Refurbisher can reaffix original manufacturer's trademark

In Nitro Leisure Products LLC v Acushnet Company, the US Court of Appeals for the Federal Circuit has held that a refurbisher of used products can reaffix the original trademark that was placed on the goods at the time of manufacture.

Nitro Leisure Products reconditions used golf balls through a process that involves treating them to remove the damaged layers and then repainting the balls to cover over the defects. It then reaffixes the original manufacturer's trademark and also adds the wording 'used & refurbished by' followed by one of Nitro's trade names. In addition, Nitro's packaging includes a detailed disclaimer that the golf balls are used and refurbished, and not endorsed or guaranteed by the original manufacturer.

Acushnet Company, a manufacturer of golf balls, became aware that its balls were being refurbished by Nitro. Acushnet sought a preliminary injunction to prevent Nitro from selling refurbished balls bearing Acushnet's marks. The district court refused the preliminary injunction and the Federal Circuit affirmed the refusal, with one judge dissenting.

Relying on the Supreme Court's 1947 decision in Champion Spark Plug Co v Sanders, Acushnet claimed that the refurbishing process produced a golf ball that "so alters the basic composition of Acushnet's golf balls that 'it would be a misnomer to call the article by its original name'". Acushnet argued that the district court had incorrectly applied the Champion Case when it refused the preliminary injunctive relief.

The Champion Case leaves room for finding infringement based on the sale of refurbished goods when the reconditioning is so extensive that even the disclaimer is not enough to prevent consumer deception or harm to the original manufacturer's trademark. When the refurbisher's efforts seek to restore the product so far as possible to its original condition, however, Champion indicates that no infringement will be found. The Federal Circuit in Nitro found that the golf ball refurbishing fell squarely within the type of reconditioning permitted by Champion.

Acushnet also argued that Nitro's actions materially altered the original golf balls so as to be considered infringing pursuant to the Eleventh Circuit's ruling in Davidoff & CIE SA v PLD International Corporation. The Davidoff court held that removing batch codes from new bottles of perfume resulted in a material alteration such that sale of the perfume under the original trademark constituted infringement. The Federal Circuit easily distinguished Davidoff as a case involving a new product. In such cases, said the court, consumers' expectations of quality are markedly different than in the case of a used product. Accordingly, the Davidoff standard of material alteration does not apply to cases involving reconditioning of used products in an attempt to restore them as far as possible to the original state.

The Federal Circuit's dissenting judge viewed the refurbishing process as so damaging to the quality of the golf balls that it should not be permitted. He also distinguished Nitro's actions from permitted refurbishing precedent by noting that Nitro's refurbishing process called for the removal and reaffixation of Acushnet's marks. The judge felt that a process that so changed the original product that the mark was removed and needed to be reaffixed should not be allowed.

Karin Segall, Darby & Darby, New York

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