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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.

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  1. identicon
    MLS, 9 Jul 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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