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Unauthorized eBay Resales of Radar Detectors Enjoined

by Thomas Long, Legal Editor, CCH Trademark Law Guide

A provider of aftermarket vehicle electronics (Beltronics) was entitled to a preliminary injunction barring a consumer electronics seller from reselling Beltronics equipment not bearing an original Beltronics serial number label, the U.S. Court of Appeals in Denver has decided. Beltronics was likely to prevail on the merits of its trademark infringement claim asserting that the seller's online resale of Beltronics radar detectors was likely to cause confusion in the marketplace.

The seller had obtained Beltronics radar detectors from authorized Beltronics distributors, who allegedly sold the products to the seller in violation of their distribution agreement. The seller then resold the radar detectors as "new" on eBay. The distributors allegedly had removed the products' original serial number labels or replaced them with phony labels, in order to prevent Beltronics from discovering that they had supplied the seller with the merchandise.

The "first sale" doctrine was not applicable because the goods sold by the seller were materially different from those sold by Beltronics and its authorized distributors, in the court's view. Beltronics's policy was to provide certain services --software upgrades, rebates, product use information, service assistance, warranties, and recalls --only to purchasers of radar detectors bearing original serial number labels.

The seller's inclusion in its advertisements of a disclosure of its warranty policies did not shield it from liability, the court said. The disclosure included a statement that the manufacturer would not honor its warranty if the product was purchased on eBay. There was evidence that the seller's customers had contacted Beltronics for warranty coverage. In addition, the disclaimer did not address the other customer services provided by Beltronics. Beltronics provided evidence that consumers relied on its product and service assistance and that the seller's simple replacement warranty did not provide the level of service expected by consumers.

Beltronics USA, Inc.., 10th Cir., 61,419.

 (The above feature is selected from the newsletter published monthly along with full text documents and other materials provided to subscribers of the CCH Trademark Law Guide.)


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