Blog 2nd Jun 2020

Facebook Shops and Live Shopping: A Guide for Trademark Professionals

Trademark Clearance

Facebook Shops and Live Shopping: A Guide for Trademark Professionals and Brand Holders – Part 1

Last month, Facebook announced its latest commercial enterprise, Facebook Shops. The social media has stated that the Shops function is not a distinctly ‘new’ proposition, but as an evolution of existing relationships between users and businesses. However, among people involved in the clearance and protection of IP, the question of whether Facebook Shops will represent a significantly new development has been raised already. With a global footprint and 2.4 billion active monthly users, even the smallest changes Facebook makes are enough to impact brand holders, especially when it comes to trademark & copyright usage, eCommerce, and IP infringement.^[i] In this article, the first of two, we examine how the Facebook Shops announcement may affect trademark clearance.

Small Businesses and Facebook Shops

Following its State of Small Business Report from May 18th, Facebook has stated that its new feature will assist small, independent businesses threatened by the COVID-19 pandemic.^[ii] According to the report, Facebook recognizes that small enterprises were already increasing their reliance on online shopping, but that this has been especially true since the onset of a global health crisis which has closed many physical stores.

Facebook’s support for small businesses also coincides with the recent news that the eCommerce platform, Shopify, has also experienced a boost to its income as a result of COVID-19-era trends. Shopify announced that its Q1 earnings for 2020 had increased 47% on 2019, and that “New stores created on the Shopify platform grew 62% between March 13, 2020 and April 24, 2020 compared to the prior six weeks”.^[iii]

With the technological and budgetary demands of creating an online retail store reduced (for access to its reported 218 million customers, retailers can pay Shopify just $29 USD per month, while Facebook Shops will be free to use),^[iv] small retailers can occupy prime storefront real estate with billions of potential customers. Facebook Shops will offer companies the chance to integrate their product catalogues, social media following, content, and websites into one ecosystem. For those businesses in the U.S. that enable payment functionality, consumers will never even have to leave the app while purchasing. What is more, communications will be enhanced by the ability of consumers and businesses to connect with each other privately through WhatsApp, Facebook Messenger, and Instagram Direct.

What is Live Shopping?

Since Facebook introduced live broadcasting on both Facebook and Instagram in 2016, companies have had the ability to perform live product demonstrations, debut new goods, and generate user interest through influencer content. With Facebook Shops, the live experience will be extended so that consumers are able to shop in real time. Sellers will be able to pre-tag their goods before a live stream, with details of the links appearing throughout the broadcast for consumers to click on and buy.

Could Facebook Shops affect trademark clearance?

While the removal of barriers to online trading will potentially benefit entrepreneurs and eCommerce novices, it also poses the risk of creating a more congested IP landscape. In countries with first-to-use trademark regimes particularly, it is possible to foresee issues arising from a sudden increase in businesses trading interstate or internationally for the first time.

Such companies may have existed at local levels for many years, but with the newfound ability to trade internationally could also gain a ‘first use in commerce’ date and thus establish possible future claims for use-in-commerce filings and grounds for opposition proceedings. If the company chose not to register such marks at national or international levels, they may not appear in some trademark screening results, but the company would still have a valid first-to-use claim. As this could negatively impact the plans of companies and IP professionals researching possible new trademarks, having a 360-degree view of the widest possible landscape is crucial.

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