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Is Used Better than New? Evaluating Trademark Use for Gray Goods, Diverted Goods and Altered Goods

By Vincent N. Palladino

Importers Inc. buys used HEAVY WEIGHT motorcycles in Japan and sells them in the United States. Heavy Weight Inc., the owner of the HEAVY WEIGHT trademark in the United States and Japan, seeks to enjoin their sale. Heavy Weight proves that the imported HEAVY WEIGHT motorcycles are materially different from their domestic counterparts because, among other things, they have smaller tires and a lower maximum speed. Although Importers Inc. includes a disclaimer at the point of sale, the court rules for Heavy Weight.

Wholesalers Inc. buys and sells used HEAVY WEIGHT motorcycles in the United States. Heavy Weight Inc. seeks to enjoin their sale. Heavy Weight proves that the used and new HEAVY WEIGHT motorcycles are materially different. Indeed, the used motorcycles have been repaired following accidents, stripped of the HEAVY WEIGHT mark, repainted, and rebranded with the HEAVY WEIGHT mark. Noting that Wholesalers Inc. includes a disclaimer at the point of sale, the court rules against Heavy Weight.

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