Zippo Files Complaint with U.S. International Trade Commission over Counterfeit Lighters

Source from:  By: SANDRA RHODES, Era City Editor 08/29/2006 08/31/2006

If imitation is the sincerest form of flattery, the officials at Zippo Manufacturing Co. would rather pass on the compliment. The lighter company, made famous during World War II, has filed a complaint with the U.S. International Trade Commission alleging violations of section 337 of the Tariff Act of 1930. Zippo, and ZippMark, the company that owns the Zippo trademark, identified seven companies in its complaint that manufacture and/or sell lighters that look like Zippo lighters in the U.S. "It is simply an action on our part to kind of focus Customs personnel on the fact that we have a trademark," Zippo Chief Executive Officer Greg Booth said. Manufacturers are "bringing these trademark and shape infringing (lighters) into the country. "It does zero in on manufacturers making lighters that are in the shape of a Zippo lighter and some with the Zippo name." According to the U.S. Patents and Trademark Office, Reg. No. 2,606,241, registered to Zippo, said the lighter has slightly rounded edges and corners and a "curvature in the shape of a slight arc in the top of the lighter." The ITC action "addresses some cases of very specific importers and manufacturers making lighters that are in the shape of a Zippo lighter." According to the ITC investigation, there were seven respondents originally - Tung Fong International Promotion Co. of Hong Kong; Wenzhou Star Smoking Set Co. of China; Taizhou Rongshi Lighter Development Co. of China; Wenzhou Tailier Smoking Set Co. of China; beWild.com of Bellmore, N.Y.; Kalan LP of Lansdowne; and Vista Wholesale of Greencastle, Ind. Earlier this month, Zippo officials signed a settlement agreement with Kalan LP, according to the ITC docket. The details of the settlement agreement were not made public. Also not made public was a motion filed last week by Administrative Judge Charles Bullock titled "Initial Determination Granting Joint Motion To Terminate Investigation," but did not list who the respondent was in that matter although it seemingly is Kalan. The case against the other parties will likely extend well into next year. A trial is tentatively set for Feb. 5 to 14. The target date for the investigation to be complete is July 20. Peg O'Laughlin, ITC public affairs officer, explained the case proceeds like any other legal case with discovery and motions and is reviewed by an administrative law judge - in this case, Bullock. After the judge makes a determination, his decision can be reviewed by six commissioners who may modify the judge's decision if they wish. The remedies available include an exclusion order - keeping the infringing product out of the country, and a cease and desist order - stopping the companies from selling the products. Throughout the proceedings, O'Laughlin explained, there are three parties to the action - the complainant - in this case Zippo; the respondents - those who are allegedly violating the law; and an ITC attorney from the Office of Unfair Import Investigations -in this case, Thomas Fusco. O'Laughlin said Fusco represents the "public's interest in the investigation and are full parties in the investigation." According to the complaint, the respondents sell lighters that are "often inferior to genuine Zippo-brand lighters" at a lower cost. "As a result, consumers are likely to be deceived and confused if Respondents continue to sell these inferior lighters in the United States." The complaint also listed specifics, including a couple of the companies explaining their manufacturing capabilities on their Web site. Vista offers "Z Style" lighters for sale on its Web site, according to the complaint. "We feel that, in fact, this is costing us sales when these guys do that," Booth said. "It is not a small dollar problem, it's a substantial one." "They are importing the product into the U.S. for a fraction of the cost of our product." Booth said that generally, these types of stores will display the genuine lighters in with the counterfeit ones and the consumer doesn't know the difference. Booth said that Zippo officials have gone to China to talk with authorities about looking into the problem. "Chinese government officials have been receptive," he said, adding it also helps that China is now part of the World Trade Organization. Likewise, the ITC investigation is helpful in delivering a message of no tolerance to the Chinese officials, Booth said. "In very layman's terms, this is a way that elevates Zippo on the radar screen," the CEO said. "There is infringing activity we would like customs and immigration" to look at. "In essence, they play off our world famous shape and trademark," he said. "They sell the lighter ... and make more." Booth added that over the last 10 years, the company has spent millions of dollars in fighting counterfeits. Given that Zippo is the largest employer in McKean County, what impacts the company, impacts all. "It damages Zippo. It damages the economics of the entire community. It will start taking sales away, it starts taking jobs away. It's a major impact on the community." Enditem