Etsy is pretty freaking awesome. There’s so many incredible things to buy on the site. If you ever become doubtful about humanity’s capacity for creativity, just head on over to www.etsy.com.

But Etsy can also be a dangerous place. And no, not just for engaged couples (speaking from experience here). For those who sell cool things on Etsy, the online store doesn’t always seem so awesome. On the legal side of things, one of the biggest pain points for Etsy sellers is the threat of intellectual property infringement. If you’re not careful, you could get in serious trouble for violating another store owner’s rights. And even if you are careful, you still have to know how to protect your own rights.

Protecting your intellectual property rights—and respecting the intellectual property rights of others—needs to be one of your top priorities if you set up shop on Etsy.

But I’m getting ahead of myself here.

FIRST, LET’S DEFINE SOME TERMS.

Intellectual property: Intellectual property is a legal term that’s all about your creative side. It refers to what your mind created. It’s the intangible stuff—ideas and concepts. There’s a lot of categories that fall under the umbrella of intellectual property, including copyrights and trademarks.

Copyright: Copyright is a category under intellectual property. Copyright is all about authorship and expression. If you created—or “authored”—something and have expressed it in some form, then you have ownership rights under copyright law. Think song lyrics, paintings, photographs, books, and blog posts.

Trademarks: Trademarks are all about branding. A trademark is a symbol, word, or words that represent your business. Think business names, logos, slogans, and product line names.

Cool? Let’s move on.

AN OVERVIEW OF ETSY’S INFRINGEMENT POLICY

Intellectual property laws are confusing. And Etsy wants to keep itself protected—it wants to play the role of “innocent third party” in all of this whenever things hit the fan.

For that reason, Etsy created a policy for how it handles accusations of intellectual property infringement. This way, Etsy does everything that it must do legally as an “online platform” that connects buyers and sellers. By obeying the legal minimum of requirements but not doing any extra policing, Etsy limits their own liability.

The infringement policy sets up a procedure that follows these steps.

STEP #1: THE ACCUSER REPORTS THE NOTICE OF INFRINGEMENT TO ETSY.

If a business believes that another Etsy seller is infringing, then that can be reported to Etsy.

Let’s use an example to paint a better picture.

Imagine that Bruce Wayne decides to create an Etsy store to sell superhero gadgets, and he calls it Batman. I’m Bruce’s lawyer (!!), so I help him get “Batman” registered as a trademark.

Then his butler, Alfred, decides to set up a similar Etsy store, and he also calls it “Batman.”

Bruce finds out about Alfred’s store, and he’s ticked off. Alfred’s store is infringing on his trademark.

Bruce can report this to Etsy in two ways. He could use this form created by Etsy, which is the easier option. If he’s not able to use that form for some reason, he can send Etsy a notice of infringement following the steps laid out here.

Joey’s tip: If you can, contact the person before sending the formal notice. It’s often the case that offenders don’t realize they are violating any rights, and many will voluntarily remove the material. Be kind, and assume they didn’t know better. If they resist, then proceed.

STEP #2: ETSY PROCESSES THE NOTICE OF INFRINGEMENT.

When Etsy receives a report of infringement, it might remove or disable access to that material. Etsy then notifies the business owner of this. In our example, Etsy might disable to Alfred’s whole “Batman” store, and then Etsy would notify Alfred about it.

This is where that “innocent third party” stuff comes in. Etsy does not police its site for infringement. And Etsy doesn’t closely review these reports to pick and choose what items to take down due to infringement.

This doesn’t mean that Etsy accepts all notices! Keep in mind that Etsy will only accept this notice of infringement from someone who owns the intellectual property in question. For example, Robin couldn’t file a notice of infringement on Bruce’s behalf to go after Alfred. Robin could, however, write to Bruce and let him know about it. (In other words, a competitor can’t report you to Etsy if they don’t have any intellectual property rights themselves, but they can report you to the true owner.)

Etsy understands that it’s a serious thing to file a notice of infringement. If you lie or say something seriously misleading in a notice, don’t be shocked when you receive an expensive penalty. Filing a notice of infringement in bad faith is perjury (or lying under oath)—ain’t no judges got time for that.

STEP #3: THE ACCUSED CAN FILE A COUNTER NOTICE (FOR COPYRIGHT ONLY).

If Etsy notifies you that you’ve been accused of copyright infringement, you’ll receive an email from Etsy. That email will include a link to a form that you can use to file a counter notice. (This all happens according to a process laid by the Digital Millennium Copyright Act, or the DMCA). If you file this counter notice, you then want to wait for 10 days. Unless the accuser who started this whole process files a court order against within those 10 days, Etsy will allow the material under question to be reactivated.

Remember, for the counter notice to be taken seriously, you have to argue that you are in fact the owner of the intellectual property in question. If that’s not the case, then just move on and consider this a learning opportunity.

Okay, cool. But what if you, like Bruce, are dealing with trademarks and not copyrights?

The answer isn’t as step-by-step. There’s not a federal law for trademarks that outlines the takedown procedure in the same way that the DMCA handles copyright infringement.

But it’s not complicated as it might seem. Again, put yourself in Bruce’s shoes. You own the trademark protections for “Batman” (thanks to yours truly). Alfred can’t make a good-faith counter notice, because you have solid evidence that you own trademark rights.

Now, Alfred could challenge this. He could try to argue that Bruce’s trademark of “Batman” doesn’t apply to Alfred’s store, which sells different things. Or, Alfred could challenge the trademark itself and argue that it should never have been accepted by the trademark office in the first place. In either case, Alfred should consult an attorney to figure out how to best respond, or at least decide whether the issue is significant enough to seek legal help.

STEP #4: ETSY STEPS ASIDE AND LETS YOU BATTLE IT OUT.

After Etsy has taken the steps discussed above, it walks away from the fight. At that point, the accuser will have to lawyer up in order to enforce her intellectual property rights. It should be noted that an accuser can always withdraw an infringement notice by following the instructions laid out here.

Now, you might be thinking to yourself: this seems a bit too soft on Alfred. What if he does this kind of thing a lot—taking names and language from what he sees on other successful Etsy stores? Well, Etsy does account for this. If an Etsy store receives several infringement notices (there’s no specified number in their policies), then Etsy might shut down your site permanently.

WHEN IT COMES TO INTELLECTUAL PROPERTY ON ETSY, IT’S BEST TO PLAY IT SAFE.

As Etsy sellers are quick to learn, you can’t just put images from Google onto your product. If you put Mickey Mouse on a shirt and then Disney comes after you, I can’t help you.

Still, if you’re selling products on Etsy, there’s no way to guarantee that you won’t get caught up in this intellectual property infringement process at some point. Even if you are careful about not copying others. But there is a way to protect your business so that these battles are relatively painless. To get ease of mind on this stuff, you need to formalize your ownership of your intellectual property. That means registering your copyrighted works, trademarking your business name and branding, and educating yourself on the boundaries and limitations of these concepts.