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From Matrix Essentials v Quality King, 522 F.Supp.2d 470 (2007)

31. Nonetheless, the court find that if L'Oreal wished to stop diversion of Matrix, products it could do so by identifying the source of the diverted products and exercising its contractual right to terminate distributors that sell large quantities of Matrix products to collectors or jobbers. 32. To the extent that L'Oreal engages in business with distributors that are not bound by a "professional sale only" contracts, L'Oreal has the ability to enter into such contracts. L'Oreal's unwillingness to enter into or exercise rights pursuant to distributor contracts is evidence of its failure to pursue seriously a "professional use only" policy. 33. The court finds that L'Oreal has not engaged in activities aimed at large scale termination of distributors so as to end the process of diversion. 34. L'Oreal employees testified at trial that the company was committed to maintaining the professional nature of the Matrix brand. For example, L'Oreal's Vice President and General Manager of the brand testified as to the marketing of Matrix products to professionals and the importance of maintaining the product's placement in that market. 35. Charles Domroe, L'Oreal's Director of Security, testified as to his commitment, over several years, to ending the diversion market and his monitoring of distributors so as to stop diversion. 36. The court finds such testimony to be completely at odds with the reality of L'Oreal's business. 37. In light of the fact that L'Oreal has known of the magnitude of the diversion market for several years, the court finds any claim that L'Oreal is serious about ending diversion of its product to be without credibility. Instead, the court finds that L'Oreal is content to enjoy the profits associated with diverted product, while paying "lip service" to the notion that they are interested in protecting the professional nature of the brand.