Brand gating and two kinds of tax changes related to patent infringement damages are three welcome intellectual property trends. The business world is still in the throes of dealing with COVID-19, making news of positive future trends in IP laws especially welcome. Your intellectual property is an important matter, and the following information on current intellectual property trends could give your business a boost.

Brand Gating on Amazon

The tremendous growth and globalization of online sales through the Internet has its pros and cons. The sale of counterfeit goods on Amazon has been a sometimes-devastating IP trend that has resulted in numerous cases of costly infringement. This problem led to a major shoe manufacturer withdrawing all sales from the mega site in 2016.

Amazon acted by coming up with brand gating, which is offered to manufacturers and authorized resellers. Brand gating allows companies to maintain control over their labels and brands. The process puts added pressure on third-party sellers seeking to sell a branded product. They are now required to apply as resellers and fulfill certain criteria.

How Brand Gating Can Protect Your Brand

When you request brand gating from Amazon, your brand is safeguarded in the following ways:

• You are protected from the potential loss of sales resulting from third-party sellers and counterfeiters leeching off of profits that are rightly yours.
• You are protected from a depletion of brand trust caused by sub-par counterfeit products going to your customers.

Brand Gating and Third-Party Sellers

Third-party sellers can expect the following requirements in order to sell brand-gated products on Amazon:

• Past performance is investigated,
• Certain qualification requirements must be fulfilled, and
• Fees must be paid.

Patent Infringement Damages as Capital Gains?

As intellectual property trends go, tax changes that reduce instead of increase tax charges on IP damages are worth celebrating. With IP claims and awards on the rise, it is meaningful that money received from an infringement case may no longer be treated as ordinary income. Instead, it looks as though patent damages will be categorized as capital gains.

Traditionally, the IRS has treated patent damages as though they were similar to royalties. Under certain circumstances, per section 1235 in the current tax code, those damages are now treated as capital gains, which are accompanied by tax advantages. The proviso is that the money award on an infringement case must be tied to the transfer of all substantial rights to the patent.

A Small Claims Court for Copyrights

A new piece of legislation signifying future trends in IP law was passed by the U.S. House of Representatives in October 2019. The Copyright Alternative in Small-Claims Enforcement Act provides an alternative program for dispute resolution on lower-value copyright infringement claims. Previously, matters regarding copyrighted materials were required to be litigated in federal court, which is often a lengthy and expensive endeavor. The new law requires voluntary participation for both claimants and respondents, and it is a far more viable legal option on low-value copyright disputes.

Contact IP Attorney Zachary Hiller

Many legal matters have been on the back burner in U.S. courts due to the pandemic, including IP cases, but the release of a vaccine means getting back to business sooner rather than later. If you’re wondering about IP licensing trends, benefits of intellectual property trends, future trends in IP law, or need legal advice, contact Zachary Hiller, patent attorney and premier IP specialist serving the Greater Houston Area.