How One Manufacturer Thought Outside the Box to Stop Unauthorized Resellers

June 20, 2019


Brand EnforcementA recent federal court decision serves as another reminder to manufactures and brands of the importance and benefits of reseller and distribution agreements. These types of agreements govern the relationship between a manufacturer of goods and the reseller of those goods. Carefully drafted reseller agreements not only help to control a company’s distribution channels, but they can also be used as a weapon to combat unauthorized resellers.

Manufacturers increasingly face the problem of unauthorized resellers on e-commerce platforms like Amazon and eBay. Unauthorized resellers cut into profit margins and upset a company’s authorized resellers. However, in Otter Products, LLC v. Wang, No. 1:18-cv-03198 (D. Colo.), the Plaintiff, cellphone case manufacturer Otterbox, was able to obtain an injunction and an award of $60,000 in damages against the defendant, one of its unauthorized resellers.

Otterbox won this matter, in part, due to its use of reseller agreements. Specifically, Otterbox relied on its reseller agreement to prove tortious interference with a contract. Tortious interference occurs when a third party knowingly induces a party to a contract to breach said contract. Otterbox’s reseller agreements prohibit the sale of its products to consumers who intend to resell the products – such as the defendant in this matter. Otterbox informed the defendant of these reseller agreements, however, the defendant continued to purchase Otterbox products for the purposes of resale, which amounted to tortious interference with the reseller agreement.

All manufacturers should ensure that they have reseller and distribution agreements in place. It is better to be proactive than to wait until a problem with unauthorized resellers arises. These agreements should be tailored to the manufacturer’s business, and they should include specific language which can be used offensively to stop unauthorized resellers.

For additional information or assistance, contact Alex Jones at aej@kjk.com or 216-736-7241, or reach out to any of KJK’s Brand Enforcement professionals.


KJK publications are intended for general information purposes only and should not be construed as legal advice on any specific facts or circumstances. All articles published by KJK state the personal views of the authors. This publication may not be quoted or referred without our prior written consent. To request reprint permission for any of our publications, please use the “Contact Us” form located on this website. The mailing of our publications is not intended to create, and receipt of them does not constitute, an attorney-client relationship. The views set forth therein are the personal views of the author and do not necessarily reflect those of KJK.