A friend of mine recently told me an interesting story. I’ve been selling on eBay for about a year now, and she had been using Facebook Marketplace and Craigslist.
I’m not a fan of FB or CL because of the amount of wasted time. Buyers are constantly lowballing, you have to respond to scam emails and texts, and you’ll often find yourself meeting with several people before finally making the sale.
These in-person transactions are a pain, and I don’t feel like they’re very safe.
I sell on eBay because I love the convenience. PayPal and eBay verify the buyers and secure the payment, the buyer pays for shipping, and the Post Office picks up my packages during their regular delivery.
It’s such a simple process, and I love it. It removes a lot of the issues of selling on other second-hand marketplaces. I’m happy to pay the seller’s fees for convenience.
I’ve had a small percentage of problems, but my overall experience on eBay is great. My friend only lasted a month selling a handful of items before she ran into several issues though.
The one that stuck out the most to me was a curious series of messages she received when selling a Netatmo Personal Weather Station.
Here is the text of two messages she received during the course of her 7-day eBay auction listing:
Netatmo Email 1
It has come to our attention that you are in VIOLATION of the federal trademark rights of Netatmo LLC. Attached is a formal CEASE & DESIST NOTICE. You have 5 days to remove all of our products sold by you online or we will be forced to pursue all legal remedies available to us under federal trademark and unfair competition laws.
Netatmo Email 2
It has come to our attention that you are still in violation of the federal trademark rights of Netatmo LLC. Attached is a second CEASE & DESIST NOTICE. Remove all of our products sold by you online or we will be forced to pursue all legal remedies available to us under federal trademark and unfair competition laws.
I love that they capitalize VIOLATION and CEASE & DESIST NOTICE as though it somehow lends more credibility to their claims.
Here are pictures of the notices they sent her:
Netatmo Cease and Desist Letter 1
Netatmo Cease and Desist Letter 2
Now there’s a lot to unravel in these notices. I’m not a lawyer, but I am an eBay seller who’s familiar with the resale market. I also know the difference between some random asshole saying “cease and desist” and an officially enforceable cease and desist order from a legal authority. These letters are the former.
When looking up the issue online, it turns out this is a common occurrence on eBay, and Netatmo isn’t the only company doing it.
Here’s an interesting story about SalonQuest sending similar letters to private resellers of Aquage shampoo. It happened back in 2006, and the main difference is they were claiming copyright infringement, whereas Netatmo is claiming trademark infringement.
More recently Ancient Nutrition sent these scary letters to sellers.
Pyramid scheme Arbonne is so infamous for these letters that when you type “Arbonne” into Google, the top autofill suggestion is “Arbonne cease and desist.”
And another interesting angle to understand is an instance where this occurred on Amazon. Mary Kay tried sending one of these cease and desist letters to an Amazon seller, and the Amazon rep’s response is hilarious.
Essentially, product page creators and contributors on Amazon are not considered page owners. The content of the product page becomes Amazon’s property, and Mary Kay was actually in violation of Amazon’s terms and conditions by even directly contacting the seller.
Ebay has a similar (with one important difference) clause in its user agreement. Here’s the text.
The difference in the two agreements is that Amazon retains ownership and bears the legal liability of its product listings. A recent high-profile case where this became apparent was when Birkenstock sued Amazon for typo-targeting consumers to sell knockoffs.
On the other hand, eBay is sublicensing to protect themselves from litigation. In the event of a lawsuit, you would be liable for your listings, not eBay.
So to explain why these letters are still in no way enforceable, we’ll need to explain a little bit about the laws regarding trademarks, copyrights, and unfair competition.
Unraveling Fair Use Laws
My friend isn’t the only person who’s heard of Netatmo or used its products. Its won a few CES Innovation awards throughout the years, which clearly isn’t translating into sales.
Now I’m not worried about infringing upon any copyrights for posting these images of Netatmo products. I own these images. Netatmo sent me these products for the purpose of taking these images, and I’m allowed to use them for editorial usage.
I’m not selling any products, and even though the Netatmo logo and packaging appears in the images, I’m not violating any laws in posting them.
I’m the owner of these images, not Netatmo.
It’s the same concept if you were to take a picture in your home of you sitting on your couch and watching TV. No trademark or copyright gives the manufacturers of that couch and TV the right to sue you for that picture.
You bought the products, and you have every right to use them in any way you see fit.
Of course, the laws are a bit different if I were using these photos for commercial purposes. For example, if I were using photos of Netatmo’s products in advertisements for my own competing products, they’d have a possible case. If I were using Netatmo’s own photos, they may have a case.
I’m not selling anything, however. And I have emails from Netatmo that gave me permission to use my photos of their products for editorial purposes. In fact, they expressly sent me their products for that exact purpose. Even if I weren’t given express written consent, I would still be in the clear because I’m using these photos for editorial purposes, not commercial purposes.
But selling on eBay is a little different. For that, we’ll refer to the First Sale Doctrine codified in the Copyright Act of 1976, 17 U.S.C. § 109, which is ultimately what protects you.
First Sale vs the Secondary Market
My friend is selling the Netatmo product she legally purchased and owns on the secondary market. This is protected by the First Sale Doctrine.
The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c). Since the first sale doctrine never protects a defendant who makes unauthorized reproductions of a copyrighted work, the first sale doctrine cannot be a successful defense in cases that allege infringing reproduction.
Further, the privileges created by the first sale principle do not “extend to any person who has acquired possession of the copy or phonorecord from the copyright owner, by rental, lease, loan, or otherwise, without acquiring ownership of it.” See 17 U.S.C. § 109(d). Most computer software is distributed through the use of licensing agreements. Under this distribution system, the copyright holder remains the “owner” of all distributed copies. For this reason, alleged infringers should not be able to establish that any copies of these works have been the subject of a first sale.
So, if she were selling the Netatmo app, she could be in violation of copyright law. However, she’s selling the specific item she purchased, not a loan nor reproduction.
Because of the First Sale Doctrine, you selling products on eBay is absolutely fair and legal. Where gray areas typically come into play is with computer software, games, music, movies, and audio books. In short – digital files may have a gray area. Physical products do not.
However, the difference between those copyright bullies back in 2006 and today’s trademark bullies is that Netatmo is attempting to bypass the First Sale Doctrine by claiming she violated their trademark. Basically they’re not even claiming she’s infringing upon their copyrights or patents. They’re claiming (among other things) she’s infringing upon their trademark.
So now we have to keep digging even deeper to show Netatmo’s stupidity.
Unraveling Netatmo’s Cease and Desist Letters
There are three different and distinct arguments Netatmo is making in the above letters.
1. First, it’s claiming that only authorized distributors may sell its products.
Netatmo is arguing that its contracts with distributors limit resale of its products only to licensed vendors. These contracts would most definitely limit its distributors from selling on eBay without Netatmo’s permission.
My friend, however, does not have such a contract with Netatmo, so this would never be enforceable in any court. She isn’t a distributor – she’s a private seller who purchased a Netatmo product. Netatmo’s contracts with its distributors give Netatmo power over its distributors. It absolutely does not in any way give it power over me, my friend, you, or anybody else but the distributors.
This argument is the most laughable part of the letter because of its complete ridiculousness. If I enter into an employment contract with Microsoft, it doesn’t mean I’m now an employee of Netatmo. If I sign a wedding contract with my wife, it doesn’t mean I’m married to Netatmo. It’s such a nonissue that even bringing it up in a letter format is hilarious.
It’s not even a situation of comparing apples to oranges – Netatmo is comparing apples to flying unicorns speaking Chinese while shooting lasers out their asses to conquer the world. A judge would laugh Netatmo’s lawyers out of court and likely fine them for wasting the court’s time, money, and resources.
2. It’s also claiming trademark infringement.
Netatmo is quoting its trademark and stating the secondary sale violates trademark law.
According to U.S. law, trademark infringement is the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.
If she were plastering a Netatmo label on products not manufactured by Netatmo, that would most definitely constitute trademark infringement. However, she isn’t.
In fact, what she’s doing is describing the product she owns and is selling on the secondary market. By using Netatmo’s trademarked name, she’s clearing up any confusion by ensuring potential buyers understand that what she’s selling is, indeed, a genuine Netatmo product.
The source of the product is, ultimately, Netatmo. They sold it to a distributor who resold it to a retailer who resold it to my friend as a consumer.
If I bought a Fender guitar or Nike shoes, I would of course need to use their trademark to verify it’s indeed genuine. In fact, if I were to attempt to pass those products off as my own, that’s when I’d actually be violating laws.
My friend is actually complying with the law by explaining that it’s a Netatmo Weather Station so as not to confuse customers. Trying to pass it off as “Susan’s Weather Station” would be the violation.
3. Finally, Netatmo is claiming unfair competition.
The law of unfair competition is primarily comprised of torts that cause economic injury to a business through a deceptive or wrongful business practice. Unfair competition can be broken down into two broad categories:
a. unfair competition
sometimes used to refer only to those torts that are meant to confuse consumers as to the source of the product (also known as deceptive trade practices)
b. unfair trade practices
comprises all other forms of unfair competition.
This includes trademark infringement (what Netatmo is really trying to claim), but other practices as well. Some examples are:
a. false advertising
b. “bait and switch” selling tactics
c. unauthorized substitution of one brand of goods for another
d. use of confidential information by former employee to solicit customers
e. theft of trade secrets
f. breach of a restrictive covenant
g. trade libel
h. false representation of products or services.
This is where it gets funny again (and you can see where the claim can’t possibly be valid). Using the Netatmo brand name is essential to avoiding a, b, c, and f.
If she were to not use Netatmo’s name, she would be guilty of falsely representing the product she’s reselling. She would be guilty of a bait and switch, false advertising, etc.
The only way for her to follow the law is to properly label her product as a Netatmo Weather Station. At this point, Netatmo’s argument has complete dissolved to basic common sense.
But we still have one last point to review, which is eBay’s VeRO program.
The eBay VeRO Program
Now you absolutely can have an eBay listing removed from the site. There’s a very simple process that any IP holder can follow. It’s called the eBay VeRO program.
Thousands of brands and companies participate in this program, and you can find a list on the Seller Central section of its site.
Scroll down to the N section, and you’ll see Netatmo is not one of these brands.
If it were, it would be very simple for the company to have this listing removed. The fact that it’s sending random letters through anonymous temporary accounts is a sign to me that Netatmo contacted eBay already.
And eBay likely told Netatmo to fuck off because its claims are ridiculous.
That’s exactly the advice I gave my friend and I’m now giving you.
If you ever receive such a notice, tell that company to fuck off. They know as well as I do that they’ll never take the issue to court. If they do, counter sue them.
These cease and desist letters are nothing more than a scare tactic used by companies who are clearly failing. And it’s not anybody else’s fault but their own.
Every brand in the world has products on the secondary resale market. But only the shit companies who don’t know how to run a business are failing. Netatmo is apparently one of those companies.
After hearing this story from my friend, I asked her to send me copies of the letters. I then emailed them to Netatmo and asked for a comment for this story. I haven’t heard back yet, but I’ll be sure to update this blog post with their comments (and my corresponding commentary on them) should they ever decide to respond.
Until then, know that you can safely sell anything you own on eBay, and don’t ever let some random company scare you into believing otherwise.