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Image: WSJ

Patagonia does not want its wares on Amazon – even If they are authentic – and is suing one of the massive marketplace’s third-party sellers as a result. According to a complaint filed in a California federal court last week, Patagonia is seeking to stop Kimberly McHugh’s unauthorized use of its name and famous “Fitz Roy” logo, alleging that the Amazon seller is “interfering with [its] contracts with its authorized dealers by purchasing quantities of Patagonia brand products for the purpose of resale through unauthorized, gray market channels, including online marketplaces, such as Amazon.com.”

Ventura, California-based Patagonia claims that McHugh, by way of her shop My Little Corner, is selling “substantial quantities of Patagonia-branded products online through retail platforms, including Amazon.com.” The famed outdoors-wear brand asserts that Monroe, Louisiana-based McHugh is “using several tactics to portray [her shop] as an authorized Patagonia dealer to consumers,” such as using Patagonia’s official copyright-protected brand imagery in her listings, and stocking multiple sizes for each style, “which implies to consumers that Our Little Corner has a ready source of Patagonia branded inventory on hand.”

While it is generally legal to resell authentic items you have purchased, McHugh’s conduct is problematic, Patagonia argues, because it does not permit any of its authorized retailers to sell “anywhere except [for] an approved retail site operated by the retailer in accordance with Patagonia’s policies.” Not only is Amazon not an approved site, McHugh is not an approved seller.

The issue, according to Patagonia, is that by offering up its wares on Amazon, where there is not a “competitive market … [because of] the absence of authorized dealers,” McHugh is able to “gouge consumers” with “exorbitant [and] misleading prices that … [they] will believe originate from Patagonia.” For instance, Patagonia points to its Men’s Nano Puff jacket, which retails for $199.00 on Patagonia.com and from its authorized dealers. “Our Little Corner is selling the same jacket for $272.00,” the complaint states.

More than “infringing, misusing, and trading on Patagonia’s famous Fitz Roy logo trademark, its copyrights, and its reputation and goodwill,” Patagonia claims that McHugh is “illegally interfering with Patagonia’s dealer agreements.” To be exact, the company claims that in accumulating such a sizable inventory, McHugh is causing authorized Patagonia dealers to run afoul of their contractual duty to refrain from “selling to any reseller” in furtherance of Patagonia’s attempt to prevent its wares from being sold on sites like Amazon, which provide “[a] materially different service and product experience than is represented by the Patagonia trademark.”

The alleged “material differences” that exist between the sale of Patagonia products by the company, itself, and its authorized dealers, and those sold by third-parties on Amazon are worthy of attention. It is well-established that the First Sale Doctrine enables the resale of trademark-bearing items by parties other than the trademark holder after the trademark holder initially releases those products into the market. However, the protection from claims of trademark infringement (among other things) that is provided by this doctrine is limited in certain cases, making it so that the subsequent sale runs afoul of the law. Such a case arises when “material differences” exist between the product(s) initially sold by a trademark-holding brand and the product(s) being “re-sold.”

That is precisely what is going on here, per Patagonia. The products/services that McHugh is offering up by way of her Amazon shop differ from these being sold by Patagonia in a number of ways, including the difference in price for the new-with-tags products, and the warranty terms provided by McHugh/Amazon, which are “inconsistent with the actual warranty from Patagonia available on genuine goods.”

This is a noteworthy argument being made by Patagonia, particularly in light of the larger pattern by brands to attempt to exercise an increasing amount of control over – and in some cases, completely stomp out – the resale of their trademark-bearing products, whether those be Patagonia jackets, Chanel purses, or Dermalogica hair products.

With all of the foregoing in mind, Patagonia has set froth claims of trademark infringement and dilution, unfair competition, copyright infringement, and intentional interference with contractual relations, asserting that McHugh is “depriving [it] of its statutory rights to use and control use of its trademarks and copyrights,” and “creating a likelihood of confusion, mistake, and deception among consumers and the trade as to the source of the infringing products,” among other things.

The company is seeking to immediately and permanently prevent McHugh from using Patagonia’s trademarks and copyrighted photographs, and an array of damages in connection with McHugh’s allegedly illegal acts.

*The case is Patagonia, Inc. v. Kimberly McHugh, 2:19-cv-07666 (C.D.Cal.).