PHILADELPHIA — A federal judge has dismissed counterfeiting claims in a Norristown athletics products company's lawsuit against Nike Inc., saying it failed to state a plausible counterfeiting claim.
U.S. District Court Judge Michael M. Baylson, on the bench in Pennsylvania's Eastern District, cited photographs provided by Nike in response to Lontex Corporation's allegations that Nike has used its trademarked "COOL COMPRESSION" branding to make millions of dollars.
The photos, which showed Lontex and Nike’s men’s long-sleeved and sleeveless compression shirts bearing the companies’ respective logos, "do not affect the court's analysis of whether Nike’s alleged use of Lontex's word mark amounts to counterfeiting," Baylson said in his June 10 memorandum. "To conclude otherwise would permit Lontex to plausibly claim that any men's compression shirt, or any other compression product covered by Lontex's trademark registrations, is a counterfeit of Lontex's products."
U.S. District Court Judge Michael M. Baylson
| law.upenn.edu
Lontex's allegations and exhibits failed to substantiate its allegations "that an average consumer in the marketplace would view Nike's COOL COMPRESSION products to be 'identical with, or substantially indistinguishable from' Lontex’s COOL COMPRESSION products," Baylson's memorandum said.
Lontex, best known for its "SWEAT IT OUT" products marketed to professional and collegiate sports teams, alleges in its five-count complaint that Nike, Inc., infringed on its “COOL COMPRESSION” mark. The infringement in Nike apparel sales violated the Lanham Act and laws in more than a dozen states, according to Lontex's original trademark infringement and unfair competition lawsuit filed in late December.
Lontex alleges trademark infringement and unfair competition under the laws in California, Florida, Texas, New York, New Jersey, North Carolina, Maryland, Massachusetts, Illinois, Georgia, Colorado, Minnesota, Washington, and the District of Columbia.
“By its illegitimate and unauthorized use of COOL COMPRESSION, Nike acted despite knowing of the likelihood of confusion with Lontex’s valid, incontestable trademark registrations,” Lontex's original lawsuit said. “At the least, Nike was reckless and careless in its evaluation of the likelihood of confusion resulting from its infringing use of ‘Cool Compression’ line of products and did not attempt to contact Lontex whatsoever for authorization before using the COOL COMPRESSION mark.”
Lontex wants Nike's alleged "ill-gotten gains," which Lontex alleges is "well over $40 million" in sales profits, in addition to statutory damages of up to $2 million per infringement and an injunction against order Nike to stop selling its own cool compression products.
In its motion for partial dismissal, Nike asked the court to toss out counterfeiting claims in two counts in the first amended complaint alleging trademark infringement and contributory trademark infringement under the Lanham Act. Nike also objected to Lontex's request that the court allow Lontex to amend its first amended complaint.
Baylson granted Nike's motion for partial dismissal with prejudice but allowed the two counts to proceed in the case without counterfeiting claims. Baylson also denied Lontex's request to amend its most recently amended complaint.