Is reselling trademarked goods trademark infringement? WILLIAMS-SONOMA v. AMAZON

Is reselling trademarked goods trademark infringement? WILLIAMS-SONOMA v. AMAZON

A trademark is something that a producer of goods or services uses to distinguish their products in the marketplace.  Traditionally a trademark is thought of as a word phrase or symbol, but anything that serves the purpose of telling consumers who produced a product can be granted trademark protection.  Trademark law grants the user of a trademark the right to prevent other people from using a trademark in a way that may cause consumer confusion.  If someone other than the owner of a trademark brands products with a trademark in a way that leads consumers to be confused about the identity of the company that produced the product, that can be considered trademark infringement.  A trademark owner can file a lawsuit to stop trademark infringement with an injunction and to get monetary damages for trademark infringement which has occurred.

United States trademark law grants a trademark owner the right to combat trademark infringement, however that right comes with some limits.  One of the limits to the rights enjoyed by trademark owner is the first sale doctrine.  The first sale doctrine means that a trademark owner’s control over a particular copy of a product ends when that product enters the stream of commerce. Under the first sale doctrine, someone who resells a branded product, or advertises the availability of that product, can use the original producer’s trademark to accurately identify the product it is selling. The first sale doctrine applies even if the product itself is used or refurbished, as long as it is not materially changed and as long as it is not misrepresented as being something different than it is.

A case which deals with trademark infringement and the first sale doctrine is WILLIAMS-SONOMA, INC., v. AMAZON.COM, INC., 3:18-cv-07548 (N.D.CA 2019).  The defendant in this case is a major online retailer of products.  The defendant sells products it owns as well as used products sold by third parties. When you view a listing for a product on the defendant’s website, you are presented with the identity of the manufacturer, the identity of the seller, and the condition of the product.  The condition of the product can be new or used.  The defendant has several listings for products manufactured by the plaintiff.

The plaintiff in this case is a manufacturer of luxury home goods, such as plates, silverware and small appliances. The plaintiff exclusive sells its products on its own website.  The plaintiff took exception to the defendant’s selling used versions of its products on the defendant’s website and filed a lawsuit for trademark infringement.  In its complaint the plaintiff repeated refers to the products sold on the defendant’s website as counterfeit.

The defendant responded to the complaint by filing a motion to dismiss.  The defendant claims that its actions are protected by the first sale doctrine.  Despite referring to the products as counterfeit, the plaintiff failed to demonstrate that any of the products sold though the defendant’s website are anything other than used products.  Furthermore, the defendant claims that if it did not clearly identify the products as genuine Williams-Sonoma products, then the defendant could be found liable for not identifying the products. To sell another person’s goods with the trademark removed and claiming you produced the product is known as reverse passing off.

It will be up to the court to determine whether the case will survive the defendant’s motion to dismiss.  The defendant makes a strong argument that it is operating legally under the protection of the first sale doctrine.  If the plaintiff does not present evidence that actual counterfeit goods are being sold then it is likely the court will side with the defendant.

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