In Part VII and Part VIII of our VeRO program article series, we discussed the steps you should take to fight a VeRO de-listing. In addition to filing an appeal and a counter-notice with eBay, you need to correspond with the VeRO complainant and make your case. If the origin of the complaint rests on the fact that you are using the rights owner's brand name to describe your legally obtained branded product, there is a legal doctrine that you can use to support your case.
The First Sale Doctrine
An owner of a genuine and unmodified item purchased at an authorised sale may resell the item, describing it appropriately, even if doing so requires use of the trademark. For example, if you have purchased a Gucci handbag, you have a right to resell that handbag, describing it as a Gucci handbag. The right to accurately describe the resold property comes from first sale doctrine, and from concepts of nominative fair use. Naturally, your resale of one Gucci bag will not raise an eyebrow; it's when you have purchased a pallet of bags and are now directly competing with Gucci's authorised distribution channels that the rights owner takes notice.
While you generally have the right to resell lawfully obtained genuine articles under their brand name, there are caveats that give the rights owner the opportunity to retract your sales.
- Appearance of relationship
One issue is whether you as reseller create the appearance of a relationship between yourself and the mark owner. While you're allowed to use the mark to describe the product you sell, you are not allowed to create the impression that you are acting with the rights owner's authorization unless you actually have such a relationship in place (in which case you wouldn't be getting a VeRO notice).
- Alterations to the product or conditions
The First Sale Doctrine does not apply if you alter the product in a way that creates confusion for the customer about whether or not they are purchasing the item they expected to purchase. This issue often involves software where some reprogramming has been done. However, it also applies to warranties. If you sell a product which usually includes a manufacturer's warranty that is no longer in force because it's a resale, the First Sale Doctrine will not protect you.
You will need to analyse your situation to determine if the First Sale Doctrine can help your case.
Nature of Communications
You may or may not be able to convince a VeRO complainant to reverse their decision. In the process of trying to do so, you may find that the complainant sends you very legalistic messages with threats of law suits, notices that you are violating the law, sometimes using pretty harassing language. Here is how you need to handle the barrage you may receive:
- Start and maintain a paper trail until the issue gets resolved.
- Keep all communication on paper. Verbal communications can be misunderstood or twisted. That's a lot harder with written communication.
- Don't admit to doing anything wrong.
- Don't provide information about your volumes, profits, etc. They are not entitled to that information.
- Avoid signing any documents in exchange for the listing being returned. These documents are often worded in ways that will come back to haunt you.
- Don't agree to pay any money to a VeRO claimant. If they want money, they should have to take you to court. That's not very likely.
The bottom line here is that you don't have to simply accept the unfairness inherent in the VeRO system. You need to fight back when you are right, and fix the problem when you are wrong.
Part X of our VeRO program article series explains how to get back onto eBay when you have lost your account.