SBJ (commercial) 01 August 2011

Legal provision on repacking and branding of products

We are an engineering company, selling capital goods for a particular application.

There is a demand for certain consumable items, based on which we finalized our own specifications. We have found few branded products that match our specifications These products are sold in bulk for general applications by dealers of these manufacturers along with many other products.

Now we intend to sell these products by repacking them under our own brand. There is no formal agreement/consent from these manufacturers for repacking and branding. Nowhere in our communication to customers, will we be using brand name of these companies. Customers will buy the product because of our association and goodwill with them. It would not be possible for us to get into any agreement with manufacturers as we may buy from multiple manufacturers.

Is there any legal issue in doing so? Can any of these manufacturers take objection or any legal action on us for rebranding the products? Can there be any financial penalties for branding the product in our name?

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3 Replies

AAK (Advocate) 01 August 2011

I suggest stop doing it unless you have written agreement. YES they have every right to take action against you for repacking their products under your brand. They can initiate criminal as well as civil action against you under IPC, copyright act and other provisions of law.

(Guest)

Dear SBJ,

It should not be a problem if you have proper agreements with the other manufacturers in place where they provide you the right to repack and rebrand their products. Please have appropriate representations and indemnities in place in such agreements.

Additionally, please get in touch with an attorney to make sure that your products comply with the Legal Metrology Act which recently came into force.

Regards,

Abhinav Bhalla

B.Tech, LL.M. (King's College London)

Advocate I Registered Patent Agent

abhinav.bhalla@gmail.com

+91-9910406711

Rajiv (Senior Consultant) 10 September 2011

Dear SBJ,

I would like to stake my opinion in your case, presuming that I have concisely understood your situation.

Even if you do not have any written agreement with the manufacturer, I do not see any violation of any provision of law if :

(i) you have bought the product validly i.e. by paying the price along with taxes as applicable.

(ii) you have not used the manufacturer's identity or his trademark, in making a resale by repackaging with your own brand.

(iii) there is no patent issue in the product which restricts you to sell without the permission of the patentee

(iv) there is no restriction or violation of any law which restricts the sale of the product, without a license issued by the Govt.

(v) if you comply with the sales tax / VAT norms as applicable for selling the product.

THE BIG LOGIC ALSO BEING that once the manufacturer sells his products for a consideration, then post its delivery, it has no much of control of its subsequent usage. The governing or restricting factors arise only by way of violation of the statutory provisions. As far as the IP aspect is concerned if you are not causing any tort to them, it is now on them to make a case against you to claim any damages.

However, it would be only wise to have a clear agreement with the manufacturer so that you can save on double taxation (sales / excise).