Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC

Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC

Opinion

 [***1229]   [*1069]  TACHA, Circuit Judge.

Defendants-Appellants are a consumer electronics company, its owners, and its trade names (collectively, "Midwest"). Plaintiff-Appellee ("Beltronics") is a provider of aftermarket vehicle electronics, including radar detectors. Midwest appeals the district court's order preliminarily enjoining it from selling Beltronics equipment not bearing an original Beltronics serial number label. See Lanham Act, § 34(a), 15 U.S.C. § 1116(a). We have jurisdiction under 28 U.S.C. § 1292(a)(1) and AFFIRM.

I. BACKGROUND

As early as 2003, Beltronics began selling electronics equipment under its Beltronics trademark. At all times relevant to this case, Beltronics sold its equipment to at least two authorized distributors who agreed to sell the products for  [**2] a specified minimum price. Apparently in violation of their distribution agreements, those distributors sold Beltronics radar detectors to Midwest, which in turn resold them as "new" on the internet auction site eBay. To prevent Beltronics from discovering that Midwest's inventory had been supplied by the two distributors, the distributors either replaced each radar detector's original serial number label with a phony label or removed the original label altogether before  [***1230]  shipping equipment to Midwest. On rare occasions, when the distributors supplied Midwest with a radar detector bearing an original serial number label, Midwest removed the label prior to resale.

It is Beltronics's policy that only those who purchase Beltronics radar detectors bearing an original serial number label are eligible to receive certain products and services, including software upgrades, rebates, product use information, service assistance, warranties, and recalls. Beltronics learned that its radar detectors were being sold without original serial labels when Midwest's purchasers contacted Beltronics with warranty requests for detectors that had phony serial numbers. A Beltronics customer service manager submitted  [**3] an affidavit stating that those purchasers were confused, thinking that they were entitled to a warranty from Beltronics. The customer service manager further stated that the customers expressed their belief that they did not receive what they thought they had purchased and that Beltronics had deceived them. He explained that they became irate when they learned their radar detector was not covered by Beltronics's warranty and did not come with other services such as recalls and product upgrades, and that this is extremely harmful to Beltronics's reputation and goodwill.

In September 2007, Beltronics filed this action against Midwest. The complaint asserted (1) counterfeiting and federal trademark infringement under 15 U.S.C. § 1114; (2) false designation or origin under [*1070]  15 U.S.C. § 1125; and (3) trademark infringement, unfair competition, and passing off in violation of state law. Beltronics also sought a preliminary injunction. ¹ Following an evidentiary hearing on October 31, 2007, the district court determined that Beltronics had satisfied all of the necessary requirements for a preliminary injunction and enjoined Midwest from selling or offering for sale any Beltronics products  [**4] that do not bear an original serial number label. Midwest filed a timely notice of interlocutory appeal. ² See 28 U.S.C. § 1292(a)(1); Fed. R. App. P. 4(a)(1)(A).

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