Online Resales of Cosmetics Could Infringe "Mary Kay" Mark

by Thomas Long, Legal Editor, CCH Trademark Law Guide

Cosmetics manufacturer and wholesale distributor Mary Kay, Inc. could proceed with trademark infringement claims against a former independent sales representative for using the Mary Kay mark in connection with web-based resales of Mary Kay-branded products, the federal district court in Dallas has ruled. The website seller was attempting to sell off a backlog of inventory via an eBay store and a website. The former representative failed to establish that her sales were protected, as a matter of law, by the "first sale" and "nominative fair use" doctrines.

First Sale Doctrine

As a general rule, the sale of genuine goods bearing a true mark does not give rise to liability for trademark infringement, even though the sale is not authorized by the mark owner. The resales would not be covered by the first sale defense to trademark infringement claims if the resold goods were materially different from authorized Mary Kay products, the court said.

Mary Kay contended that the goods sold via the website were materially different from its own because the products were expired. The former representative admitted that approximately 75 percent of the products she sold were expired. A genuine issue of material fact existed as to whether the expired products were prevalent enough to affect the Mary Kay name. There was evidence that Mary Kay had implemented and followed procedures to keep expired goods out of the stream of commerce, the court said.

Nominative Fair Use

A genuine issue of material fact existed as to whether the former representative's keyword-triggered advertising copy implied an affiliation between the parties, which would preclude a finding that the former representative's conduct was nominative fair use. Although the use of keyword advertising did not, by itself, suggest a connection between the parties, the phrase "Mary Kay Sale 50% Off" could imply that the ad came from Mary Kay itself or from an entity that had Mary Kay's approval. There was also a factual issue as to whether the seller's website itself suggested affiliation or endorsement by Mary Kay, according to the court.

Mary Kay, Inc., ND Tex., ¶61,380

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