E-commerce has revolutionized the way businesses of all sizes do business, but it has also opened up a host of problems for manufacturers and brands. In decades past, unauthorized resellers were usually limited in scope because of logistical difficulties making it harder to turn a profit quickly. Now, manufacturers and brands need every legal tool at their disposal to root out unauthorized resellers all over the world.
KJK is experienced in ecommerce law and knows how to protect your brand from unauthorized online resellers. Since these resellers can damage your relationships with both your customers and your distribution partners, partnering with a law firm with the services necessary to deal with the problem is crucial.
What Makes a Reseller “Unauthorized” Under the Law?
The first sale doctrine, which gives most buyers the legal right to resell goods as long as they have not been modified, often protects resellers. However, there are narrow exceptions to this rule, especially if you have a MAP policy in place.
Sometimes, there may be laws other than trademark laws that allow legal action against an unauthorized reseller. If the reseller uses the company’s own images, the company may file a complaint under copyright law. One non-intellectual property example is if the reseller has made misleading statements about the goods or violated state warranty laws.
Another possibility is that an authorized reseller passed the goods on to the unauthorized reseller. If you can prove this, then you might be able to shut down the transaction by ending your relationship with that reseller and suing them for breach of contract.
How to Take Down Unauthorized Resellers
Some online retail websites have trademark violation reporting systems that allow you to address unauthorized resellers on your own. In many cases, these reporting systems require substantial evidence to ensure the accused reseller’s rights are protected. Even if the form looks straightforward at first glance, it is important to consult with a trademark lawyer that understands the issues at stake and can support you in gathering evidence.
Often, the process becomes much more complicated due to the website wanting to protect their cut of the profits. There are multiple U.S. laws and agencies that can potentially give you the legal support you need. However, determining which laws apply to you is extremely difficult, especially when considering the intersection of federal law and website policies.
When the website itself is not cooperating, you may be able to contact the seller directly with a cease and desist letter. However, most resellers ignore these letters for as long as possible. Working with the lawyers at KJK can help you gain full and permanent compliance.
Important to Consider:
MAP Policies
One of the key tools in combating resellers who are hurting your bottom line is by creating and enforcing a Minimum Advertised Pricing (MAP) Policy. This basic policy requires retailers to only advertise pricing at or above a certain minimum. This policy does not prevent a store from offering additional unadvertised coupons or discounts, but it prevents brand erosion that hurts the perceived value of your goods.
However, just having a MAP policy in place isn’t enough. Enforcing this policy is especially difficult when dealing with businesses overseas or those adept at skirting the legal boundaries of your policy. We offer complimentary reviews of your existing MAP Policy so we can identify potential avenues for enforcing or revising the policy.
Focused on Your Best Interests:
Monitoring Sales Channels
Finding unauthorized resellers is a time-consuming process. You could spend months manually checking websites and search engine results on your own, only to discover that the reseller popped back up on another site.
Although any unauthorized reseller is a potential risk, the problem becomes even more urgent if the reseller is racking up bad reviews or significantly undercutting your authorized sellers. It is crucial that you partner with a law firm that can identify new threats to your brand image. The eCommerce attorneys at KJK have a proprietary process for making sure they identify all unauthorized outlets used by resellers, even if they’re spread out over an enormous range of websites.
What To Expect:
DMCA Takedowns and Subpoenas
The Digital Millennium Copyright Act (DMCA) allows copyright holders to address online violations of their copyright. Although the difference between trademark and copyright law means that this law cannot target some unauthorized resellers, it’s a good starting point for obtaining seller information. You can subpoena the website owner for the name and address of the account selling your goods without authorization.
Some sites, including eBay, go above and beyond the minimum requirements of the DMCA to allow you to file good-faith complaints about a wider variety of infractions. Unfortunately, some online retailers are more interested in protecting their bottom line than honoring brands’ agreements and policies. This is an especially common problem with unauthorized Amazon resellers but can also happen with unauthorized Walmart.com resellers and others.
Fortunately, we have success in dealing with difficult online retailers. One of our biggest success stories was with Hinkley Lighting, a company that worked hard to establish its network of knowledgeable sales reps. Since it was difficult to confirm whether the goods being sold were counterfeit, we used a combination of DMCA takedown notices, trademark law and the Intellectual Property Office of U.S. Customs and Border Control to shut down the reseller’s operations.
In the end, the reseller promised never to sell our client’s products or use their trademarks or copyrights in the future. KJK was able to protect the hard work of the entire Hinkley Lighting team and ensure their brand image remained untarnished.
In addition to this success story, we have brought nearly 250 other MAP violators into compliance, filed nearly 200 DMCA takedown notices and filed more than 100 federal lawsuits. We manage to win compliance without proceeding to the lawsuit stage approximately 60% of the time, thanks to our professional evidence-gathering methods.
Important to Know:
First Sale Doctrine
Resellers will be quick to invoke the first sale doctrine when confronted with evidence of their unauthorized activities. Since the first sale doctrine is so broad, your chances of proving their violations are slim without help from a qualified legal team.
Our eCommerce attorneys have a strong track record of collecting the evidence necessary to prove that laws and regulations other than the first sale doctrine apply to your case. Instead of arguing with website owners or resellers yourself, get a legal team with the experience and knowledge necessary to resolve the matter quickly.
We’re Here For You:
Let KJK Assist in Combatting Unauthorized Online Resellers
KJK is committed to providing the support you need to deal with the ever-changing world of e-commerce. Call us today so we can get to work protecting your business and reputation.