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Wingmaster Plus, Inc. v. Meserlian

A-2144-04T3 (N.J. Super. App. Div. 2006) (Unpublished)

UNFAIR COMPETITION —Unfair competition is a broad and flexible concept, focusing on fair play and aiming to promote higher standards of the business world and, in the absence of a patent, any competitor may reproduce an item and sell it as its own provided the original product has not acquired a secondary meaning.

A manufacturer contracted with a distributor to distribute a certain tool used to maintain swimming pools. The relationship deteriorated and the distributor eventually began to manufacture and sell its own tool capable of performing the same function as the manufacturer’s tool. Both the manufacturer and the distributor sold their tools through the same catalogue company. The distributor used different markings on its tool than the manufacturer used on its tool, and the description of the distributor’s tool differentiated it from the manufacturer’s tool. The distributor’s customers would have been the same customers who would have purchased the manufacturer’s tool had the distributor sold the manufacturer’s tool. The manufacturer sued, alleging violations of federal trademark law and unfair competition practices. The distributor cross-claimed, alleging breach of contract, fraud, unfair competition, unjust enrichment, and tortious interference with prospective business advantage. The Appellate Division found the record devoid of any factual evidence to support the distributor’s tort claims. As to the distributor’s claim of breach of contract, it ruled the jury was free to interpret the contested contract provisions and, in fact, the jury chose to do so in such a way that supported the manufacturer’s position.

The Appellate Division has no evidence on which to overturn the jury’s decision. A counterfeit mark is one that is identical with, or substantially indistinguishable from, the registered mark. The manufacturer did not produce any evidence at trial that the distributor made unlawful use of any registered trademark or used any counterfeit mark after the manufacturer registered its mark. Therefore, the distributor was entitled to judgment as a matter of law. As to unfair competition, it is a broad and flexible concept, focusing on fair play and aiming to promote higher standards in the business world. In the absence of a patent, any competitor may reproduce an item and sell it as its own provided the original product has not acquired a secondary meaning. Even absent a patent, a business may take suitable steps to protect its business by distinctively dressing its product to prevent others from misleading purchasers through imitating such dress. In this case, the labels on the distributor’s tool were different from the labels on the manufacturer’s tool. Further, the distributor’s advertising promotions identified it, and not the manufacturer, as the producer of its tool. The record below also lacked any evidence that the manufacturer’s trademark had taken on a secondary meaning in the marketplace. Therefore, the manufacturer’s unfair competition claim was rejected.


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