Minimum Advertised Price Policy
Labworks Minimum Advertised Price ("MAP") Policy for Catalyst Branded Products
Effective April 18, 2016
This policy applies to all Catalyst branded products sold by Labworks International Design Ltd. (hereinafter “Labworks” or the “Company”). Labworks’ product advertising goals require its direct customers, and the resellers they sell to (together and individually the “Distributors” or "Distributor"), to aggressively promote the Catalyst premium brand image. Labworks recognizes the value of the Distributors that dedicate resources and provide services to support and promote Catalyst branded products (the “Covered Products”) to the marketplace.
Such valuable services include, but are not limited to, educating end-users, customers, media, product reviewers, companies and professionals on the product performance, features and benefits of Catalyst products, maintaining an adequate inventory to ensure timely excellent service to the customer; and having superior service and high quality tangible product presentation and demonstration to promote Catalyst in the market. Catalyst’s image, and the investments that Labworks and its Distributors make in the introduction and marketing of the Covered Products, are not furthered by Internet-only and other types of distributors that lack the capability to provide such services and fail to comply with this Policy.
Labworks implemented and adopted this Minimum Advertised Price Policy (the “Policy”) to support the Distributors in achieving Labworks’ goals of protecting its image and reputation, promoting its brand and providing excellent service. Labworks will sell Covered Products only to those Distributors that:
- Properly represent and promote the quality image and superior goodwill associated with the Covered Products from physical locations and where applicable on the Internet.
- Do not sell or market the Covered Products in any way that disparages or injures Labworks or its products or the products or services of any other company.
- Do not engage in any form of advertising or advertising practices that violate any applicable federal, state or local laws or ordinances, including without limitation “bait and switch” advertising practices.
- Clearly identify the specific model being advertised (e.g., Catalyst® case for iPhone 6 in Black & Space Gray)
- Do not use the Internet (including, but not limited to, business-to-consumer and other websites, auction sites, electronic bulletin boards, browsers, portals, and on-line services and service providers) to advertise (such advertising collectively “Internet Advertising”) the Covered Products to the general public at a “Net Adjusted Price” (defined below) that is less than the list price set forth in the effective Labworks Price List (such prices referred to herein as the “MAP Price”). As used in this Policy, the term “Net Adjusted Price” means the advertised price at which a Covered Product is offered by or on behalf of a Distributor to a customer (potential or actual) after (i) applying all discounts, rebates, allowances, coupons and similar price reductions advertised in connection with the Covered Product; (ii) excluding certain taxes and shipment charges paid by the customer; and (iii) giving effect to the value of free or reduced-price bundles advertised in connection with the Covered Product.
- The requirements set out in Section 5 apply to all publicly accessible levels/pages on a website. This includes any price published on the Internet, including but not limited to prices displayed through links, pop-ups and other methods of publication, even through another website. For example, reseller may not include statements such as “click here for best price” or “click here to see pricing.”
- Do not offer, advertise or provide one or more of the Covered Products on any Internet auction site, including but not limited to ebay.com; webstore.com; ebid.com; OnlineAuction.com; ubid.com; epier.com; OZtion.com; CQOut.com; Webidz.com; yahoo.com; MSN.com; Amazon.com; Auction Addict.com; Auction-Warehouse.com; publicsurplus.com; bid-alot.com; Auctionet.com; Auctions.com; dealdash.com; auctionfire.com; ItsGottaGo.com; or by selling one or more of the Covered Products to any person or entity, which the Distributor knows or should reasonably know might offer or sell the Covered Products on an Internet auction site. The only exception to these Section 7 Internet auction prohibitions applies when the Covered Product is offered using a “buy it now,” or comparable established price, instant purchase at an advertised price at or above MAP Price.
- Comply with requirements set forth under the heading “DO NOT SELL LIST” in this Policy in cases where a Distributor is selling the products to another Distributor.
The requirements set out in Section 5 above also apply to all forms of Distributor advertising including mailings, catalogs, displays at consumer exhibitions and shows, and any and all other forms of advertising media, including, without limitation, the Internet and any other electronic network. Any price information relating to the Company products on an Internet website which can be accessed directly through any hypertext link or by any other method which uses the hypertext transfer protocol (http), including shopping cart pricing, is considered to be advertising for purposes of this policy. Mail in rebates, promotional coupon codes or electronic mail sent in direct response to a customer inquiry shall not be considered advertising.
THIS POLICY ADDRESSES ONLY ISSUES WITH RESPECT TO THE ADVERTISEMENT OF PRICES ON THE INTERNET, BROADCAST, AND IN PRINT. ALTHOUGH LABWORKS SUGGESTS RESALE PRICES, THIS POLICY DOES NOT REGULATE ACTUAL SELLING PRICES, THE RIGHT TO SET ACTUAL SELLING PRICES, OR THE ABILITY TO COMMUNICATE AN ACTUAL SALES PRICE IN A DIFFERENT MANNER, SUCH as telephone, e-mail response, and product purchase confirmation communications.
This Policy supersedes any similar policies that were in effect prior to its effective date. Labworks, at any time, may vary the MAP Price for a Covered Product, or add to, or delete any or all of the Covered Products. This Policy may be modified, extended, suspended, discontinued, or rescinded, in whole or in part, by written notice from Labworks at any time. Any such notice will describe the nature of any such modification, extension, suspension, discontinuation, or rescission of the Policy. Because this Policy is a statement by Labworks concerning the manner in which Labworks chooses to do business, in its sole discretion, if there is any disagreement over the interpretation, application or enforcement of the Policy, Labworks’ interpretation or decision will be final and conclusive.
Labworks will endeavor to provide prior notice of each new MAP Price or such change in the Covered Products. While Labworks will communicate each MAP Price, each Distributor is responsible for making sure that it is aware of the appropriate MAP Price and the Covered Products in each circumstance.
The Policy is a statement of Labworks’ preferences concerning the type of distributor through which Labworks chooses to distribute the Covered Products. It is not the intent or purpose of this Policy to restrict, coerce, force, or reach agreement with a retailer to charge a particular price for any products, including, without limitation, the Covered Products. The Policy is not a contract or an offer to form a contract, agreement or any other form of mutual understanding. Labworks will not engage in any sort of negotiation with a reseller related to the matters addressed by this Policy. Rather, the Policy describes the terms under which Labworks may, in its sole discretion, choose to sell the Covered Products. Labworks does not ask for, has not asked for, and will not accept, any agreement to comply with the Policy. To the extent any person or authority misconstrues this Policy as some sort of “agreement,” it shall be interpreted in accordance with the laws of the State of Delaware.
Violations of this Policy
Labworks intends to act in its sole interest, based on its own discretion, in addressing violations of this Policy. Although each Distributor remains free to establish its own resale prices, Labworks, without assuming any liability, will take one or more of the following actions immediately following verification by Labworks to its satisfaction that such Distributor has violated this Policy by advertising one or more of the Covered Products at a Net Adjusted Price less than the MAP Price:
For the first violation:
Each Distributor that does not act in accord with this Policy shall receive notification of the violation and an explanation of the consequences of continuing violations. The non-compliant Distributor will have twenty four (24) hours from time and date of the notification to bring itself into compliance with this Policy. A Distributor known to be supplying a noncompliant Distributor shall likewise be deemed a non-compliant Distributor.
For the second violation:
If a non-compliant Distributor does not bring itself into compliance with this Policy within twenty four (24) hours from the time of notification of the first violation, Labworks will respond by transmitting a second notification and removing any and all marketing related support, promotional benefits, incentives, discounts or warranty service provided directly to that Distributor. Labworks, at its own discretion, may also increase the wholesale price to that Distributor by an amount deemed reasonable by Labworks. Labworks may also limit the supply of new product to the non-compliant Distributor
For the third violation:
If a non-compliant Distributor does not bring itself into compliance with this Policy within five (5) calendar days from the date of second notification Labworks will respond by no longer selling to that Distributor and terminating any relationship between Labworks and the non-compliant Distributor.
Each violation of this Policy is cumulative. The consequences of the violations are additive and take effect regardless of whether the consequences of the preceding violations are still in effect. If a Distributor continues to violate the Policy (as determined by Labworks) after receiving notice thereof from Labworks, Labworks will treat such violation as a subsequent violation, so that the same act(s) or failure(s) to act may result in multiple violations.
Labworks reserves the exclusive right to sell or not to sell to the entities included on the Company’s Do-Not-Sell List, which will be identified and enforced through use of written or electronic notice from Labworks.
Immediately upon receipt of a notice by a Distributor or posting by Labworks of each Do-Not-Sell List (whichever occurs first), Labworks will treat any sales by a Distributor (including pending orders) to any entity on the Do-Not-Sell List as a violation of this Policy and the consequences of a first and a second Do-Not-Sell List violations shall correspond to the consequences for previously described advertising violations.
Use of Trademarks or Copyrighted Materials by Direct Customers
One reason for the implementation of this Policy is the protection by Labworks of the image of Catalyst products and the positive experience that customers have of the products when proper sales service is provided to customers and the value of Catalyst trademarks and copyrighted materials including but not limited to Catalyst product information and photographs, renderings, documents, advertising copy, articles, website content and layout, images, files, videos, webinars, text and graphics displays, service manuals, training materials, web banners, and other digital assets, (collectively, the “IP”). Advertisements in violation of this Policy (including with prices below the MAP) will likely result in diminishing, diluting or weakening the value of such IP. Accordingly, any Distributor that violates this Policy shall not be authorized to sell or advertise the Covered Products and be restricted from using the IP and any materials derived from such IP.
Notification of restriction shall come via a Cease and Desist letter. In conjunction, Labworks shall let it be known that the selling of Catalyst branded products during the period in which the Distributor is restricted from using the IP shall void any and all Labworks product warranties for such products.
Use of Trademarks or Copyrighted Materials by Customers of Distributors
With respect to any customer of a Distributor that advertises or otherwise promotes Catalyst branded products at a Net Adjusted Price below the MAP, Labworks shall take all steps necessary to prevent that customer’s unauthorized use of any of the IP. Further, Labworks shall let it be known that the selling of Catalyst branded products by any customer of a Distributor in violation of this Policy, during the period of the restriction, shall void any and all Labworks product warranties for such products.
Labworks’ representatives and employees are strictly prohibited from discussing the Policy with any Distributor. Labworks representatives and employees are also strictly prohibited from seeking or accepting any assurances of any Distributor’s compliance with the Policy.
All inquiries regarding the Policy should be directed in writing to:
ATTN: Kathleen M. Walker
3143 Russell Street
San Diego, California 92106
Attn: Minimum Advertised Price Policy Administrator
No representative of Labworks has the authority to speak to or to modify the terms and conditions of this Policy. This Policy may only be modified in writing and the only authorized communication regarding the Policy will be through the above-referenced email address.
Labworks does not and will not discuss the business dealings of any Distributor with any other Distributor. Labworks does not seek and will not accept any complaints or comments about the advertising or pricing policies of any other Distributor. Labworks reserves the right to change or discontinue the Policy at any time, and no Distributor has the right to rely on the continued existence of the Policy or Labworks’ enforcement of the Policy. Labworks reserves the right to choose any Distributor with which it will do business and reserves the right to accept or reject any purchase order from any account at any time. Labworks may, at its discretion, provide a “Frequently Asked Questions” reference (FAQ) to this Policy to Distributors.This Policy shall not apply in any jurisdiction in which such policies have been deemed by any court or governmental authority to be unenforceable.