In an interview for Vox, David Barnett – the founder of PopSockets – said that he saw the first counterfeit product in about 2016. In 2017 and 2018 he claims to have been Amazon’s best takedown customer because his company was taking down 1,000 – 2,000 listings every day from marketplaces around the world. PopSockets claims to have 40 lawyers around the world and has spent over $7 million in 2018 fighting alleged counterfeits.
We say “alleged” counterfeits because not all PopSocket targets are counterfeiters selling or offering for sale a counterfeit PopSocket. Some of the listings on Amazon and other marketplaces are selling authentic PopSockets. However, PopSocket attempts to transform these bona fide sales into counterfeits through the quality control program it established.
Under the first sale doctrine, also known as the exhaustion doctrine, a branded product may be bought and resold without change, assuming that there is no deception present in the resale process. Therefore, once the trademark owner authorizes the initial sale of the product under the trademark, the trademark owner cannot ordinarily prevent or control subsequent sales of goods bearing the mark. For example, down-the-line retailers can display and advertise the branded goods, and secondhand dealers can advertise the branded merchandise for resale in competition with the sales of the trademark owner, provided they do not misrepresent themselves as authorized agents.
However, the first sale doctrine does not apply if the goods differ materially from the authorized goods. One way a brand owner can differentiate authorized goods from unauthorized goods is to adopt a quality control procedure because this program gives consumers ongoing benefits after the point of sale that is not available from the unauthorized product. However, superficial differences between the quality controls of the authorized product and the unauthorized product do not allow the trademark owner of defeat the first sale defense.
The PopSocket is not a complicated product. It is a circular disk that attaches to the back of a cell phone and extends when pulled making it easier for the cell phone user to hold the phone in certain situations. To suggest that a rigorous quality control program conveys a meaningful benefit to consumers beyond the point of sale is a stretch especially when the PopSockets being resold were from authorized retailers, to begin with.
But PopSockets is not distinguishing these legitimate resellers from the true counterfeiters. This is the case in a recent lawsuit filed by PopSockets against Lora Suzanne Wilcox. PopSockets were purchased from authorized retailers and then resold on Amazon. This act is squarely within the defendant’s rights, yet PopSockets’ is attempting to argue that its rights were not exhausted when it sold a PopSocket to the first authorized reseller because of its quality control program.
PopSockets will likely lose this case because it is likely the case that no quality issues exist with the PopSockets being resold on Amazon by Ms. Wilcox. She is not one of the counterfeiters PopSockets should pursue. What PopSockets should be more concerned about is potentially losing its trademark rights altogether.
Trademarks should never be used as nouns. They should always be used adjectives. If consumers start using a trademark as a noun, congratulations you have just lost your trademark rights because the trademark is now a generic term. PopSockets appears to be heading in this direction.
At the beginning of the Vox article, the journalist states “[e]very time some asks me, ‘What’s that?” there’s about a 70 percent chance I know exactly what they are referring to. It’s my PopSocket.” Throughout the article PopSockets is used as a noun:
- I love PopSockets
- Without a PopSocket
- PopSockets were originally invented . . .
- PopSockets sell really well
With the Federal Circuit’s decision in Coke Zero finding that a generic term can exist for sub-categories of the generic term like “no sugar soda pop,” PopSocket should be concerned that it may meet the same fate.
Counterfeiting is bad and counterfeiters should be aggressively pursued by brand owners. But any enforcement campaign must be thoughtfully designed to pursue the actual wrongdoers. Not individuals that are legally reselling branded goods. Otherwise, the label of a trademark bully is fitting.