I have received several comments asking if we have ever taken legal action against diverters, as well as some addressing the lawsuit between L'Oreal and Quality King (one of the country's leading grey market wholesalers of salon products), regarding the unauthorized sale of our products.
To give you some background information - in 2004 the Professional Products Division of L'Oreal USA, Inc., served a motion for contempt against Quality King Distributors, Inc. (Quality King), and related companies for repeated violations of an injunction stemming from the gray market wholesaler's buying and selling L'Oréal's Matrix professional salon brand.
According to the court papers, Quality King, based in Ronkonkoma, NY, acting independently and with several related companies, violated a longstanding court order prohibiting it from acquiring and redistributing the Matrix brand. L'Oréal USA's Professional Products Division produces this brand, among others, exclusively for use and sale by professional hairdressers at authorized salons.
It is true that in November 2007, after three years in litigation, a judge lifted a 1990 injunction that prohibited Quality King from selling Matrix. We were very surprised by the ruling because all we were asking was that the court enforce its own order. We believe the 1990 ban should be reinstated and have already filed for an appeal.
Tuesday, August 19, 2008
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1 comment:
Dave,
As the diversion fight continues there is one important fact that has made this battle harder. The supreme court docket: 96-1470 L'anza Research International, Inc., vrs Quality King distributors. On March 9, 1998 we lost a fight due to unprepared lawyers whom thought they would fight without definitive facts. You can hear the mistakes here in the end and the court giving hints where and how to battle diversion, very interesting and when you hit play it is all 59 min of the court case, just listen: http://www.oyez.org/cases/1990-1999/1997/1997_96_1470/argument/. That ruling overturned more then L'Oreal lawsuit and defined that once a product has put them into commerce we can not say whom can resell said product. On that note if we look into section 1526 some interesting facts come into play. Check out: http://grove.ufl.edu/~techlaw/vol8/issue1/devesta.html#_edn7. Now remember most diverted redken products have new upc labels placed over the factory label. The FDA can not control product issues when the product UPC & Date code covered. HINT!
Although fighting grey market goods is a grey area when it comes in to law. There is many ways to fight this by increase your overseas shipment prices so importing goods back to the US will not be cost effective. Or consider label changes, say "For sale in said country only. And / Or " Exclusively sold in salon and spas" If this product is found outside a salon it is more expensive and diverted. We do not guarantee the products safety if diverted and our 100% guarantee is voided on this products. RedKen is only sold in salon/ spas. Please go to www.RedKen.com for more information. Something along those lines.
That last part will add allot to our fight and put a rest to the law suits that will arise when people find out about diversion. Remember once a product is sold you loose your right as a manufacture. The only long term effects you can have on said products is your label. If removed and replaced you now have a concrete fight.
And as I said before; the best diversion fight is in the salon. Stylist have their clients ear and have so much untapped power in this fight. Train your stylist how to talk about diversion and the battle will be won. I did send our "How to handle diversion behind the chair". If you did not get it let me know. Keep up the good work! U the man.
Cheers,
Mike
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