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Comment by edoo | Hacker News Reader

They also allow illegal infringement on sellers. I knew a family that ran an Amazon import business and they bought an entire batch of surplus tennis shoes directly from a company in the primary supply chain of the shoe company. All on the up and up. The shoe company filed a complaint with Amazon that they were not authorized to sell their shoes and Amazon closed down the related listings. That was a serious restraint of trade and Amazon could likely be sued to the moon but they just moved on. I really wish they would have pursued the lawsuit against Amazon.

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What did Amazon do here that was wrong? It sounds like these people bought illegitimate “ghost shift” shoes from a factory and the brand owner correctly shut them down.

If you obtain a product legitimately you are allowed to sell it. This wasn't a counterfeit product nor was it claimed to be. Just because a company has a policy of only selling to authorized retailers does not allow them to restrain the trade of their merchandise by legal owners. It would have been a huge lawsuit.

Yes but ghost shift goods are counterfeits unless they are free of any logos and other intellectual property. The first sale doctrine doesn’t apply because it was never purchased from the IP owner at any point in the line.

If I have a factory in Bangladesh print some t-shirts with the Nike logo on them, I wouldn’t be able to sell them (at least in the US) because I didn’t get permission from Nike, which owns the rights to their logo. It’s the same thing here. It doesn’t matter if the factory happens to also produce legitimate Nike t-shirts.

I believe you are trying to classify what they bought as something it isn't (ghost shift goods). They legitimately bought the surplus from an authorized retailer.

If you go buy a bunch of Nike shirts from a Nike store they cannot stop you from selling them on eBay or Amazon (at least legally). At best the shoe company could have sued their authorized retailers for the bulk sale if it violated a contract.

Amazon happily complied with an illegal request to restrain trade causing damages to a small company. The lawsuit would have been huge.

No, the mandatory binding arbritration would be very small.

I'm asking around about that. In a simple contract dispute I believe you are right. If you have damages due to criminal activity it may not fall under the terms of a simple contract dispute.

That's true, I assumed from your original comment where you said "directly from a company in the primary supply chain of the shoe company" that the shoes were from further up the supply chain, like a factory, rather than further down. My mistake.

Even if the product were from an authorized retailer, I don't see how the shoe company's request to Amazon was illegal. Restraint of trade means that contracts restricting commerce are in some cases unenforceable. It doesn't mean that Amazon is compelled to do business with the reseller if they would rather prioritize their relationship with the shoe company.

If Amazon had terminated their listings without any cause or even because of competition agreements it probably would have been legal. Since it was in direct compliance with an illegal demand and Amazon stated as such they probably doomed themselves. Judges tend to look very poorly on large companies ramrodding the small guys. The small business wasn't prepared to spend $50k+ just initiating the process and went on with their business model.

> All on the up and up.

Unfortunately, trademark law in most jurisdictions allows manufacturers to effectively prohibit importing and selling goods obtained cheaply overseas and reselling them in direct competition with ‘legitimate’ distributors.

This allows manufacturers to engage in price differentiation, to the detriment of consumers. As with most IP law it mainly serves to enrich those in a position to exploit it.

I don't think think I agree. The first sale doctrine protects the resale of lawfully purchased, legitimate products.

The kirtsaeng v Wiley supreme Court case affirmed the right of sellers to import international versions of textbooks for resale in the US. This resulted in a reversal of Omega watches v Costco where Omega had argued that Costco couldn't resell their watches in the US.

https://en.m.wikipedia.org/wiki/Kirtsaeng_v._John_Wiley_%26_....

That’s an interesting case; historically courts have ruled that the first sale doctrine doesn’t apply to overseas manufactured goods, since they were never legally sold in the US.

However, the case doesn’t necessarily create a precedent. There was a four judge majority, with one judge concurring, but with a different opinion. Also, it was a copyright lawsuit, not a trademark lawsuit, so it doesn’t necessarily set a precedent for trademark disputes.

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