Unauthorized Sales of Authentic Goods: Not Counterfeit but Trademark Infringement?

When is it OK to sell authentic goods?

Ever wonder why certain sales of authentic goods would not constitute trademark infringement? When is it not OK to sell real trademarked goods? Can unauthorized sales of authentic goods lead to legal liability?

Need to resolve a trademark issue? Contact US patent and trademark attorney Vic Lin at 949-223-9623 or email vlin@icaplaw.com to explore how we can help you navigate around complicated trademark issues.

First Sale Doctrine: Can you resell copyrighted or trademarked goods?

Under the First Sale Doctrine, someone who lawfully owns an authentic trademarked product does not commit trademark infringement by reselling the item. For example, suppose you purchased an original product bearing an authentic trademark and used it for a few years. You now wish to sell your used product. The First Sale doctrine allows you to sell your used authentic product without committing trademark infringement.

This defense can get a bit tricky when the original transaction does not involve a straightforward sale. For example, a batch of new greeting cards “sold” by the manufacturer to be destroyed by the buyer would not constitute a first sale.

Exceptions to First Sale Doctrine: When Unauthorized Sales of Authentic Goods are Not OK

Just the fact that the products are authentic does not make it OK to sell them. Unauthorized sales of the real stuff can still lead to liability.

One such exception to the First Sale Doctrine is known as trademark material difference. No protection is provided under the First Sale Doctrine for goods that are materially different from those sold by the trademark owner. A difference is material if a consumer would likely consider it to be relevant when purchasing the product.

What are examples of trademark material difference?

Examples of trademark material difference include:

  • battery life
  • warranties or warranty protections
  • formulations, blends or content of product
  • alterations to packages
  • changes in operator manuals
  • service plans or available services
  • warning labels or lack thereof

What is the quality control exception?

Another exception to the First Sale doctrine has to do with quality control standards. Under the quality control exception, the First Sale doctrine will not apply if the product is sold without the trademark owner’s quality controls.

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