Many people are selling A&F , Hollister and other designer brand clothing on eBay but my friend told me that Resale of A&F clothing is prohibited according to the terms of sale. If it is illegal to re-sell an item after purchase, why so many people are selling their clothes on eBay ? Thanks.
Well, you are getting legal advice on Avvo where you are receiving "opinions and uninformed hearsay" from friends. I represent several apparel manufacturers. eBay is full of counterfeit and "grey market" goods. You may buy one shirt and resell it at no risk. If you buy two hundred out of the back of a truck and try to unload them on eBay you should expect problems from the manufacturers and potentially from eBay through their VeRO program. Part of manufacturing and sales involves chains of distribution, and a manufacturer may have contrcted exclusivity with a distributor and will not allow it to be interrupted in a systematic way. If you plan on making this a business instead of an electronic garage sale, you should consult an attorney.
It is legal to resell clothing, regardless of what brand it is. You do not sign an agreement with A&F when you buy an article of clothing at their store, so I do not see how you could be bound by any terms of sale. I think a requirement like that might be an unlawful restraint on alienation anyway. If you were an employee, they probably would make you agree to a term like this, however as a practical matter I imagine it is rarely enforced.
Even if you did agree to such a term, A&F could only enforce it by filing a lawsuit against you for breach of contract, which is unlikely to be worth it for them unless you are reselling thousands of dollars of clothing. It would not be trademark infringement to use the A&F name for reselling, since it would qualify as nominative fair use (using the trademarks to identify the brand) and in any case is not misleading as to the source of the goods.
The business model of buying a new product at retail and then re-selling it for more via eBay makes absolutely NO economic sense because everyone can buy the same product at retail that you're selling for more via eBay. For you to sell at or below retail the source of your product must be from someone selling it you at wholesale -- or the product is counterfeit. Wholesalers, however, are contractually restricted by the product manufacturers from selling their products to just anyone [they're normally limited to retail stores] and as for the counterfeiters they sell unlawful products.
So how on earth can you lawfully sell new clothes at or below retail prices on eBay? You can't. And that's why if you do you will stir up more trouble than you can handle.
Gee, that's an interesting question.
Because, in general, once someone buys a tangible item, he isn't prevented by the law from selling it whenever he wants.
It gets more sticky when the item includes some intangible stuff that's protected by a form of intellectual property, e.g. trademark, patent or copyright.
For example, the contents of a book are protected by copyright law from being reproduced without permission. But once you buy a book in the U.S., the "first sale doctrine" provides that the purchaser can resell that tangible book without the copyright owner's permission.
And if the product is patented in the U.S., then the doctrine of "exhaustion" of the patent right permits an owner of a product to sell it to another, who'd automatically be permitted to use or sell the product without a further license under the patent.
Now if a product is identified by a trademark, there are various considerations, and that might be what's involved in the situation you ask about. A trademark is a special kind of right, and actually it's supposed to be there to protect the consuming public from being misled as to the source or sponsorship of a product or service. If you buy a genuine product marked as, say, Gucci, then I have the power to sell it to you as a Gucci product without the trademark owner having the right to stop me.
But if I buy a product that's a counterfeit Gucci, and offer it for resale, then the Gucci folks would have the right to prevent me from misrepresenting it as a genuine Gucci.
Then, what if I have such a counterfeit and publicize it for sale as a "fake Gucci" or "knockoff Gucci"? Well, that's where it gets sticky, and there isn't enough space on this forum posting to detail the ramifications.
But in the situation where there are lots of counterfeit products in the stream of commerce, the folks at eBay sorta get stuck in the middle of a maelstrom, and I suspect that is what leads to the practices you query about.
I don't know anything specific about A&F and whether they have an enforceable "terms of sale" that might prohibit resale of even a genuine A&F product. Without more information, I am skeptical as to whether such a purported restriction, if applied to goods sold outright rather than merely leased or licensed, would be enforceable. I invite my learned brethren at the bar to chime in with any further wisdom on this scenario.
Many times a large store will buy too much of a product, and it goes out the back door as "gray goods." Their contract with the trademark owner says they cannot do this, but it happens anyway. Then, a different part of the large store's management complains loudly about the competition.
Gray goods can also be purchased in foreign markets and brought into the the US for sale. They are not always the same product that would be sold in the US, but they have the same brand name, and are not actually "counterfeit."
These actions explains how someone can obtain a number of items of legitimate goods that can be sold on eBay at below retail prices and still make money. However, in response to complaints of large store consumers, Brand name owners may try to pursue people doing this selling. Or they may try to stop sales of foreign versions of a product, which may be subject to different quality control, for example.
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