Former employees of air freshener manufacturer sued for trademark infringement. ENERGIZER v. PARADISE

A trademark is something that a seller uses to brand goods to tell consumers that the trademark owner is the seller of the products. Traditionally a trademark is though of as a word, short phrase or symbol. However, anything that serves the purpose of telling consumers who produced a product can be eligible for trademark protection. A trademark can be registered in the United States by filing an application with the United States Patent and Trademark Office. Registration of a trademark is not required to begin using the trademark, but registration strengthens the rights associated with the trademark.

In the United States the first person to use a trademark to brand products is considered the senior user and has priority to the trademark. Subsequent users of the same, or similar, trademark are referred to as junior users. If a junior user brands products with a trademark in a way that causes consumers to be confused about who produced a product that can be considered trademark infringement. A senior user of a trademark can sue a junior user for trademark infringement. A plaintiff in a trademark infringement lawsuit can request an injunction to stop the infringing activity and also get monetary damages for trademark infringement which has occurred.

Frequently a trademarked product involves another facet of intellectual property. Product manufacturers want to prevent competitors from copying successful products, so every aspect of a product is guarded. Patenting a product is a popular way to protect a new invention, but sometimes a product cannot qualify for patent protection, or the product manufacturer does not want to divulge the details of how a product is manufacturer. In those cases, the details of a product can be protected using trade secret law. Trade secret law depends on confidentiality and the manufacturers efforts to keep the details of a product a secret. Trade secret law does not protect against reverse engineering but does offer protection against corporate espionage or disgruntled employees using trade secret information to compete with the product manufacturer.

When a former employee takes trade secret information, uses the stolen trade secrets to produce a product for sale by another party, and that party infringes on the trademark of the former employer, the former employee can be liable for contributory trademark infringement. Although liability for contributory infringement is not expressly imposed by the Lanham Act, the United States Supreme Court has recognized that liability for trademark infringement can extend beyond those who actually mislabel goods with the mark of another. If a manufacturer or distributer intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributer is contributorially responsible for any harm done as a result of the deceit. See Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982).

A case which involves former employees accused of contributory trademark infringement by using trade secret information is ENERGIZER HOLDINGS, v. PARADISE AIR FRESH, LLC, 4:19-cv-00429 (E.D. MO 2019). The plaintiff in this case sells various automobile care care products, including air fresheners, using the the trademark “California Scents”. The plaintiff owns several trademarks related to the phrase California Scents, which have been registered with the United States Patent and Trademark Office. The plaintiff has used the trademarks in commerce long enough and filed the appropriate paperwork to make the registration of the trademarks incontestable. One of the plaintiff’s registered trademarks is reproduced above on the right. It features a leaf on the second I, in the word California.

The defendants in this case are former employees of the plaintiff that created their own company that markets air fresheners. The defendants left employment of the the plaintiff around August of 2017 and formed the company Paradise Air. The defendants began producing products which compete with the plaintiff shortly thereafter. One of the distributors that sells products manufactured with the assistance of the defendants uses the trademark Calm Scents which features a leaf on the the letter L, in the word calm. An example of that trademark is reproduced above on the left.

The plaintiff sued the defendants on the theory that the Calm Scents brand constituted trademark infringement and that the defendant’s use of trade secret information to help produce the Calm Scents products constituted contributory trademark infringement. While this case stretches the definition of trademark infringement to the limit, the facts seem to favor the plaintiff. The defendant will be given an opportunity to respond the allegations in its answer.

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