What Are Private Label Rights? (PLR)

August 4, 2024 Liscah Isaboke, Esq.

Are you interested in Private Label Rights?

Have you bought or sold PLR products?

Are you interested in learning more about the legality of buying or selling PLR products?

Stay tuned, we’ve got you covered! Here is a comprehensive explanation of everything you need to know about Private Label Rights.

WHAT ARE PRIVATE LABEL RIGHTS?

Private Label Rights (PLR) refer to the rights associated with products that are manufactured by one company but sold under another company's brand or trademark. These products are labeled with the brand or trademark of a person or entity other than the manufacturer, and the manufacturer's brand does not appear on the label Private Labeling, § 2052. Definitions. This can be particularly useful in the context of digital goods, where the buyer can market the products as their own, potentially modifying or enhancing them to better fit their market needs.

In transactions involving private label products, it is crucial to include contract language that protects the buyer from third-party intellectual property (IP) claims.

HOW ARE PRIVATE LABEL RIGHTS USED IN COMMERCE?

Private label products are typically created to be sold exclusively by a particular retailer or supplier, distinguishing them from national brands that are widely distributed under the manufacturer's own brand name. This practice allows retailers to offer unique products that can only be purchased at their stores, potentially increasing customer loyalty and profit margins due to lower costs associated with private labeling. Legally, private label rights can involve various agreements and regulations. For instance, under the Lanham Act, trademark owners can prevent unauthorized use of their private labels by others, ensuring that their brand identity is protected J. C. Penney Co. v. Parrish Co., 339 F. Supp. 726. Additionally, private label agreements often include specific terms regarding the marketing, distribution, and sale of the products, as seen in various case laws and statutes Zuzel v. Cardinal Health, Inc., 2021 U.S. Dist.

PLR products can encompass a wide array of various items that are bought and sold in today’s market. Examples of these products include, but are not limited to, digital products like eBooks, cosmetic tools such as makeup brushes, beauty accessories like eyelashes, hair extensions, instructional video tutorials, audio books, and much more. The versatility of PLR products allows entrepreneurs to tap into numerous categories and tailor offerings to their specific audience. PLR products are popular because they are easy to use. You don’t have to create anything from scratch or reinvent readily available products.

CAN I REALLY SELL SOMEONE ELSE’S PRODUCT AND LABEL IT AS MY OWN?

Yes, you can legally sell someone else’s product and label is as your own if they have given you a license to do so. For eBooks for example, you can find relevant content that not only resonates with your target audience but also engages them on a deeper level. After identifying such content, make some adjustments to it—altering it just enough to reflect your unique voice and perspective—but ensure you do not modify it too drastically. Once you have refined it, you can confidently publish it as your own, knowing that it aligns with your brand's message.

CAN I REALLY GIVE SOMEONE THE RIGHT TO RELABEL AND SELL MY PRODUCT?

Yes, you can license out private label rights to another individual or company, but there are specific conditions and limitations that you need to consider. In the context of private label products, it is important to include contract language that protects your client from any third-party IP claims that might be asserted. Suppliers acquiring such goods from a third-party manufacturer will want to receive broad indemnification rights against third-party claims alleging infringement arising out of the proper sale or use of the private label products. Manufacturers should be required to indemnify and defend retailers and suppliers from any IP claims. Private Labeling.

Additionally, certain regulations and statutes provide guidance on the assignment and licensing of rights. For example, under HRS § 482P-8, any person seeking to license publicity rights from a living person has the right to presume that the individual has the right to assign or license their publicity rights unless there is a publicity rights name registration for that individual. This statute implies that licensing rights, including private label rights, is permissible under certain conditions § 482P-8. Procedure for identifying transferees, licensees, or assignees; requirement to seek damages or relief. Moreover, the case of King Koil Licensing Co. v. Harris illustrates that license agreements can include royalties on private label sales, indicating that private label rights can be licensed out under negotiated terms. King Koil Licensing Co. v. Harris, 2017 IL App (1st) 161019. While you can license out private label rights, it is crucial to ensure that the licensing agreement includes appropriate indemnification clauses and complies with relevant regulations to protect all parties involved.

WHAT ARE THE PROS OF PLR?

The ability to make money online with PLR products allow you to scale your business quickly and start profiting in no time.
Almost any topic you choose likely has an eBook or content created by someone else.
PLR products save valuable time and effort since you don't have to start creating them from the very beginning. This allows you to focus on other essential aspects of your business.
PLR products can be modified to better meet your audience's specific needs, allowing for effective customization that resonates with your target market.
You can easily locate numerous PLR products available for purchase and resale.

WHAT ARE THE CONS OF PLR?

Copycats: PLR products are usually faced with duplicate issues because thousands of people have the right to purchase or have already purchased one particular PLR product to use on their various platforms. Lots of people may be using the same PLR product as you.
Low Quality: Many PLR (Private Label Rights) products available in the market today are often of low quality and fail to provide the value that customers typically expect.These products are frequently outdated or poorly written, which significantly reduces both their usefulness and appeal in today's competitive environment. As a result, potential buyers may find it challenging to derive value from them.

In summary, private label rights encompass the legal and commercial aspects of selling products under a brand different from the manufacturer's, involving trademark protections and specific contractual agreements to maintain brand integrity and exclusivity. J. C. Penney Co. v. Parrish Co., 339 F. Supp. 726, Zuzel v. Cardinal Health, Inc., 2021 U.S. Dist. The manufacturer should indemnify and defend the buyer against any IP claims arising from the sale or use of the private label products. WAC 458-20-15503. Digital products. Furthermore, the sale of digital goods can be considered a sale for resale if the digital goods are subsequently sold, licensed, leased, broadcast, transmitted, or distributed as an integral part of another digital good or service Sec. 12-410. Presumptions and resale certificates. [Effective October 1, 2024]. In the context of licensing, a private label purchaser can market, license, and sell the software under their own names and trademarks, and develop updated versions and derivative works without attributing authorship to the original seller. The buyer would own all rights and titles to these updated versions and derivative works, allowing them to market or use the software as they see fit. Fort Bend Indep. Sch. Dist. v. Hipaaawareness, 2016 Tex. Dist. In summary, private label rights can be effectively used in the selling of digital products by allowing buyers to rebrand and resell the products under their own brand, provided that appropriate legal protections and rights are secured through well-drafted agreements. This approach can help buyers leverage existing products while minimizing risks associated with IP claims.

HOW CAN ISABOKE LAW HELP ME?

If you answered yes to any of the above, you’ve come to the right place. Here at Isaboke Law™, our team of experienced attorneys specialize in providing comprehensive commercial contract drafting, review, negotiation, licensing, etc. Contact us today to learn more about how we can help you with all things encompassing PLR.

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