When two iconic companies share a similar name, disputes are bound to occur. The iconic “Stanley Cup”, a seemingly ubiquitous insulated tumbler gave rise to a high stakes legal battle between Stanley Back decker Inc., Vs. Pacific Market International (PMI) alleging breach of contract and trademark infringement. The Connecticut based giant Stanley Black and Decker sues PMI over allegedly using their name “Stanley”. The lawsuit claims Pacific Market International the maker of popular Stanley drinkware violated an agreement from 2012 over the use of name Stanley.
Let Us Recall History
Stanley Black and Decker (SBD) founded in 1843 manufactures and sells branded products including indoor and outdoor hardware equipment, clothing, footwear, bags etc. The company entered into a series of deals from 1966 to 2012, previously with Aladdin Industries Inc. (predecessor of PMI) and then with Pacific Market International (PMI) for utilizing the STANLEY trademark. Initially, the deal limited PMI to sell a narrow niche of insulated food and beverage containers which could be featured as “Stanley-Branded”. At that time, PMI reportedly agreed to use the name Pacific Market International LLC or PMI in association with Stanley to differentiate its products from that of Stanley Black and Decker. In the licensing agreement, Stanley Black and Decker clearly refrained PMI from using STANLEY as a company name, pronoun, in connection with any website domain name or for any advertising and marketing purposes in an exercise to refrain Stanley’s overall brand from PMI’s limited use of “STANLEY” on food and beverages.
Impact On Stanley Black & Decker
Stanley B&D accuses PMI of using Stanley as its company name, expanding into unauthorized product categories and failure to display PMI’s own branding as a licensee despite of clear restrictions thereby pushing the boundaries of licensing agreement. Such behaviour creates a direct association between Stanley B&D and PMI in the minds of consumers implying a connection or endorsement between the two companies which may not likely exist. This blurring of lines is a classic example of trademark infringement and consumer confusion.
Last year, millions of Stanley mugs were recalled due to complaints of potential lead poisoning and burn hazards which made it seem like the defective products came from Stanley Black and Decker, resulting into huge losses for them. The company is now claiming damages from PMI stating the alleged breach of contract and trademark infringement by PMI poses an imminent threat to the Stanley brand and their goodwill and reputation earned in the market for almost two centuries.
Additionally, PMI is also accused of intentionally ignoring the explicit terms & conditions of the licensing agreement and instead choosing to infringe upon Stanley’s trademark rights in order to expand and capitalize on their long-standing goodwill. It claims damages, product recalls, correction campaigns, public disclaimers, forfeiture and destruction of products or articles found to be in violation of trademark rights and inclusion of “PMI” or “Pacific Market International” marks on the Stanley drinkware products, clearly marking a difference between the two brands.
PMI’s Response
In rebuttal, PMI plans to vigorously defend itself against the federal trademark suit. PMI traces its relation to Stanley drinkware back to 1913 having owned the Stanley brand in the food and beverage container category. It argues that both the companies have different marketing approaches, market positions and that their brands have stark differences. After PMI’s viral moment, its Stanley Quencher has proved to be wildly popular and has been named the 2023 product of the year for the promo industry.
Future Of Trademark Licensing
Trademark licensing agreements often lay down specific product categories with an aim to prevent direct market competition and protect licensor’s rights. Expanding a brand into new markets through trademark licensing offers businesses a chance to grow revenue and get global recognition. Understanding the market trends and accordingly tailoring the license agreements helps both the licensors and licensees to grow while protecting the trademark’s value. Both the parties must align their efforts to protect the trademark’s value and deliver exceptional services to consumers. This shared objective ensures both the parties are working towards the same vision. Although trademark licensing provides brands with unparalleled opportunities, it also comes with its own set of challenges. Parties need to understand these complexities and commit towards brand integrity in order to achieve success.
Conclusion
The present lawsuit is all about who gets to use the STANLEY name on its products. This decision is now to be determined federal court of Connecticut. If Stanley Black Decker wins, it may force PMI to stop using the Stanley name and forfeit its products. If PMI wins, it will continue the usage of Stanley as it has been resulting in a significant blow to Stanley Black & Decker. Regardless of the outcome, this case proves to be a valuable lesson to the brand owners considering trademark licensing. This case highlights the importance of meticulous drafting and transparent agreements. The brands must lay down strict rules on use of their brand names and closely monitor licensees to avoid confusion and protect their reputation.
Authors: Seema Meena, Manasvi Shah & Devanshi Gotecha