Scott Pilutik

I am an attorney and consultant living and working in Manhattan, focusing primarily on church/state constitutional law. I'm a recognized expert on the Church of Scientology organization. I also have strong interests in intellectual property law where it intersects with emerging media, and free speech.

I support the efforts of the Americans United for Separation of Church and State, the Freedom From Religion Foundation, the National Lawyers Guild, the ACLU, Creative Commons, and the Electronic Frontier Foundation. I am a member of the New York County Lawyers Association and the New York State Bar Association. I also enjoy (watching) hockey and (doing) photograhy.

Online I can be found on Facebook, Twitter. My resume can be viewed here. I can be reached by phone at 212.645.6241 or by e-mail at pilutik[at]gmail.com.

Scientology Abuses eBay's VeRO Program to Practice Religious, Price Discrimination

By the time Bill (not his real name) left the Church of Scientology a few years ago, he had amassed quite a collection of Scientology material—mostly books, tapes, e-meters. But ex-members of Scientology (especially staff members) find themselves in a difficult spot in this regard when they leave Scientology: their books, tapes, and e-meters are only valued by Scientologists, who, quite inconveniently, are strongly discouraged (read: disallowed) from communicating with ex-members—as any ex-Scientologist will tell you.

Not surprisingly, he turned to eBay, where a Scientologist buyer can remain blissfully unaware that his seller is a declared suppressive person. But every time he attempts to sell his e-meter on eBay, the listing is removed within hours by the Church of Scientology, which claims that the listing violates their intellectual property rights. See screenshots of the auctions while they were up here [update; personal info redacted] and here, and respective “Invalid Item” eBay pages here and here. And it’s not just Bill—I’ve watched numerous e-meter listings from other sellers removed before they even receive a bid.

If you’re uninitiated to eBay, you’d probably think that for each of these removals, the Church of Scientology informs eBay of the violation of its rights, eBay considers the merits of their argument, and then only then does eBay yank the listing. But that’s not what happens at all. Instead, eBay effectively deputizes Scientology, which logs into eBay and removes the listings itself.

The mechanism that permits the Church of Scientology (and others) such broad access and discretion is called the Verified Rights Owner (“VeRO“) Program. Membership in VeRO is obtained simply by submitting a form to eBay explaining that you are an Intellectual Property rights holder.

It should come as little surprise that VeRO members routinely overreach, as the cost of challenging a listing removal is almost always prohibitive. (See my paper on this subject here, and see the brave husband and wife exception to this rule here.) The VeRO Program makes a great deal of sense for some types of listings—counterfeit Rolexes and Gucci handbags appear on eBay with such frequent regularity that those companies would be hard pressed to handle these trademark violations any other way.

But Bill’s e-meters (and the e-meters other ex-Scientologists have attempted to sell on eBay) are not counterfeits and do not violate the Church of Scientology’s trademarks, patents, or copyrights. Some sellers have even included the serial number found at the bottom of each e-meter in their listings in order to authenticate them. There is no source confusion, as every seller whose e-meters have been removed have made it clear that they took the photo of the e-meter, and that they are not affiliated with the Church of Scientology. Patent law doesn’t prevent the resale of patented items, and patent law barely covers e-meters anyway, the first having run out years ago and the 2000 patent only covering “improvements” on the “Quantum” e-meter. And copyright law barely applies here—all of the listings I’ve observed have been originally written, for one thing, and regardless, Scientology (from what I can gather) has only issued VeRO complaints under patent and trademark bases.

In short, the Church of Scientology is at least constructively aware that the e-meters being listed on eBay are authentic, and so have no basis under trademark—or under any other intellectual property basis, for removing these listings. What’s actually going on here is that Scientology is abusing eBay’s VeRO program, knowingly alleging Intellectual Property violations that clearly don’t exist, so that they can limit the secondary market for e-Meters, controlling both the price and who can get them.

It shouldn’t shock anyone that Scientology is trying to limit (if not eliminate) the secondary marketplace for e-meters, since they have a strong motivation to control the price on e-meters from their own production line (they update to a newer more expensive model every few years), and a strong motivation to control to whom they’re sold. The economic motivation should be clear enough—Scientology doesn’t want what few members it has being exposed to a secondary market because it would undermine their monopoly on a prohibitively expensive and infrequently purchased item.

Scientology’s other motivation for wanting to be the only game in town is intrinsically cultish—it has long perpetuated the idea that e-meters should never be used outside of the auspices of the Church. In other words, not only should Scientology be the sole sale source, but it should also be able to dictate every element of the post-sale environment—who can use it, how it can be used, etc. If e-meters are being sold on eBay, it doesn’t know the purchaser and can’t therefore control how and by whom it’s used.

Indeed, the warning label at the bottom of each e-meter demonstrates the kind of control to which I’m referring. The need for a label came about after the FDA took offense at Scientology’s claim that the e-meter retained medical benefits; the court eventually agreed with the FDA and mandated a disclaimer, which has morphed from the original into the following:

By itself, this meter does nothing. It is solely for the guide of Ministers of the Church in Confessionals and pastoral counseling. The Electrometer is not medically or scientifically capable of improving the health or bodily function of anyone and is for religious use by students and Ministers of the Church of Scientology only. (emphasis added)

But if the Church of Scientology has no real legal basis by which to remove eBay listings of e-meters, why would it assert, under penalty of perjury (as it must do to use eBay’s VeRO program), that it has “good faith belief” that the listing they are removing constitutes an infringement? It’s a roll of the dice no doubt, but the odds are in its favor that Bill—like almost anyone else similarly situated—will not sue to have the listing restored, litigation being profoundly cost prohibitive, especially against the Scientology litigation machine, even where the item removed could have sold for up to $5,000.

But Bill and the other similarly afflicted sellers are not without a legal basis for a complaint. It’s possible to argue that Scientology is engaging in price fixing, tortious interference with a contract, misrepresentation, perjury, unfair competition, discriminatory business practices, and religious discrimination, to name a few off the top of my head. Scientology’s intellectual property rights in its e-meter stop well short of being able to prevent a secondary market from existing, but eBay’s VeRO program permits them to essentially do just that.

This is not a new development—it’s been going on for nearly 8 years, as this Slashdot story shows. But it’s high time eBay did something about it.