Ep 171 | 2025 Legal Updates Etsy Sellers Need to Know --with Attorney Paige Hulse

Summary

Podcast Summary: Ep 171 | 2025 Legal Updates Etsy Sellers Need to Know --with Attorney Paige Hulse

Podcast Information:

• Title: How to Sell Your Stuff on Etsy
• Host: Lizzie Smiley
• Guest: Attorney Paige Hulse
• Release Date: March 6, 2025
• Description: This episode delves into critical legal updates impacting Etsy sellers, featuring insights from Attorney Paige Hulse. Topics include the General Product Safety Regulations (GPSR) for the EU, Creative Fabrica legal issues, BOI compliance, and legal considerations surrounding AI.

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1. Introduction and Episode Overview

Lizzie Smiley kicks off the episode by expressing her enthusiasm for having Attorney Paige Hulse as a guest, highlighting their productive past collaborations and the value Paige brings to Etsy sellers through her legal expertise.

"[Lizzie]: I love chatting with attorney Paige Hulse because she gets us. She's so relatable. She breaks it down. She can handle my personality. It's the best." [00:00-00:30]

2. General Product Safety Regulations (GPSR) Update for the EU

Paige introduces the General Product Safety Regulations (GPSR), a new EU law akin to the GDPR but focused on product liability. She explains its scope, highlighting that it applies to both physical and digital products sold within the EU, affecting all Etsy sellers regardless of their location.

"[Paige]: The GPSR is a product liability law intended to protect EU citizens from products that could cause damage or harm. It applies to both physical and digital products, including software." [13:24-13:53]

Key Points:

• Scope: Applies to anyone selling to EU citizens, encompassing physical and digital goods.
• Implications for Etsy Sellers: Most Etsy sellers are unlikely to need an EU authorized representative unless selling products deemed "unsafe" (e.g., heavy items that could cause injury).
• Action Steps: Sellers should monitor Etsy’s seller handbook for updates and conduct a risk assessment of their products to determine if they fall under GPSR’s safety definitions.

"[Paige]: Think of it from a product liability perspective. If your product is something like a lamp that could potentially explode, that's unsafe. A T-shirt, usually not." [18:00-18:54]

3. Creative Fabrica Legal Issues and Trademark Concerns

The discussion shifts to Creative Fabrica, a platform providing fonts and graphics for digital products. Lizzie raises concerns about recent lawsuits involving the misuse of trademarked elements from Creative Fabrica by Etsy sellers.

"[Lizzie]: There are lawsuits where Etsy sellers were sued for using trademarked elements from Creative Fabrica in their products." [29:20-29:58]

Key Points:

• Terms and Conditions: Creative Fabrica includes clauses that limit their liability and provide minimal warranties, similar to platforms like Canva and Adobe.
• Risk Management: Sellers are advised to:
  • Avoid using heavily restricted or trademarked elements directly in their products.
  • Add significant creative input to ensure the final product isn’t a direct copy.
  • Consider sourcing creative materials directly from independent creators to negotiate clearer licensing agreements.
• Legal Advice: Paige emphasizes the importance of understanding licensing agreements and ensuring that any third-party elements used are properly licensed for commercial use.

"[Paige]: Don't just use a font to add text on a T-shirt. Combine it with other creative elements to ensure it's not a direct copy of the original work." [36:21-37:03]

4. BOI (Beneficial Ownership Information) Compliance

Paige updates listeners on the BOI law, officially the Corporate Transparency Act (CTA), which affects how businesses report beneficial ownership information.

"[Paige]: The BOI form is back in effect as of February 18th. The new deadline to file is March 21, 2025." [40:10-40:35]

Key Points:

• Deadline: March 21, 2025, for all filings.
• Requirements: Businesses must file beneficial ownership information, detailing who ultimately owns or controls the company.
• Compliance: Lizzie and Paige recommend preparing early by filing the necessary forms to avoid penalties, emphasizing that understanding and complying with BOI is crucial for business legitimacy and protection.

"[Paige]: Assume you have to comply because you are being told by the government that you have to." [41:35-42:00]

5. Legal Considerations Surrounding AI

In the latter part of the episode, Paige discusses the legal landscape of AI, specifically referencing the case Thomson Reuters vs. Ross Intelligence Inc. which addresses fair use and copyright in AI training.

"[Paige]: This is our first case that examines the question of fair use as it applies to AI and copyrights." [47:10-48:00]

Key Points:

• Case Outcome: The judge ruled in favor of Thomson Reuters, indicating that training an AI model on their copyrighted case notes without permission constitutes infringement.
• Implications for Etsy Sellers:
  • AI Art and Content Creation: Using AI tools that train on copyrighted material can expose sellers to legal risks.
  • Best Practices:
    • Avoid using specific, copyrighted reference images as inputs for AI-generated art.
    • Ensure that any AI-generated content does not directly copy or closely mimic protected works.
    • Incorporate diverse inputs to minimize the risk of creating derivative works.
• Future Litigation: Anticipate ongoing legal battles that will further define the boundaries of fair use in AI applications.

"[Paige]: Outputs aren't necessarily fair use just because the instructions you input differ. The underlying usage of copyrighted material still plays a crucial role." [55:49-56:10]

6. Resources and Legal Support for Etsy Sellers

Paige introduces her Creative Law Shop and Creative Law Foundry, platforms offering legal templates and AI-powered contract customization tools tailored for Etsy sellers and other creatives.

"[Paige]: The Creative Law Shop offers over 80 contracts, and the Foundry allows you to customize your own contracts through our AI-powered platform." [57:00-59:59]

Key Points:

• Creative Law Shop: Provides a wide range of legal templates, including LLC agreements, shop policies, affiliate agreements, and more, designed to protect Etsy businesses without the high cost of hourly legal counsel.
• Creative Law Foundry: An AI-driven platform that customizes contracts based on user input, making it easier for sellers to create legally sound documents suited to their specific needs.
• Discounts and Accessibility: Lizzie offers a coupon code (Smiley10) for listeners to get discounts on Paige’s services, encouraging proactive legal management.

"[Lizzie]: For those just starting, use the Creative Law Shop. For more customized needs, the Foundry is perfect." [59:15-60:50]

7. Conclusion and Final Thoughts

Lizzie wraps up the episode by emphasizing the importance of legal preparedness for Etsy sellers. She encourages listeners to utilize Paige’s resources to safeguard their businesses against potential legal pitfalls.

"[Lizzie]: Thank you so much for hanging out with us. If this episode was helpful, please rate, review, and subscribe to help others find this content." [62:00-62:46]

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Notable Quotes with Timestamps

• Lizzie Smiley on Partnering with Paige:

  "I love chatting with attorney Paige Hulse because she gets us. She's so relatable. She breaks it down. She can handle my personality. It's the best." [00:00-00:30]

• Paige Hulse on Product Liability:

  "Think of it from a product liability perspective. If your product is something like a lamp that could potentially explode, that's unsafe. A T-shirt, usually not." [18:00-18:54]

• Paige Hulse on Creative Fabrications:

  "Don't just use a font to add text on a T-shirt. Combine it with other creative elements to ensure it's not a direct copy of the original work." [36:21-37:03]

• Paige Hulse on BOI Compliance:

  "Assume you have to comply because you are being told by the government that you have to." [41:35-42:00]

• Paige Hulse on AI Legalities:

  "Outputs aren't necessarily fair use just because the instructions you input differ. The underlying usage of copyrighted material still plays a crucial role." [55:49-56:10]

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Key Takeaways for Etsy Sellers

1. Stay Informed on Legal Updates:

   • Monitor changes in regulations like the GPSR and BOI to ensure compliance.
   • Regularly review Etsy’s seller handbook for updates pertinent to your business.

2. Manage Product Safety:

   • Conduct risk assessments to determine if your products could be deemed unsafe under GPSR.
   • For physical products, consider limiting sales to the EU or ensuring compliance if you choose to sell there.

3. Handle Third-Party Creative Elements Carefully:

   • Avoid using trademarked or heavily restricted elements from platforms like Creative Fabrica without proper licensing.
   • Enhance your products with significant creative input to differentiate from original works.

4. Leverage Legal Resources:

   • Utilize platforms like the Creative Law Shop and Creative Law Foundry for affordable and tailored legal documentation.
   • Consider establishing a backup Shopify site with proper legal setups alongside your Etsy shop.

5. Be Cautious with AI Tools:

   • Understand the legal implications of using AI-generated content, especially regarding copyright and fair use.
   • Ensure AI-generated outputs do not infringe on existing copyrighted works.

6. Prepare for BOI Compliance:

   • File beneficial ownership information by the deadline to avoid penalties and ensure business transparency.

7. Seek Professional Legal Advice:

   • For complex legal matters, consult an attorney specializing in intellectual property and ecommerce law to safeguard your business effectively.

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Resources Mentioned:

• Creative Law Shop: shopcreativelaw.com
• Coupon Codes:
  • Save50 for Paige’s courses.
  • Smiley10 for 10% off at the Creative Law Foundry.

Connect with Lizzie Smiley:

• Website: howtosellyourstuff.com
• Follow on Social Media: Access show notes, blog posts, courses, and coaching services.

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By staying proactive and informed, Etsy sellers can navigate the complex legal landscape with confidence, ensuring their businesses remain compliant and protected as they grow and thrive.

Transcript

[Lizzie Smiley]

Hey, my name is Lizzie Smiley and I absolutely love helping people connect with their calling and all the tools they need to kick roadblocks and excuses right out the door so they can cultivate the life they dream about. If you want to launch, grow, pivot, or scale your Etsy shop, or you've always wanted to develop the mindset and skills to run your own business, then I'm your girl. I've had that entrepreneurial spirit going strong since my very first lemonade stand. And now I'm a work at home mama with multiple online companies and a full time Etsy shop, all while being present with my kids for the everyday chaos and most important milestones. On this podcast, we'll talk about all things business, mindset, Etsy, creativity, dazzling our customers, and so much more. There's plenty of room at this table for you, so scooch on in and let's go. I'm holding nothing back. Welcome to how to sell your stuff on Etsy. I'm so glad you're here. Hey, guys. Welcome back to the show this week. This is one of my favorite types of episodes. I love chatting with attorney Paige Hulse because she gets us. She's so relatable. She breaks it down. She can handle my personality. It's the best. And we always have the best conversations. And I feel like I learned so much and I know from all the feedback I get from you that you learn a lot as well. But before we get into what you need to know about the GPSR updates for the EU and the creative fabrica drama and Paige's take on that and the current status of the BOI compliance gonna be, it's gonna be a day. A really important one to tune in though. I just wanna make sure that you know about the AI coloring pages workshop coming up on Thursday, March 27th. You're gonna wanna get enrolled with that as soon as possible. That is coming down the pike. Don't miss it. And then I wanted to gauge your interest. Will you please go down to the show notes and let me know if you'd be interested in a beginner coaching call? So we'll do like a, we'll do like an Etsy beginners workshop and I'll talk you through like those early, those early questions, you kind of weigh in on what we cover. But basically I'd be going over the started and to start having success on Etsy, it would just be like super beginner. You could be very comfortable asking the questions that you have and the things that maybe you feel like you know, you don't catch from the podcast or from even from YouTube where you want to see it. Let me know if you'd be interested in like a beginner, an Etsy beginner workshop and we will get that lined up coming up soon. So just go down and slip your email in for me so I know and I can let you know what comes of that. So without further ado, let me tell you about Paige Hulse if you're here for the first time. She has been on several episodes of the podcast. I have a whole playlist for that if you want to. I'll also link that down below in the show notes if you want to listen to all of the episodes. Because she's talked about like whether or not you need an LLC and talking about different things with like AI legality. We did cover that today though. There's kind of an amazing update that we need to talk about that she's going to cover for us. Just things about like what do you do if there's copycats on Etsy, things like that. So I will go ahead and link that, that playlist as well. But after working as a business litigator by day and running a calligraphy side hustle on the weekends, Paige left the corporate world in 2017 to form her law firm, Paige Hulse Law, serving creative entreprene entrepreneurs worldwide. Soon after forming her firm, she founded the Creative Law Shop, melding together her contract law expertise with her firsthand experience as a creative entrepreneur. Currently, the Creative Law Shop boasts more than 80 contracts. It's actually more than that now, and that she has drafted for herself and her clients, assisting creative entrepreneurs run legally sound businesses worldwide without the expense of an hourly rate. Today, Paige practices trademark law through her law firm while also running her nonprofit for deployed Green Beret soldiers. It's called the Special Forces Support Fund, if you're interested in that. A lifelong equestrian, she and her husband are building a premier boarding stable in Tulsa, Oklahoma, soon to be known as Fairway Stables. So let's get into it. Lots to cover. Super meaty episode. Please help me welcome Paige to the podcast. Yay. Hi Paige. Welcome back to the podcast.

[Paige Hulse]

Thank you so much, Lizzie. I am absolutely thrilled to get to talk to you again.

[Lizzie Smiley]

Well, it's been, it's been a few minutes, so please tell like how I need to know the things. How are you? I need to know about the horses, I need to know about the farm, I need to know about Oklahoma, what's going on.

[Paige Hulse]

So that's that. Now that's all we're going to be talking about. You get me started talking about horses, and it's pretty hard to stop. Thank you for asking. I'm looking at them right now. Oh, Oklahoma. Well, first of all, Oklahoma has been very Oklahoma. We went from negative 3 degrees a few days ago to 70 degrees today. So there's that horses already. Yeah, I know. We're like, way. Yeah, we. The pendulum swings widely over here. Horses are good and they are keeping me sane, like, genuinely. I mean that with all sincerity. Keeping me sane through what has been a very, very busy start to 20, 25.

[Lizzie Smiley]

Are you. Do you ride every day?

[Paige Hulse]

I have been a literal, fair weather rider lately. Because of the weather. Negative three degrees. Yeah. I. In the spring and summertime, I won't ride every day. I wish that this is a whole. This is a whole deeper question about like, work, life, balance and all that. It.

[Lizzie Smiley]

I wasn't gonna touch that one.

[Paige Hulse]

Yeah. Now this is a therapy session. Now, in the spring and summertime, I'll try to ride at least. At least three times a week, if not more. But it's, you know, when, when people. It's hard to like, carve out that time in the middle of the day. So. And honestly, we have a lot of construction going on around us right now. And so I don't know if you remember, and not to get us off on a tangent, I don't know if you remember the story last year with my horse flipped upside down on me.

[Lizzie Smiley]

Oh, oh, I remember Paige. Yeah.

[Paige Hulse]

Yeah. And so I have not been riding in our back pasture because I'm like, well, that would be a bad deal if one of the, like, if construction spooked them and flipped right upside down on top of me again. So anyways, it's been a minute and honestly, it's gonna be. I in here in about two weeks. We're gonna start getting into it pretty like, pretty hardcore. And I already know for the first like week or two, it's going to be like a bucking bronco type situation, so.

[Lizzie Smiley]

Really?

[Paige Hulse]

Yeah, yeah, legitimately.

[Lizzie Smiley]

Because they're just like, ma'am, you have not been out here. Leave me alone.

[Paige Hulse]

They. He. Especially the horse that I. That I ride right now, he is so spunky. His call him twinkle toes. Just when I want to make fun of him, he's so. He'll. He will be like, indignant that he has to work out. That's aim. Yeah, right. I know.

[Lizzie Smiley]

It's like relatable thing I've ever heard. I know.

[Paige Hulse]

No, think about, like, what it feels like to take a few weeks off from the gym and then you go back and you're like, oh, like, do I really want to be here again? That's literally. Horses are the exact same. And once I like, once we get going for a few weeks, then he'll literally, like, trot up to the gate when I come with a saddle. Oh, until it hits a hundred degrees.

[Lizzie Smiley]

Well, no, we're not even. I can't. I cannot. That. My brain stops processing that temperature. That's when we go to Wisconsin. But you write English, right? Or do you have an arena?

[Paige Hulse]

So I don't have an arena yet. I grew up. I rode English from the age of four, and technically I still do. I started writing. I've always. I showed English jumper.

[Lizzie Smiley]

Yeah.

[Paige Hulse]

Yeah. And then in 2020, I got a literal national reigning horse, like, story behind this. This Rainer.

[Lizzie Smiley]

That's what we had.

[Paige Hulse]

He is like. So I joke that he's teaching me western. I know how to ride western, and that is what I ride. Right. Actually. Really, Lizzie, if I'm being honest, I ride bareback most of the time right now because I cannot stand. I cannot stand the western saddle. But that horse, he's the. He is the most, like, insane horse I'm ever gonna have in my life. He was. There's. I'm sorry, I told you. You can't get me to shut up about it. He was born, like, worth hundreds of thousands of dollars, and as a five year old, was in Vegas competing at Nationals, blew out a tendon. His previous owners were told to put him down. They rehabbed him. Instead, I got a literal national reigning horse for free.

[Lizzie Smiley]

Oh, my gosh.

[Paige Hulse]

Yeah. So he's. When I say he's ridiculous, I mean that in a very, very literal and also complimentary way. But I literally can sit on his back with no saddle and just have like a lead rope around his neck and use my pinky and spit him in circles.

[Lizzie Smiley]

Yes. No, I lost my train of thought. But I. Raining again. But raining is my absolute favorite. Oh, I was gonna. I know what it was. I was gonna say, like, no wonder he doesn't want to work out. He's probably, like, extra stiff, right? Like, he's. He's been through it.

[Paige Hulse]

And, you know, not to be judgmental, he's a little bit fluffy right now, so the girth is a little bit tight when I put it on him.

[Lizzie Smiley]

Most of us have our winter coats, you know, and. And here in Texas, so, like, we now have horses next door. Our. Our neighbor comes, he's a famous rodeo guy. He comes a few months out of the year, and I was ready to go to Walmart and buy freaking electric blankets for those horses when it was so cold. And he's laughing at me like, girl, we live in Canada the rest of the year. Like, they are fine. This is balmy. I'm like, it's so cold. I felt so bad for them.

[Paige Hulse]

I had a. Someone that lives not too well. I call them our neighbor, but they're like, two miles away. Um, they have. They've been out. They've had, like, I think it's a fifth generation ranch. And they had new neighbors, city folk, move out next.

[Lizzie Smiley]

That's us.

[Paige Hulse]

Who thought that the horses were too cold and have called animal control and have called the sheriff on them three times. And the sheriff has to. They have to show up and, like, write a report. And he says, like, he literally is like, no, the. You know, the horses are meant to live outside. They're okay. We've performed the wellness check, and now these ranchers have caught these new neighbors, like, throwing food over the fence. And. Yeah, it's a whole thing. So I hear you on that. I can tell you if anybody shows up, if anyone comes down my driveway, I'm watching both of the horses lay down right now. They're both. They're sleeping, laying down, back to back. I joke that it's very evident to everybody involved that I work hard so that my horses have a good life.

[Lizzie Smiley]

That's how it always goes, right?

[Paige Hulse]

They're fine. Yes.

[Lizzie Smiley]

Oh, my gosh. No. I mean, yeah, I know. I know it was just really cold and really windy, but it's fine. I'm totally. The city folk. Everyone looked at us like, y'all are gonna last 30 seconds with all the scorpions and snakes out here. I'm like, I'm made of sterner stuff. You haven't met me, like, so I'm not that bad. I know you never feed someone else's livestock, like, anything, because you just don't know what they could, like.

[Paige Hulse]

Major takeaway from this conversation. Yeah. That's so good.

[Lizzie Smiley]

Yeah. If you love to pet horses and cows on the side of the road like me, just know you could kill them if you feed them a carrot. Please don't do that or anything. They have allergies just like humans do. Okay, perfect.

[Paige Hulse]

Exactly.

[Lizzie Smiley]

On that note, Paige, perhaps we should. We should talk about some legal things. Although I. I'd really rather not. You're the only person that I'll stomach it with. But I. I Do want to come out with kind of a heavy, heavy hitting question for you if you don't mind, because I, I'm getting a lot of emails about it and then I don't, I haven't actually checked Etsy's seller handbook but for the last several months it said we'll have an update in February. They were basically like, yeah, we don't know. And it's about the, the GSPR requirements which I'll let you summarize what that means so I don't get us all in trouble. And then also you probably should do a disclaimer before we talk about any of this. But specifically like we're the people who are really looking for information are the digital sellers. So the impacts for PDFs, PNGs, SVG files on Etsy seems to be the fuzzy space that we can't find information about.

[Paige Hulse]

Yeah. Okay. Well, first of all, Lizzie, thank you genuinely for asking about the horses because sincerely, people would be shocked if they knew how much of either A my business ideas or B like the content I put out. You, all of my best ideas always come when I'm out in the horse paddock. Like literally most of the time I've talked to you, I've been like out feeding, like literally feeding the horses. It's where it's like, it unlocks my creative brain. So it's a perfect way to get started talking about this because even though we're here today to fortunately and unfortunately talk about the law, I want today's, the takeaway from today's conversation to be once again, yeah, we have responsibilities as business owners. There are things that we have to make ourselves aware of, have to comply with, but we also don't need to inject an unnecessary amount of stress or cortisol into, into our systems. And as we're talking about this, it's really at the end of the day, as long as we have the information and then we, we operate appropriately. I really don't want the legality of business to be something that keeps people up at night. It really doesn't have to be. I know it's easier.

[Lizzie Smiley]

My heart rate just came down. I, I felt, I just, I, I already feel better.

[Paige Hulse]

I want everyone listening. I want your shoulders to come down. This will be okay. So, okay, before and again, thank you for the reminder. I get so used to talking to you, I always forget but everything I'm talking about today in particular when talk, the gpsr, everything today is I think I got it right or I have.

[Lizzie Smiley]

I don't know I have a GSPR written down, but now I don't even know. Keep talking, I'll figure it out.

[Paige Hulse]

Everything that I'm sharing today is for general educational purposes. I'm not anybody's attorney who is listening to this. Unless and until we've signed an engagement agreement and if anybody has any specific legal questions about anything I'm talking about today, I recommend that you reach out to an attorney in your jurisdiction. So now that the disclaimer is out of the way. Okay. It's the General Product Safety Regulations Act. So the gpsr.

[Lizzie Smiley]

Wow. Okay.

[Paige Hulse]

This is a new law, a new eu. Technically this applies jurisdictionally within the EU and Northern Ireland. I'm just going to, I'm going to keep this simple and just say the EU for purposes of this conversation and what this, this law applies to technically, if we, if we strip away the legalese out every article you've seen written about this new law. If this is a product liability, liability law. So this, if we look at. I can get real heady here. So stop me if I do, I'll go to regulation or a law and you actually are trying to figure out what it's telling you. Literally think through the public policy behind the regulation and I promise you it'll be like a light switch comes on in your brain and it becomes much easier to actually see how these laws are intended to be applied within companies. I know that sounds like stupid simple, but when looking at the GPSR again it's a, it is a, at its core a products liability law. It's intended or it's put in place. It has been put in place by the European Union with the intention of protecting EU citizens from products sold to EU citizens that could cause damage, harm or I think they, they define it as anything that could be unsafe, which the lawyer in me hates that that's such an open.

[Lizzie Smiley]

Yeah, that's so vague.

[Paige Hulse]

Obviously this applies to all products which also includes physical and digital products as well, including software sold to EU citizens. So similar to the gdpr which is the law that we are all much more familiar with, that's the governs privacy regulations that requires certain information within your privacy policy, et cetera. That's been around since 2020. So I think at this point, I know that I've talked about it at least once probably with you. This is similar to the GDPR in terms of it being an EU law that jurisdictionally applies to anybody who sells to anybody within the eu. Roundabout way of saying that even if you're listening to this and you're not an EU citizen. It does technically apply to you. Okay, so now we've established, like, who has standing, who's actually involved, who actually needs to think about this law. And unfortunately, that's going to just, generally speaking, include anybody on Etsy, because you never know if somebody's purchasing one of your products from Northern Ireland or France or, you know, some other EU country.

[Lizzie Smiley]

For digital products, you can't differentiate. You have to sell them wherever they're. They can be sold. But for physical products, you can specify where you want to sell them.

[Paige Hulse]

Yes. So, and also to your previous point as well, I'm looking over at my other screen here because I refreshed it right as we got on, and Etsy still hasn't updated that manual that you were talking about. It's. Yeah, they say at the end of, at the end of February 2025. So we are very literally at the end of February 2025, all of that to say. There's obviously a lot of, just within the legal world and business world, a lot of confusion around this law. Because just on a base level, like, again, how can you. It's very difficult to be able to block. Be able to block EU citizens from purchasing your products, like your digital downloads. Okay? So without again getting in the weeds too much about this, here's what the prevailing point that I want to drive home with this. I know that this feels like. And when I first heard about it, honestly, I felt the same way where it was like, what the heck? We have another. We have another international law that they just dropped on us that we have to now figure out how to integrate within our own businesses. And that's why I started this by saying, think of it from a. From a public policy perspective. Are you creating anything that is going to be, quote, unquote, unsafe to your purchasers?

[Lizzie Smiley]

Paige, it is 2025 and there's no more common sense. Okay? Like, everything is like, you talk to the right person and everything is unsafe. Like.

[Paige Hulse]

Yeah, well, touche to that one. I think of it from like a product liability perspective. Like, if you're selling. I should have thought of an example before I started speaking, but I didn't. So we're gonna. Watch me try to think on my feet. But if you're selling some sort of. I don't know if you're selling some sort of, like, like you've created your own lamp or something. Sitting here looking at a lamp. Let's say you've, like, created your own lamp, like, put it together. It has an electronic Component. It's my prevailing point here. It's for sale on your Etsy shop. Somebody in France buys it, they plug it in and it explodes. That's going to be considered unsafe, right? Selling a T shirt is not going to be considered unsafe, generally speaking. Do you see what I'm saying? From a public policy perspective, yes.

[Lizzie Smiley]

From a very practical, we have common sense perspective, absolutely. Yes, exactly.

[Paige Hulse]

Which sometimes we have to try to hold. Hold on to that. What. As much as we can. So what I'm getting at with this is that when looking at how to apply this within your own business, number one, I'm going to just say, as an Etsy seller, keep your eye on that guidebook. That or the what I'm looking for, seller handbook.

[Lizzie Smiley]

I'll link that.

[Paige Hulse]

Yep, keep an eye on the. The handbook because they. I was actually really impressed with how much detail they went into on that. Presumably will be updated soon by the time this airs. Yeah, yeah. This is going to be. This law is it does jurisdictionally reach to anybody selling within the eu. From an implementation perspective, though, it's going to apply to people or it's going to impact people. I should say not apply to people, but it's going to impact sellers, A, if they get caught or if this governing body. I don't even want to define what caught means. I don't know if that means in the Euro, if that means somebody reports it or if this governing body is like monitoring Etsy. That's something that has genuinely not been answered by, or at least I have not found the answer within any of the EU curriculum I've been reading. So, number one, it's going to. It will impact people if they are selling into the EU and they get caught and then B, if that product that they're selling is unsafe. When it comes to the definition of unsafe, I really want to repeat the term product liability. Think of this. It's not necessarily, from what I understand, it's not safety in terms of is your product a replica of somebody else's? We're not actually talking about intellectual property unsafety, we're talking about literal product liability safety. Is this product going to be like a lamp somebody plugs into their wall in France and it explodes? Think from those types of terms. I think that a lot of people listening. Once you think again from that perspective, I hope that it helps again alleviate some of the stress that even, like I said, even myself felt as I initially heard about this, this law and questioned, like, I have a product shop, like, what. What do contract templates constitute an unsafe product. That's, you know, again, I've applied this, applied this to my, my own self. So I don't say any of that to be dismissive, but if you walk through that from the logical steps that we just laid out and you're still like, ah, this, I do sell products that could potentially be unsafe for whatever, whatever in whatever way that they might be unsafe. Like if it's a really heavy product that could fall over on a kid or something like that, like again, that could be something governed or deemed unsafe, then you are going to have, have to have an authorized representative in the EU that basically, from what I understand, basically almost acts as like a registered agent for your company. And again, from what I understand that authorized representative is going to communicate with the GPSR on your behalf. I can explain this thing.

[Lizzie Smiley]

It's me getting it wrong, not you. I'm laughing at myself, okay?

[Paige Hulse]

I like second guess myself every single time leaves my mouth. So with all of that being said, I don't think that. And again, I want you, to people listening, this is educational. I want you to take a look at your own business, take a look at like your own, like do your own risk assessment within your own business. I genuinely though do not think that the majority of Etsy owners are going to have to go pay to have a, you know, annual subscription with an authorized representative in the eu. I simply don't believe that at this time. Now if as more information comes out about this and even as Etsy updates its handbook or guidebook on this and, or as litigation occurs over the next couple years about this, I'll be the first one to correct myself if, if that is incorrect and we do in fact all have to have authorized representatives in the eu, but as it stands right now with the information that we have, if again you've performed your own risk assessment, risk valuation when looking at the items that you sell within your shop and again, think of it from a products liability standpoint, I don't think most of our Etsy shop audience is selling products that would be deemed unsafe.

[Lizzie Smiley]

No, I mean, and I don't want to spend too much more time on this because I have other questions for you. But this is such an important topic and I think again, physical products you don't even have to sell to the eu. I'd love to, like that's wonderful if you can figure out the shipping and you want to serve that community, I love that. But you could press pause while this is being figured out. You know, I know I was Selling signs that were 15 to 20 pounds that hung above a bed and if they weren't hung properly and they fell on someone, it would have been a really big problem. I would have been concerned about that. Yeah. And then in terms of print on demand, the only thing that's jumping out to me are like, the candles.

[Paige Hulse]

Yeah, that would be.

[Lizzie Smiley]

That's a good pause on the, on the, on the print on demand candles in the eu until we know more.

[C]

I.

[Paige Hulse]

Otherwise, if you generally.

[Lizzie Smiley]

I know.

[Paige Hulse]

Yes. Generally speaking, if, if you, if you don't know much about, like your manufacturer. For example, for one of my companies, I, I have actually have a, like, candle lined on one of my companies and I worked with somebody local and like, I know where they were made, they were made locally, I know like exactly how they were made, etc. I don't think the liability of those, of those candles is that high. If I had found candles from, like, I don't want to say a random supplier, but, you know, somebody that I.

[Lizzie Smiley]

Didn'T know, Print on demand.

[Paige Hulse]

Yeah, it would be. My answer would probably be different. And that being said, I've found a couple I haven't have. I don't have any actual referrals for authorized representatives. I just want to be really clear about that.

[Lizzie Smiley]

So no emails to Paige asking about.

[C]

That.

[Paige Hulse]

But I do know that there are some European Union attorneys who offer this service on like an annual recurring basis, so.

[Lizzie Smiley]

Well, we'll keep watching the seller handbook. I think that's going to be our biggest tool for right now. And if anything really big happens, I know that, you know, you and I are regularly in contact and we can address it down the line. So as much as I can, guys, I will have your back on this. It's. I mean, you haven't said a single thing about, about digital products, so if I'm doing tumble wraps and PNGs, I'm just not going to sweat it. Is that okay with you?

[Paige Hulse]

That's okay right now. That's what I'm doing too.

[Lizzie Smiley]

Yeah. Okay. Okay. Are you brand new to Etsy, about to get started, or struggling a bit to find your groove? What I'm about to say is just for you, okay? I can completely relate to where you're at because I think I can help you achieve success faster. When I first started my Etsy shop, it was not one of those success stories that we hear, you know, on the big YouTube channels, even on this podcast where I just had crazy success and it took off right away. Right. I all but failed for my first Six months, just like a lot of new sellers. And so it's very relatable. And the issue for me was I didn't understand demand for one, I didn't understand SEO. I was way too broad in my search terms and I didn't know how to position my product so that customers just couldn't help but click add to cart. And so once I learned those things, I went from making about $25 a month in sales to $6,000 a month and up. And in the holidays, I would even have $13,000 months, like at my shop's peak. And the thing about me, if you've been here for a minute, you already know this. I'm a terrible gatekeeper, okay? When I figure something out, when I crack code, when I get excited, I cannot help but tell everybody who wants to listen. It's like either my, my best asset or my toxic trait. I can't decide. But I put everything that you need to know to fill that beginner knowledge gap into a low ticket, just under three hours beginner course that I have called Six Figure Secrets to getting started on Etsy. In it, I'm teaching you how to find what's in demand for your niche, how to find and use trends, how to start your shop if you're worried about that part. SEO strategy to find the micro niches where the opportunity is, how to understand the Etsy algorithm, and a ton more. The whole thing is bite sized videos. Not long form, just small bite sized videos. Zero fluff and to the point. You could get the course today, go through the less than three hours over the next couple days, launch your shop this weekend and have sales coming in as soon as Sunday. So let's get you the few missing pieces of the Etsy success puzzle, those little tweaks you need to make so you can start making the sales that you deserve. Because I have never been more convinced that there is room at this table on Etsy for everyone. And the opportunity is so ripe right now. I am in the, in the numbers in the data every day and my mind just keeps expanding on the possibilities. Okay? So as a special treat, use the code save50 to save $50 on the Six Figure Secrets course today. That's $50 off with a coupon. Save 50 and by all means DM me or shoot me an email when those sales start popping. Because I want to celebrate with you. Moving on. I don't know if you've heard about all this tea, but there's a lot of rumb about Creative Fabrica, which is for people who are listening, I still use it. I still love it. I actually, Paige might correct me in a minute, but I laugh at these lawsuits, but it's basically a third party site where you can download millions of like, fonts and graphics and all kinds of digital, digital things that can help you with Print on demand that can help you with. I use them even to put together some of my PNGs. Like I'll bring in certain elements and like, here's the thing, it's a marketplace just like Etsy, where Etsy's doing the best it can to try and govern millions of creators. There are millions of creators that contribute to Creative Fabrica. And while there are checks and balances in place over there, they. Bad actors sometimes happen. Things happen. And so the instances that I'm referring to were on a YouTuber's channel, created a really big hullabaloo. I'm sure it was lots of clicks. And basically a couple of different Etsy sellers were sued for elements that they used sourced from Creative Fabrica, which had actually been trademarked, from what I understand. Have you heard about this at all?

[Paige Hulse]

I have been in a very, very different context than you have. And then.

[Lizzie Smiley]

Oh, good. Correct me, I love to be wrong.

[Paige Hulse]

No, you're not wrong. Well, you're, you're not wrong. Except for. We'll come back to the trademark piece. You're not wrong. But I've heard from that. I've heard about this because I'm in a couple of networking groups for intellectual property. I practice intellectual property primarily for those listening who aren't familiar with my practice. So I'm in a couple of different networking groups with other IP attorneys around the world. Where I've heard about it the most is within those groups and people like all of us attorneys being surprised that people are just finding out about it, frankly.

[Lizzie Smiley]

Oh, and okay.

[Paige Hulse]

And it's not new, which that sounded really condescending now that I think about the way I just phrased that. But what I mean by that is this company, Creative Fabrica, honestly, they're going to have, they have a PR crisis on their hands right now. What they are doing to creators and what you're, what you're. Referencing happens with some of the big, big time. I'm not going to name any names obviously, but some of the big providers for like free stock images. That's.

[Lizzie Smiley]

Yeah, I'll. Can I name names? Do you care if I. It's. This isn't on you at all. I'm saying, I. Here's my interpretation page and because I just like to keep it real. So tell me if I'm wrong. I'm willing, I will literally say bad advice from Lizzie if I have no problem with that. Adobe. You go get an Adobe photo, you go use something off of Canva, you go use something you bought from a photo something supplier. And if you don't do your due diligence to make sure that thing is an IP protected, you have the same exposure as anything you grab from Creative Fabrica. Tell me if I am wrong about that.

[Paige Hulse]

No, you're. You're correct. And from what I understand with these without. I haven't actually read the, like any of the actual cases from Creative Fabrica, but from what I understand, I've read their terms and conditions though. What I understand the first of all, within their terms and conditions, obviously they've, and they just, like all of the other companies you just named, they've worded them very, very delicately for a very specific reason. And this is that specific reason. First of all, they don't provide representations and warranties in perpetuity. Second of all, they don't provide.

[Lizzie Smiley]

Whoa, whoa, what is that? Sorry, you lost.

[Paige Hulse]

So when you most contracts you sign and most terms and like contracts meaning client agreements or terms and conditions, you're going to see a representations and warranty section. And warranties there are express and implied. You're getting, you're going to get such.

[Lizzie Smiley]

I'm trying, I know I'm getting, I'm getting wrinkles right now.

[Paige Hulse]

I know, like sitting here looking at my contracts casebook and I'm like, I can just open it up and start flipping through pages for you. Okay, so representations and warranties, you have specific or you have implied and you have expressed warranties. So some implied warrant. And these are always defined within contracts. So implied in general, when you see warranties, you're going to see language like fitness for a particular purpose, warranty of merchant, merchantability, etc. Etc. Those are the two warranties that I want to focus on here because from what I gather, those are the heart of, at the heart of this litigation. A warranty of merchantability means that the provider or the seller. So in this case, Creative Fabrica is promising. That's just another word for a warranty. Generally speaking, okay, can like hear my contract professor correcting me in my head right now. But for purposes of stripping the legalese from this conversation, it's a promise that what they are selling to the buyer, so the user of Creative Fabrica can actually use that product in commerce. They are expressly saying that they are not promising that.

[Lizzie Smiley]

Okay, wow.

[Paige Hulse]

The warranty of fitness for a particular purpose is very similar to a warranty of merchantability for purposes of this conversation. But it means that while they might be selling, let's say a font or you know, whatever creative aspect or element you're using from them, you might be able. The license might extend so that you're able to use the font within your own products or, you know, within your own business, but not necessarily use that font on products in commerce or products that are maybe even potentially competing with the original provider of said font. These are this is when or this is why. Unfortunately, it's a really good example of why I say you can Contract disputes sometimes can come down to two words within a paragraph. Like it's wild. It's wild how when I read their terms and conditions, that was the, the like however many five or six words that I zeroed in on and I was like, ah, there we go. And the reason is, I mean I understand from their perspective too, not to be the unpopular opinion here, but I understand from their perspective they can't promise, just like Etsy can't promise who's selling what on that platform. They can't promise that either.

[Lizzie Smiley]

They would have the same terms, right? And same with Canva. Like they'd all have the same.

[Paige Hulse]

They all have the same. That's why. Exactly. And that's why I referenced just the different networking groups I'm in where we're talking about cease and desist that our clients are getting all the time privately that usually have a gag order on them. So that's why people don't know about it, but get them all the time because somebody's used, you know, a photo incorrectly or something like that. So that's just a generalized intro into talking about this topic. But again, stripping the legalese as much as possible from this case, and again as much of the angst as possible from this case, I really want it to serve as an explanatory purpose of saying licenses aren't buying a license to something doesn't it gets. That term gets misused and that term gets. The definition gets applied too liberally, understandably, but too liberally by creative entrepreneurs. When you buy a license to something, you have all sorts of restrictions in the license, whether that be the term. So if it's for a one year term or per user term, or if it's in perpetuity, different restrictions in terms of how it can be used in commerce, et cetera. From what I understand many other Elements that are usually negotiated from what I understand in these cases as well, something that a lot of those, those creators that I saw the same YouTube videos that they got pegged for. This is just like across the board, good education, say advice, but great informational material. Whenever you are creating any sort of like drop shipping items or anything like that, if you're pulling a creative element off of another website in any way. Because if you're. I don't also don't want people to think that they have to know how to understand a license like licensing agreements.

[Lizzie Smiley]

Right.

[Paige Hulse]

As a non lawyer, if you're using any sort of, of creative element from a third party, don't just put it on your own candle, don't just put it on your own mug, don't just put it on your own T shirt, whatever the item might be, without making it more creative yourself. So add like if you're buying a font or licensing a font from Creative Fabrica, don't just use the font to have like whatever the text you want to put on a T shirt, have it the text be used in conjunction with, you know, a creative image or something like that or like another creative, creative aspect. That's really. I don't think I'm explaining that very well. But we want to, we.

[Lizzie Smiley]

When it's actually a term of On Etsy, we have to.

[Paige Hulse]

This.

[Lizzie Smiley]

The. The seller to. To be. To be compliantly selling on Etsy, you have to, you have to change it somehow. You have to.

[Paige Hulse]

That's exactly what I want people to take away from this. Yeah, yeah, that's exactly right. From a copyright perspective, we have to look at whether or not you've actually made a creative material using some of the elements of other people. If it's literally other people's creative elements. If it's just using or if it's primarily based off of somebody else's creative element, that's not good enough. You're gonna have to make it more creative.

[Lizzie Smiley]

The font surprised me. Like I. We sell a lot of shirts and things like that that are just lettering. So I suppose we need to be careful about that when we're sourcing fonts from Creative Fabrica to just have like a phrase, you know, because simple cells. Right. So just a phrase could get you in trouble.

[Paige Hulse]

Yeah, exactly. This is where I would encourage people to reach out to. I want to encourage as much as possible. People would be shocked at some of my like design clients that literally have created their own fonts who would be happy to license out to creators for like very low Amounts per month that are probably less. I don't even know what a subscription for Creative Fabrica is. But, like, there are other places to source creative materials than just these big like juggernaut companies that have the big juggernaut law law firms behind them as well.

[C]

Yeah.

[Lizzie Smiley]

Yeah. Okay.

[Paige Hulse]

When thinking about where you want to source your creative materials, don't overlook other actual. Like actual business to business relationships that you can form with other actual creators. And you can actually negotiate a licensing agreement with that creator.

[Lizzie Smiley]

Yeah. I mean, and not to say that that's completely 100 foolproof either, because if they're copying a common font and you just don't know that. So, yes, I think that really reduces our risk. But I could sit here all day and devil's advocate the risks of anything. Like, it's risky walking down the street, you know, like, you know, again, 2025.

[Paige Hulse]

But. Well, in the. My final note to that is to your point. Yeah. There are still risks anytime you're entering into an agreement like that, but at least you can draft in an indemnification provision.

[Lizzie Smiley]

Yes.

[Paige Hulse]

So at least you have some recourse.

[Lizzie Smiley]

What she's saying is you have some recourse with that individual creator to have terms and conditions that are less vague or less cited to the creator. Like it can be a little more fair and balanced. Terms and conditions. That's a really interesting. I hadn't thought about that. That's really. It would be. Gosh. In all of our spare time page, it would be really cool to do a compilation of.

[Paige Hulse]

Anyway, I would actually love to. I need to find time to do that because it would be. I have so many people I could that come to mind that I can just like plug in like that. I want other people to know about. But.

[Lizzie Smiley]

Okay, so we are. We're coming down to the wire and I want to make sure we talk about. This is hysterical. We need another episode. We're not hitting half of what I wanted to talk about, but we do need to talk about the status of the BOI law that came out last year. And I was really excited because it was on pause and I didn't have to do anything about it. And then you're telling me today. So go ahead and make the announcement. We'd love to talk about boi.

[Paige Hulse]

Okay. The Corporate Transparency act, what I just referred to as the CTA/BOI form as of February 18th is back into effect. It's basically been. It was on hold, then not on hold, then on hold and not on hold within both the Legislative and the judicial branches of government. It's just been a dumpster fire. I'm going to keep it super simple and say so. The new deadline to file, whether that filing be for general applications, initial applications, updated applications or corrected applications, is now March 21, 2025. I said this, but I didn't, if I'm being honest, I didn't actually put it into practice myself. But in January, when we weren't sure exactly how long things the law, we thought it was going to be extended through 2026 because they told us that at one point in time, et cetera, we knew we kind of estimated a good like date to comply by just in case would be January 21st of 2025. I think it was on January 18th the law was put on hold again. And so even I told people to prepare, just go ahead and file. Worst case scenario, at least you have it on file because it's going to go, it's going to play ping pong back and forth. It probably will again, honestly, who knows? But anybody listening, just assume that you have to because you are being told now by the government that you have to comply by March 20, 20, 25. The filing, you can have the filing, you can have somebody help you with the filing or you can file it yourself. Not to speak for you, Lizzie, but I know you'll provide. We have plenty of resources on my websites in terms of how.

[Lizzie Smiley]

Y'All.

[C]

I don't know about you, but the legal stuff surrounding business really intimidates me. It's not fun, it's not easy, and I generally just want to shove my head in the sand like an ostrich and hope it will go away and nothing bad will ever happen. But the truth of the matter is that we are business owners now and that is so cool. And it takes so much courage and effort and it would be absolutely devastating to lose it all and more like maybe even our homes or our, our family's well being because we didn't take a few precautionary steps in the front end to set up our business correctly. So whether you're just getting started on Etsy or you've been selling for years now but never quite got around to the legal setup, I want to make sure you know about attorney Paige Hulse and her creative law shop. Paige used to be an Etsy seller just like us, which I freaking love because she gets us. She understands the nature of our business and the Etsy platform so well. Like so much better than, you know, some local attorney who maybe understands like, you know, general law. She's the one person that I trust for myself and that I trust to take care of you guys for like any entrepreneurship needs, like, or by the way, equestrian as well, if you happen to be a horsey person, like she and I are.

[Lizzie Smiley]

She's got a specialty there as well.

[C]

So first off, I want you to know about some free resources. Um, Paige was on the podcast three times so far. So if you look for episodes 36, 61 and 86, great free advice there. You can learn some of the basics.

[Lizzie Smiley]

From her of how to protect your.

[C]

Your business the way you need to set it up correctly. Um, she's an absolute dollar and she's smart as a web. And also like, you're going to love the easy way that she breaks down, like complicated legalese. Like, I can actually, I can actually focus on what she's saying and not go blank because it's so technical. Um, you're going to love her. And also this is really important. I want you to know that she's available if you. Especially in the United States, of course. Like if you run into legal trouble or if you need to register a trademark or you have some other issue with your business that requires legal advice, you can just search for Paige Hulse Law. Hulse is spelled H as in horse, U L, S E. And I'll also have her sites, you know, of course, linked in the show notes for you guys. And most importantly, I want to make sure you know about her creative law shop because it can save you boatloads of money. It's literally like a template shop for, for like legal documents, the kind of things that we need all the time. So in many instances you can just purchase a legal template from Paige directly from her site that will protect your business for a fraction of the price that you pay for hiring an hourly attorney. And it's going to be written a million times better than something free off of the Internet. Like the stories she's told me about trying to defend people who grabbed a free, like, contract of some kind off the Internet because they didn't want to spend the money and then like it cost them everything. Like they thought they were safe. But those templates are not written well and they're not written specific to like the Etsy entrepreneur. So she has so much in there. You can get everything from your LLC contract, which is super critical. Multi person LLC agreements for partnerships. If you work with more than one person person in the llc. Special provisions for your Etsy shop policies. If you really want to cover yourself there. Affiliate agreements, influencer contracts, photography releases, and so much more. There's literally over 80 contracts available, plus additional free resources. Her blog is incredible and there's a lot of educational tools like some even.

[Lizzie Smiley]

For purchase if you want to take.

[C]

Like a course learning some basic business law stuff. So check it out. If you need to order something from the Creative Law Shop and you want.

[Lizzie Smiley]

A bit of a break on the.

[C]

Price, you can use my coupon code, Smiley10. That's all lowercase S, M, I, L, E, y and the number 10 and you get 10% off and hopefully that will help. So just go to shopcreativelaw.com and there are a ton of resources waiting for you. My hope and prayer is that you'll never need to fight a legal battle. But just like we have fire insurance and car insurance for a reason, setting up your business the right way now can save you from a lot of pain later. So I really trust Paige to help you out.

[Lizzie Smiley]

The rumor is that it's quite cumbersome. Is that true? Is it. How much time would we. Would you suggest people set aside to be able to complete it?

[Paige Hulse]

I don't think it's actually that cumbersome. I put set aside 30 minutes. I can do it in 10, but I think it's like 60 some questions. I've done dozens and dozens. I'm just can't remember exactly how many questions it is. When you see like 60 something questions, it makes a lot of people like kind of freeze up. But they're really not difficult at all.

[Lizzie Smiley]

At all about the structure of your business and who you are and who the players are basically. Okay, so I will have more information linked about that. I am. We're. We're just gonna. We have to wrap this up. I'm so sorry. But next time we'll do. I'll get. I'll get y'all's FAQs for the next time. I will cajole Paige into joining us again in a few months, hopefully.

[Paige Hulse]

I have so first I have another 10 minutes if you.

[Lizzie Smiley]

You do?

[Paige Hulse]

Yeah, I'll have. I have 10 more minutes.

[Lizzie Smiley]

Okay, then. Oh my gosh. Okay, I do have another really big.

[Paige Hulse]

Yeah, we can do rapid fire and I have an AI update if you want.

[Lizzie Smiley]

Oh, start with that. So. Oh my gosh. You just made me so happy. I was like, I'm like, I got to get her out the door in five. We got to get this uploaded. So. Okay, let's do a little bit more then. So. Yes, do an AI update. What's happening legally with AI.

[Paige Hulse]

Okay, so we just had a big. Finally had our big. Our biggest update I think that we've had, I would say that we've had in and probably a year as of a few days ago at the time of recording this. So we had a case. I won't actually bore everybody with the case details, but ironically this case. I've been waiting for litigation to show the answer to this, to this type of question because I get asked this question all the time and especially as somebody who has created my own AI powered platform, I've wondered the legality around this as well. So oversimplifying the. The root of this case, which the case is Thomson Reuters or Reuters Enterprise center vs Ross Intelligence Inc. So just for context, simplifying the basis of this case, Thomson Reuters, which actually is the like informational house for a lot that a lot of attorneys use. That's where all of our cases are published. That's. I can't even explain how big of a role that plays within the legal industry. So of course somebody thought it would be smart to basically create an AI model based upon Thomson Reuters. They have thousands and thousands and thousands of what are called case notes. So actually published cases. It's literally our online library of published cases and other forms and templates. This company, Ross Intelligence Inc, Essentially pulled some of those case notes and trained its large language learning model off of the Thomson Reuters. Off of the Thomson Reuters case notes or just their content. We can say the reason why this case is so important is because this is our first. This is the hallmark case. It's our first case that examines the question of fair use as it applies to AI and copyrights, which if you've heard me talk about AI, you, you've heard me talk about the concept of fair use. The reason why this is so interesting to me is because if we break it down into four quick components here, the judge actually, the judge found in favor of Thomson Reuters. So the judge looked at four different factors. They looked at the purpose and character of what Ross Intelligence Agency created, which was essentially again to create an AI, an AI large language model providing legal information from what I understand, you know, out into the public. So the purpose and character it competed with Thomson Reuters. The judge also looked at the nature of the copyrighted work and found that the underlying work, meaning Thomson Reuters, think of it as blog posts, just their content, their articles. When I keep saying case notes that underlying work involved is, was creatively sufficient enough to warrant protection. The third factor that he looked at was the Amount in substantiality of the use. So how much of Ross Intelligence Inc. Was based off of Thomson Reuters? I'm going to come back to that because that's really important.

[Lizzie Smiley]

Yeah.

[Paige Hulse]

And then fourth was Market harm. So obviously what they created was going to compete with Thomson Reuters going back to that amount and substantiality of use. This has been the, this has been the prevailing argument on both the pro and con side of AI, because people like myself argue if you've ever tried to do, if you've ever tried to train a GPT, you know that just because you input something doesn't mean that you're going to get the exact same output that somebody else is going to get. So there's always been. We've had this lingering question that, honestly, people have had a little bit too much time. I was waiting for case law to come in and start clarifying this, but we've had this lingering question of is it fair use if the output is so substantially different from the input? Is it actually copying? If you, if you pull articles from somebody else, but you have your own instructions built into your GPT and it outputs something that may be similar to the original article, but is in a completely different tone, maybe has a completely different hook or what, you know, whatever those other elements are. The judge found in this case that even though the outputs were different than the content it was based upon, which was Thomson and Reuters content, that that wasn't good enough, essentially. So what anybody that is using AI or advising on AI needs to know right now is this should be. This, this should be a big flag, a big flag to at least start narrowing down our definition of how, of what constitutes a creative output. And if you're building any sort of tech platform or if you're using AI or building anything within the AI realm, know that what you are, what you are training your GPT or your other large language model off of cannot be definitively because of this case, cannot be based upon the. It cannot be based specifically upon somebody else's copyrighted work. It's a lot of talking.

[Lizzie Smiley]

No, no, it was actually. I actually followed most of that. I'm just like, good job. Most of us are. And I know, I mean, there's so many different things, right? We're using the GPT models for, in our, in our application, if we're like writing emails or writing responses to customers or writing descriptions. And so that's a little less to me, like, concerning the bigger thing, I think where there were, where my listeners are going to have an exposure potentially would be we're using AI art platforms to create.

[Paige Hulse]

Exactly.

[Lizzie Smiley]

Yeah. So tell me your thoughts on like, for example, I might use a reference image that I find somewhere to put in with my own prompt to get an output. It's always super different, but it does give me something closer to what I want than if I just prompt it without a reference image.

[Paige Hulse]

I would now, based upon this case, say that whatever that input is cannot be one specific. Like let's say it's a photograph of mine that you, that I've copyrighted, that you're, I don't know, creating whatever scenario you want to play with there. But it can't just be based off of my image, my copyrighted image. It's going to have to. Now, I would, I would say it now has to include other inputs as well. So maybe, maybe you want. We're using. I don't. Again, I don't know what example we want to use. Let's say it was a GPT that converts a photo into like a. Looks like a painting or something like that. You would have to use my image. And then I would also recommend that you use other. Some additional images as well so that that output that you've created is not directly based upon the input owned by me. That.

[Lizzie Smiley]

Okay.

[Paige Hulse]

Does that make sense?

[Lizzie Smiley]

Yeah, I mean, basically what you're saying, like, for example, I use Mid Journey and you can't put in. You can do a blend, but that's. No, that tool isn't great. You would just use like a, a reference image. I'm almost thinking like, we need to stop using reference images or we need to make sure that there's no IP on that reference image before we use it.

[Paige Hulse]

Yeah, the latter would be probably a better answer.

[Lizzie Smiley]

Okay.

[Paige Hulse]

Yeah, we're going to have much more. Obviously we're gonna. There is so much litigation that's just like in the, it's in the pipeline right now. So it. This changes on a weekly basis. But this is going to be one of those cases that's going to be in textbooks.

[Lizzie Smiley]

Yeah, I'm excited to hear that's. That's a really interesting application though. Like, I'm sitting here thinking, even again, we talk about common sense. Like, no, they literally spent millions and decades creating that resource. No one should be able to use AI to just copy it. Like, and I'm an AI person, you know, and you are too. But like that. I'm not okay with that. Like, I actually agree with the judge. I know that I heard the whole case, but I do too.

[Paige Hulse]

It's. It's I have a lot more to say about that, but it's. Yeah, it's very, very interesting. Especially again just because I, I was saying it too and I still believe it to a certain extent.

[Lizzie Smiley]

Like, yeah, there should be lines. There need to be. There need to be like, yeah, bumpers around a lot of this stuff. I really, I genuinely, I genuinely want to protect original works. I genuinely want to protect an artist, you know, who spends hours and hours and hours. I want, I, I care a lot about there being lines around it.

[Paige Hulse]

Yeah, exactly. The thesis statement, I guess from this case is that outputs aren't necessarily. No matter what the instructions you've, you've inputted into your GPT or other AI model, outputs are not binding themselves just because they exist creative. Other factors go into determining what constitutes fair use and creativity.

[Lizzie Smiley]

Yeah, I agree and I agree with that. Okay, actually really, really grateful we got to that then. So then as we, as we close out, would you like to chat a little bit about? Because there, and I know we did this last time, but I'm still trying to get my brain around it because you've got your creative law shop, which is where I bought all of my contracts from my website, from my Etsy shops. Like you've been the resource because, and I trust you because you're an Etsy seller and you're an intellectual property lawyer. And I'm not just going, you know, you're not just some rando on the Internet selling, you know, selling super low, like low ticket, cheapo, whatever contracts. And I get that there's a time and place for everything. It's called college. But, but the point is I come to you because I trust you and I know that the words that are in your contracts are most likely to protect me from my application. You had some changes though. Like you were saying, you built a whole AI system for creating contracts. Help us as Etsy sellers just point us in the right direction of where we should be going to get the tools that we need for our specific application. I'd say both in what we need to be having in our Etsy shop where you can have your terms for your shop and, and maybe even in your listing. But also like people are a lot of my listeners also have like a Shopify site. So where do we need to be looking for that content? And I totally just put you on the spot and I'm sorry, but I really want people to use your stuff.

[Paige Hulse]

Yeah, thank you very much. Well, and also you, you hit on a point that I always, I always want to mention, which is if you have an Etsy Shop, obviously listeners do most likely have an Etsy Shop. I cannot stress how important it is to have a backup Shopify site as well. So just good, good, good general education there. But again, thank you. Thank you for asking that. So I have the Creative Law Shop. I've had it at this point for about eight years. This is where I've every contract I've written for myself and my clients converted into templates. And this past year like we've redacted all of the proprietary information like my name from the contracts, but they're the exact same contracts. This past year I have converted that into. We still, we still offer templates through the Creative Law Shop, but we also have the Creative Law Foundry. This is my own SaaS platform that is based, it's trained off of eight years of questions we got in the shop, every contract and many other elements. And you can now customize your own contracts through this platform that we built or that I built last year. To answer your question more directly, anybody with a Shopify site or any, anything like that, you're going to need your terms and conditions. You're going to need. You federally mandate have to have a privacy policy. You should have an operating agreement. Can't stress that enough.

[Lizzie Smiley]

Which is llc.

[Paige Hulse]

Operating agreement governs your llc. And typically you also, if you do any, any work like personalized work for any customers that become clients, if there's any sort of client relationship that that is formed, you of course have to have your client agreement as well. The, the last thing I see that couple other things I see that Etsy sellers end up needing is an independent contractor agreement as your team, if you have a team and as that team grows. And this past year in particular, I've had a few instances of Etsy sellers needing the copyright assignment agreement. So if people come to them and want to buy copyright rights to something they've created, that's, that's literally a tool. Think of that as like a key that can unlock a like treasure chest within your, your company and help like bring in additional passive income. So licensing is the conversation for a whole other day. Copyright.

[Lizzie Smiley]

It's so fun. It's so fun. Okay, okay. So what I didn't appreciate is that you actually still have the Creative Law Shop open if people aren't ready for the foundry. If they're not, if they don't need the bigger, more robust. Oh, okay, amazing. So then what I will do is you've actually given me a list before of the clauses that you need for an Etsy shop. And I have all of those links straight to the Creative Law Shop, now that I know that it's still there. So for people with bigger projects who really need a more customized contract, you need a more personal touch to the things that you're putting together. You want to look at the Creative Law Foundry. Is that the right name?

[Paige Hulse]

That's right, yes. And that also, again, it has a GPT trained off of. It's literally the closest somebody can get to sitting down with me. And I mean that. I mean literal and the correct use of that term. So if you've ever thought about even like asking a question, because we can't answer. I can't answer questions about contracts within the shop. Like I can't walk somebody through it or I'm breaking the law. So I created something that can. So if you've ever. Yeah.

[Lizzie Smiley]

If you've ever such a good application. I'm so sorry, Paige. I'm just saying such a good application of AI like that is like, talk about the way it should be done. You have all of this information, you have all of this experience. You have pages and pages and pages and pages and volumes of. And. And you're using AI to compile it so it can output in a really convenient, appropriate legal way. Like, that's the perfect application, unlike the example in the law lawsuit.

[Paige Hulse]

Thank you. Well, and. And to your point, too, there's a time and a place for everything. You. You get what you pay for. What I've tried to do is democratize that a little bit, frankly, because the Foundry is genuinely the first bridge I've been able to create between a template shop, which those contracts have stood behind in court. Like, they're extremely strong contracts. I understand that purchasers are not lawyers or have not gone to law school. So I understand if you have a question about a paragraph or wonder how you can, like, if you need to negotiate a paragraph with somebody for whatever reason, you might need help doing that. I've created the model that provides for that because I understand that you might not be in a position to also hire our law firm as your general counsel right now either.

[Lizzie Smiley]

So for some of you listening, the Foundry is the perfect place to go. And for many of you who are maybe lower ticket, you're just getting started. You need to put some things in place. I'm going to link the ones that I use from the Creative Law Shop, and it won't be as. It won't be as much as having a membership to the Foundry. So those will be linked down there for you to grab so that you can have something in place while you're building up to the point of having legal counsel. And. And thank you for democratizing that, Paige, because it feels very overwhelming for those of us who don't have the time or necessarily capacity to understand all the things that you do.

[Paige Hulse]

Yeah, exactly. There's a reason why I have lots of fun. Law school, bills I'm paying off.

[Lizzie Smiley]

Yeah. I can't even imagine. I know that I need to. I need to let you go, but I want you to know that I don't take light that you spend the time with us like this. I know that this is a profound privilege and you don't have to do it. And you're unbelievably generous and kind and just wonderful. So thank you so much. I really, genuinely appreciate it.

[Paige Hulse]

Absolutely. I really appreciate you having me here. It's always. I. Absolutely. This is the only place I usually am talking about many of these topics because I genuinely love getting to talk to you about it. So thank you for asking the good questions and asking the questions people need in order to get their Etsy shops off the ground. I never take that for granted.

[Lizzie Smiley]

Well, we just need to get them to push play and not be terrified. So that's. We'll work on that. Guys, thank you so much for hanging out with us. I know how much you love when Paige comes on the show. Send us your FAQs for next time. And what do I always say? I can't even remember until next week. I love you. Go make something awesome. Y'all have a great day. And that's a wrap on this episode of how to sell your stuff on Etsy. Thanks so much for hanging out with me today. If you're looking for more resources, head on over to howtosellyourstuff.com where you'll find podcast show notes, all the links from today's episode, the blog courses, coaching, and more. If this episode was helpful to you, awesome. The greatest compliment I can receive from you is a rate, review and subscribe on this podcast. Not only will it allow us to connect again on a future episode, it lets me know I'm providing you with value and helps other people find this content more easily. From the bottom of my heart, thank you for your support. Have a great day and see you next time.