It seems that some manufacturers are trying to fix prices artificially high for their products by forcing 3rd-party retailers to uphold the “Minimum Advertised Price”. I’m fine with manufacturers enforcing this on authorized retailers as they’ve contractual obligation to uphold the MAP. Where I take issue is this MAP is something to which the 3rd-party vendors never agreed.
The problem I see with this is the manufacturers are attempting to coerce 3rd-party vendors–which have no obligation to advertise any specific price at all. By threatening Costco et al. with lawsuits for trademark-violation, prices-which-the-market-should-dictate are instead being artificially inflated.
First of all, what claim does the manufacturer really have to property which has moved from the authorized retailer to a 3rd-party? Assume I’m the 3rd-party and buy a drill, as the article mentions, from an authorized retailer. I then decide I no longer want/need this drill and want to sell it unused on, say, CraigsList to recoup some my purchase price. Am I obligated to put the MAP in my For-Sale Listing? And can I not say it’s an “XYZ brand drill, model number 123” for fear of infringement? What if my example was for a car instead? Could I not say it’s a Triumph Spitfire? Should I instead say “2-door car (Make/Model redacted)”? Should I also call the manufacturer so they can let me know how low I can list it? I should think not. This crosses lines on both property rights and freedom of speech.
The second problem is that the discounters are now seeking government intervention to remove a company’s ability to set a MAP all together. Since I’m in such great company, I’m sure I don’t needs to enumerate the myriad of reasons why this government intervention in the market is a bad thing.
Thanks for letting me rant. I look forward to reading everyone’s thoughts on the matter.
It’s rent-seeking from both ends. The manufacturers are trying to do something they have no right to do (enforce a “rule” the seller never assented to) and the discounters are trying to have their contracts nullfied, essentially.
None of this would happen if the government would just stay out of things and eliminate IP laws.
During the whole Kazaa nonsense. Sony, the record label was vehement in trying to get Kazaa closed down or whatever for obvious reason. On the other hand, another branch of Sony that made CD players etc. was defending Kazaa.
If I buy a good without an agreement for a minimum price and then choose to sell it at a price less than the minimum then I am NOT fine. If the reseller, the person I purchased the property from, has agreements describing pricing and pricing term then I do not have clear title to my property. In this case the manufacturer has rights to sue the reseller for damages. The manufacturer may come after me for the property. I may have to return the property and would have the right to sue the reseller. This is true if there are a chain of resellers. All resellers except the first can be held for the return of the property and depending on sales conditions for damages as well. If the subsequent owners/resellers did not know of the original agreement then they would simply sue the original reseller for any damages.
So the answer is YES. End users and subsequent resellers may be liable to replace property and/or pay damages depending on their agreements with the original reseller and the agreement between the reseller and the manufacturer.
This can all be explained easily in an agreement between the manufacturer and the reseller. There is no need for any action by government as the terms are simple. Otherwise the manufacturer would charge a higher price or would not sell to the reseller in the first place.
Yes you do. Once the sale is made, you have title to it. You did not sign the contract with the manufacturer: the place you bought it from did. The seller fulfilled the terms of that contract, and it ends there.