outdated website uses preserve TM infringement claim; false use of (R) doesn't matter if it doesn't cause harm

Max Rack, Inc. v. Core Health & Fitness, LLC, 2019 WL 4451698, No. 16-cv-01015 (S.D. Ohio Sept. 17, 2019)

Sloppy website maintenance likely denies defendant what otherwise would have been summary judgment victory on its ex-partner/now-competitor’s trademark infringement claims; meanwhile, false advertising claims based on a false use of “®” go nowhere.

Max Rack sells weightlifting equipment, including a machine known as the Max Rack, for which it owns a registered trademark.  Max Rack used to contract with defendant Star Trac for it to exclusively make and distribute the Max Rack; after the associated patents expired in 2015, the agreement would terminate and Star Trac would have a 6-month sell-off period.  Star Trac’s successor Core Fitness told Max Rack that, when the agreement terminated, it would continue selling a product identical to the Max Rack but under the name Freedom Rack. Although it began implementing the name change on its company website, in associated printed materials, with its manufacturer, and with its independent dealers and distributors, “as late as November 2017, Core Fitness had failed to remove every reference to MAX RACK from its website.” Core Fitness also sold 24 Max Rack units after the six-month run-off period had expired (and agreed to pay gross revenues for those).

Max Rack sued for state and federal trademark infringement and false advertising.

Trademark infringement: No evidence of particular strength within the field (against confusion); goods and marketing channels are identical (pro confusion); Freedom Rack and Max Rack aren’t similar but continued use of “Max Rack” on the website could weigh in favor of confusion, though it wasn’t clear how often this happened (didn’t weigh in favor of anybody).  Plaintiff’s COO claimed to have received “less than ten” calls from customers who claim to own a Max Rack bought from defendants that turned out to be a Freedom Rack, which was minimal evidence of confusion in light of the market size (more than 5000 Max Rack units sold during the licensing term, and nearly 800 Freedom Rack units sold quickly after the expiration of the agreement), weighing against likely confusion. The likely degree of purchaser care was high: the products cost around $2,000, and are typically purchased by fitness equipment dealers, health clubs, hotels, and other establishments operating fitness centers.

Intent: Freedom Rack was a fine name; “Rack” is not protectable. There was an issue of fact over whether retained references to Max Rack were human error or intentional, considering that the references remained “for at least a year and a half after the parties’ agreement terminated.”

Ultimately, “[a] reasonable juror considering Defendants’ unauthorized references to MAX RACK, coupled with the similarity of the parties’ products, could come out on either side of this question.”  Clean up your websites!

False advertising: “For some unspecified period of time, Defendants displayed a registered trademark symbol alongside its advertisements for the FREEDOM RACK prior to the United States Patent and Trademark Office issuing such a trademark.” Even if this was literally false, the court couldn’t find a connection between the falsity and any harm to Max Rack’s business reputation, its reputation with its customers, or its loss in sales. No causation, no liability. Nor was there a separate private right of action for trademark misuse.

State law claims followed the same pattern: yes to infringement, no to any other false advertising claim.