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A lawyer explains why importing a PS3 into the UK is illegal, while Sony goes after a UK seller

UK publication MCV received legal advice from a top law firm informing them that any profits made from importing PlayStation 3s into the UK, where the machine won’t be officially available until March, could prove insignificant compared to the huge legal costs if Sony were to take matters to court.

According to Mitra Pahlabod of Davenport Lyons, Sony could play the trademark infringement card on those who import a PS3 into the UK. Sony is already investigating a company named Mastercash, who is advertising that it will sell PS3s before Christmas.

“They run the real risk of defending lengthy and costly trademark infringement proceedings,” Pahlabod stated. “It is up to the grey importer to prove that consent to resell the goods in Europe has been given by the trademark owner.”

“Brand owners should be aware of their rights with regard to grey importing, monitor closely the sale of their goods and where possible ensure that their trademark registrations are kept fully up to date,” she said.

In late October, Sony banned European imports of its PSP hardware from Hong Kong-based retailer Lik-Sang, which caused the shop to close its doors. Sony denied that it had anything to do with Lik-Sang’s closure, while admitting that its directors have illegally imported hardware previously from the retailer.

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By PurdueRy on 12/4/2006 2:50:31 PM , Rating: 5
So wait...I am confused...does Sony actually want to SELL the PS3?

RE: hmmmm....
By EarthsDM on 12/4/2006 2:58:42 PM , Rating: 3
What's to be confused about? This is Sony.

RE: hmmmm....
By MAIA on 12/4/2006 3:17:00 PM , Rating: 2
Talking about consumer care ... Yeah, sony has some great hardware, but their comercial practices seem like economicist vendetas against consumers.

"Damn you Europe, you'll get my hardware when i want, the way i want"

RE: hmmmm....
By Weavz99 on 12/4/2006 3:57:44 PM , Rating: 2
Why is it that consumer's are so quick to claim that their "rights" are somehow being violated when a company wishes to follow a plan. I mean, do laws have no bearing on society anymore? Obviously there's legal ground for Sony to stand on here...and don't argue that I'm a "fanboy" because I stick up for Sony, cause if that's your only basis for disagreeing with me, then it's only a personal attack on me, because you can't counter with anything that has any value to my point.

RE: hmmmm....
By Suomynona on 12/4/2006 4:43:08 PM , Rating: 3
Yes, they have the law on their side, but the law is ludicrous. Why should you be able to control products that you have already sold? Your ownership of something should cease when you sell it, period.

RE: hmmmm....
By patentman on 12/4/2006 7:46:05 PM , Rating: 2
This is classic gray market goods trademark law at work. Basically its where the manufacturer of a product marked with a trademark authorizes distribution of the product in one country, i.e. country "A" and that product makes its way into another country, country "B" without the trademark owners permission. In most countries that have modern trademark laws, this is illegal, particularly if the goods sold for distribution in country "A" are not of the same quality as the goods that are or will be sold in country "B." This is because trademark laws are concerned with protecting consumers by preventing consumer confusion as to the source of goods. This is the law in the U.S. as well, and for good reason. Proiducts sold in different countries under the same mark may be of very different quality. I.e., there is at least one U.S. case of gray market good infringement where the defendant imported soap from England into the U.S. without the trademark owners permission. Although the trademark was the same in both the U.S. and the foreign country, the soap in the U.S. was formulated to work well with soft water, whereas in the other country it was formulated to work best with hard water. Given that these products are marketed under the same mark and exhibited different performance, the court found that consumer confusion as to source was likely to result, and barred importation of the foreign goods.

Similarly, it may be that the PS3 has to be manufactured to certain standards for the U.K. that are different for other countries, such as those in Europe, the U.S., and Japan. Thus, it is easy to see why Sony would be pursuing this course of action.

RE: hmmmm....
By ChoadNamath on 12/4/2006 8:31:10 PM , Rating: 2
This is obviously not the case here, though. Just as with the PSP, it's almost certain that the PS3 sold in different countries is identical other than the power supplies. They're taking a law that is meant to protect consumers and using it to hurt consumers.

RE: hmmmm....
By frobizzle on 12/5/2006 4:17:38 PM , Rating: 2
If Sony is within their right to control distribution (and I do not think that they are,) what about all the people that purchased one or more PS3s for the sole purpose of listing them on EBay to make a huge profit? If that is the case, then they should be prosecuting every one of those sellers.
Sounds to me like they need to get advice from their RIAA buddies on this!

RE: hmmmm....
By Jellodyne on 12/4/2006 4:45:54 PM , Rating: 2
Why are companies like Sony so quick to claim their "rights" are being somehow violated when an importer wishes to follow a plan? Sony is telling these importers what they can and can't do with consoles that they purchased from Sony. Sony is using 'trademark' BS and legal threats to assert rights that they do not have to try to prevent importers from reselling their legally aquired goods to people who want them. They are not a victim, they are the bully.

RE: hmmmm....
By Kamasutra on 12/4/2006 3:18:37 PM , Rating: 2
They'll be releasing it there in March. For now, they'll sell out regardless of allowing imports. They're taking it this far because they know they can get away with it, but why they care I can't say for sure. Perhaps because allowing imports would reduce supply in the places where the consoles are actually released, or maybe to enforce the region-locking of Blu-ray movies.

RE: hmmmm....
By BladeVenom on 12/4/2006 3:55:12 PM , Rating: 2
No PS3 for you!

Total BS
By exdeath on 12/4/2006 4:53:36 PM , Rating: 5
Once a product is in the owners hands, they can't dictate what is done with it, it's private business at that point.

If I have a set of silverware and someone in Africa wants to pay me for the cost of the silverware and pay the shipping cost because they don't have that silverware over there, and throw in extra for my trouble, who is going to stop that?

If I want to sell used clothes on Ebay and someone in Canada wants them who has a right to say I can't do that?

If I want to buy and import a used car from Australia into the USA that is 30 years old (Falcon XB GT), nobody has a right to say that I cannot do that, not even the government. (I would still be responsible for making sure it meets US DOT safety and emissions requirements to legally register and operate it however).

Think about what is going on here. This is a company interfering with individual’s private lives and property AFTER they have paid the agreed retail price to own the product.

More specifically it’s Sony, the company who wants the PS4 to be disc-less so you can’t sell your used games, rent games, or even loan them to your buddy for the weekend!!!!!

Does anyone else see anything wrong with this? We pay $59 a game and $599 a console to PURCHASE and OWN those products, not pretend to own them or borrow them under a strict LEASE. Once you pay the price and walk out the store it’s yours to do as you please with, even if that includes selling it to someone in Guam; counterfeiting and piracy exempt of course.

RE: Total BS
By exdeath on 12/4/2006 5:04:18 PM , Rating: 2
Just wanted to add:

Just so there isn't any misunderstanding, I didn't say I feel we own the IP content on the disc, so we are not entitled to modify, hack, pirate, relabel, etc. outside of our own personal use. I'll hack and crack whatever I want that I have purchased inside my house for whatever reason I feel like without justification, but it wouldn't be right to distribute it, much less market it as my own product or as my improvement to someone elses trademark.

However the plastic disc and cardboard case (or ceramic ROM chip) are OURS when we walk out of the store. If we want to give it away free to the neighbors kid down the street or sell it to a rich guy in Zimbabwe for $10,000 unmodified and as-is, it's nobody elses #$*%(#@()# business.

RE: Total BS
By exdeath on 12/4/2006 5:12:03 PM , Rating: 2
So sick of companies that both want to sell you products but still retain all control over them under the guise of 'rights' when half the things they sue for have no negative impacts to their business. How long before we have EULAs or obscure slips of paper hidden in every box that basically says "Yeah you paid $1000 for this but its not really yours, and by using the product you agree" in everything we buy or use?

Does the idea of 'can't have your cake and eat it too' not apply to big companies like Sony?

So what if they decided oh, no more PS2 on the market we changed our mind because it competes with PS3, would all of us be under threat of law to return them? Would we be forbidden to sell our used PS2s and library of games to willing abled private buyers because Sony says so and wants them to buy a new PS3 instead?

Oh do fvck off. And my comments apply to everyone, not just Sony.

RE: Total BS
By patentman on 12/4/2006 7:50:13 PM , Rating: 2
Your are talking about the first sale doctrine. Generally what you say is true when it comes down to individual consumers, but Sony is not aiming their lawsuit at an individual consumer at this point, they are suing a company who is specifically set up to import PS3's into the U.K. without their permission. Moreover, the first sale doctrine generally does not apply in Gray Market goods cases. IN any respect, if British Trademark law is set like U.S. Trademark law, Sony's remedy will be limited to having British customs officials seize the goods or bar their importation into the country. Thus, they are not barring the company from selling PS3's, they are barring their importation into a country.

Seems fair to me
By MonkeyPaw on 12/4/2006 6:19:24 PM , Rating: 2
I think Sony has a very legitimate complaint here, and their efforts are actually helping more people than they are hurting. Sony has a plan to launch PS3 in Europe, and they want to ensure that there is a fixed price on the units that sold by all retailers. In this case, Sony appears to be gunning for businesses standing to make a profit. If a manufacturer loses control of its retailers, then the manufacturer loses control of the market and, more importantly, the ability to fix the price for the consumer. Don't confuse a $1000 PS3 sold on eBay with a $1000 PS3 sold at a store. Imagine if every Best Buy in the U.S. had charged that much when PS3 launched? Not only that, how bad would it be to have a major retailer order 10,000 PS3s, only to ship them to Europe with a $500 markup? That's why there are laws for this. If Sony does not drop the hammer now, we could see this getting out of hand for every international product roll-out. The first rule in controlling a potential riot is to grab a guy and punish him harshly--everyone else gets the message at his expense. I'm sure Sony isn't the only business to need to do this.

RE: Seems fair to me
By PrinceGaz on 12/4/2006 6:57:18 PM , Rating: 2
They most certainly do not have a legitimate complaint.

If they wanted to avoid the importing of consoles by third-parties into Europe at a higher price, they should have launched it worldwide on the same date even though that would mean fewer available in the US and Japan.

So instead of shipping 500K consoles divided between 100K Japan and 400K US, they should have been split more like 50K Japan, 200K US, 200K Europe, 50K other countries. That way everyone desperate enough to queue for long enough to get the console can get it through authorised retailers, and there will be no point importing a console because it would probably be more expensive to do so after shipping and taxes were added.

It's a pretty obvious solution but I guess Sony didn't do it because they had a lot less than 500K consoles ready for the Japan/US launch, and they didn't want a worldwide launch where very few people in any country actually got to own it on launch day (and where most of those that were bought were by people intending to sell it on eBay for many times its value).

Sony and other global corporations only make as much money as they do because of the market economy, so they must be prepared to accept that individuals or companies will move in to satisfy demand at a higher price if they are not themselves prepared to supply it.

RE: Seems fair to me
By MonkeyPaw on 12/4/2006 7:49:00 PM , Rating: 2
Sorry, but it's Sony's choice to launch as they see fit. If they chose a method that fails, it's their choice because it's their product. The blurb at Dailytech states that Sony is "investigating" a business that appears to be ready to break the rules. It also looks like there is a warning to the consumer, but I doubt it's nearly as big a threat as what Sony wants to make to retailers. It's funny to me how everyone complains about PS3s high price, then they complain about Sony's attempt to fix the price in each country (a price that costs Sony money, mind you), claiming it hurts the consumer! People are basically saying that it's okay for the middle-man to get greedy and gouge, but not Sony. It's not like Sony is saying that you can't sell PS3 on eBay for a profit. While I sympathize with Europeans about their lack of PS3s, consider that most of America and Japan is in the same boat, too.

On a side note, I think it's tragic how people will rate down the posts of others because it's not what they want to hear. My comments are perfectly inline with the topic at hand, but have been rated down because they are contrary to the anti-Sony machine. I have no problem criticizing Sony when they screw up (and have done so in the past), but in this case, I'm simply trying to explain why they might want to enforce their product rollout schedule. People complain about censorship so much these days, yet when they have the power to censor themselves, it's altogether different. I could care less about my own rating, but to suppress the other side of the argument is absurd. Dailytech gives people the power to take out all the "First Post" crap for the hope of better content, and this is what people do with it. Nice work, guys.

RE: Seems fair to me
By Xavian on 12/4/2006 9:57:49 PM , Rating: 2
Its not Sony's place to choose though. Supply and Demand my friend, Supply and Demand.

Sony cant possibly think they can go against the free open worldwide market that we have today? because its that same market which made them a massive conglomerate. The point is, don't mess with with the market for your product, otherwise you run to risk of losing the market you are trying to sell to.

RE: Seems fair to me
By patentman on 12/4/2006 7:52:57 PM , Rating: 2
For the record, Sony did not "control" (or at least they better not have controlled) the retail price of their PS3's. If so, that is a per se violation of the U.S. Antitrust laws.

By shabodah on 12/4/2006 3:56:52 PM , Rating: 3
I used to be the biggest "sony fan" out there. After all these disappointments, I've really lost all care in what they are doing. The PS2 launch was just the start of a lot of bad things. They should have fixed all the negative aspects of that launch before they even launched the PS3. Personally, I think I should be able to get a UMD drive for my PC, and maybe if they sold one, and/or a desktop UMD player, maybe they could have supported the disc format and instead of big disks floating around, I could have smaller ones. Instead of all the positive they could have produced in the last 6 years, I think Sony should be held accountable for EVERYTHING that occured during the PS3 launch. Apparently they really don't want to sell their product. That's fine, I'm not buying it, regardless.

RE: Sony
By shabodah on 12/5/2006 4:57:56 PM , Rating: 2
Funny all my anti-MS posts get negative ratings in minutes, but the anti-Sony one gets a postive rating. Coincidence? I think not.

By VooDooAddict on 12/4/2006 5:42:11 PM , Rating: 1
What's Sony worried about? The rate of PS3 sales is already slowing.

There are reports from this weekend that Wii's sold out again at places like Toys 'R Us. Some also had a few PS3's (around 5 units) available. Wii's sold out immediately. And at many stores not a single PS3 was purchased until later that day. While I'd bet they are all gone by now it's clear they are not generating anywhere near the same frenzy. I think people are fed up with this stuff.

I used to be a big fan of Sony Hardware. I'd pay a bit more to get the perceived quality and Sony to Sony compatibility. Not so anymore.

Sony should think twice before killing the secondary market for their goods. In the past they did well to profit of the secondary market forces. Re-releasing the PS1 and PS2 with cheaper hardware to compete with used sales. Re-releasing best selling games with new packaging and lower price tags. These were good ways to capitalize on secondary market forces. Killing the secondary market won't profit anyone. Things like this are reasons to sell stock in a company.

By sxr7171 on 12/4/2006 10:55:08 PM , Rating: 2
I know. The 20GB version can easily be had on Ebay for $600-650 shipped in some cases. Terrible compared to the premiums the 360 had and the Wii currently has. As a percentage of cost it is even worse.

You can make about $100 on a $500 PS3 purchase after taxes and shipping and Ebay fees while you can make $150+ after all those fees on a $250 Wii purchase.

That poor level of demand is absolutely shocking. Even the PS2 sold for a good 100-150% premium until Christmas and even after.

By Loc13 on 12/5/2006 11:44:53 AM , Rating: 2
I personally have a 20GB ps3 and it is a high quality product. The lack of good launch titles, supply and the high price tag hurt the launch. I go to PS3 forums in various game sites, and there are LOTS of people who are looking for a PS3 or want one. There are daily Best Buy or Circuit City shipment threads in all the forums to help those people find a PS3. There's no doubt that a lot of people put them up on eBay for a profit, but there are still a decent amount of people who truely want a PS3.

Many owners of PS3 give it high praise because it runs nearly silent, and it gets warm at the most after long game play sessions. Some review sites rate the PS3 blu-ray playback quality superior than the other existing blu-ray players that costs hundreds more. It is to me clearly worth the $500 spent on it. Online play for Ridge Racer 7 and Resistance: Fall of Man is completely lag free.

And of course there are issues with the PS3. The lack of upscaler, no unified online community, not very user-friendly and intuitive interface, lack of online store contents, etc. Most of these issues can be addressed with future firmware updates, at least I hope. But I think once the good games come out, revision 2 come out, and maybe prices drop a little, people will start picking it up.

As to this importing issue, i agree with MonkeyPaw above.

Small scale
By Nik00117 on 12/4/2006 3:25:26 PM , Rating: 2
There was a story of a wealthly man in UK wanting his son to have a PS3, lets just say he contacted and conviced a man with an american passport to smuggle a PS3 into the UK and sell to him for big $$$.

As I once saw quoted

"You can pay a man enough to walk to hell and back"

Frankly if some rich guy in the UK wants to spend 20k on a PS3 because he needs it illegally imported into the UK then fine thats his business.

Why can't they just refuse to go to court? Or pay court fees, OJ does it. If sony contacted me and demand I am to go to court with them i'd represent my self and just say "no comment" to everything I was asked. ANd then when they slap me with a mutli-million dollar fine I simply won't pay it and sony will waste more money trying to get me to pay then its worth.

RE: Small scale
By patentman on 12/4/2006 7:58:22 PM , Rating: 2
And then you will go to jail for contempt of court and and a big buiser named Lonny will make you his bunkmate for the next 5 least you will be warm at night.

By kristof007 on 12/4/2006 3:37:14 PM , Rating: 2
This sentence is at the end of the first paragraph and at front of the last paragraph:

Sony is already investigating a company named Mastercash, who is advertising that it will sell PS3s before Christmas.

Sony + EA
By Jeff7181 on 12/4/2006 5:33:52 PM , Rating: 2
Woot for monopolistic and fascist companies!

"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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