April 25, 2006
Printer Manufacturer Obstructs Sale of Printer-Compatible Labels on eBay, Threatens First Amendment Rights
Florida Resident’s Sale of Printer Labels Does Not Infringe on Printer Maker’s Intellectual Property
WASHINGTON, D.C. – A Florida resident should be allowed to inform consumers that he is selling computer printer labels compatible with Dymo-brand printers but not manufactured by Dymo Corp., Public Citizen said in a lawsuit filed April 24 in a Florida federal court.
The lawsuit, which was filed in the U.S. District Court for the Middle District of Florida, seeks to guarantee Rene F. Mohl of Ponce Inlet, Fla., the right to tell eBay users that he is selling printer labels compatible with printers made by Dymo, a Stamford, Conn., company. The lawsuit also seeks to prevent Dymo from interfering with future sales of the compatible printer labels and to compensate Mohl for lost sales.
Mohl has sold the labels on eBay since January, but Dymo has threatened to sue Mohl if he continues to use the Dymo name on eBay or elsewhere.
Because Mohl’s printer label listing on eBay is a form of speech, it is protected by the First Amendment. Currently, however, Mohl is prevented from telling consumers that his labels are compatible with Dymo’s printers because Dymo complained to eBay, erroneously claiming that Mohl’s labels infringe upon Dymo’s trademarks and that the sale of the labels voids consumers’ printer warranties. Dymo has threatened legal action against Mohl if Mohl uses Dymo’s name or parts numbers. Mohl is continuing to sell the printer labels on eBay, but because he is not using Dymo’s name or parts numbers he has suffered a major loss in sales.
Dymo’s trademark infringement claims threaten basic principles of our competitive marketplace, the suit says. Although trademark laws are intended to prevent people from being confused about the origins of the goods they purchase, they do not prevent people from truthfully selling compatible products. Federal law also provides that a user’s warranty cannot be voided simply because a compatible product was used.
“The First Amendment protects truthful commercial speech,” said Greg Beck, the Public Citizen attorney representing Mohl. “If Dymo’s theory were the law, it would be impossible to explain what your compatible products are compatible with. That would hurt all consumers by limiting the choices available to them and leading to higher prices for everyone.” The brand-name Dymo labels on eBay cost an extra $2 per roll.
Mohl began selling Dymo-compatible printer labels on Jan. 5, 2006, after he and Dymo were unable to reach an agreement under which Mohl would sell Dymo labels. Mohl truthfully described his products as Dymo-compatible, but he never stated in any of his eBay listings that his labels were manufactured or endorsed by Dymo. Therefore, he is not violating Dymo’s intellectual property rights.
Less than three weeks after Mohl began selling the Dymo-compatible labels, Dymo filed multiple notices of claimed infringement with eBay under eBay’s “Verified Rights Owner” – or “VeRO” – program, asserting that Mohl’s use of Dymo’s name and part numbers in his sales violated the printer maker’s intellectual property rights.
Printer companies frequently invoke trademark law to terminate the eBay sales of compatible products like labels and ink cartridges. Small eBay sellers do not have the resources to defend themselves from the intellectual property claims of big corporations. As a result, these claims almost always go unchallenged.
After receiving the notice of claimed infringement, eBay terminated auctions for the printer labels. EBay terminates auctions if intellectual property owners that are part of eBay’s VeRO program – in this case, Dymo Corp. – file notices of claimed infringement against particular auctions. When a certain number of auctions are terminated – the exact number varies from person to person – eBay suspends the seller’s account. If one more of Mohl’s auctions is terminated, he could face the suspension of his entire account, which would make it impossible for him to sell any more products on eBay.
“This is just another example of how corporations are exploiting eBay’s Verified Rights Owners program to curtail legitimate competition by small online retailers,” Beck said.
Public Citizen has a record of defending the First Amendment rights of Internet users.
C. Richard Newsome and Andrew Knopf, of the firm Newsome & Didier, P.A. in Orlando, Fla., serve as local counsel for Mohl. To view the lawsuit, click here.