Ergowerx Int'l v. Maxell Corp. of Am.

A distributor who sells trademarked goods that are genuine does not infringe on the trademark and does not violate the Lanham Act.

Opinion (Engelmayer): Plaintiff Smartfish, a New York Corporation, retails ergonomic computer keyboards and mice designed to reduce the risk of use injury. Defendant Maxell, a New Jersey Corporation, is an international product distributor. The Corporations signed an agreement deeming Maxell the exclusive distributor of Smartfish products. Smartfish asserted, inter alia, three trademark claims against Maxell. First, Smartfish alleged that Maxell used marks similar to those trademarked by Smartfish to sell Smartfish products. Even if the owner of a trademark does not approve of a sale it will still not be considered a trademark infringement. Therefore, a distributor is not liable for the resell of genuine goods bearing a true mark if the goods remain unchanged. In accordance with the terms of the agreement, Maxell resold unaltered trademarked merchandise originating from Smartfish and thus was not liable for trademark infringement. Second, Smartfish alleged Maxell violated the Lanham Act by using the true mark to misappropriate and misrepresent the source of the Smartfish merchandise. A trademark owner can only show a violation of the Lanham Act by establishing that the goods in questions are not “genuine,” meaning materially different. Here, the products were produced by Smartfish and sold directly to Maxell. Thus, the goods were genuine. Third, Smartfish alleged that Maxell’s use of the true mark hindered its business reputation and diluted the unique quality of its goods in violation of New York Business Law. However, the quality and reputation of a business cannot be tarnished if the goods sold are genuine. Accordingly, Defendant’s motion to dismiss all three counts was GRANTED.