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Revision Legal’s trademark attorneys brought home a legal win for their client, Goodies for Kiddies (Goodies) in Rohn v Viacom, 14-cv-83, in the Western District of Michigan. Goodies, a small business that resells children’s clothing purchased from retail stores, was roped into a lawsuit between the owner of the trademark GUPPIE and several large companies including multimedia conglomerate Viacom/MTV.
Defendants used the BUBBLE GUPPIES mark on a slew of products, including t-shirts and other items. Revision Legal’s client, Goodies, purchased those items from the big-box stores and sold the items online.
Plaintiffs brought suit for trademark infringement. Revision Legal filed a Motion to Dismiss and the Honorable Janet T. Neff granted the motion, dismissing Goodies as a Defendant. The opinion is available here: 07-15-15_opinion (PDF).
Goodies relied on the first sale doctrine in its motion. Like copyright law, the first sale doctrine in trademark law immunizes those whom sell unaltered, lawfully purchased goods from trademark infringement.[1] As long as the goods have not been materially altered, they can be sold freely without the seller infringing on the trademark. The doctrine is grounded in the idea that the trademark owner should not have the ability to restrict and/or charge licensing royalties after an initial receipt of payment for the product in the original sale.
Plaintiffs argued that the first sale doctrine did not apply to Goodies because the trademark was not legitimate in that it infringed on Plaintiffs’ trademark. Plaintiffs cited the case at bar for proof that the validity of the trademark was in question and thus the first sale doctrine should not be applied to Goodies. Goodies responded by arguing that it had no knowledge of any infringement and lawfully purchased the goods from big-box retailers. The court agreed with Goodies and dismissed the claims against it.
The Rohn v. Viacom case offers an important illustration of the first sale doctrine—one of the most practical and frequently litigated defenses in trademark law. Understanding how this doctrine works, where its limits lie, and how it interacts with online resale is essential for any reseller operating in today’s marketplace.
The trademark first sale doctrine (also called the “exhaustion doctrine”) holds that once a trademark owner sells a product bearing its mark, it cannot control the subsequent resale of that specific item. The doctrine is rooted in the fundamental purpose of trademark law: protecting consumers from confusion about the source of goods. Once genuine goods enter commerce through an authorized first sale, the trademark owner’s interest in those particular goods is satisfied.
The doctrine was recognized by the Supreme Court in Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924), which held that the owner of a trademark cannot prevent the resale of legitimately purchased goods bearing its mark, provided the goods are genuine and unaltered. The Lanham Act does not explicitly codify the doctrine, but courts have consistently applied it as a limitation on trademark infringement claims under 15 U.S.C. §1114.
For the doctrine to apply, several conditions must be met:
The material alteration limitation has generated substantial litigation. Courts have found material alteration in contexts that go beyond physical product changes. In Davidoff & CIE, S.A. v. PLD Int’l Corp., 263 F.3d 1297 (11th Cir. 2001), the court found material alteration where the reseller had removed batch codes from perfume bottles, which eliminated the manufacturer’s ability to identify and recall defective products. In Nitro Leisure Products, LLC v. Acushnet Co., 341 F.3d 1356 (Fed. Cir. 2003), the court found that refinished and repackaged golf balls constituted a material alteration sufficient to defeat the first sale defense.
For online resellers, practical material alteration issues arise when sellers strip packaging, alter product descriptions, or bundle trademarked items with unrelated goods in ways that could confuse consumers about what they are receiving.
Gray market goods—genuine products manufactured for sale in one country and imported for sale in another—present a distinct first sale issue. The Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013), addressed the copyright exhaustion doctrine for internationally distributed goods, but trademark law handles gray market goods differently. Under Lever Bros. Co. v. United States, 981 F.2d 1330 (D.C. Cir. 1993), trademark owners may be able to block importation of gray market goods when those goods differ materially from the domestic product—even if the physical product is identical—because the trademark owner’s quality control standards or warranty coverage may differ between markets.
Online marketplaces like eBay, Amazon, and Etsy create particular tension between brand owners’ enforcement interests and resellers’ first sale rights. Brand owners have filed numerous lawsuits attempting to use trademark law to restrict online resale of genuine goods. Courts have generally applied the first sale doctrine to protect resellers who clearly identify their goods as used or secondhand, are selling genuine unaltered products, and are not creating false impressions of affiliation with the brand.
Resellers should be aware that platform policies and trademark law are not the same thing. Amazon’s Brand Registry program allows brand owners to flag and remove listings that they believe violate their rights, and the platform often removes listings before any legal proceeding occurs. A reseller who believes their listing was wrongfully removed may need to pursue a legal remedy to restore their first sale rights.
The Rohn v. Viacom outcome demonstrates that small businesses caught in disputes between larger parties can prevail on well-established legal grounds. Goodies for Kiddies did nothing wrong: it purchased legitimately manufactured goods from authorized retailers and resold them. The fact that the brand owner was itself in a dispute with its licensees about the validity of the mark it was licensing did not change the fundamental analysis—Goodies had no knowledge of any upstream infringement and had done exactly what the first sale doctrine contemplates.
For resellers, the lesson is clear: purchase goods from authorized distributors and retailers, do not alter the products or their packaging, and document your supply chain. These practices are the foundation of a first sale defense and can be decisive in litigation.
If you are a reseller facing a trademark infringement claim, or a brand owner seeking to enforce your rights, contact Revision Legal’s trademark attorneys at 855-473-8474.
[1] See Sebastian Int’l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073, 1074 (9th Cir. 1995).
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