Disney Seeks to Stop the Rise of Infringing Baby Yoda Goods on Etsy

by Josh H. Escovedo
The IP Law Blog

When Disney chose to delay the production and release of merchandise related to The Child—commonly referred to as Baby Yoda—from its hit series, The Mandalorian, it created a significant opportunity for unlicensed fans to create and sell such merchandise. According to statements released by the Walt Disney Company, it intentionally delayed the production of Baby Yoda merchandise to avoid any leaks about the character’s existence until The Mandalorian aired. Because the first episode of The Mandalorian was not released until November 12, 2019, the Walt Disney Company was left with minimal time to release related merchandise. In fact, the Walt Disney Company was only able to roll out limited merchandise in advance of the holiday season, presumably losing a substantial sum of money it would have earned if it had released its full assortment of Baby Yoda gear before the holidays. Of course, as is usually the case with Disney and Star Wars fans, when Disney and LucasFilms fail to deliver, the fans intervene—this is the way.

If you go to Etsy, you’ll find a substantial variety of Baby Yoda merchandise, including without limitation, t-shirts, crochet dolls, coffee mugs, stickers, tumblers, keychains, and bookmarks. Make no mistake, none of it is officially licensed. Every merchant on Etsy that is selling Baby Yoda merchandise is infringing Disney’s copyright in the character. Knowing that, you might be wondering, why doesn’t Disney just put a stop to it by enforcing their copyright? The Digital Millennium Copyright Act includes a mechanism through which a copyright holder can almost immediately have an infringing user’s material taken offline. Similarly, the Copyright Act enables a copyright holder to sue to enforce their intellectual property rights and to obtain injunctive relief precluding the infringing user from using the mark. We all know Disney can afford to take action, and those of us who regularly deal with intellectual property know that Disney aggressively polices its intellectual property. So why hasn’t Disney taken action?

The answer is they have, but there are just too many infringing merchants on Etsy for Disney to deal with. Disney has recently taken action against these infringing users by contacting Etsy, identifying certain users, and requesting that their infringing listings be taken offline. As a result, Etsy has been deactivating the listings identified by Disney and warning merchants they should not re-list the product unless the dispute is worked out with the copyright holder. But as you can see by searching for Baby Yoda on Etsy, there are still nearly 12,000 search results. This is because there are so many merchants selling these counterfeit goods that Disney cannot send out takedown notices and/or cease and desist letters fast enough. In order to do so, Disney would have to regularly review Etsy for infringing goods, examine each of the goods, and send a new takedown notice or cease and desist letter.

Some sites, such as YouTube, provide a more efficient mechanism through which copyright holders can enforce their rights by utilizing an automated tool to identify all infringing content. Unfortunately for Disney, Etsy does not. Instead, Etsy requires copyright holders to review all search results and deal with the infringing merchants on a case-by-case basis. This process is time consuming and requires substantial resources from the copyright holder. But as a result of the Digital Millennium Copyright Act’s safe-harbor provision, which enables Etsy to avoid most liability for infringement perpetrated by its users, Etsy isn’t incentivized to make the process more efficient for copyright holders. In other words, it isn’t really Etsy’s problem, so why should Etsy concern itself?

Nonetheless, Disney could likely dedicate adequate resources to this issue to eradicate the presence of such counterfeit goods on Etsy. However, doing so would be a time-consuming and costly endeavor. Disney will have to decide whether it is worth the time and effort to shut down every merchant on Etsy, or whether it should selectively target the larger, more harmful infringing merchants. The latter would obviously be a more economical approach, but Disney has proven in the past that it is willing to go the extra mile to protect its intellectual property as a matter of principle. While that approach may not make sense for all businesses, it works for companies like Disney that have virtually unlimited resources. Whether Disney will take this approach, however, remains to be seen. One thing is for certain: begun, the Baby Yoda wars have.