Can a seller resell items in trademarked packaging provided by the original customer who failed paying for it? 7 Answers as of October 22, 2013

My customer ordered ammunition for which they provided me with trademarked packaging art as requested by their customer. My customer has failed to pay for the material which is now in this trademarked pack. Under the UCC the seller’s remedies are to resell to minimize losses. Can I resell in this trademarked pack without worrying a law suit from my customer's customer?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Mohr Intellectual Property Law
Mohr Intellectual Property Law | Joseph Mohr
You should speak with a qualified trademark attorney about the doctrines of passing off, reverse passing off, and first sale or exhaustion.
Answer Applies to: Oregon
Replied: 10/22/2013
Mark S. Hubert PC
Mark S. Hubert PC | Mark Hubert
NO. You can resell the ammunition but not in the trademarked boxes from the third party. If you sold the ammunition in the third party's boxes (say at a discount) you would be stealing a sale from the third party. Your recovery cant be from the losses of a third party.
Answer Applies to: Oregon
Replied: 10/21/2013
Law Office of Kirk Buhler
Law Office of Kirk Buhler | Kirk A Buhler
This is generally a NO. You do not own the trademark. While you may own the material to make the product and you may have paid for the printing of the boxes, you have no rights to the trademark. While you have the rights to minimize loss, if you sell the product and the buyer wants to return the product, or has a warranty issue who is responsible? From this example you would receive the benefit of the sale but the non-paying customer would be harmed because it has their trademark. You should consider repackaging the product, marking-out the trademark or labeling over the trademark.
Answer Applies to: California
Replied: 10/21/2013
Banner & Witcoff, Ltd. | Ernie Linek
No. This fact pattern is odd. Typically the manufacturer of goods (here the ammunition) provides the goods in its own packaging - showing the manufacturer's trademark on the package. The customers purchase these goods based on past experience with this brand of merchandise. Here, the typical case is not followed. We have three parties - and it is unclear who made the ammunition, and unclear what trademark is being used. Sell the ammunition without using the trademarked packaging art - as you are likely not authorized to use that art.
Answer Applies to: Massachusetts
Replied: 10/21/2013
Webb IP Law Group
Webb IP Law Group | Jason P Webb
I would be worried and would see what I could do about repackaging.
Answer Applies to: Utah
Replied: 10/21/2013
    Eminent IP, P.C.
    Eminent IP, P.C. | Paul C. Oestreich
    It is not clear from your statement of the facts whether the "trademarked packaging" you were provided is the same packaging that the ammunition manufacturer uses to sell their ammunition with their trademark. Who owns the trademark? The ammunition manufacturer? Your customer? Your customer's customer? Or some other unrelated party? Furthermore, it is not clear whether or not the ammunition manufacturer has trademark rights or not (presumably yes), or whether you are the ammunition manufacturer and you sell it generically for private branding. I will assume for this analysis that the "trademarked packaging" is marked with "Private Brand X" and the ammunition is actually manufactured and sourced from "Federal Brand". This presents at least two issues. First, Federal is going to have a trademark infringement action against anyone repackaging their ammunition and selling under some other brand name, e.g. Private Brand X, unless they have a license from Federal to do so. The second issue arises from a change in the factual scenario. Assuming that the ammunition is actually generic and not branded (*i.e.*, you are the ammunition manufacturer and you private brand your ammunition) and that your customer's customer owns the trademark on the trademarked packaging that was provided to you by your customer (highly likely), then your customer's customer may have a trademark infringement action against you. Furthermore, as you note there are UCC remedies, one or more contracts that have been breached and multiple parties involved in a possible dispute. So, you would be well advised to seek the advice of counsel before trying to minimize your losses.
    Answer Applies to: Utah
    Replied: 10/21/2013
Click to View More Answers: