Why Are Companies Shutting Down Auctions? (from January's newsletter)

Here's one thing I think a lot of you don't understand about Vero. eBay's Vero program isn't about authentic vs counterfeit per se, it's more about rights and such, you know like licensing, trademarks and copyrights. Some people believe that you can't have an auction shut down if you're selling authentic merchandise and that simply isn't true.

Now I'm not an attorney, so don't go thinking that what I am saying is de-facto law, I'm just giving you some insight.

Let's take for example Gucci, since they are shutting down auctions like crazy. Well, Gucci owns several trademarks, their logos, their patterned logo fabric, they have specific designs and names for those designs that may be protected under copyright or trademark law and so forth. Can Gucci shut down an auction for authentic merchandise? Yes, because you could simply be infringing upon their rights by copying an image, using a name without the registered trademark symbol and so on.

They are within their rights to do so. Like for an example, this is a true example that I experienced. I had for sale a certain poster of a certain artist from a certain music group. I received a letter from their attorneys letting me know that the license for that item expired long ago, and I needed to remove both the item and the image from my website immediately because I was in violation of the licensing agreement. Now it turns out that the actual distributor was the one being held responsible because they were selling this stuff in violation of the license and pretty soon they were contacted by the attorneys because they sent a letter to all their retailers asking them to remove the items from their websites. Now if this were an auction, the company or its attorneys could have had the auction shut down under the Vero program and would not HAVE to send me any correspondence.

And I hope this gives some insight as to how things like this can happen even when you are selling authentic merchandise. In my case, since I was buying from a legit distribution channel, I'm not in trouble. The problem with off-price is, you don't know HOW your jobber got the merchandise and whether or not they got it legitimately.

Now in most cases, no one wants you, they want the source that's putting the stuff out on the market. But this is the way this stuff works. Is there something you can do about it, well, I don't know, because a company has every right to protect their trademarks, copyrights and other stuff.
Now if you're selling fakes, counterfeits or as some like to say it nicely "knock-offs" that's another issue because that's illegal and you're breaking the law.