Yet Another Lawsuit Over Whether A Company Can Ban The Sale Of Its Products Online

from the first-sale dept

Just last week we were talking about baby stroller companies in the UK trying to prevent retailers from selling their goods on eBay, and now Eric Goldman points us to news of a case in the US on this very issue. Here we have a "dietary supplement" seller, Standard Process, who sued an online e-commerce site, Total Health, for selling its supplements despite not being an "authorized reseller." Basically, Total Health would buy products from Standard Process through other means and then resell them online -- which seems like it should be perfectly legal.

Not so far, claims the judge. The court refused to grant a summary judgment, claiming that, even though Total Health makes it abundantly clear that it is not an authorized reseller, because Total Health uses the pronouns "we" and "our" in describing Standard Process' products that it somehow (how? who knows?) implies evidence of an affiliation. That seems like quite a stretch. The judge also notes that since Total Health shows up as the top ad result in a search for Standard Process, there's an implied association (why? again... that's not explained at all). There are a few other questionable bits of reasoning by the judge, highlighted at the link above. The judge did rule in Total Health's favor on the question of whether or not it interfered with the "contract" between Standard Process and its authorized resellers, by noting that there's no actual contract if Standard Process just tells the resellers the terms without any actual agreement or exchange taking place. It has the right to stop selling to those resellers, but not to claim that they broke an existing contract.

Still the first part of this ruling does seem quite questionable. It seems like a stretch to think that any moron in a hurry would be confused by Total Health's marketing claims -- when it quite clearly states that it's not an official reseller of Standard Process' goods. It seems like the court twisted itself over backwards to try to come up with any loose link to try to make that connection.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Jul 8th, 2008 @ 9:48am

    IBM vs. PSI... good article

     

    reply to this | link to this | view in thread ]

  2.  
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    Speaker, Jul 8th, 2008 @ 9:58am

    Depends on which moron you choose

    Not all "moron's in a hurry" are created equally. Seems that law today is as much about choosing the correct venue as the intent of the law. Choosing the correct judge or correct jury mix can have as much an effect on outcome as whether there is an actual case.

     

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  3.  
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    Computer Bob, Jul 8th, 2008 @ 10:11am

    So I can't legally resell something I bought leagally?

    Since when is it illegal to resell anything that I legally bought? As long as I don't advertise that I'm an authorized reseller, or say I'm not authorized, what's illegal about it?

     

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  4.  
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    Anonymous Coward, Jul 8th, 2008 @ 10:39am

    Re: So I can't legally resell something I bought leagally?

    Well, you can, but you can't misrepresent yourself as being the manufacturer of the product in question. That seems to be what the judge was saying.

    I could sell my car, but I can't make the person buying it think they're buying it from yug^h^h^hferrari.

     

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  5.  
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    Anonymous Coward, Jul 8th, 2008 @ 10:50am

    Is there a right of first sale for goods? I mean, you own it, so how can the producers of the product limit how you choose to dispose of your property? Somebody in the know please let me know.

     

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  6.  
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    arby, Jul 8th, 2008 @ 11:07am

    So, how do you think the judge would explain it if the first hit on a google search on his name turns up "Judge XXX is a moron." By his logic, it must be true...

     

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  7.  
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    chris (profile), Jul 8th, 2008 @ 11:54am

    you're all missing the point

    the point of all of this is that there is no more right of first sale. you can play the trademark card to intimidate anyone smaller than you into closing up shop.

    if you sell something without paying off enough people then your ass is as good as sued. you either need to pay the manufacturer for the right to sell, pay a team of lawyers to protect you from the manufacturer, pay a judge to rule in your favor when the manufacturer sues you, or pay the manufacturer to settle damages.

     

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  8.  
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    Steve R. (profile), Jul 8th, 2008 @ 12:59pm

    Re: So I can't legally resell something I bought leagally?

    A problem that we seem to have today is that corporations are assuming "police powers" and are not constrained by "due process". So if a corporation says you are doing something they define as illegal, you are guilty. No proof necessary.

    Furthermore, it seems that nothing is actually sold anymore, so you actually never own it. I guess corporations let us lease stuff so that we won't be burdened by the obligations of ownership.

     

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    Steve R. (profile), Jul 8th, 2008 @ 1:05pm

    Its leased

    Corporation are eliminating the concept of "sell" in their quest for total control. Now we are are only allowed to "lease" or "license" the product and we can only use it in conformance with the corporate EULA. So according to the corporations we never own anything and we don't have any rights. Time for a change?

     

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  10.  
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    MLS, Jul 8th, 2008 @ 9:03pm

    Perhaps if you actually read the court's decision, instead of relying on a third party account, you would not be as inclined to ridicule its contents.

    This was a motion for summary judgement. It was not a decision on the merits. Significantly different legal standards pertain, as the court clearly notes.

     

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    Mike (profile), Jul 8th, 2008 @ 11:39pm

    Re:

    Perhaps if you actually read the court's decision, instead of relying on a third party account, you would not be as inclined to ridicule its contents.

    The two accounts are from well respected legal scholars.

    This was a motion for summary judgement.

    Which I noted in the post.

    You keep accusing me of stuff that is wrong. It's sometimes comical.

     

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  12.  
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    MLS, Jul 9th, 2008 @ 8:21am

    Re: Re:

    "The two accounts are from well respected legal scholars."

    Do you believe everything they say because they are "legal scholars"? If you had read the opinion you would have quickly noted that their blog comments glossed over some of the salient facts that guided the judge in his decision.

    Regarding my comment about "summary judgement", I suspect that the vast majority of your readers do not understand what the term means, and as a consequence fail to appreciate just what it is the court had decided. For example, it did not say "we", "our", etc. was conclusive on the issue of suggesting a relationship with the plaintiff.

    On a final note, your last paragraph suggests that you are familiar with the facts of the case, and yet as you noted in your response you relied on third party accounts to glean what the case is all about. In my view this was wrong.

     

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  13.  
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    domenic l siracusa, Jul 12th, 2008 @ 11:57am

    total health

    HOORAY FOR TOTAL HEALTH,, THEY CAN SELL ON THE INTERNET,,THIS IS GREAT FOR EVERY ONE OF US ON PLANET EARTH


    DOMENIC LOUIS SIRACUSA

     

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  14.  
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    TooMuchManganese, Mar 29th, 2009 @ 11:54am

    Too Much Manganese in a Standard Process Product!!

    EPA recommends .05 mg Maximum allowable Manganese per liter of drinking water.

    Standard Process has a product called "Ostrophin PMG 6500"
    Each tablet contains 4 mg Manganese.

    So could we say that this is 80 times more than what the EPA recommends? Over-consumption of Manganese is cited for Severe Neurological functions by the Linus Pauling Institute.

     

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    A1555, Apr 30th, 2009 @ 3:21pm

    Standard process - Total Health

    I don't understand why Total health must post on the bottom of their site, that they are not favored by Standard Process etc. Also, to the manganese comment - There is nothing wrong with 4 mg manganese. One bowl of oatmeal has 3 mg of manganese. However, it is true too much of any mineral is bad - all minerals should be used carefully according to need and not necessarily daily.

     

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  16.  
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    scottp, Sep 1st, 2009 @ 2:25pm

    standard process- total health

    the bigger picture is clearly being missed. Standard Process sells medically prescribed supplements only to be dispensed by professionals possessing the knowledge to do so. Banning the sale from resellers should be illegal. that is to the benefit of the consumer.

     

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  17.  
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    scottp, Sep 1st, 2009 @ 2:25pm

    standard process- total health

    the bigger picture is clearly being missed. Standard Process sells medically prescribed supplements only to be dispensed by professionals possessing the knowledge to do so. Banning the sale from resellers should be illegal. that is to the benefit of the consumer.

     

    reply to this | link to this | view in thread ]

  18.  
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    MARCUS, Nov 18th, 2009 @ 1:11pm

    STANDARD PROCESS INC LAWSUIT

    I THINK THEY SHOULD FILE LAWSUITS AGAINST THESE COMPANIES. I USE A NUTRITIONIST TO KEEP A CHECK ON MY HEALTH AND OTHER CHALLENGES I HAVE. MY NUTRITIONIST TAKES A HAIR SAMPLE SENDS IT TO A LAB TO FIND OUT WHERE MY MINERALS ARE IN MY BODY WHAT IS BALANCES OR NOT BALANCED BASED ON THESE LAB TEST THEN THE STANDARD PROCESS INC ALL NATURAL SUPPLEMENTS ARE GIVEN BASED ON MY BODY ALONE TO KEEP MY MINERALS BALANCED ALLOWING MY BODY TO FIGHT OFF OTHER CHALLENGES I AM DEALING WITH. AND COLDS FLU AND ALLERGIES. WHEN MY NUTRITIONIST WAS OUT ON VACATION I NEEDED TO GET SOME MORE SUPPLEMENTS. SO I USED A COMPANY THAT CLAIMS TO USE STANDARD PROCESS INC. AND THEY DO BECAUSE THEY HAVE A PHYSICIAN ON STAFF PER SAY YOU CAN NEVER TALK WITH THEM .THIS COMPANY STATES YOU WILL HAVE YOUR SUPPLEMENTS IN 7 TO 10 BUSINESS DAYS BUT THEY DONT TELL YOU IF THEY DONT HAVE ONE OF THE SUPPLEMENTS YOU NEED IF THEY CANT GET THEM FROM STANDARD PROCESSING. SO THEN YOU GET THE PRODUCTS WHICH YOU NOT CANT TAKE DUE TO YOU ARE TO TAKE ALL THE SUPPLEMENTS AT SAME TIME SO THE WORK TOGETHER TO KEEP YOU HEALTHY. THESE COMPANIES DONT CARE THAT YOU WONT BE ABLE TO TAKE YOUR SUPPLEMENTS UNTIL YOU GET THE OTHER SUPPLEMENT THEY COULD NOT GET FOR YOU. NOR DO THEY CARE THAT IT IS PUTTING YOUR HEALTH AT RISK. THEY CARE ABOUT THE MONEY BOTTOM DOLLAR THATS ALL. STANDARD PROCESSING WORKS DIRECTLY WITH PHYSICIANS AND NUTRITIONIST THAT WORK DIRECTLY WITH THEIR PATIENTS. NOT CUSTOMERS THEY KNOW NOTHING ABOUT.

     

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