Ferrari 'DRM:' Don't Screw With Our Logos And We'll Let You Know If It's OK To Sell Your Car

from the an-agreement-is-just-another-kind-of-license dept

We’ve covered a lot of stories dealing with the Right of First Sale being undermined by digital goods being sold as licenses, rather than products. It’s much more rare to find the Right of First Sale being yanked away from paying customers who have purchased physical products. But it happens. You’d think shelling out a quarter-million dollars would allow you to do what you please with your purchase. Think again.

Apparently Ferrari was none to pleased with the custom badges and associated floor mats on Deadmau5’s 458 Italia Purrari. So much so that Ferrari North America sent the self-admitted button-pusher a cease and desist to have the custom emblems removed.

Deadmau5 (aka Joel Zimmerman) wrapped his 458 in a vinyl tribute to Nyan cat, running it in a few rallies and getting coffee with assorted celebrities and disgraced politicians before it went up for sale.

Deadmau5 didn’t share the actual cease and desist order but pointed out later that it specifically mentioned the badges and floor mats. Ferrari was probably none too thrilled with the custom wrap, which took the vaunted manufacturer’s luxury sportscar and turned it into a meme-on-wheels for the Gumball 3000 Rally.

First off, it seems a car company should let its customers customize their vehicles however they want to. Second, it was originally done for the Gumball 3000 — an event where all sorts of vehicles are wrapped/customized to ridiculous extents.

But that’s Ferrari’s m.o., apparently. Not only will it get testy about Pop Tart cats trailing rainbows, but it also won’t let you sell its vehicles without its permission. The Right of First Refusal contract (posted at a Porsche enthusiasts forum) states that Ferrari, not the customer, gets to say who the car gets sold to.

Customer recognizes that the 430 is a limited-edition, high-performance vehicle and that it is the goal of both Ferrari and the Dealer to offer and sell such vehicles principally to Ferrari enthusiasts who are purchasing the vehicles for their own use, who intend to use the 430 and not for purposes of resale or price speculation. Customer further recognizes that, in the past, Ferrari vehicles like the 430, have frequently appreciated in value, such that used and “almost new” vehicles can be sold at prices substantially in excess of the original Manufacturer’s Suggested Retail Price. While there is no guarantee that the 430 will enjoy similar customer acceptance, and while Ferrari and the Dealer recognize Customer’s ultimate right to enjoy any appreciation that may occur with respect to his/her vehicle, Customer acknowledges that Ferrari and Dealer have a legitimate interest in minimizing speculation in the 430, at least and the time of, and within reasonable time after, introduction of the vehicle. Customer, in particular, acknowledges that, in the past, excessive speculation in certain Ferrari vehicles has resulted in customer ill-will and can, under certain circumstances, expose Ferrari and/or Dealer to liabilities over which neither has control or recourse.

In order to address the foregoing concerns. Customer hereby grants to Dealer, as a material consideration for the opportunity to purchase a 430, an option to repurchase the 430 at its market value (but in no event more than the original Manufacturer’s Suggested Retail Price) at any time within two (2) years of the date of delivery of his/her 430, provided Customer decides to sell, lease or otherwise transfer possession the vehicle to a third-party during that period (the “Right of First Refusal”). Customer agrees to abide by this provision, and understands that, notwithstanding any other terms thereof, it constitutes an integrated and material part of the retail contract between Customer and Dealer.

To put this in the best light, Ferrari (and its licensed dealers) doesn’t desire for the rich to become richer by flipping its vehicles. It apparently wants customers to drive the cars, not buy up a few with the hopes of profiting on the price appreciation. It’s a noble thought, but it completely destroys the Right of First Sale. The contract says it recognizes the customer’s “right” to “enjoy any appreciation,” but then says the dealer gets first shot at repurchasing the Ferrari “at no higher than the “original MSRP.” How often this clause is actually triggered is unknown, but it basically takes control of a very expensive vehicle out of the customer’s hands for two years.

I’m not saying more money should mean more rights, but it would seem that those spending a small fortune for Ferrari’s vehicles should at least be able to paint the vehicle like the General Lee and sell it to old money in Mississippi without the owner having to check with the dealer first or receive ludicrous cease-and-desist orders.

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Companies: ferarri

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Comments on “Ferrari 'DRM:' Don't Screw With Our Logos And We'll Let You Know If It's OK To Sell Your Car”

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Anonymous Coward says:

Re: Re:

You need to reread the CONTRACT. You can sell it any time you like, to Ferrari.

I expect most here are too young to remember, but when Porsche came out with the 959, you couldn’t purchase one unless you were already a previous Porsche owner.
“Having the money wasn’t enough, however. To qualify, you had to be a Porsche owner and promise not to sell your 959 for at least six months. You also had to be willing to travel: Sales and service were handled only from the Stuttgart factory.”

Doesn’t look like Ferrari is the first or only ones to do something similar.

nasch (profile) says:

Re: Re: Re:

Doesn’t look like Ferrari is the first or only ones to do something similar.

The question is, is that the only model they did that with? Does the 458 have the same clause? What about all the rest of their models? The 959 was Porsche’s first supercar built in extremely tiny numbers. If Ferrari puts this clause in every sale contract, then it’s not really comparable. If it were only for the LaFerrari, then it would be a similar situation.

AJ says:

Re: Re: Re:

“You need to reread the CONTRACT. You can sell it any time you like, to Ferrari.”

My point was; They should just lease it for 2 years, then let you buy it. Write it up that way to begin with. You pay for it in full upfront, but you can turn it back in within 2 years and they will give you back fair market. If after 2 years you decide to keep it, its yours. They would be doing the same thing, but in a way that seems more “customer friendly” IMO

Anonymous Coward says:

How much for the paint job?

He agrees that they have first refusal on the car. But he can set whatever price he likes for the paint job, and have the two bundled together. They can then either pay him what he is after for the car and his “enhancements” or they can exercise their right to refuse to buy back the car. Storm in a tea cup either way.

Anonymous Coward says:

yet another instance of copyright monopoly! even though the prices and produce are totally different, the manufacturer is still dictating what can and cannot be done with a legitimately paid for item! what is worse is the part where the ‘dealer has the right to purchase back the item before anyone else can have it and it must be at a price no higher than the dealer originally sold it for! downright taking the piss! i’ll be telling Ferrari to take a hike when i buy next high power, over-priced, head turning, ‘i’m a rich son of a bitch, motor vehicle!!

Anonymous Coward says:

I’m just waiting for this to become standard In all products that retain or increase in value , because they own the patents or emblem copyright, It does give me a chuckle watching the rich attack the rich, live by the pen die by the pen , but I honestly don’t believe this has a chance In hell at being Ok’d in the courts.
Maybe he should have purchased a Tesla instead.


Re: Re: The judge has to like it.

It might be viewed as against public policy. This is why you can’t contract for sex, even with your spouse.

Given the cost of these vehicles and who is buying them, these kinds of antics might not go over very well. This is one group of people that can actually defend themselves if they want.

Matt Katz (user link) says:

Re: Right of first refusal is common and a decent idea.

It can be structured in many ways. My condo board considered it as well.

For Ferrari, given their aims, it’s actually a great idea akin to anti-scalping rules for tickets, holding periods for securities, etc. If you want to stop short term speculators you lengthen the holding period to realize gains.

It prevents betting and enables enthusiasts and communities to grow healthily.

I don’t know of a better way to prevent jerks from gaming lines and trying to extract value from your customers. I as a vendor might want you to be able to purchase my goods for less than the maximum I can realize – because having a mix of purchasers is good for the community around my goods.

Michael (profile) says:

Re: Re: Right of first refusal is common and a decent idea.

I don’t know of a better way to prevent jerks from gaming lines and trying to extract value from your customers

Pricing the cars at what the market will support would not only prevent this, but also put more money in their pockets. If they immediately sell out special edition vehicles and their secondary market prices skyrocket, they under-priced the cars. I’m sure they are not under-pricing them in an attempt to keep their economical-friendly reputation afloat, they are under-pricing them because they stink at pricing.

Allowing a secondary market INCREASES the value of the cars. What they are doing is not only hurting the people “gaming” them by completely taking away the guessing game of car value speculation (which is CRAZY risky), but they are hurting the value of their product for the customers they actually want to sell them to.

Good plan – help the speculators by ensuring that there is no up-side to trying to flip the cars quickly and hurt the regular consumer by making their purchase less valuable. While this contract seems legal, it looks to me like a spectacularly stupid business move.

Michael (profile) says:

Re: Re:

No, two different issues here.

Deadmau5 wrapped the car (removing the badges so the wrap would fit nicely) and changed some of the interior – including the original floor mats. Ferrari send him a nasty-gram for doing that. While I think the car looks horrible, he should have every right to do whatever he wants to a car he owns.

In addition to that, Ferrari has the stupid “you can’t re-sell our car” clause. Deadmau5 may be forced to sell the ugly car back to Ferrari, but as far as I can tell, he is not complaining about this clause at the moment.

Anonymous Coward says:

Re: Re: Re:

It’s not that he removed the badges so that the wrap would fit. It’s that he replaced them with customized versions that mimic the originals with the name “Purrari” in the same logo type instead of “Ferrari” on them.

Gwiz (profile) says:

Re: Re: Re: Re:

It’s that he replaced them with customized versions that mimic the originals with the name “Purrari” in the same logo type instead of “Ferrari” on them.

I’m still not seeing how that is a problem at all. That might constitute a trademark infringement if he sold it, but I think that would be stretching the law a bit if you ask me. It’s not like he’s mass producing them.

It does remind me of a time in my youth where a friend had an ex-roommate abandon a car in his driveway. We changed it from a FORD to DORF with a claw hammer and some glue.

nasch (profile) says:


From what I’ve read, Ferrari are pretty much dicks. I’ve heard they won’t even give the time of day to someone who doesn’t already own a Ferrari – if you want to buy a new one, you have to first buy a used one or they won’t even sell to you. They send ringers to car tests so you can’t believe any performance results unless they use a customer’s car. Sometimes they even send two cars, one for acceleration testing and one for handling. And by “send” I mean they bring along a mobile pit crew. And now this – sounds right in line with the rest of their behavior. If I had money to burn I would take it elsewhere.

Anonymous Coward says:

you may recall the sad event of a former ferrari formula 1 mechanic/engineer dying in an odd early morning truck/pedestrian accident in southeast england not long ago. that fellow had been involved in an ugly spy episode with ferrari a few years ago.

i’m guessing the death was ruled accident or suicide, but i’ve kept my ear to the ground on that. may be a lot more to it, or may not.

OldMugwump (profile) says:

Re: a horrid practice


I wouldn’t buy a car on terms like those.

But, I don’t have a problem with what Ferrari is doing here.

They’re using ordinary contract law to do something that IMHO is stupid, but fine – people have a right to be stupid.

Freedom doesn’t mean anything if it doesn’t include the right to do things that other people think are stupid.

Anyone who buys a car from them sees these terms (they don’t appear to be making any attempt to hide them), and agrees to it.

So…why is that a problem for anyone?

Whatever (profile) says:

I read the story and almost spit my coffee on the monitor. Not because of what Ferrari is doing, but rather at the uppity anger and attitude of the author.

Simple deal here: If you want to “buy” a Ferrari, you do it under that contract. When Deadrodent dude pair for the car and signed the sales contract, it included that stipulation. Knowing that, he (a) still went ahead with the contract, and (b) promptly ignored it.

Ferrari has a line up of people out the door more than willing to obtain their cars under that arrangement. Quite simply, they make a CONDITIONAL SALE of the cars, and the clients have the right not to enter into that contract. There is no first sale doctrine issues here, it’s a conditional sale and not and outright sale.

Rather than getting all uppity about it, just remember: He signed on the dotted line, none of this should be a surprise to him.

Ninja (profile) says:

Re: Re:

Hmm, I seem to recall that these abusive contracts that violate the first sale doctrine were deemed illegal by the courts? Maybe I’m wrong? Sure it seems to magically don’t apply when it’s on the Internet but as far as I’ve noticed it is pretty physical.

You see, I’ve BOUGHT the car. Ferrari doesn’t own and is not entitled to anything with it anymore. If I want to wreck it I will. If I want to paint it I will. If I want to sell it with paintings I will. End of the story. I can do it to cellphones why wouldn’t I do it to a goddamn car? Hope he challenges this in the courts for an easy win.

Whatever (profile) says:

Re: Re: Re:

It depends if you have truly bought the car, or if you have made a “conditional purchase” – essentially the actual sale does not occur completely until 2 years had passed. If the dead rodent had kept the car for two years (instead of trying to turn it for a profit), he would have been in the clear and could have sold it in any state that he chose to.


You see, I’ve BOUGHT the car. Ferrari doesn’t own and is not entitled to anything with it anymore.

Read the contract. Part of the sale is this agreement. After two years, he is in the clear. It’s not an open ended thing.

John Fenderson (profile) says:

Re: Re: Re: Re:

Of course, everyone should read (and understand) every contract they sign.

That said, however, contracts are often obfuscated and contain traps. No contract can really be trusted. Also, a contract is only as good as the lawyer you can afford to enforce it.

To just say “read the contract” as if that solves all the problems is to oversimplify.

JMT says:

Re: Re:

“I read the story…”

No, as usual, you didn’t. If you had, you’d realize the second part of the story about Ferrari’s conditions of sale had nothing to do with the first part of the story about Deadmaus’ 458.

“Rather than getting all uppity about it, just remember: He signed on the dotted line, none of this should be a surprise to him.”

Who said anything about a surprise? Just you, the uppity idiot. Next time, actually read the story before commenting.

Michael (profile) says:

Re: Re: Badges

if he had put a Ferrari horse on a VW, that seems like a trademark problem

Only if he was then selling the VW as a Ferrari. Trademark is about consumer confusion. You can take the emblem off of a car and stick it on another one and not violate any trademark laws. You can build a replica of a car and use badges from an original – you just can’t try to sell it as an original.

nasch (profile) says:

Re: Re:

This will do wonders for their sales numbers.

Ferrari literally can sell as many cars as they feel like making. Most automakers try to estimate production based on how many people will want to buy the cars. Ferrari (and other small exotic car makers) decides how many they want to make, and always sells all of them. This will have no effect on sales.

DB (profile) says:

Hmmm, I you might carefully consider your qualifications before lecturing Ferrari on the optimal pricing strategy.

The Ferrari brand is the most important asset of the company. Not the factory, the designs or the inventory. They make far more on logo-wear, laptops, messenger bags, etc. than on selling cars. But all of that high-margin revenue goes away if the car brand fades.

They have obviously decided that the best way to maintain the value of the brand is to build high performance cars that are actively used, rather than jewelry.

Anonymous Coward says:

I see nothing wrong with a company requiring the right to buy the car back, sure it limits the owner, but that is in the contract.

You buy a house in an association, they can tell you what your house has to look like on the outside. They can tell you not to put in pools, fences or anything else.

You buy a condo, the condo association has to approve new buyers if you want to sell.

lokiwill says:

Standard stuff, really

This happens all the time in housing- can’t get a VHA loan without signing specific paperwork that says you won’t sell the house for at least a certain number of years, you have to actually LIVE in the house, and you can’t sell it for a profit when the time is expired. If you don’t like the terms of the loan, don’t take the loan. So why should it be so strange for a high-end car?

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