Before you Buy from ANYONE
First my usual required disclaimer.
I am not a lawyer, I am not connected with the UCC, and that my statements and/or opinions are correct
to the best of my knowledge.
2005
Be sure to read caveat (below) added August 25, 2005
Since I posted this section about buying subsets of the U.P.C. numbers, I have been swamped with questions. Before I go on, I must reiterate the fact that I am not a lawyer, I am not connected with the UCC, and that my statements are correct to the best of my knowledge. If I steer someone in the wrong direction please tell me and accept my apologies.
Many times the dealer of U.P.C. numbers will advertise that he buys numbers in bulk, or that he has figured out a way to sub divide them, or that his numbers are sanctioned by the UCC, or registered with the UCC, which is hype that he thinks will legitimize his offering. These are all bogus claims. The long and the short of it is that the UCC sells the rights to use a manufacturer prefix for U.P.C. numbers to their clients. They do not sell in bulk nor do they register subsets. Only the original manufacturers prefix is registered with the UCC. The symbol design itself and the bar coding method is in the public domain and there are no restrictions on its use.
The U.P.C. was originally conceived by and for the Grocery & Food industry. At first the council would not issue numbers to other than people in those industries. As the stores began carrying more varied merchandise and outlets including the US Army PX insisted on all merchandise having a U.P.C. symbol, the council loosened its policy a bit, but a key part remained. Only manufactures and retailers could buy rights to a prefix number. When the rights to a number were sold, the buyer was expected to abide by the rules. The buyer was to return the number to the council if the company ceased to do business or even changed its name. The buyer was not to subdivide the number. A retail outlet would not reject a shipment of goods simply because the symbol was unreadable. The buyer was expected to abide by these and many other rules.
The rules were NOT in form of a contract but the companies followed them without question. After all these were big companies such as Wegmans, Lilly, Proctor & Gamble and the pioneers in the establishment of the code. It was not until August 2002, after the UCC decided to add a renewal fee, that the contract was codified spelling out the rules and making them more specific. Only AFTER August 2002, was a purchaser required to sign or agree to a contract when purchasing a prefix. Teresa Truscelli, Director, Customer Service, UCC gave me this date in April 2004 in response to an e-mail I sent her regarding the legitimacy of subdividing U.P.C. numbers. Presently the contract includes the phrase, "The license agreement for our membership prohibits any use of the UCC Company Prefix other than for the use of the owner company, including but not limited to selling, sharing, leasing, sub-dividing, or re-selling the UCC Company Prefix.". Although certificates issued prior to that date may contain the same or similar wording on the reverse side, nothing on the part of the purchaser was agreed to. In light of the law suit regarding annual fees that the UCC lost (see U.P.C. Renewal Fees -- Lawsuits ), the UCC apparently believes that these one sided compacts are unenforceable.
Often I am asked if a person that purchases a number from a subset seller will have legal problems in the future. Again, I am not a lawyer, but if the number was originally assigned to the seller by the UCC before August 2002, the answer is no problem. Even if the owner of the rights to the manufacture prefix does not pay the annual renewal fee, there should not be a problem. Law suits have been successfully brought against the UCC with regard to these yearly fees. Of course in this era when a person can successfully sue McDonalds for not telling a customer their hot coffee was hot and that person was burned when he spilled hot coffee in his lap while driving, any law suit may be filed. Most law suits are filed against those companies of persons with deep pockets so I would not expect anyone to receive anything more than a threatening letter from the UCC which would have no backing of law. It is wise to be cautious but I believe the UCC is close to being guilty of restraint of trade, gouging, and making idle threats, very similar to Lemelson and the way he extorted money. I do have one warning. In the past the UCC has done nothing about “pirated” numbers, i.e. the unauthorized use of numbers. If the UCC became aware that an issued number was being pirated their policy is to simply notify the legitimate prefix owner and let him take whatever action he deemed appropriate. The UCC treated the rights to the number as an asset of the company that purchased the number. Therefore if someone sold subsets of a pirated prefix that legitimately belongs to a manufacturer, that manufacture could probably sue anyone using a subset of the pirated number for damages. Even in this case, a request to stop using the number is the most one would expect. The purchaser of a subset would be wise to try to determine if the prefix being sold is legitimate. Unfortunately the UCC, at this time, will not provide a list of the owners of prefixes which makes verifying the legitimacy a very difficult task.
The ideal situation for a person purchasing the rights to a subdivided number would be for him to obtain from the seller:
1: A copy of the original authorization certificate issued by the UCC showing the date of issue. Note that many of
the early certificates were computer genrated and not signed.
2: A certificate from the subdividing dealer stating what numbers the dealer is authorizing the purchaser to use
and that these numbers will not be assigned to anyone else.
3: Agreement that the dealer will make every effort to maintain his prefix number in perpetuity.
4: Agreement that the dealer will make every effort to also maintain and keep up to date a list of all subset buyer's
names and addresses along with a complete list of the numbers the buyers were sold in perpetuity.
5: An agreement that any correspondence the owner of the original prefix receives pertaining to a subdivided
number will be forwarded in a timely manner to the purchaser of the subdivided number.
6: The seller should also disclose his rules and contracts with regard to the subset number to which the purchaser
must agree, before the purchase is made.
One should be aware that the use of the U.P.C. is voluntary and that both EAN and US U.P.C. numbers can be used. The System Number which is the first character in the US version may be anything except 2, 3 or 5 since they are random weight, health and beauty aids (FDC) and coupons respectively. There may be others in the EAN countries but I do not know them.
Caveat --- August 25, 2005
Although the use of the U.P.C. is voluntary, it is within the prerogative of a retailer or distributor to require its use as a condition of their handling a product. An outlet could in fact require that you obtain your U.P.C. number or prefix from GS1 US or some other source as a condition to handle your product.
I have only heard of one company that has refused to accept a subset seller’s number. If you have any doubt, contact the reseller and ask if his clients have had any problems with acceptance.
Agents of GS1 US have been making many defamatory and maligning statements concerning resellers such as saying that they are scams, that they are breaking the law, that they are illegal, that NO retailer will accept reseller’s prefixes, etc. These are all false and should be ignored. I would appreciate it, if when someone is told such things by GS1 US, that they tell me about it. Please include the name of the person, date, and time. GS1 US also claims to be the only one “authorized” to issue numbers. If this were true I would like to know who authorized them.
Other concerns could be shipping container symbols (see below). There are numerous automated electronic systems such as the EDI standard ASC X12 administered by GS1 that use the U.P.C. number in one fashion or another. These should not be of any great concern to someone just entering the market. If and when you grow to the point where these do become a concern it will be time enough to pay the exorbitant fee GS1 US demands for a prefix.
Serial Shipping Container Code (SSCC also called SSCC-18)
Recently web sites have incorrectly stated that the use of a reseller's subset number will create a conflict when an SSCC code is needed. This is untrue and should not deter you from purchasing a number from a reseller. One such site making these false statements uses a name very similar to GS1 US but they are not affiliated with GS1 US in any way. Don't be fooled.
The following will seem quite cryptic to a newcomer to shipping container marking so I strongly suggest that you first read and understand GS1 US’s guide at: http://www.uc-council.org/ean_ucc_system/pdf/SSCC.pdf although it is probably sufficient to know that unless your business grows to a major industry you will most likely not need to concern yourself with shipping container marking. If it does grow to those proportions, there will be no conflict if you simply use the full 11 digits assigned to you by the seller when you create a SSCC symbol. If anyone encounters a problem with SSCC, ITF-14 or similar formats please let me know so I can verify and understand the problem.
The specifications for this code/symbol had been around for many years. In May 2004, GS1 US modified this voluntary standard to accommodate variable length prefixes and the country flag used by the EAN code. In order to accommodate the requirement for more digits due to the longer Company Prefix* and the addition of the country flag the format now specifies the use of some of the serial reference** digits as part of the company prefix. However, the specification only defines how a Company Prefix up to a length of 9 digits (including the country flag which is “0” for the US) should be implemented. Although 12 digits will be needed when one buys a single number from a reseller, no conflict will arise if common sense is used. If you find the need to create a shipping label simply use the serial reference digits N11, N12, and N13 (in addition to digits N2 through N10) to uniquely define your product. One will still be able to define 100,000 SSCC’s (1 digit extension times a 4 digit Serial Reference). GS1 US will eventually have to specify the use of N11 as they are presently assigning company prefixes as long as 10 digits including the country flag.
Example of 11 digit prefix SSCC:
PLEASE NOTE: This in not endorsed or approved by GS1 US but it is the logical expansion of their present specification and is most probably what they will do when they decide to make a change to handle the 10-digit GS1 US prefix they are now assigning.
*This Company Prefix, when combined with the serial number that is assigned by the member company, acts as an identifier or “license plate” and provides access to information stored in computer files, which are transferred through electronic business transactions
. **Serial Reference – the number assigned by the holder of the EAN.UCC Company Prefix to uniquely identify the logistic unit. The Serial Reference varies in length as a function of the EAN.UCC Company Prefix length. Note: The combined length of the EAN.UCC Company Prefix and Serial Reference is always 16 digits.
U.P.C. and EAN-13 are the same symbol
I have had many e-mails asking about the difference between U.P.C. Version A and EAN-13 symbols and if their U.P.C. symbol can be used in Europe. They can. Please see Section 3 of my Q&A or FAQ's. There is a more complete explanation there.
It is very important that you also read Evolution of UCC certificates
George J. Laurer