Expanding trademark liability destroys small business – compliance costs are too high

Legislators behind the SHOP SAFE Act are taking a complicated and misguided policy approach to protect consumers by reorienting copyright and trademark law previously established by overturning standing court precedent. If passed, the bill would adopt a guilty-until-proven-innocent attitude towards internet retailers, forcing legitimate small businesses that operate online to prove they aren’t selling stolen items.

The bill’s broad interpretation of trademark law would allow big-name brands to copyright basic colors, common phrases, and simple words. This means online sellers would have to “proactively” hunt down trademarked items to comply with SHOP SAFE’s hastily put-together and poorly-written policies. Small business owners aren’t seasoned trademark attorneys. They simply shouldn’t be expected to become experts on complex trademark regulations, nor should they spend valuable time and resources agonizing over hypothetical issues with their product that could potentially put them out of business.

Unfortunately, SHOP SAFE’s impossible compliance standards and burdensome bureaucratic regulations are only the beginning of the bad news for small online businesses.

To make matters worse, this legislation green lights big brands to bully their small online competitors. Since the bill places the onus on online sellers to take down copyrighted goods, large corporations can abuse SHOP SAFE’s expansive and overly-broad interpretation of trademark law to aggressively pursue smaller competitors that sell similar products, forcing them to back down out of fear or bogging them down with expensive litigation.