WotC Authorized Internet Dealer Agreement (what does it mean?)

[cperkins]

I'm wondering how the following will impact upon online store like Amazon.com and BN.com. Seems pretty draconian to me... but I'm not fluent in legal-speak, which is why I posted this here.

Clipped from the WotC website:

Wizards of the Coast is releasing a new policy governing the sales of its products over the internet. The Internet Sales Policy has clear guidelines for online sales of Wizards' products, and requires that retailers register with Wizards by signing an Authorized Internet Dealer Agreement.

Here's the meat of the agreement:

1. At all times You will maintain at least one (1) location primarily selling adventure/hobby games, comics, models/collectibles, or collector cards directly to Consumers.

2. You will purchase Magic Products only from an Authorized Distributor or Wizards directly, and not from other sources (including the secondary and gray markets).

3. You are authorized to sell Magic Products only to Consumers located in the Territory through your Retail Location(s) and through the Authorized Retail Website(s). You may not sell Magic Products to distributors, wholesalers, retailers, or to any person or entity You know or should know intends to resell, transship or otherwise re-distribute the Magic Products.

4. You will not distribute, sell or transfer Magic Products outside of the Territory.

5. You are responsible for all aspects of your sales and fulfillment of Magic Products. You will not take any action which diminishes the value or reputation of the Magic Products or Wizards.

6. Wizards grants You a non-exclusive, non-transferable, non-sublicenseable royalty-free, license to utilize the following materials (“Licensed Materials”), solely in the manner described:
(a) You must include Wizards’ proprietary “Authorized Internet Retailer” service mark as presented in the file Wizmark.jpg that will be made available to You with Your authorization acceptance letter (“Authorization Logo”), on the lower right quadrant of the home page of each Authorized Retail Website, in the same size as provided. You may utilize the Authorization Logo in advertisements and marketing materials for your Retail Location(s) and Authorized Retail Websites, provided, that such Authorized Retailer Logo solely appears in the lower left quadrant of any such advertisement or marketing material; and is sized as provided.
(b) You may utilize Wizards’ proprietary trademarks and copyright materials as presented in the file Wiztm.zip that will be made available to You with Your authorization acceptance letter, on Your Authorized Retail Websites, in Your Retail Location(s), and in advertising and marketing materials for same.

7. In addition to other consideration provided to You under this Agreement, Wizards will include Your Authorized Retail Website(s) in a listing on its website and your Retail Location(s) in its website store locator. Wizards may additionally contact you regarding upcoming promotions, events, and marketing opportunities.

8. Either party may terminate this Agreement for any reason by giving the other party written notice of termination. This Agreement will terminate upon receipt of such notice. Upon termination, You will immediately cease using all Licensed Materials and You will not be authorized to sell Magic Products through the Internet. You acknowledge and agree that Wizards may notify Authorized Distributors of Your termination. Sections 5, 8, 9, 10, and 11 survive the termination of this Agreement.

9. This Agreement is governed by the laws of the state of Washington, without reference to its choice of law rules. You irrevocably and unconditionally consent to the exclusive jurisdiction of the federal or state courts located in King County, Washington for any actions, suits or proceedings arising out of or related to this
Authorized Internet Retailer Agreement 2
Agreement. BOTH PARTIES AGREE THAT, IN ANY LITIGATION, TRIAL BY JURY IS WAIVED. Any legal action against Wizards arising out of this Agreement must be commenced within one year from the date such action could first be brought or be forever barred.

10. WIZARDS MAKES NO REPRESENTATIONS OR WARRANTIES TO YOU IN CONNECTION WITH THIS AGREEMENT, INCLUDING (WITHOUT LIMITATION) IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, WIZARDS WILL NOT BE LIABLE TO YOU FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, AND, WITHOUT LIMITING THE FOREGOING, WIZARDS’ ENTIRE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED ONE HUNDRED UNITED STATES DOLLARS ($100.00).

11. The parties are independent contractors, and this Agreement will not be construed to create a partnership, joint venture or other relationship. Neither party will have, or hold itself out to third parties as having, any authority to bind or enter into any agreement on the other party’s behalf. Any notice or other communication under this Agreement given by a party to the other party will be in writing and will be sent to the intended recipient by first class mail and facsimile or e-mail at the address specified on the Cover Page. You may not assign this Agreement, in whole or in part, without Wizards’ prior written consent. This Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes any previous or contemporaneous oral or written agreements regarding such subject matter, and can only be amended or modified in a writing signed by both parties.

[pedr]

I think this is the result of the Supreme Court decision on anti-competitive behaviour which Ryan Dancy discussed in 2007. Before that, this kind of thing might have been considered an illegal restriction on freedom of competition, but SCOTUS changed the way such restrictions were scrutinised in a case, the name of which I can't find now. There's a thread about Ryan Dancy's comments here: New Ryan Dancy article - RPGnet Forums - but his blog seems to have disappeared.

Whether this agreement would satisfy EU competition law I don't know.

[Festivus]

It makes me wonder more about places like Auggies and the other smaller fish, moreso than Amazon who can likely figure out a way around this through an exemption (hey look, we sell nnnn copies of your product, you REALLY sure you want to cut off that revenue stream?)

[cperkins]

Originally Posted by Festivus

It makes me wonder more about places like Auggies and the other smaller fish, moreso than Amazon who can likely figure out a way around this through an exemption (hey look, we sell nnnn copies of your product, you REALLY sure you want to cut off that revenue stream?)

True. I should have been thinking in terms of online retailers like FRPGames and RPG Shop. Does this "put the screws" to them if they want to sell WotC products?

If so WotC looks like a toxic entity to deal with.

[frankthedm]

Originally Posted by cperkins

True. I should have been thinking in terms of online retailers like FRPGames and RPG Shop. Does this "put the screws" to them if they want to sell WotC products?

If so WotC looks like a toxic entity to deal with.

Just want to mention...

“Consumer” means a person who purchases Magic Products for personal use.

So the document is limited in scope.

[S'mon]

NB If you buy goods from a distrbutor, you don't have a contract with the publisher. If the distributor is willing to supply you, you can retail the product online if you wish.

[pedr]

Originally Posted by S'mon

NB If you buy goods from a distrbutor, you don't have a contract with the publisher. If the distributor is willing to supply you, you can retail the product online if you wish.

Can WotC make it a condition of their contracts with their distributors that the distributors only sell to authorised retailers? Which would mean that the only way that an online retailer would be able to get WotC product would be through the grey market?