I posted about this case once before. Australian Gold, a sun tanning lotion company with offices in Indianapolis(where I live) is now batting .500 in its efforts to perpetuate a restrictive and outdated distribution network.
Under the Australian Gold distribution model, Internet sales of sun tanning lotion are forbidden. Not only that, but distributors may only sell to certain authorized retailers.
Why you ask? The for public consumption explanation is that only by selling through trained retailers can the unsuspecting public be protected from the horrors that can occur when sun tan lotion is improperly applied.
But, as is all to common under such arrangements, someone saw a chance to make a buck. The defendants bought supplies of sun tan lotion from retailers- under circumstances that were sometimes sleazy- and resold the sun tan lotion on the Internet.
To protect its cozy position Australian Gold sued the defendant in two different federal jurisdictions. Charging several violations including tortious interference with contract, and trademark infringement, Australian Gold lost in Nevada and won in the NY under factually identical circumstances.
How can that be? Well, of course there can be many reasons. But IMHO the Nevada court properly adopted a consumerist posture while the NY court was swayed by the semi- sleazy conduct of the defendant in securing sun tan lotion from retailers.
As I have noted before, Australian Gold was arguably unharmed by the defendant's actions since ALL the sales of sun tan lotion were legitimate sales. And though I am not intimately familiar with the facts, I find it very difficult to believe that sun tan lotion is such a dangerous instrumentality that only a trained retailer can sell it. Such arguments have been raised by those in the hair care industry who sought to preserve similar semi-monopolistic arrangements. And judges gave the arguments a Bronx cheer.
The Southern District of New York is undoubtedly the most influential trademark court in the United States. I hope that they have a chance to comment on this case.


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