What rights does a manufacturer have regarding where its product is sold?

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What rights does a manufacturer have regarding where its product is sold?

We have a small retail store and buy our products from local companies, as well as overseas. I have been contacted by a couple companies who claim that we can’t sell their product because we are too close to another store already selling it. We did not buy directly from this manufacturer but rather from someone they had sold to (I am assuming). Might be a couple layers there as I don’t really know. Can they prevent us from selling these legally purchased items? Does it matter if they are not patented etc. What penalties are we facing etc.?

Asked on June 24, 2014 under Business Law, California

Answers:

Shawn Jackson / The Jackson Law Firm, P.C.

Answered 7 years ago | Contributor

Well, I would imagine that the manufacturer has "territories/regions" that they have written agreements with its "buyers". Since you mention that you did not purchase directly from the manufacturer...but from "someone else", I would think that along that chain of transfers, someone may be in violation of their agreement with the manufacturer...but without seeing the written agreements, it will be difficult to let you know of your specific rights and/or liabilities in this situation.

Shawn Jackson California Business Development Attorney


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