Friday, January 27, 2012

New Trademark Infringement Case Filed in DRI --- Selling Good Stuff Cheap Can Get You in Trouble

Swarovski Aktiengesellschaft v. Building #19, Inc., No. 11-627 ML (D.R.I. filed Dec.14. 2011)
A new trademark infringement case was filed in the District of Rhode Island in December.  The case involves the sale of genuine Swarovski crystal products by Building #19, Inc., which obtained the products from a salvage company after the warehouse in which the products had been stored was damaged in a tornado.  For those of our readers outside New England, Building #19 is an iconic chain of discount stores known for selling items it obtains at fire sales, liquidations, bankruptcies and other unfortunate events.  The chain’s motto is “GOOD STUFF CHEAP,” which is all you really need to know. 
According to Swarovski’s Complaint, Building #19 acquired over $1.5 million of Swarovski crystal products from an insurance salvage company.  At least some of the crystal products came from a warehouse that had been damaged in a tornado, but Swarovski claims it was not a Swarovski warehouse.  As can be expected in a disaster like this, the packaging for some of the products was damaged.

In  December, Building #19 advertised a “One Day Event” for “SWAROVSKI CRYSTAL” in the Providence Journal and on its website, and allegedly used the Swarovski name liberally in website ads and in in-store materials promoting the sale.  The next weekend, Building #19 advertised a similar sale at its Weymouth, Massachusetts store.  Swarovski took offense to the use of its name and trademark on the web ads, on Building #19’s Facebook page and on the in-store promotional materials.  Apparently, Swarovski feels that the ads made it look like Swarovski sponsored or otherwise approved of the sales.
Swarovski’s complaint alleges that Building #19’s advertising constitutes federal and common law trademark infringement, trademark dilution, federal and state unfair competition, deceptive trade practices under R.I.G.L. Section 6.13.1-2, and injury to business reputation under R.I.G.L. section 6-2-12.  The complaint seeks injunctive relief, damages, treble damages for willful infringement, punitive damages, and an order requiring Building #19 to produce corrective advertising.
The case has been assigned to Judge Lisi.

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