Is It Trademark Infringement To Resell A Product You Legally Bought?
from the here-we-go-again... dept
It seems like we have a few of these cases every year or so, where some company that tries to maintain strict control over its distribution channels freaks out about people reselling products online. A few years ago it was a shampoo company that said no one could resell their shampoo bottles. Now, it's the famed cosmetics firm Mary Kay, who is claiming that an online retailer is violating its trademark.The details of the case are pretty interesting. Basically, Mary Kay requires its "independent" distributors buy a certain amount of product every month to sell -- and the amount required is often a lot more than they can reasonably expect to sell. So, one former Mary Kay distributor set up a pretty good business in buying the "remnant" inventory from others at lower prices (better than being stuck with it completely) and then reselling it online. It's basically arbitraging the inefficiencies set up by Mary Kay's ridiculous system that pushes excess product onto its distributors.
But, of course, Mary Kay doesn't like any of this (despite the fact that it still gets paid for its product) -- and, in theory it should have no case due to the always popular first sale doctrine (i.e., you can resell stuff you bought). Except, Mary Kay is trying to get around this by claiming that the online seller's goods are "materially different" and thus first sale doesn't apply. Why are the products materially different? Apparently, they're old, expired and not supported any more -- which doesn't necessarily seem to be "materially different," but perhaps a judge will find otherwise.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: consumer rights, resale, trademark
Companies: mary kay
Reader Comments
Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Re:
Next time try something more like this:
Dearest Mary Kay,
Thinking of you again so I thought I'd share this link with everyone here!
http://www.pinktruth.com/
Kisses! Enjoy.
[ link to this | view in chronology ]
Re: Re:
"
or it could be a method of trolling for the every present spelling nazi
[ link to this | view in chronology ]
Re: Re: Re:
Heh.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
What a scam.
Why would MK care how it gets sold. Do they want to financially ruin their independnat sellers?
[ link to this | view in chronology ]
Re:
duh, its a pyramid scheme.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
Aw crap
OTOH, if MK prevailed on that point, it would just encourage their 'saleswomen' to give up (on) the goods that much earlier.
[ link to this | view in chronology ]
Expired == We Want You To Buy More
Expiration dates on water is a scam.
I imagine that cosmetics is somewhere in between, very close to the scam side.
[ link to this | view in chronology ]
Bad Business Practices
A couple of thoughts:
I know of one woman who sells Mary Kay cosmetics who actually turns a profit. The whole thing sounds like Amway to me (an ounce of success stories with a ton of folks who pay, realize they can't sell the products, and ... ).
Unlike Amway ... at least from the perspective of one wife of one commentator ... their products are great. My wife has very sensitive skin and for some reason, their cosmetics are the only things she's found that don't cause problems for her. They're not perfect, but she likes to wear makeup and she can actually wear this stuff for more than an hour.
Assuming my wife's opinion is accurate, they should focus on getting their products out in the hands of as many people as possible because if they really are that good, the secondary market (which may have a more limited selection) could increase sales in the primary market.
[ link to this | view in chronology ]
Re: Bad Business Practices
I do not want your product, please go to Craigslist where you belong.
Thanks
[ link to this | view in chronology ]
Use the Judson King way of fixing things...
http://www.cbsnews.com/video/watch/?id=4765453n
[ link to this | view in chronology ]
http://www.pinklighthouse.com/wp-content/uploads/2009/03/17714255627.pdf
If one takes the time to read what the District Court judge said, it becomes fairly clear that more is at issue than the mere sale of a product manufactured by the Mary Kay Company.
[ link to this | view in chronology ]
Never take marketing advice from lawyers
Sellers are not required to adhere to it, nor do consumers need to pay attention to it.
They can try trademark, but I think they'd have to prove the date is, in any way, meaningful to their brand?
Do they really want to run the risk that people find out that the reason for the date is to get them to throw out perfectly good product.
It's too late now, but they should have "reformulated" their products so they don't expire. Not they're going to piss off sellers and buyers of their product. oh well....
[ link to this | view in chronology ]
Read The Court's Opinion
[ link to this | view in chronology ]
This article is full of lies
[ link to this | view in chronology ]
Contract law issue
If this were a copyright matter -- and it may be considering that product labels are involved -- then a contract provision in the agreement between Mary Kay and the independent distributor that proscribes the resale of the purchased items would trump the "first sale" doctrine. See http://tinyurl.com/4cbzt2 at pages 655-56.
I see no reason why the same principle should not apply in the trademark context as well.
In short, Mary Kay distributors may be breaching their agreements with Mary Kay by wholesaling their unsold product.
The question, however, is whether Mary Kay has a cause of action against the purchaser of those products bought at wholesale. I doubt it. But maybe.
[ link to this | view in chronology ]
Mary Kay
The Mary Kay opportunity is a great one for those who are looking for an alternate avenue of income. The only requirement is that consultants need purchase $200 in wholesale dollars PER calendar year to stay active. So, you get $400 worth of products for only $200. And that is per year, not per month. And, if you fail to do this, it is only $20 to rejoin with Mary Kay. The company also gives a 90% money back guarantee for those consultants who decide that Mary Kay is not for them-which means the company itself takes a 90% loss risk when they allow a new person to enter into a contract with them. They will take back any product the consultant does not sell, and return them 90% of the money they spent on their products.
Mary Kay is a great company to be a part of and they truly do know how to treat their consultants. I have found that the only people who are disgruntled about the business are the ones who are not willing to follow the rules, which there are not many of. I am not writing this to "recruit people" for Mary Kay, I simply want the truth to be known that it is a good company and they do treat people right.
[ link to this | view in chronology ]
Re: Mary Kay
[ link to this | view in chronology ]
Re: Mary Kay
[ link to this | view in chronology ]
Mary Kay ALWAYS has issues..why be an MLM company then? If you need to sell the items to make a profit or fulfill the monthly expectations, then you should go all out to market and sell it. Plus, as far as I know, MK does not accept EXPIRED PRODUCTS back..
[ link to this | view in chronology ]