9 – Mail order problems

Background

ElectroGoods, a well known supplier of consumer electrical items, has a vigorous business via a large number of different outlets. For example, its products are sold in supermarkets and chain stores, through dedicated dealers, by mail order and also increasingly directly via the internet. The internet sales can be made directly from the company’s website.

As ElectroGoods products are well known brand products, other companies have often copied certain products and placed them on the market. Up to now ElectroGoods has been able to control or eliminate such copying by making use of legal remedies based on passing off, unfair competition, unfair business practice, trademark infringement, copyright, etc. It is now facing a new challenge.

The problem

A wife of an employee of the company has discovered that a very small hairdryer, similar to the one marketed by ElectroGoods for travellers, especially for business persons, is offered for sale on a webiste of a US mail order company. The picture on the website has a poor resolution so that it was not certain to be identical to the one of ElectroGoods. No trademark of ElectroGoods was used and there is no reference to ElectroGoods in the internet advertisement. When the employee reported this fact to his boss, he was instructed to purchase one of the items.

The employee’s wife made the internet purchase. Three weeks later an unmarked brown paper parcel arrived through the post from India. In the parcel was what looked like an exact copy of the hairdryer made by ElectroGoods.

Engineers at ElectroGoods examined the product carefully. It appeared to be very well made. ElectroGoods has this product made by several third party manufacturers so there are some differences in the designs. Although there is some doubt, the engineers believe that the product is not made by any of ElectroGoods’ manufacturers.

The challenge

• What can ElectroGoods do about supplies of copycat products from India or other countries via internet/mail?
• What action can ElectroGoods take against the US internet sales company?
• How can ElectroGoods change the way it does business to have a stronger position if this happens again with other products?

The solution

If these are the kind of problems that you have, please contact BIRD GOËN by email (ipadmin@birdgoen.com) and refer to “case study 9” to arrange for consultation.