Car-Freshener Corporation

Car-Freshener Corporation and Julius Samann Ltd v. Grey Global Group Inc: Intellectual Property perils in the global economy.

Car-Freshener Corporation and Julius Samann Ltd. (“Samann”), the companies behind the legendary LITTLE TREE and WUNDER-BAUM air fresheners, recently filed a trademark infringement lawsuit in the US District Court for the Southern District of New York against Grey Global Group Inc. (“Grey”) a multinational marketing agency. The lawsuit stems from a 2011 marketing campaign in which Grey worked with Another Dancing Bear Productions (“ADBP”), a California company, to develop car air fresheners that were ultimately manufactured by Scent USA (“Scent”) for BMW’s line of certified pre-owned vehicles. Specifically, Plaintiffs alleged that the BMW air fresheners, which contained a pine tree design, were confusingly similar to their own trademarked tree logos.

Grey has denied any liability and asserted that the failure of Samann to demonstrate any harm resulting from Grey’s use of the air fresheners precludes an award of damages. Additionally, Grey claimed that because ADBP and Scent declared to have rights to the design at issue, and that ADBP agreed to indemnify Grey from any legal claims that might arise from use of the subject air fresheners, it is Scent and ADBP that should be responsible for any damages caused to Samann.

Based on these assertions, Grey filed a Third-Party Complaint against ADBP and Scent that was represented in the action by The Medrala Law Firm, seeking indemnification from Plaintiffs’ claims.

It remains to be seen whether Plaintiffs will prevail on their claims for trademark infringement, or whether the contract with ADBP will adequately shield Grey from liability. However, on May 17, 2013 on aMotion  filed by the Medrala Law Firm on behalf of Scent, the US District Court dismissed Grey’s claims against Scent based on Grey’s failure to state a claim for indemnity and contribution.

However, regardless of the outcome of the lawsuit between Samann and Grey, this case serves as an example of the risks that many manufacturing and marketing companies are facing in today’s global and interconnected economy, especially in the area of intellectual property rights. Many of this risks can be mitigated by properly drafted supplier agreements and due diligence performed before executing the contracts. Regrettably, however, too many companies forget about taking these precautions and enter the global market unknowingly exposing themselves to lawsuits in remote areas.

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