Seattle Trademark Lawyer

Can a trademark owner stop you from re-selling its branded good?

In other words, can Tiffany stop sellers on eBay from selling Tiffany-branded rings to purchasers who want to buy used product? (What a boon to Tiffany if you had to go to its stores to buy Tiffany-branded jewelry! But what bust for someone who wanted to sell their Tiffany ring to pay the rent!)

In general, there’s nothing that Tiffany can do to stop a resale. In trademark law terms, the reason is the “first sale” or “exhaustion” doctrine. The first sale doctrine cuts off a trademark owner’s rights after its product is first sold. In other words, once a brand owner releases its good into the marketplace, its right to control the distribution of the good is exhausted. The resale of genuine trademarked goods, even if not authorized, does not constitute trademark infringement.

However, the doctrine is limited to selling the branded item in the same condition it was in when it was first sold. That limitation protects against confusing consumers into believing a “materially” changed good was made by the trademark owner. If a good is modified, it can’t be sold bearing the original trademark. A sale that voids a manufacturer’s warranty is considered a material change. Such a good can’t be resold as being on par with a new good that carries a warranty.

The doctrine also does not apply when a branded good has been repackaged, and the notice of the repackaging is inadequate. That limitation prevents someone from buying an item in bulk and re-selling it in smaller quantities without alerting the consumer what has occurred. As with most protections under trademark law, the intent is to protect the consumer from being misled.

Resellers can advertise they’re selling new, used, or reconditioned goods bearing the trademark, such as the Tiffany seller on eBay. They just can’t imply that they are authorized resellers or have some other special relationship with the brand owner that doesn’t really exist.

It should go without saying none of this authorizes counterfeiting — the placing of a trademark on a good that suggests it was made by the trademark owner, when the good wasn’t actually made by the trademark owner.

Can anyone tell I’m preparing a talk about the first sale doctrine? That’s one of the neat things about teaching. If you’re going to teach something, you have to first learn it yourself!

Last post about China, for now.

But I return in June with a UWSL program, so there’ll be more then.

Anyway, I saw this poster when leaving China on my way back to Hong Kong. 

I’ll leave snark to others. The U.S. and China both have a long way to go to get counterfeiting and piracy under control. But it’s nice to see the issue has both governments’ attention.

(Photo by STL)

When I wasn’t in Hong Kong (HK-related posts here and here), I was in Guangzhou, two hours to the north in mainland China.

It was the work trip of a lifetime. I joined 300 Chinese judges — from lower provincial courts to the Supreme People’s Court — to study intellectual property law as part of China’s National Judge’s College. I was in unbelievable company. Besides the incredibly accomplished Chinese Supreme Court justices and other distinguished Chinese jurists, I joined experts Mike Remington (copyright law) and Federal Circuit Chief Judge Randall Rader (patent law) to talk about new developments in U.S. trademark law. Suffice it to say, I count myself lucky to have been part of the program.

Mike Remington’s presentation 

My talk focused on three main issues: pending legislative efforts to address foreign counterfeiters (including PIPA, SOPA, and OPEN), trademark bullying, and standards for online liability as reflected through Tiffany v. eBay and Rosetta Stone v. Google (slides here). That’s what I helped bring to the table.

More interesting was what I took away:

• China’s commitment to developing best practices in intellectual property law is impressive. Three hundred judges attended the program and worked ten-hour days for seven straight days. Seven straight days! Including all day Saturday and Sunday. China’s IP docket is bursting at the seams, and its judges are highly motivated to make sure they get things right.
• They’re hungry for information. My slides were translated and circulated before my talk. I got engaging questions. One judge said “everyone” in the audience had read Chinese translations of the Tiffany and Rosetta Stone cases my slides signaled I was going to discuss. A Supreme Court justice said Chinese judges would consider more American decisions if more were available in Chinese. Note to the U.S. government: if you want to influence thinking in the Chinese judiciary, translate important U.S. cases into Chinese. This also presents an opportunity for universities. Chinese judges want to know how we approach cutting-edge IP issues. We should respond to their eagerness by making our decisions easy to access.
• Chinese IP judges are struggling with the same IP issues our courts are struggling with. One judge commented that China has decided cases involving online auctions and keyword advertising similar to Tiffany and Rosetta Stone. With a huge IP docket, it’s no wonder China’s top judges are at the intersection of law and technology much like some of our judges are here.
• I received a few comments about Tiffany and Rosetta Stone. The Eastern District of Virginia’s Rosetta Stone decision — which found Google not liable for direct or indirect trademark infringement even though it made the sale of counterfeit goods more efficient — built on the Second Circuit’s Tiffany decision, which found that eBay’s response to Tiffany’s counterfeiting complaints was reasonable under the circumstances. Interestingly, at least a handful of judges found the cases sufficiently different as not to warrant similar treatment. In their view, eBay for practical purposes can’t control what third parties sell on its site (as the Second Circuit largely found), but Google is different. They argued that Google sells its own product — advertising — and, therefore, it should be charged with a greater responsibility commensurate with its ability to exercise greater control over the product it sells. I personally don’t agree with that view — I see Google’s position as being pretty close to eBay’s — but think they make an interesting point.
• Finally, though folks were too polite to point it out, the U.S. is on shaky ground with respect to the famous trademarks doctrine. We’re pushing China to adopt the doctrine in order to protect well-known U.S. brands in China that aren’t registered (and, therefore, don’t have trademark rights there). From what I gather, China has started to offer the protection our brand owners want. Yet, the U.S. itself does not recognize this doctrine. At least not in the influential Second Circuit, which in ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2d Cir. 2007), rejected the doctrine asserted by a famous Indian restaurant with no U.S. presence against a copycat restaurant that opened in New York. The Second Circuit held no U.S. trademark rights means a foreign trademark owner can’t prevail here — precisely the opposite conclusion we’re encouraging China to adopt. Our efforts would seem to be a lot more persuasive if we were able to lead by example!

The Asia Foundation and U.S. Agency for International Development (U.S.A.I.D.) funded the program, along with the Supreme People’s Court. All three organizations have the right idea. We have a lot to learn from each other, and what better way to develop best practices in addressing new IP issues than by sharing our experiences?

(Photo by STL)

Building on my last post, here are a few more fun trademarks I spotted in Hong Kong.

Can you imagine choosing to get your hair cut at the “Harvard of Hair”? Having a suit made at “Very Good Tailor” or its new incarnation, the “New Very Good Tailor”? (One would think they could upgrade their image simply by cleaning the seagull feces off their sign.) How about taking language classes at the Obama Language Centre? 

It seems crazy, but some businesses use these trademarks. They apparently believe doing so gives them a competitive advantage.

Undoubtedly, cultural differences played a role the adoption of these marks. Still, these outlandish examples demonstrate that sometimes, less is more. If you need to shout that you’re the “Harvard of Hair,” you probably aren’t.

(Photos by STL)

Hong Kong was great.

One cool thing, among many, is the way they name their buildings.

They all sound very posh, or at least aspiring to be.

My favorite’s got to be “Tycoon Court.” Tycoons only! I’ve got a few years until I qualify.

“Prosperous Building” isn’t bad, either. You know if your office is there, you’ve made it. And your clients know it, too.

I get the feeling my office address of “93 Jackson Street” wouldn’t quite cut it in Hong Kong. But in Seattle, it suits me fine.

(Photos by STL)