Hamilton Musical Copyright Suit Pits Social Selling Against IP Rights

December 16, 2016

11:20 am

The online clothing retailer, SunFrog, boasts more web traffic than Victoria’s Secret and displays over 11 million designs on its website. The company prints shirts in their large facility, ships them and fulfills the orders for companies too light on resources to do it themselves. SunFrog has economy of scale because they print millions and millions of shirts. You share the money and keep marketing your business.

While this success has been enjoyable, growing from $1 million to $100 million doesn’t come without a few challenges. SunFrog was issued a cease and desist from none other than the rights holder behind Hamilton, the broadway hit taking the world by storm. Representatives for the musical objected to a couple of the designs used by a merchant, GearLaunch, on SunFrog’s site. SunFrog’s CEO, Josh Kent, said his company “invests heavily in copyright infringement safeguards but can’t be in all places at all times.” It’s a classic dilemma for a growing business.

Their solution has been to partner with known clothing labels to make sure their intellectual property is rewarded. Much like a candle in a dark room, copyrights tell any interested party who to contract with.

“IP is a priority. We pride ourselves on being able to create business for people globally but that also can’t be at the expense of talented people who have created amazing things,” said Kent. “That’s why we continually create partnerships with brands, teams, musicals, and more to make sure their items are promoted to our global user base and they make more money with us.”

SunFrog, which has a large shop community, uses the leverage of that community to attract partnerships with those brands that could lose out on infringing sales. If they’re willing to sell some of their designs on SunFrog or take a cut for every user-generated design, SunFrog promotes them heavily and creates new revenue for them.

The larger a community gets, the harder it can be to police it. SunFrog operates globally and intellectual property protections vary across different countries. Brands with sales in countries with strong intellectual property regimes can use that to their advantage by leveraging marketplaces to protect their IP in jurisdictions with weaker or poorly enforced copyright regimes. SunFrog’s example offers one way for businesses to think creatively about addressing issues regarding IP and how to protect it.

Not every business will like the idea of partnering and selling items on a different site. While it seems logical, it may not apply to each and every business model. But for some it turns a potential negative in to a new business model.

“Social selling and commerce is a fast-moving stream. Rather than finding ways to swim against the current and stop it, we try and find ways to swim with the current and bring everyone with us,” said Kent.

Photo: Flickr / Travis Wise

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Jordan French is founding CMO of BeeHex Inc. 3D printing, President of O'Dwyer-ranked Notability Partners and cofounder of "Airbnb Police" start up BNB Shield. Jordan French is a technology commentator, biomedical engineer, intellectual-property attorney and business strategist for film and music stars. French works with Billboard-charted artist and multi-platinum producer, B. Howard, who wrote and produced songs for Vanessa Hudgens, Ginuwine, Dru Hill, Akon, Ne-Yo, Jason Derulo, Chris Brown and Wyclef Jean. French is on the leadership team at FOWNDERS, the social-impact start-up accelerator based in Newark, NJ. He is the Marketing & PR director of Scorpion Computer Services, Inc. and consults for executive producer Walter O’Brien, the inspiration behind the hit CBS television drama, Scorpion. As founding CEO and COO Jordan French built Status Labs into a Fast-50 and Inc.-500-ranked marketing firm and represented the people of the United States as an enforcement attorney at the Federal Energy Regulatory Commission where he tracked down energy-market manipulators and enforced electric grid reliability rules.

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