Trademark Attorney Michael Gallagher notes that Fitbit has sued (Fitbit v. Laguna 2) a reseller of its products, New Jersey-based Laguna 2 for trademark infringement, counterfeiting and dilution that once again raises interesting questions about the role of resellers in the marketplace. The suit claims that Fitbit products, designated to be scrapped or recycled, were subsequently resold by Laguna 2. Fitbit claims that Laguna 2 has “continued to threaten to resell these products with no regard for the harm to Fitbit, its brand, and the consuming public.”
This is not the average counterfeiting case. To start with, Laguna 2 is not the average “counterfeiter,” as we usually think of that term. They are a reseller of a number of brand name products, claiming alliances on their website to such companies as HP, Acer, Samsung and LG. Secondly, the products involved are not what we usually think of as “counterfeits” as they appear to be originally genuine, or at least to have originated with Fitbit.
For its part, Laguna 2 claims that these are genuine Fitbit products, refurbished by a third-party, and sold clearly labeled as such.
So what does, or should, happen to the endless number of returned, defective, or close-out items? How far does the trademark holder’s rights to control the eventual disposition of these products extend? Lately we’ve seen trademark holders try to exert trademark claims to try to achieve subject matter control in the area of sports marketing. Is this an honest attempt at trademark protection, or a try to exert end-to-end control across a product’s life?
Some interesting questions await resolution, not the least of which is “How did Laguna get these products to sell in the first place?” We suspect that, absent an early settlement, this case will turn on some highly fact-specific things, such as how the resold products were obtained and labelled for sale. Was there real danger of confusion to the public? We’ll have to wait and hopefully see.