Wayne Schwartz, partner, left, and Dori S. Solomon, right, of Lee & Amtzis in Boca Raton.

Boca Raton lawyers Wayne H. Schwartz and Dori S. Solomon of Lee & Amtzis shielded mom-and-pop tobacco store The Smokers Edge from a trademark infringement lawsuit seeking up to $2 million over its sale of counterfeit water pipes—or “bongs” as they're commonly known.

In a bench trial Feb. 7, U.S. District Judge Donald M. Middlebrooks found that although the West Palm Beach shop did sell knock-off versions of water pipes made by Amsterdam-based company RooR International BV, they weren't on the hook for damages.

RooR—one of the world's largest water pipe manufacturers—brought the suit in April 2018 with Sream Inc., a California company licensed to use its trademark, alleging counterfeiting and trademark infringement. On top of damages, the suit asked for an asset freeze, injunctive relief and attorney fees.

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Click here to read the full complaint

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Husband-and-wife defendants Raymond and Julia Poteet came to Schwartz after RooR hired a private eye to scan their smoke shop for imitations of its water pipes and, in the form of a lawsuit more than two years later, announced that he'd found one.

The investigator hadn't introduced himself at the time, according to Schwartz, so the complaint was a surprise.

“He didn't say he was there on behalf of the plaintiffs, he didn't say that he believes that the water pipe my client was offering for sale was counterfeit,” Schwartz said. “He just browsed around for five minutes, took some pictures secretly and then bought one water pipe.”

The pipe was undeniably counterfeit, but Schwartz raised other issues in the defense of the couple, such as their background, and how and where they'd acquired the water pipes.

Julia Poteet, a retired civil servant, and Raymond Poteet, an injured construction worker, opened the shop to supplement their income. And because of that, Schwartz argued they knew next-to-nothing about smoke shop products or brands. When it came to filling their shelves, the couple said they depended heavily on their distribution company H&H Distributor Inc.

“The owner walked around with them and suggested different things, what he thought was popular, what he thought they should put in their store, things of that nature,” Schwartz said. “They relied solely on his expertise.”

That naiveté swayed the judge, who considered their lack of retail experience a mitigating factor.

The Poteets sued H&H but never heard back as it's gone out of business.

“H&H, I'm sure, got the product from their distributor. I'm sure there's a chain and it continues and ends up somewhere,” Schwartz said. “But most plaintiffs lawyers who are serious about stopping counterfeiting, the first question they ask the defendant or the defendant's lawyers is where they got the product and who was the source, so that they can go after the source because that's really one of the best ways to try to shut it down.”

That's a common problem, according to plaintiffs attorney Jamie A. Sasson of The Ticktin Law Group, who brought the case with Chezare Palacios.

“Even if you sue this company if you can find them, they're going to shut down the place,” Sasson said. “But it's definitely something that we're interested in.”

The Poteets were one of about 150 business owners hit with a similar lawsuit from RooR and Sream, which had sent private investigators to various Florida smoke shops.

There was no malice behind those suits, Sasson said, as his client was willing to offer a deal and give them discounts on RooR products to sell and offering some for free. According to Sasson, RooR wants to “clean up the marketplace” and offers payment plans to avoid putting defendants out of business.

“What else is my client supposed to do if his company is being taken over by fakes in the marketplace?” Sasson said.

'Innocent Infringer'

A smoking bong. Photo: Shutterstock.com.

Faced with a counterfeit product, Schwartz and Solomon focused on demonstrating how different the two types of water pipes were.

While RooR's products are internationally renowned, made with hand-blown glass by an award-winning designer and often retailing for more than $300, The Smokers Edge version typically goes for about $10 or $15.

Schwartz visited a Fort Lauderdale smoke shop to check out the genuine RooR water pipes it had for sale.

“It's very intricate,” Schwartz said. “It looks like something that if you bought it you wouldn't use it.”

The judge agreed, ruling that the water pipes weren't similar enough to cause customer confusion.

“My client was what you call an innocent infringer, and that was clear to the court,” Schwartz said.

Middlebrooks did note the similarity of the trademarks on the water pipes. But the two pipes were completely different in design, construction and quality, according to the ruling, and representatives from RooR even testified as much.

“I found quite persuasive the testimony from plaintiffs' own witnesses that the quality of the counterfeit pipe defendant sold was so poor, and the price at which it was offered was so far below market value, that there would be almost no likelihood that any person would be deceived, aside from the most naive customer,” Middlebrooks wrote.

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Click here to read the full court order

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The judge also found both companies sell and advertise the water pipes differently, as they're aimed at separate customer groups.

But while this ruling pertained to a single counterfeit water pipe, Sasson argues there's a bigger underlying problem.

“What's happening is people are going to these stores and they're seeing a cheap RooR product,” Sasson said. “That's the feedback we're getting, that, 'Oh, maybe RooR has a lesser brand item they're selling.' That's the opposite of what the company's about.”

In an aside, the court pointed out that even if there was infringement, the plaintiffs had waited too long to file their suit. Schwartz, who's defended various infringement cases involving different products, said he was also surprised by the delay.

According to Sasson, his client faced a Catch-22.

“If you file too many cases at a time, then the courts could get upset that you're just kind of blasting them with all these cases in federal court,” Sasson said.

Midway through the case, the plaintiff added the Poteets as defendants but removed them a week before trial—a move Schwartz said placed unnecessary pressure on his clients.

“It was an emotional roller coaster,” Schwartz said. “They've had sleepless nights preparing for proceedings in federal court and it's been financially burdensome.”

Before heading to trial, the case went through mediation and the Poteets offered to settle, according to Schwartz, who will now move for attorney fees and costs.

Case: Sream, Inc. and RooR International BV v. The Smokers Edge, LLC

Case No.: 18-cv-80545-DMM

Description: Federal trademark counterfeiting and infringement, federal false designation of origin and unfair competition

Filing date: Apr. 26, 2018

Verdict date: Feb. 7, 2019

Judge: U.S. District Judge Donald M. Middlebrooks

Plaintiffs attorneys: Chezare Palacios and Jamie Sasson, The Ticktin Law Group, Deerfield Beach

Defense attorneys: Wayne H. Schwartz and Dori S. Solomon, Lee & Amtzis, Boca Raton

Verdict amount: Defense verdict

 

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