As a court expert witness for e-commerce and digital marketing, I’m often aware of the sensitive issue involving digital asset ownership.
Such issue arises in the ownership of an Amazon account, of a registered trade mark, a Facebook page, a domain, etc.
Just like recording an apartment in the land registry office, we would like our digital assets to be registered in our name.
Story Time
Once upon a time there were two companies, A and B, who decided to start a partnership for a toy brand. The two companies wanted to start a joint venture, but in order to save time, company B offered company A to start operating immediately through B’s legacy business. Company A didn’t have sufficient knowledge about such matters, so it said yes.
What’s happening?
All digital assets, including trade marks, Amazon trade marks, Amazon account, Shopify website, and Facebook page, with all business information, are now registered as owned by B. So effectively, one party holds all asset keys and has complete control.
When does it come out?
Regrettably, in such cases and in many others where I was approached for my expert opinion, that is when the unequal distribution comes to light, during the argument over who owns the assets or when one side wishes to part ways, shockingly learning that all the assets (who basically provide value to the deal) are not in their possession. In most of the introductory phone calls I’ve had on such legal matters, my first question is: under whose name are those digital assets registered? Sadly, in most cases, I receive a hesitant reply from the other side of the line (meaning they don’t know), which is when I realize what kind of situation we’re dealing with.
Is there anything I can do?
Yes. In such cases of arbitration or litigation, one can demand either ownership over digital assets or being paid their cash equivalent. You can determine the monetary value through digital asset valuation, submitted as expert opinion.
How to avoid it?
First, you should know the meaning and the value of this issue. It’s crucial to have the assets under your name only, at all times. We meet that issue with assets of different types:
1. Facebook page–did you get a supplier to set up your Facebook page? Make sure that the Admin account is registered under your name, so you never get locked out by a supplier
2. Trademark–for registered trademarks, you can check at USPTO who owns the registered trademark. Sometimes, competitors/vendors/manufacturers would register your registered trademark in their countries. I suggest setting a Google alert for your trade mark, so you’re notified each time Google reads new material about it.
3. Amazon account–possibly the most common one: you can’t register an Amazon account under 2 partners, for example. You can incorporate one company (with the partners having stock in it in one way or another), with the company being the Amazon account owner.
4. Domain name–also must be owned by a single legal entity.
Conclusion:
Digital assets are the main, actual value of our business and it’s important to ensure their registration under your name (just like with real estate property). I recommend getting an expert to walk you through such transactions, to avoid future difficulties that cost time and money in effort to extract such assets.