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Attorney Wayne
Attorney Wayne, Lawyer
Category: Intellectual Property Law
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Experience:  Practicing Law Since 2000
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Hello, Received an email from Johnson & Pham, LLP re item

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Hello,

Received an email from Johnson & Pham, LLP re item sold on eBay they believe is counterfeit. Items were purchased as part of a bulk lot at Sheriff's auction, which I provided to J&P. J&P insists on getting my entire accounting records which I do not think they are entitled to. Also some of the products have been previous identified as GENUINE products so if their allegations are correct, there is a mixture of GENUINE and allege counterfeit (identified as AFTERMARKET) items. I think they are trying to get my accounting records because item sold for only nominal $ less than $10.00.
Submitted: 1 year ago.
Category: Intellectual Property Law
Expert:  Attorney Wayne replied 1 year ago.
PLEASE DO NOT use the rating system until satisfied. Instead, please click REPLY TO EXPERT to continue our conversation.

Hello. Thanks for contacting us. It sounds like an awful shock to get a notice like this--but worry not, these are often standard legal tactic to soften up the recipient.

As a legal matter, no one is entitled to any private business records without a court order or administrative subpoena. However, to settle a matter to someone else's satisfaction, it may be prudent to share such data. But the decision is wholly a matter of choice, until. as mentioned, there's a court order or subpoena in play. Then, the only way to prevent seizure of the records is to make a motion to quash the court order or subpoena. Refusal can lead to jail or fines for contempt.

So if there is no court order or subpoena yet, then the key issue is to find out (1) whether there were any counterfeit goods among the lot sold and (2) assess how much in legal fees or hassle one is willing to invest to fight.

Even if there are no counterfeit goods in the sales lot, it can cost both time and money to defend even against a ridiculous case when sued. While there are theoretical "sanctions" that can be brought for frivolous lawsuits, all but the most ridiculous usually proceed to dismissal without any sanction imposed. So many find it simply better to figure out a way to satisfy the company concerned about trademark infringement by some mechanism.

One thing that can happen when items are sold way below normal retail is that a trademark holder tries to intimidate those who might sell items that are not counterfeit, but obtained through alternative distribution channels (whether a sheriff's auction, through bankruptcy sales or as used items in flea markets), into stopping the sales out of fear of litigation. This use of litigation is arguably illegal as a "restraint of trade" under anti-trust laws. Companies simply can't enforce prices other than by refusing to sell wholesale to discounters. But they still sometimes try.

The problem with an anti-trust law issue like this is that it can also be both time consuming and expensive to pursue. But if wholly sure that the items sold are not counterfeit, it may be possible to report this sort of anti-competitive action to the appropriate regulator (for instance, the Federal Trade Commission or the state attorney general). These regulators don't necessarily prosecute individual cases unless tremendous, but they do follow patterns -- and a company that is tracked engaging in anti-competitive antitrust law violations may get prosecuted for a series of such things.

So, if sure of the legitimacy of the products sold, one can respond to the threat from the manufacturer by sending a certified letter, return receipt requested (keeping a copy of the letter and receipt as evidence) by both stating that items are not counterfeit and that any further attempt at intimidation to sellers who make these products available at a low price will be met with a complaint to the appropriate antitrust authority at both the Federal and State Level.

Again, this is not really useful if one is not completely sure that no counterfeits are involved. But if appropriate, this is a kind of legal counter-punch that might get the company to back off -- especially if their strategy really is to intimidate sellers who might undercut usual price floors for the product.

I wish you speedy and successful resolution of this matter.
Attorney Wayne, Lawyer
Satisfied Customers: 1506
Experience: Practicing Law Since 2000
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Expert:  Attorney Wayne replied 1 year ago.
Hi again, Nathaniel.
Just checking if you have any follow up on the intellectual property question. If so, please post it in the next text box.

If not, please remember that experts only get paid if the customer rates them good or excellent.

Thanks for your consideration in closing the question out.

Best regards,

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