Rotoworks International Ltd., a New Zealand farm implement manufacturer, received a preliminary injunction Monday in a trademark infringement case involving a bait-and-switch scheme by a northwest Arkansas group.
In the lawsuit filed by the Henry Law Firm of Fayetteville, Rotoworks claimed the defendants — Grassworks USA LLC, Grassworks!!! LLC, Robert D. "Bobby" Umberson and Linda K. Reed — infringed on the federally registered Rotowiper trademark and violated several trademark laws by manufacturing copies of Rotoworks' herbicide applicators, known generically as "weed wipers."
At a hearing last month in U.S. District Court for the Western District of Arkansas, Rotoworks said Grassworks used Rotoworks' trademarks in all advertising and exhibitions of products to the public, yet delivered copies manufactured at the Grassworks plant at Lincoln to purchasers instead of genuine New Zealand units.
"At the hearing, I learned that my exclusive distributor used my trademark to sell more knockoff units than they sold of the genuine product," said Neil Barker, managing director of Rotoworks. Barker added, "I became suspicious when I noticed a decrease in sales, and it turns out that the Grassworks people were abusing my trust. As a trademark owner, I had to stop them."
Judge Jimm Larry Hendren said the "defendants were profiting from the deceptive use of Rotoworks' trademark" and found "a strong likelihood" that Rotoworks would succeed on its claims of trademark and trade dress infringement.
Rotoworks has sold aqua-colored weed wipers under the Rotowiper trademark since 1998. According to the injunction, the Grassworks group served as Rotoworks' exclusive North American distributor but started manufacturing competing aqua-colored units in 2004 "without authorization from or notice to Rotoworks."
The injunction claims Umberson, a principal of Grassworks, and Reed, the marketing director, "purported to sell only Rotowipers, some made in New Zealand and some made in Arkansas. In some instances, Umberson and Reed would indicate that the models made in Arkansas were stronger, had better tires and had larger tanks allowing longer use before refilling."
The defendants claim there is no Rotowiper mark actually applied to their products, and the aqua color is not a registered mark, so there is no infringement.
Hendren prohibited the Grassworks group from using the Rotoworks' trademarks in the advertising and sale of weed wipers. The injunction further prevented the Grassworks group from selling aqua-colored weed wipers and shut down the defendants' Web site.
The case is set for trial in December.
In their reply brief in support of the motion for preliminary injunction, patent attorneys Mark Henry and Nathan Chaney said the "defendants were quite literally banking on the erroneous assumption that Rotoworks would never check on the propriety of defendants' operations under the exclusive distributorship arrangement."
Chaney said the case is interesting because it involves an Arkansas importer being sued by a foreign manufacturer. Despite the international presence surrounding Wal-Mart Stores Inc.'s vendors, many may not understand the significance of domestic intellectual property rights owned by foreign vendors.
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