The one great thing (to lawyers) regarding the burgeoning craft and hobby industry is…
The more players you have in the field, the more likely it is that the players will start to step on other people’s toes.
You can see this, in fact, in the trademarks field: bitchin’ about certain marks notwithstanding, you can only guess at the number of businesses that have started up with a name containing a variant of “ewe” or “knit” or “yarn” in a punny way. Even off-spellings: right now, there’s an opposition proceeding before the USPTO concerning KNIT STIX — the company with these applied for a trademark registration, and now the application is being opposed by a company I’ve never heard of that says it started using “Knit Stix” itself not long before the application was filed for its own rosewood knitting needles. And there may be a so-called “Stitch & Bitch Cafe”, but there’s also a “Knit Cafe” (registered US trademark, too) and a “Stitch Cafe” out there, too. Oh, and Artfibers is seeking to register YARNTASTING, a term I’ve seen used by other shops as well (I couldn’t place them in order of time definitively, but personally my earliest recollection is Artfiber’s).
There’s a rational for defending a trademark: this is how your customers know you, and you don’t want your customers to confuse you with someone else; not only may that someone else be a competitor, but it might be a competitor with bad products or service. And you certainly don’t want to be associated with that. Whether your trademark rights are deserved, or whether there is confusion, of course, is another question.
But there’s more than just who-called-what-first disputes in the business. Some yarn distributors or manufacturers don’t want to sell with retailers that routinely discount yarns: they don’t want their yarns being sold at a cut price. I don’t know if they still do it, but I recall that distributors would double-check to see if new shops were actually bona fide bricks-and-mortar or only had an online presence. And have you ever noticed only 10% variance on prices of certain brands of yarn? Is that the practical effect of competition among retailers, or some other reason?
You can probably figure out the answer yourself. Here’s one example: one shopowner blogged that she was told by Tilli Tomas to start using “keystone” pricing for their luxury yarns because competing retailers complained about her discount pricing. This shopowner announced then a sale, and then the next week, she was advised by the company that they would no longer provide yarn to that shop.
This isn’t an unusual practice. Some distributors don’t want their products offered with eBay, because it is perceived to lend the product a… shall we say, downmarket cachet; I remember hearing once that Colinette wanted to get their products off eBay, but now I can’t find the reference. Others specifically refuse to continue supplying a retailer that routinely undercuts other retailers of the same yarn line. Of course, this lead to a whiff of something that smells like price fixing (also called price maintenance, or vertical price maintenance) — and in the case of Tilli Tomas, an outright accusation on the net.
An “anonymous” commenter to the shopowner’s blog suggested that the reason for enforcing pricing was to ensure supply through competing retailers — the logic goes that if one discounter undercuts all other retailers, then the other retailers will not be able to stock the yarn and the only source of the yarn will be the discount retailer; this would negatively impact the ability of the distributor to expand the product line. That might make sense, assuming that a single retailer could not reach the entire market; but that likely made more sense back in the day when yarn wasn’t available to order over the Internet.
For Canadians, here’s the web version of a pamplet about price fixing published by the Competition Bureau (this website also has links to the Canadian Competition Act, and a more academic dissertation on various competition issues including price fixing). For those of you in the 11th province (or 4th territory, I’m not picky) a very bare-bones and brief explanation of price fixing. Either my intuitive searching skills fail me, or the Federal Trade Commission’s website isn’t a very good source for this kind of information (surprising).
Found via LJ.
Edited to add: By the way, there’s a feature I really like about Sarah’s Yarns, the shop in question. She tries to show you the drape of swatches knit from the yarns she stocks — for example, take a look at the left-hand column on this page.
And edited again to add: From the US DOJ, there’s an antitrust primer for law enforcement personnel.