items marked not for resale

gotgame · Jan 13, 2006

What is the name of your state?

Minnesota

Hi. I read a thread from 7-17-04 on here about someone who was questioning the legality of someone(third party I assume) selling a bottle of perfume at an on-line auction that was marked not for resale- the post response stated it was legal as items marked not for resale are a company's designation to it's retailers,reps, and such, but, when items come into possession of a third party, the third party may dispose of these items even if by selling.

So, say I have sold samples ( and am third party to these samples -never having any affiliation with company) but, the company notifies me I cannot because:
------The samples are marked "not for resale". These products are intended as samples for our reps. to provide free of charge to their customers, and have different packaging requirements than those products that are intended for sale.

Are they feeding me a line of garbage hoping I will believe it or is it true?
If true, then what are the different packaging requirements of samples marked not for resale from items that are intended for sale?

dallas702 · Jan 13, 2006

If you own them and are not affiliated with the company(ies), or are not a retailer or wholesaler of their products, you can do whatever you wish with them unless the company can show you in writing that they have some legal title to them.

However, if they require tax stamps (cigarettes, liquor, etc.) or FDA or UL labeling for health reasons you may have a problem with federal authorities.

gotgame · Jan 13, 2006

How will I know if there is FDA labeling? Say,for instance on cosmetic / skincare samples? And what kind of legal title could there be? As in example so I can better understand. Thanks

divgradcurl · Jan 13, 2006

dallas702 is not quite correct. There is no need to show legal title to these samples, this is a question of trademark law. There is a concept known as the "first sale" doctrine, that basically says that once a legal purchase is made, the trademark holder has limited rights to controller further resale of the particular good.

In this case, however, if the trademark holder GAVE the samples to a rep, there is no "legal purchase," so first sale does not come into play, and the rep cannot resell these products unless he has permission from the trademark holder. Now, if you got these for free from the rep, there STILL has not be a "sale," so the first sale doctrine STILL does not kick in, and the trademark holder can continue to keep these samples from being sold. Further, if the rep was NOT authorized to sell these free samples, yet did (to you), then their STILL has not be a "legal" sale that would cause the first sale doctrine to kick in.

Unless you purchased these samples from someone who was authorized to sell them to you, you do NOT have the right to resell them -- the trademark holder still has the right to control the sales of these products.

JETX · Jan 13, 2006

divgradcurl said:
dallas702 is not quite correct. There is no need to show legal title to these samples, this is a question of trademark law. There is a concept known as the "first sale" doctrine, that basically says that once a legal purchase is made, the trademark holder has limited rights to controller further resale of the particular good.

In this case, however, if the trademark holder GAVE the samples to a rep, there is no "legal purchase," so first sale does not come into play, and the rep cannot resell these products unless he has permission from the trademark holder. Now, if you got these for free from the rep, there STILL has not be a "sale," so the first sale doctrine STILL does not kick in, and the trademark holder can continue to keep these samples from being sold. Further, if the rep was NOT authorized to sell these free samples, yet did (to you), then their STILL has not be a "legal" sale that would cause the first sale doctrine to kick in.

Unless you purchased these samples from someone who was authorized to sell them to you, you do NOT have the right to resell them -- the trademark holder still has the right to control the sales of these products.

Damn, I just LOVE it when you talk like that!!

Good post. Well done!!

gotgame · Jan 13, 2006

Ok- such said company does sell these samples to thier reps.- so does that constitute the first sale? To avoid trademark issues, does one declare there are no warranties/guarantees, third party to item is not sponsored,endorsed or such, and that they are genuine items? Will that be a good disclaimer in regards to trademark issues- and what does not for resale really mean to general public who has ownership of the samples in thew end?

divgradcurl · Jan 13, 2006

gotgame said:
Ok- such said company does sell these samples to thier reps.- so does that constitute the first sale? To avoid trademark issues, does one declare there are no warranties/guarantees, third party to item is not sponsored,endorsed or such, and that they are genuine items? Will that be a good disclaimer in regards to trademark issues- and what does not for resale really mean to general public who has ownership of the samples in thew end?

Not necessarily -- it's possible to contract around the first sale doctrine. If these reps were sold the samples with the knowledge that they were not being sold for retail, that could constitute a contract between the trademark holder and the rep -- and if the rep then resold them in violation of this contractual agreement, then there has been no "first sale" for the purpose of exhaustion of the trademark holder's rights.

If you didn't acquire these in such a way that "first sale" applies, there isn't any type of disclaimer that will keep the trademark holder from suing you, if that's what they want to do.

ablessin · Jan 18, 2006

so, then - it kind of sounds to me like on e-bay where all these sellers are auctioning off lots of samples of Mary Kay items, Avon items, etc. . . some are samples - and clearly indicated so in the auction..... then -are these sellers in wrong-doing for auctioning off these "lots" of sample items???

divgradcurl · Jan 18, 2006

ablessin said:
so, then - it kind of sounds to me like on e-bay where all these sellers are auctioning off lots of samples of Mary Kay items, Avon items, etc. . . some are samples - and clearly indicated so in the auction..... then -are these sellers in wrong-doing for auctioning off these "lots" of sample items???

Maybe -- again it would depend on the exact details of the arrangement between the company, their reps, and the seller. It's certainly possible for such sales to be legal -- but there are many instances, like in the OP's case, where the trademark holder has some rights to control the downstream distribution of samples and other like objects. In any event, the key issue is whether or not the trademark holder cares enough to decide to actively enforce their mark -- whether the other eBay sellers are doing is legal or not is less important than whether or not the particular trademark holder has decided to enforce their mark and the "not for resale" language. In the OP's case, the trademark holder apparently does want to enforce the language, so that's why we are here.

ablessin · Jan 19, 2006

gotch'a - I was just curious if it made any difference.

I know Mary Kay samples the consultants have to buy those ( a friend sells it) but what I have seen, they are not marked not for re-sale.

This is just interesting, I never knew the above info that was posted before.

Learn something new every day!!

items marked not for resale

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gotgame

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