A multinational direct-selling firm has agreed to drop a lawsuit it filed against an Oregon couple and a third person after reaching an agreement resolving the dispute. Amway had accused the defendants of purchasing its products from authorized merchants and then wrongfully selling those goods on eBay.
A representative for Amway and its parent company issued a statement announcing the federal lawsuit's dismissal, explaining that all pending civil litigation between Amway and the defendants had been resolved. However, she declined to release the details of the agreement, explaining that the terms of the agreement are confidential.
According to the lawsuit, the Oregon couple secured its products second-hand and then resold them. Amway argued that the couple repackaged the products and sold them with a limited return policy that differed from Amway's own policy.
Additionally, the couple reportedly said buyers could send proof of their purchases to Amway in exchange for free products. This reportedly resulted in a number of complaints, with some buyers unsure whether they had purchased genuine Amway products and others unhappy with their quality. Amway says that these frustrated customers then associated their issues with Amway as a whole, damaging its reputation.
Although the couple stopped selling the Amway products shortly after the lawsuit was filed, they argued that they were protected by first sale doctrine, which allows individuals who legally purchase a product to resell it without asking for the permission of its manufacturer or rights holder. Amway said first sale doctrine did not apply because the method by which the goods were obtained violated company policy.
After the lawsuit was resolved, Amway's chief legal officer announce that the company would continue taking action against individuals wrongfully selling its products online, explaining that such action is needed to protect businesses and individuals who legally partner with Amway to sell and distribute its products around the world. However, Amway has yet to file any additional lawsuits.
Source: Mlive.com, "Amway drops lawsuit against eBay sellers in Oregon after reaching 'agreement'," Shandra Martinez, Sept. 16, 2012