In the fast-paced, ultra-competitive world of e-commerce, the brands that survive and flourish are the ones that are continually innovating. According to Statista, Amazon achieved total sales amounting to USD 127.36 billion in Q1 of 2023, representing a net sales increase of 9.37% from the previous quarter. With such rapid growth, e-commerce brands must constantly innovate with new product launches. Successful brands always develop new and exciting products as they strive to carve out a market share.
It is no secret that e-commerce marketplaces are full of bad actors. Counterfeiting remains an ongoing issue with Amazon. With so much nefarious activity on e-commerce marketplaces, protecting intellectual property (IP) has never been more crucial for brands to remain competitive. In addition to copyrights and trademarks, patents are another form of IP protection brands should be aware of.
What is a Patent?
In a previous GreyScout blog, we covered the importance of protecting IP and trademarks through copyright law. Copyright and patent law protect against IP theft. However, they serve different functions. Copyright is a form of protection granted to original works of authorship, including literary, artistic, musical, and other creative expressions. Patents, however, are presented to protect new and valuable inventions or discoveries. They provide product developers exclusive rights to their ideas for a limited period.
When it comes to products sold on e-commerce marketplaces, there are two distinct types of patents that brands should be concerned with, known as utility patents and design patents. A utility patent protects a product’s core function, whereas a design patent protects the “ornamental” appearance.
Utility Patent: Protecting Functionality
A utility patent is the most common type of patent. It protects new and useful processes, machines, manufactured items, and compositions of matter. In e-commerce, utility patents are often used to protect innovative technologies, algorithms, and business methods. For example, in 1999, Amazon patented its one-click buying process.
A vital element of the coveted Amazon Buy Box, the “1-click” button allows customers to purchase products instantaneously without entering their billing and shipping information. This core element of Amazon’s functionality patent would be considered a utility patent. Other examples of a utility patent include:
· Protecting Software and Algorithms: E-commerce platforms often rely on sophisticated software and algorithms to enhance user experiences, optimize operations, and drive sales. Utility patents can protect these technological innovations.
· Business Methods: If your e-commerce business has developed a unique and effective way of conducting online transactions, a utility patent can safeguard your proprietary business methods.
· Novel Devices: Innovative hardware or devices that improve the e-commerce experience can also be protected under utility patents—for example, a new type of digital shopping cart with advanced features.
· Backend Operations: Unique logistics and inventory management systems that improve efficiency can be patented.
Design Patent: Protecting Aesthetics
A design patent is granted to protect a product’s ornamental or aesthetic aspects. A great example of the use of design patents comes from Peak Design, a camera bag and accessory brand whose sales come primarily from Amazon.
As reported by CNBC, Peak Design found that competitors were copying many core design aspects of their top-selling product, a sling bag. They responded by filing design patents to protect their bag’s logo, colour patterns, and unique access points. Design patents cover the unique and non-functional visual elements of a product. In e-commerce, design patents are often used to protect the look and feel of a product, packaging, or website. Examples of a design patent include:
· Website Layout and Design: The distinctive design elements of an e-commerce website, including logos, icons, and overall page layout, can be protected by design patents.
· Product Design: For physical products, the unique and non-functional aspects of the product’s appearance, such as its shape, pattern, or surface ornamentation, can be safeguarded.
· Packaging and Branding: Design patents often protect unique packaging designs, including product labels and branding materials.
The Bottom Line
Applying for a utility or design patent can be complex and expensive. In the case of Peak Design, for example, the brand protected its products with 200 patents at a price tag of roughly $1,000 each. Registering patents can prove to be a costly business expense. Safeguarding the investment by remaining proactive to identify and act against would-be patent thieves is essential.
Using automated brand protection software and tools like GreyScout can make it easier to monitor, identify, and quickly act to defend against scammers, counterfeiters, grey market resellers, and other cyber criminals online to ensure your patented products are secure.
