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Altering and reselling a product - legal?

 
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Roccopark
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PostPosted: Mon Jul 28, 2014 3:32 pm    Post subject: Altering and reselling a product - legal? Reply with quote

Hello all, this forum has been interesting reading, and I'm hoping you can help me with what is probably a very simple answer!

If I were to buy an "official" product, alter it, then resell it, would I be infringing on any laws?

To be more specific - if I saw a star wars shirt for instance, but it wasn't available in a small enough size, could I alter it and resell it (and equally if they didn't do plus size, add material to make it larger to resell it).

I've a feeling that if I did that then it would no longer be the original officially licensed product, and therefore I'm effectively selling an unlicensed product.

Edit - could I sell it as "official product altered to 'x'"?

Thanking you hopefully,
Rocco.
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AndyJ
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PostPosted: Mon Jul 28, 2014 7:01 pm    Post subject: Reply with quote

Hi Rocco,
You pose an interesting question. So long as you only alter and re-sell the original garment then there is no copying so copyright is not involved. Neither is design right which might otherwise protect the design of a garment. And trade mark law is not being infringed because this is effectively a re-sale where the size and shape of the underlying garment are irrelevant. Nor as far as I can tell from what you have told us is there an issue about passing-off. The only time I could see passing-off being an issue might be if you were dealing in high-end branded goods (for instance a Prada Star-wars tee-shirt) where the brand owner might suspect you were actually trading in substandard copies, especially if the machining of the alterations was done to a lower standard than the original, and thus had the potential to damage the reputation of the brand, if your re-worked tee-shirt fell apart too easily. The licensing aspect shouldn't come into it either because since you would have bought the tee-shirt legally, the sale includes a built-in licence for you to wear or dispose of the shirt as you wish.
I'm assuming that you want to do this within the EU. The EU doctrine of exhaustion of rights should even operate if you import grey products into the EU for resale, provided the goods are genuine. In the US, a case called Kirtsaeng caused a brief upset when the lower courts took a more protectionist view on what is know there as the first sale doctrine (largely the same as the exhaustion of rights) where grey imports are involved, but ultimately the Supreme Court reversed the earlier decisions.
So just to recap, I think your proposal is unlikely to fall foul of IP law, but if any high-end brands are involved, be prepared for pressure from their legal departments, based more on their ability to fund expensive litigation rather than because the law is on their side. We have seen certain perfume brands successfully closing down sales of genuine branded perfume on eBay, just because the companies objected to this kind of marketing which they felt damaged the exclusive image of their brand.
Your edit at the end reminded me I should also mention the Trade Descriptions Act which has relevance to how you advertise your products. If you are not buying your shirts from a wholesaler, there may be problems with describing the shirts as 'new', as technically they will have been owned by you before being sold on. This would apply where you were using eBay and have to describe the goods as either new or used. Equally truthfully, 'used' is not a correct description either because nobody will have worn the shirts. Once your business is doing sufficient turnover then you can class yourself as a retailer, and then the new/used dilemma goes away. It may seem like a word you could just avoid, but whether something is new or second hand also has implications for the Sale of Goods Act and other consumer protection legislation. And by altering the garment, you will have most likely voided any manufacturer's warranty and so this will affect the consumer's rights. I don't intend to go into that here because it is some way from the purpose of this forum, but it may be something you want the read up on.
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jackalantern1
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PostPosted: Fri May 20, 2016 11:50 am    Post subject: Reply with quote

Hi, what an interesting and knowledgeable forum! This is my first post...

I'm sorry to resurrect this thread, but I have a rather similar question that I am struggling to find an answer to... I'm hoping someone here might be able to help me with...

What would be the position if someone purchased an official item, for example a sew-on badge depicting some well know tv or film character, sports person or other such protected image, and then sewed the badge onto a blank t-shirt or jumper to sell? Would that infringe any copyright or trademark, assuming that whoever purchased the clothing knew that only the badge was official?

Another example could be the purchasing of official decals/graphics which are then attached to other items and sold... would this be a breach of copyright?

I hope my questions make sense.
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AndyJ
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PostPosted: Fri May 20, 2016 2:39 pm    Post subject: Reply with quote

Hi jackalantern,

Since you would not be making a copy of the licensed items such as decals or badges, copyright shouldn't come into it.

However there might be trade mark issues if the new goods bearing the decal or emblem were put on sale when there were already licensed goods of the same type on sale in the same territory. The tee shirt example is a good one. If a manufacturer had already obtained a licence to sell tee shirts with, say, a Star Wars logo on, chances are they may have paid for an exclusive licence to make and sell those goods in a particular market like the UK. If you were to obtain genuine Star Wars decals and apply them to blank tee shirts, with the purpose of selling them, this would undermine the value of the licence for the manufacturer. And even if it could be argued that your actions did not infringe the Star Wars trade mark per se, on the basis that you had obtained the decals legitimately, there would certainly be grounds for a passing off action because anyone buying one of your tee shirts would probably be misled as to the official origin of the goods, and your sales would damage the goodwill which might have been built up by the licensed manufacturer.

In some ways this is the reverse of an issue which has cropped up in the courts to do with the appearance of after-market spare parts such as car badges. It is perfectly legitimate for a third party supplier to sell spare parts which may be fitted to a existing vehicle, assuming that they are not being sold as the being from the car maker. However where the appearance of the item requires the car maker's logo to be present (think of something like a bonnet badge) then an interesting situation arises, in that it is argued, the logo is not serving as trade mark, but as a necessary part of the appearance of the the item. This is a problem which the courts have wrestled with on a number of occasions. However with your example, of course there is no requirement for your finished item to resemble anything in particular, yet both components (the tee shirt and the decal, in this case) would be genuine, and it is only when they are combined that a possible problem arises.

I think you would need to make a pragmatic decision, depending on who the intellectual property right is owned by. If the company is known to be litigious and a strong defender of their brands (companies like Disney come to mind) then you would probably be inviting a great deal of hassle by using their intellectual property, whereas other owners may take a more relaxed view.
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jackalantern1
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PostPosted: Fri May 20, 2016 7:25 pm    Post subject: Reply with quote

Thanks for the reply! That was pretty much what I was thinking, but information seems to be fairly scarce on the subject.

My train of thought is that if I buy something that is legitimate, I am allowed to sell that item on. I can't see how I can be prevented from selling it on simply because I have attached it to another item.

Your point about passing off is something that had crossed my mind earlier, but I believe this could be avoided by expressly (and very, very clearly) informing every single potential purchaser that the overall item is not official - and stating what part of the item (e.g. the badge or sticker) is official.
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ancelotcharter
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PostPosted: Thu Jan 05, 2017 1:12 am    Post subject: Reply with quote

Hi, I also have a quick question in relation to IP Law in the UK. I am currently a first year law student but I am having trouble finding the exact point of law as I have come across several contradictory views. I am about to launch a gift basket service, aimed at the luxury market in London. I plan on including several well known and established brands - such as Ralph Lauren and Dior. I wanted to know whether or not it is legal to buy the product legitimately from the brand itself and include it in the gift baskets - whilst adding value (other products) and reselling together at a higher price. If it is not entirely legal, should I be considering a partnership with the brands and reaching a formal agreement in terms of what my company will be doing? Thank you so much for your help! I look forward to hearing from you. Best wishes
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ancelotcharter
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PostPosted: Thu Jan 05, 2017 1:20 am    Post subject: Reply with quote

Sorry, reading through the feed again - I thought I should clarify that I will not be modifying the purchased product or its packaging from the brand in anyway. It will be resold as and how it was originally purchased by me/my company. Thank you!
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AndyJ
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PostPosted: Thu Jan 05, 2017 7:51 am    Post subject: Reply with quote

Hi ancelotcharter

There should be no legal problem with doing what you have outlined. There is no copying involved nor any misuse of trade marks. As for the price you wish to charge for the complete set of products within the basket, plus of course the cost of the basket itself, it is entirely up to you. Retail price maintenance is generally illegal under competition law and so manufacturers are not allowed to impose sanctions on retailers or other middlemen who wish to charge higher or lower prices for their branded goods. However certain manufacturers of luxury brands have been known to misuse the IP protection regimes of sites like Ebay to impede sellers they don't approve of, by claiming the goods being offered are counterfeits. To guard against any interference of that sort, be careful about where you source the items for your baskets and keep good records.
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