(CN) – The 10th Circuit upheld an injunction barring Midwest Inventory Distribution from reselling Beltronics’ radar detectors on eBay without the original serial numbers. The court said Midwest failed to show how its disclaimer and replacement warranty reduced consumer confusion.
Beltronics’ distributors purportedly sold the radar detectors to Midwest in violation of their distribution agreements. Midwest resold them as “new” on the Internet auction site, eBay. To conceal where they came from, the distributors either replaced the original serial numbers with phony numbers or removed the serial numbers before shipping them to Midwest.
Customers became irate when Beltronics refused to honor its warranty on radar detectors without original serial numbers. The manufacturer sued Midwest for counterfeiting and trademark infringement, and won a court order halting Midwest from selling the radar detectors on eBay.
Midwest argued that its sale of the products is protected by the first-sale doctrine, but that even if the doctrine doesn’t apply, its disclaimer and replacement warranty alleviated any consumer confusion.
The first-sale doctrine generally shields companies that resell trademarked items from trademark infringement liability. However, the doctrine no longer applies when the trademarked goods are “materially different” from the originals.
Because the original serial numbers and associated warranties had been stripped before resale, Midwest’s radar detectors were materially different from those offered by the manufacturer, the court ruled.
It rejected Midwest’s alternative claim that its disclaimer and one-year replacement warranty eliminated any consumer confusion.
“[T]he two products at issue are nearly identical in all physical respects, they are used in the same manner, and Midwest did not offer any evidence showing that consumers were not confused,” Judge Tacha wrote.