is selling stolen goods trademark infringement?

Tentantable.com, LLC v. Aljibouri, 2025 WL 959656, No. 22-CV-78-LJV (W.D.N.Y. Mar. 31, 2025)

Not sure I’ve seen this before! Is selling stolen goods trademark infringement? No, this court says, and that has to be right.

Plaintiffs sell “various inflatable products such as bounce houses[,] water slides, and...air blowers used to inflate such products,” as well as “party tents, pole tents, [and] banquet tents with associated tables and chairs.” They claim trademark rights in “Zoom Blowers,” “ ‘Pogo’ inflatables,” and “PartyTentsDirect.com.” They also alleged rights in “a black and yellow housing for an air blower.” Their application “for the yellow and black color scheme” is pending at the PTO.

Defendant Mohammed Aljibouri began working at Tentandtable as a “warehouse supervisor” in October 2019. After he quit, they allegedly discovered that had been “entering orders” and “making deliveries” of the plaintiffs’ goods for which they had no record and had not been paid. He also had “stole[n]...property” from the plaintiffs’ warehouse. And even after he left, he made unauthorized orders by signing in as a Tentandtable user.

Defendants sold the plaintiffs’ products, which “bear[ ] the [p]laintiffs’ names and trademarks[,] including Tentandtable.com, Zoom Blowers, Pogo Bounce House[,] and Partytentsdirect.com.” They also allegedly sold yellow and black air blowers that look “similar[ ]” to the plaintiffs’ air blowers.

The RICO claims failed because they were RICO claims.

Trademark infringement as to the allegedly stolen goods: Selling goods that have been altered so that they “do not meet the trademark owner’s quality control standards”—or failing “to observe a restrictive condition on the sale of a product”—and thereby causing “consumer confusion” may be infringing. But “repackaging of goods is not trademark infringement if it does not deceive the public or damage the mark owner’s goodwill.” But the complaint didn’t allege these things. “[T]he mere fact that the defendants sold the plaintiffs’ goods with the plaintiffs’ trademarks without their permission is not enough to state a Lanham Act claim.”

Burton v. Label, LLC, 344 F. Supp. 3d 680 (S.D.N.Y. 2018), rejected similar claims against a former employee, where the allegations were that the former employee had “use[d] his position as a Label salesman to sell items represented to be Label goods by placing orders with Label suppliers” and then keeping the profits for himself. Unlawfully pocketing proceeds that belonged to an employer does not constitute false designation of origin. ML Fashion, LLC v. Nobelle GW, LLC, 2022 WL 313965 (D. Conn. Feb. 2, 2022), likewise rejected Lanham Act claims based on sales of unaltered but allegedly stolen goods. There was no actionable misrepresentation-by-omission that they had the right to sell the goods.

As for the more conventional trade dress claims, they failed too. First, a trade dress plaintiff must “offer ‘a precise expression of the character and scope of the claimed trade dress.’ ” This is vital to assessing protectability, infringement, and the scope of any relief. The court was unconvinced that plaintiffs had provided the requisite articulation here. The complaint focused on the air blowers’ yellow and black “design[ ],” “configuration,” “scheme,” and “appearance.” But they said little more than “yellow and black.” And a “focus on the overall look of a product does not permit a plaintiff to dispense with an articulation of the specific elements which comprise its [trade] dress.” Images attached to the complaint couldn’t relieve plaintiffs of this burden. Still, the Second Circuit has cautioned that “a plaintiff that articulates the components of its trade dress with the requisite precision should not have its claims prematurely dismissed” regardless of whether the trade dress claimed is sufficiently distinctive.

So the court turned to distinctiveness and found it insufficiently pled. (It was also skeptical about conclusory allegations of nonfunctionality.)

Product design trade dress always requires secondary meaning, including the primarily color-based claim here. Plaintiffs did not succeed in the “formidable task” of pleading secondary meaning for product design. The complaint was silent on the first four factors courts consider: (1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, and (4) sales success. As to (5), attempts to “plagiarize” the mark, plaintiffs alleged copying by defendants, but not by anyone else. “[C]urts have found that when a complaint alleges that only the defendants have violated the plaintiff’s trade dress, this factor weighs against an inference of secondary meaning.” As the court noted, “if allegations of the defendant’s plagiarism were itself enough, this factor always would weigh in favor of finding acquired secondary meaning.” Finally, the length of the mark’s use was pled as being since January 2015, and the complaint didn’t specify that they have used this design “exclusively,” although plaintiffs referred to the design as “unique.” “But even assuming the plaintiffs have sufficiently alleged more than seven years of exclusive use, that would not be enough to state a plausible claim in the absence of any facts relevant to the other factors.”

The court declined to exercise supplemental jurisdiction over remaining claims.