Knockoff Products and the Potential for Lawsuits

Knockoff products are often illegal even if the company is selling something that only slightly resembles another item on the market. This often leads to litigation in the civil courts. The likelihood, however, that a lawsuit between the legitimate manufacturer and the knockoff manufacturer will be successful generally depends on the specific intellectual property rights over the product and how similar the items are.

Trademark Infringement

When the other company that owns the trademark for product or service sales has an active trademark in place, the knockoff item usually infringes on these IP rights. The company with the trademark has a right to sell the item without other companies selling the same with the trademark symbol or wording. This normally even extends to the ingredients if they are part of a trade secret. If an individual becomes the manufacturer, he or she may run into many legal hurdles and face litigation from the original owner of the IP in a trademark or patent. If a manufacturer or business entity engages in these practices, it is possible
to negotiate a deal with the company or attempt to bypass these legal matters.

What Is a Knockoff Product?

When a product manufacturer has no product of his or her own, the company may take something high in demand and create a new product with cheaper materials and sell it for less than the name brand. The same is possible from an individual proceeding through the same process. However, many companies face litigation if the item is too close, resembles or has the same ingredients as the original producer of the product. The knockoff generally must have a distinct difference or different properties. If the original company has no intellectual property rights in place for the ingredients of the item, the knockoff manufacturer may have a possible path for revenue.

Selling Knockoff Products

When the seller is an individual, he or she may sell many different items through reselling if there are no specific laws that counter the enterprise. This is possible in person or through online access. Knockoff products that copy or emulate the parent company items could lead to a lawsuit if the company does not provide permission, acquire revenue from sales through a percentage of the sale or allow the company to continue sales that may increase the deals with the original product as well. In most legal circumstances, the seller must acquire a license or direct permission to sell the product.

One way of bypassing the legal complications that may arise with selling a knockoff product is to outsource the selling and manufacture to another country and manufacturing plant outside the United States. The parent company may create a more generic item, create it in another location and then sell it within the country as a generic manufactured product that appears to come from another company. Then, there are no issues with intellectual property, no violations for using a trademark symbol or the words of the name brand and additional sales to the same business.

The Lawsuit

When the individual or company sells knockoffs, it is possible that a lawsuit will arise at any point when permission to sell something similar or that is a knockoff is not received from the owner of the trademark or patent. The intellectual property rights to sale extend to products with the specific ingredients, symbols or branded items that the parent company sells. If the owner of the business discovers the infringement of knockoff products, he or she may issue a cease and desist order. This could lead to a lawsuit. Then, the owner of the IP could receive damages owed for the infringement or a different remedy.

Other complications may arise when attempting to sue the company or person. These issues often stem from another country selling in the United States. The pills, food, merchandise or other consumables may have no connection to the original company through IP protections and only contain similar ingredients based on what the initial product states. However, if the similarities end there, the judge may not provide a successful outcome in his or her judgment of the matter.

IP Infringement with Knockoff Products

The person selling knockoff products may need to hire a lawyer to negotiate a deal with the parent company or to help prevent a lawsuit when selling the item. A lawyer is usually essential to help prevent a lawsuit and incur violations of the IP rights the owner has.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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