Terms of Service Woes?

In 2015 it can feel like every day we are having to agree to some new terms of service or use to use this or that platform. We do it for apps we download on our phones, social media sites, and just about any site where you'd like to use something, especially something for free. Our lawyer friend Jonathan Tobin at Counsel for Creators has some advice on how to read those terms.

People have expressed concern about the terms of service for the newly-launched Amazon Handmade site. It seems that the biggest problem is that the license granted in the Amazon agreement is somewhat vague. 

Here is what one version of the Amazon Handmade agreement says:

"License: You grant us a royalty-free, non-exclusive, worldwide, perpetual, irrevocable right and license to use, reproduce, perform, display, distribute, adapt, modify, re-format, create derivative works of, and otherwise commercially or non-commercially exploit in any manner, any and all of Your Materials, and to sublicense the foregoing rights to our Affiliates and operators of Amazon Associated Properties."

Etsy's agreement is a little different because while you give the same type of license, Etsy's language indicates that while you give them a license, the license is solely for promotional purposes. That makes it more benign.

The Etsy agreement limits its grant to the use and marketing of the Etsy website.

In contrast, the Amazon agreement appears to extend its grant to usage for any purpose. Theoretically, that means that Amazon could use their sellers' intellectual property for any purpose - even to set up competing businesses.

Is that what Amazon will do? Since none of us can read Amazon's collective mind, we need to proceed by way of conjecture. 

Let's imagine a sinister situation: Amazon seeks to collect the valuable copyrights of many different Handmade sellers and launch a swarm of competing products, undercutting the original person in the process. This is bad, and definitely a huge red flag. 

Sounds far-fetched, but it could happen. Technically, under the terms of the contract it might be possible. Remember, the license grant to Amazon doesn't specify a purpose for the license like the Etsy one does.

Would it happen? My guess is that it will not. Amazon likely wouldn't want to damage its goodwill and reputation by screwing over its sellers in this manner. That being the case, the best move for Amazon might be to tighten up the language so that sellers can be comforted knowing that Amazon isn't planning to hoover up rights.

So why does Amazon and Etsy include this type of language in its agreement anyways? The simple reason is that they want freedom to advertise and promote their sellers and site by using the images and products that are sold on the site. That is a totally legitimate reason, and my guess is that is what they are trying to do - they just need language that's a little more to the point.

Jonathan Tobin is a Los Angeles based attorney and helps creative businesses with issues involving copyright, trademark, contracts, business formation and anything else necessary to build a strong legal foundation. He can be found at Counsel for Creators.

This article is provided solely for informational purposes only. If you want real legal advice, hire a lawyer in your jurisdiction. Do not rely on this for making legal decisions. No attorney-client relationship is formed because of this article.