In trademark law what is the first sale doctrine?

The first sale doctrine is that once the trademark owner has placed its product into the marketplace its right to control any further sales of that product is exhausted. To state the first sale doctrine a different way, if you legally purchase a trademarked product from the trademark owner you may resell it without being liable for trademark infringement.

There are limits to the first sales doctrine which could make a purchaser of trademarked goods liable for trademark infringement. One limit is called the material difference exception to the first sale doctrine. The material difference exception, simply stated is: if the goods being resold are materially different than goods purchased from the trademark holder than the first sale doctrine does not exhaust the trademark holder’s rights. The rationale for the material difference exception to the first sale doctrine is to protect consumers. Since a materially different product is not genuine, consumers may be confused as to the source of the products.

The courts in the United States have held material differences may be physical or non-physical. An example of a physical material difference is refurbishing a trademarked product with parts not authorized by the trademark holder. An example of a non-physical difference would be the warranty coverage offered on the product.

It should be noted that you cannot transform a non-trademarked product into a trademarked product by using trademarked replacement parts which you legally purchased.

If you are considering reselling trademarked goods or you are concerned about goods bearing your trademark being resold, you should consult with a trademark attorney to determine the best strategy for your business.