Product Diversion

Maximizing Profits on Online Marketplaces Without Losing Control of Pricing, Damaging Your Brand

eCommerce continues to grow in the United States. Among the contributing factors are third-party online marketplaces. Stop Unauthorized Sales on Online Marketplaces. There are many statistics that show just how big eCommerce is in this country. For example, U.S. eCommerce sales totaled more than $101 billion in the third quarter...

Maintaining Internet Minimum Advertised Price (IMAP) Policies While Avoiding Antitrust Issues

E-commerce has fundamentally changed consumer behavior.  Prior to the internet, great deals were normally had by only the most savvy of customers.  Now, however, price comparisons, blowout sales, and bargain shopping are the norm for anyone with a smart phone.  As a result, the past few years have seen never-ending...

Video: Vorys’ Online Seller Enforcement Program

Vorys has developed an Online Seller Enforcement Program which incorporates innovative graduated enforcement systems that combine technology, investigation, and legal tactics to monitor, identify, and eradicate unauthorized online sellers. The internet has made selling products more competitive than ever. It has also led to an increasing number of unauthorized sales. Unauthorized...

How to Prevent Grey Market and Diverted Goods From Undercutting Your Prices on eBay

Let’s say your brand is sold on eBay.com.  To monitor your products, you frequently check eBay. You notice that there are regularly many products listed on the website for much less than your MAP prices. Unfortunately, there is no magic solution to fix this problem.  Instead, we recommend that brands implement integrated enforcement...

Placing Tracking Codes on Products to Combat Unauthorized Online Sales and Product Diversion

In general, the First Sale Doctrine permits a person to sell another’s genuine trademarked goods. However, a failure to abide by or follow a company’s quality controls can give rise to trademark infringement. Placing tracking codes on products can play an integral part in enforcing against such infringement. According to the U.S. Court...

A Zero Tolerance Policy to Prevent Product Diversion and to Stop Unauthorized Sales

Companies seeking to stop and prevent product diversion should consider adopting zero tolerance policies. In essence, a zero tolerance policy amounts to using actual consequences to mold authorized distributors’ behaviors. The goal of an anti-diversion policy is deterring authorized distributors from engaging in product diversion. In other words, companies must...

Anti-Diversion Efforts vs. New York Warranty Law

Trademark law is one of the key tools for stopping unauthorized sellers. When an unauthorized seller offers products that are materially different than genuine products, it may infringe the company’s trademark. Many businesses have a warranty or guarantee that only apply to products bought through authorized channels. A product bought...

Strategies for Stopping Online Product Diversion, Unauthorized Online Sales

Businesses across many industries want to control product distribution. Among other things, they do not want third parties to engage in product diversion and sell their products below retail prices. However, many businesses are, indeed, finding their goods online at reduced prices. This issue of product diversion and related unauthorized online sales is all...

Unauthorized Sales: The ‘Material Difference’ Exception

One who purchases a trademarked good may ordinarily resell that product without infringing the trademark owner’s mark. This is what is referred to as the “First Sale Doctrine.” This principle–a common defense to trademark infringement claims–only applies to the resale of “genuine” goods. In other words, the First Sale Doctrine does not apply...

Scraping off UPCs Can Give Rise to Trademark Infringement

Courts can hold parties liable for Trademark Infringement under the federal Lanham Act for something seemingly as trivial as scraping off unique production codes (UPCs). Under the First Sale Doctrine, a purchaser of another’s genuine trademarked good can ordinarily resell that product. In other words, that person could potentially use the...