Trademark

by Mike Masnick


Filed Under:
auctions, trademark, trademark bullying

Companies:
coach, ebay



Class Action Lawsuit Filed Against Coach Over Bogus Takedowns, Trademark Bullying

from the nicely-done dept

We've seen so many cases of trademark bullying, and it's so rare to see people fight back, that it's interesting to see it happening -- and even more surprising to see it done as a class action suit. Eric Goldman points us to the news that this class action lawsuit has been filed against luxury goods maker, Coach, for apparently issuing takedowns to eBay for perfectly legitimate second-hand sales, while also threatening those who put up those items. I'll let the lawsuit itself (the full filing is embedded below) explain the basics:
Without investigating the validity of its allegations, Coach wantonly accuses consumers of infringing its trademarks by selling counterfeit Coach products. Coach apparently monitors online retailers such as E-Bay, looking for ads from consumers selling second hand Coach products. In response to such ads, Coach delegates a New York law firm to launch a threatening letter to the consumer. These letters accuse the consumer of trademark infringement, threaten legal action, and demand the immediate payment of damages to Coach in "settlement" of Coach's threats. At the same time, Coach (or its New York law firm) informs the online retailer that infringing merchandise is being sold on its website. In many cases, this causes the online retailer to involuntarily remove the allegedly infringing ad, and to disable the consumer's online account. This destroys any chance the consumer had to sell the Coach product second hand, and otherwise damages the consumer.

In many cases (such as that of the lead plaintiff identified here), Coach's allegations of infringement are flatly false. It appears that Coach fails to conduct even a minimally reasonable investigation into its counterfeiting claims before threatening legal action. For example, the lead plaintiff identified in this Complaint is a former Coach employee, who owned, and tried to sell, genuine and legitimate Coach products It was entirely legal for her to do so. Coach's threats against her were false, reckless, and unwarranted.
We've definitely seen attempts to use trademark law to block the legitimate sale of secondhand goods. It's a bad trend that needs to be stopped, and hopefully lawsuits like this might do the trick. Unfortunately, in the past few years, we've seen some really underhanded tricks used by producers to effectively block secondhand sales and first sale rights through legal trickery. It's not clear if that kind of defense will be used here.

The lawsuit itself wants a declaratory judgment that selling legitimate Coach goods secondhand does not infringe... but also includes a defamation claim, pointing out that accusing someone of infringement when it's not true could be seen as libelous. That part seems like a stretch, but I'll be curious to see how the court rules.

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  1. identicon
    Paul Keating, 15 Feb 2011 @ 3:59am

    Anonymous Coward - logic lacking

    Anonymous Coward, Feb 14th, 2011 @ 9:40am

    Exactly where is the logic in your response?

    "That would be true if the product was clearly offered up as "used". Selling of a new product without being a dealer may be an issue (misappropriation of trade mark, example). Your Chevy example fails because it is clear you are not a Chevy dealer selling a new car, you are some dude selling his used El Camino."

    There is no legal obligation on the seller to identify him/herself at all here. Nor is there any legal authority for Coach attempting to control the resale. It is their obligation to determine if something is or is not infringing. There is a penalty for ready, fire, aim

    That sounds an awful lot like 'Youtube should automatically know which uploaded videos are authorized by Viacom' when Viacom can't even tell which are

    No, that would be more like asking companies to prove their dealer status, or have all of their products marked "USED / SECOND HAND / NOT OFFICIAL DEALER". It isn't a big deal, rather it's a good way to keep consumers informed.

    Again, where is the legal basis or logic in such a statement? You really want everyone to do all of the work for brand owners don't you?

    I hope this type of action persists. I also suggest that the plaintiff's counsel consider claims such as tortious interference and perhaps even a RICO claim based upon the "settlement" demand made to resolve claims that may be completely unsubstantiated.

    PRK

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