Mary Kay Inc., the Dallas-based cosmetics company, quietly filed a civil suit in the Federal District Court of Texas against La Salle, Illinois residents Scott and Amy Weber and their company, Touch of Pink Cosmetics. Touch of Pink resells Mary Kay products on the internet. The suit alleges tortious interference with current and prospective contracts, unfair competition, passing off, and trademark infringement.
Translated from legal-speak, tortious interference means the Webers are accused of inducing current Mary Kay consultants to break their contracts with Mary Kay. Mary Kay also alleges that the Weber’s thriving business selling Mary Kay products at a steep discount has deterred and will continue to deter women from signing contracts with Mary Kay.
The 71-page complaint contains a brief statement that may be of interest to any current Mary Kay consultants who are using liquidators to recoup some of the money they sank into hard-to-sell inventory: “Mary Kay requests leave of the court and an order to conduct expedited discovery so that Mary Kay can properly identify the Participating Independent Beauty Consultants, who are also potential defendants in this lawsuit, prior to the preliminary injunction hearing and for purposes of judicial economy.” This is what lawyers call a”fishing expedition”. Mary Kay wants to rummage around in the Touch of Pink business records to get information they can’t get in any other way.
Given that tortious interference is an act that can’t be committed between two parties to a contract, and that the alleged trademark infringement is by the Webers, one wonders exactly why these consultant would be defendants? Against which of the complaints? At worst, it would show that they have violated their contract with Mary Kay and the contract would be terminated. Is this meant to intimidate existing consultants who may be tempted to dump unsalable product to recoup some of their money.
I found Mary Kay’s assertion that certain consultants were buying from Mary Kay at wholesale and selling to Touch of Pink at 50% of wholesale somewhere between far-fetched and ludicrous. Do they truly believe that consultants are willing to accept an immediate 50% loss?
The complaint includes multiple paragraphs claiming various “unauthorized uses” of Mary Kay’s trademarks. While it is true that an consultant’s contract prohibits the consultant from using any Mary Kay trademarks without authorization, no such restrictions apply to anyone else provided they follow normal trademark laws. Using a trademark in advertising to accurately describe what is being sold is one of the instances when it is not necessary to get the permission of the trademark holder. I’m not a lawyer, but the Touch of Pink website misuses Mary Kay’s trademarks the way usedcars.com misuses Ford and BMW trademarks: it doesn’t.
The whine about “they are buying ad words that violate our trademark” has already been decided in favor of companies who buy ad words, not the owner of the trademark. The judge in a recent case between Google and Geico said “as a matter of law it is not trademark infringement to use trademarks as keywords to trigger advertising.” It is amusing to note that Mary Kay briefly bought ad words so that their ads would show up if someone searched for “Pink Truth”, the blog that has Mary Kay’s dirty laundry draped on its balcony.
A company that sues a liquidator for selling obsolete and surplus products and threatens to sue its own sales force must be desperate.
REFERENCES: Case 3:08-cv-00776 filed 05/07/2008 in the U. S. District Court for the Northern District of Texas (Dallas).
Reference:
- Federal District Court of Texas: www.txnd.uscourts.gov/index.html
