Another Misuse Of Trademark Law To Prevent Competition

Legal Issues

from the just-what-we-needed dept

Gregory A. Beck of Public Citizen writes in to let us know “Public Citizen Litigation Group filed suit yesterday against Dymo Corporation, a company that makes label printers. Our client is a small eBay seller named Rip Mohl, who sells printer labels that are compatible with Dymo printers. After failing to talk him into becoming an authorized distributor of brand-name Dymo labels, the company began invoking eBay’s Verified Rights Owner (“VeRO”) program to terminate his auctions of compatible labels. VeRO is an implementation of the Digital Millennium Copyright Act, but although the DMCA applies only to claims of copyright infringement, eBay also extends the same takedown procedures to trademark claims. In this case, the company claimed that by truthfully stating that the labels were compatible with Dymo printers, Mohl was infringing the company’s “Dymo” trademark. After several VeRO terminations, Mohl had to remove the Dymo name from his listings in order to avoid the risk of losing his eBay account. As a result, his sales have declined to a fraction of what they used to be. Printer companies are especially active in terminating the eBay sales of compatible products like labels and ink cartridges. This is, we think, another example of abuse of intellectual property laws to squelch legitimate competition. This kind of abuse ultimately hurts everyone by raising prices and reducing choices available to consumers. The Dymo-brand labels on eBay, for example, cost an extra couple dollars per roll. Small eBay sellers, however, typically do not have the resources to defend themselves from the intellectual property claims of big corporations. These claims therefore almost always go unchallenged.” This is another bad use of trademark law — having nothing to do with the intended purpose of trademarks.