How to virtually eliminate gray market through Copyright, Trademark and Patent Enforcement

 

By: Melinda Herndon
GM, Scuba.com

The gray market refers to new goods sold through channels other than those authorized by manufacturers.  Gray market scuba gear sales are damaging to the industry by removing profit from manufacturers, reducing brand equity, increasing the risk to consumers and posing a threat to their well being.

Presently, warranty cards filled out at the point of purchase are the means of contact between manufacturers and consumers. It is common practice for a gray market dealer to have another shop purchase the items for inventory.  Most often, the warranty card is removed from the manufacturer’s original packaging to make it more difficult for Manufacturers to trace the sold item back to the original dealer who purchased it on behalf of a gray market seller. This virtually eliminates the chance of alerting diving consumers to the dangers of using a product before it can be tested, replaced or retrofitted or in the rare case of a recall.

Manufacturers lose profit when gray market sellers force their products to compete with items which are similar and can be purchased by customers from a gray market provider.

Brand Equity is the biggest concern any Manufacturer should have, as it determines the prices that the market will bear for its products, the image that the product has with its distributors, and the value perceived by customers.  It is the most important component to determining the value of the company at the point of sale.  Reduced brand equity means less revenue and lower product value.

Internet search engines like Yahoo and Google provide higher ranking to products with the lowest price.  When gray market dealers fail to abide by manufacturers’ precepts and offer the same product for much less than the minimum advertised price, the manufacturers and the authorized dealers lose Internet presence.  In retaliation, retailers may cease to promote these products to avoid perceptions of overpricing.

Manufacturers are not entirely without defense...

There are three levels of recourse for Manufacturers.

Section #1 relates to immediately shutting down all use of your copyrighted images and text by gray market sellers.

Section #2 will assist in legal recourse for continued copyright and trademark violations.

Section #3 is a new and powerful level of protection available to Manufacturers who hold U.S. Patents for the items that they sell.

#1) Search portals are willing to aid in the removal of unauthorized use of copyrighted material from the Internet.  Use the links below to take advantage of these services.

#2) Copyright service companies can also be rendered to assist in registration of your copyright and enforcement thereof:

Do it yourself with this government resource:

Copyrighting your text and images is automatic at the point of producing new information, but unless it is registered, there is no course for legal action.  Getting a registered copyright is as easy as sending your product catalog to the address below with the required form and a check for $45.00.

U.S. Copyright Office
101 Independence Ave. S.E.
Washington, D.C. 20559-6000

#3) If you have already taken all of the above actions to protect your brand equity… congratulations to you. The benefit that you are already seeing is that your images and text cannot be used by gray market sellers.  This is useful to protecting your brand, but there is another step left to take.

If you hold a U.S. Patent for the items that you sell, you can  shut down gray market sales through the use of a powerful new program available exclusively through Net Enforcers.

Here is how it works: You will be issuing a license to sell your patented products to certain retailers.  If these retailers resell to unauthorized third parties, this would be considered an infringement of the patent license and be actionable by you, the patent holder. 

This partnership with Net Enforcers allows Manufacturers the highest level of brand equity control possible, and the scope of the control far exceeds that available to copyright and trademark holders.

Complete details are available through direct discussion with the company: http://www.netenforcers.com/pages/contactus.cfm

Gray market sales pose an onerous threat to the scuba industry. Following the above steps can result in protection of your hard-earned brand equity and more importantly, increased safety to the diving public.