1. Your client, Ms. Tek, writes computer software. In July of 2014, she obtained a U.S. patent on an algorithm used in her software. Ms. Tek then began selling her software under the unregistered mark “TekHed.” She has not registered a copyright in the software or its accompanying manual.
Ms. Tek began by selling the software and manual out of her garage. After encountering unprecedented domestic demand for her software, however, she contracted out the copying and distribution of the software and accompanying manuals to the large, U.S.-based CompCopy Corp. All the software diskettes and manuals she has sold carry the “TekHed” mark, which also appears when a computer runs the software.
In August of 2014, using the services of CompCopy, Ms. Tek began exporting TekHed to retailers in China. In September, 2014, Ms. Tek learned that other Chinese retailers had begun importing TekHed from U.S. retailers, who were re-selling TekHed diskettes that they had purchased from Ms. Tek. These U.S. re-sellers offered TekHed at about 1/2 the price that Ms. Tek charged her Chinese retailers.
Why the big difference in price? Because Ms. Tek had to recoup the costs of preparing a Chinese-language version of the TekHed software manual. The U.S. re-sellers sold only the diskettes — something that Ms. Tek refused to do for fear that Chinese consumers would blame her software for any confusion they suffered in using TekHed.
Needless to say, the Chinese retailers with whom Ms. Tek deals do not feel very happy about their competitors selling TekHed at 1/2 off. Although her contracts with these retailers require that they purchase TekHed only from her, a few of them have started carrying diskettes purchased from the U.S. re-sellers.
Write a brief memo to advise Ms. Tek how to prevent these unauthorized re-sales of her TekHed software, taking care to explain how and why she can (or cannot) do so.