Tuesday, October 7, 2014

Beachbody is Coming After Me!!

Dear Rich: I am a stay at home mother of three children who was looking to earn a few extra dollars by reselling on eBay. I recently sold some Beachbody DVD sets on eBay that I acquired from a person on Craigslist. This person explained to me in writing by a text that these disk sets were a surplus and able to be purchased at a discount through an arrangement his girlfriend had with Beachbody. He stated that she runs a weight loss program and that the discount was due to the volume of DVD sets purchased. I purchased these DVDs and began selling them on eBay in June 2014. I was alerted from eBay that Beachbody asked to have my auction closed September 25, 2014 due to the sale of counterfeit products. I stopped selling them the day I received notification. I then received a "Cease and Desist in Counterfeit Sales of Beachbody Branded Products" on September 29th. They were able to verify it was counterfeit because an undercover buyer purchased one from me on eBay. I compared my product with a friends genuine product and was not able to tell that these products were anything but genuine. When I looked on eBay I was able to see 100 other people selling similar products. I only earned between $7 and $10 dollars for each product. I explained this information to their attorney and gave them the person's information (who was still active on Craigslist) to help aid in their investigation. I did not sell any products once I was alerted that they might be counterfeit, but an attorney representing Beachbody is asking for me to pay them every dollar that was collected for these products which is about $14,000. Am I liable to pay them for the sale of products that I didn't know were fakes? They verified that one product was fake, but unless they ask all my buyers to ship them back how can I be certain they are all fake? Can they file a civil lawsuit against me? Yes, the owners of the Beachbody products (Beachbody, LLC, or Product Partners of Santa Monica) can proceed against you with a civil suit for copyright and trademark violations. The attorneys can seek payment of all money you received for the sale (and more if they can prove you knew or should have known you were selling counterfeits).
Innocent infringer? An "innocent" infringer can be pursued in a civil action but the penalties are often reduced based on the facts of the case -- that is, if the case were to go trial, a person in your position would fare better than the person who sold you the DVDs (and most likely knew they were counterfeit). In an ideal world, the attorneys for BeachBody might weigh your behavior -- lack of intent, cessation of sales and cooperation in prosecution -- and modify their demands accordingly. But in today's whack-a-mole world of intellectual property infringement, the business model used by your pursuers is to chase the small dealers, set examples for others, and hopefully recoup revenue to justify their pursuit. In many such cases, the judgment exceeds the person's ability to pay or may be pre-empted by bankruptcy.
Your course of action. If you can come up with the consultation fee for an attorney, we would strongly recommend you meet with one. There may be issues regarding your liability (including whether all the goods were counterfeit) and your cooperation that could merit a reduction in the proposed settlement. What you save with an attorney's intervention may justify the fees. (You may be able to get a reduced fee by dealing with a local legal arts organization.) If you can't hire an attorney, you need to make the strongest case possible that you cannot pay the $14,000 and try to negotiate a reduced penalty, perhaps with some sort of payment plan.