protecting your products today.

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Have article ideas, requests, or collaboration proposals? Reach out to us at editor@8fig.co – we’d love to hear from you.

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