Good Ideas Gone Bad!

If you are selling a branded or a licensed item, and do not have permission or pay a license fee or royalty arrangement, you may have violated trademark and copyright laws. The owner of the IP can sue you and if they know it is an illegal item, can also sue the sales platform and payment processor you use to illegally sell the merchandise. If the owner of the trademark or copyright sues you and wins they can also ask customs to seize your shipments and destroy the merchandise. You wind up paying for the merchandise, shipping fees, and any customs handling charges to dispose of the merchandise. The owner of the copyright can sue you for actual damages, confiscating any profits you have made, sue you for damage to their brand name or image, and also ask the court to award penalties.

The best approach is to follow the law and get the license or royalty agreement if you can. If you can’t reach an agreement, stop selling illegal products.

I assume you are selling t-shirts or other similar items with a branded image. Since you are drop shipping I assume the orders are small so you may stay under the radar for a while, but since your payment gateway is asking, I have to assume you have been busted already and may lose credit card processing privileges over this matter if you cannot provide reseller permission.

I am not an attorney so seek out qualified legal counsel to protect your company and assets if you have engaged in this behavior.

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