Industry News

Made in USA Violations and Clean Hands

Jun. 1, 2023
By: David G. Forgue

In 2020 we ensured that our readers understood that there were real consequences for misuse of the “Made in USA” designation. In that post we discussed Newborn Bros. v. Albion, in which Newborn Bros. sued a competitor alleging that the competitor has inappropriately used Made in USA on its products, and thereby harmed Newborn Bros. The court in New Jersey agreed that Albion had violated both the Lanham Act and New Jersey common law. The only remaining question was what it was going to cost Albion.

Which leads us to the opinion issued on May 24, 2023 by the same court. Albion raised a number of defenses during the course of the Newborn litigation. While most of the defenses were rejected by the court, one was not. This was the “clean hands” defense. It turns out that Albion was able to show that while Albion was misrepresenting the origin of goods to the detriment of Newborn Bros, Newborn was also misrepresenting its own goods. In specific, the court found that certain company information on the packaging was misleading consumers into believing the goods were Made in USA when they were not. This fact will lessen any eventual damages that Albion is forced to pay.

There are several morals to this story. First, there can be serious consequences to inappropriate claiming (or implying) that goods are Made in the USA. Both Albion and Newborn bore years of legal fees, business disruption, and economic uncertainty. Whatever damages are ultimately paid (if any) it is very unlikely that either company will see the advertising benefit they believed they gained as worthwhile when all is said and done. Second, reputational damage may well be worse than economic damage. The industry-specific articles about this dispute have been numerous, and it is likely that both companies have lost a certain amount of prestige. Finally, the playground maxim that if you want to be treated fairly you need to treat others fairly is actually an ancient Anglo-American legal doctrine.

If you have any questions about country of origin marking, Made in USA marking, or anything else having to do with origin, do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.