Hayward Industries has emerged victorious this February in a multi-million-dollar trademark infringement lawsuit filed against Blue works Corp., a swimming pool equipment manufacturer.
The complaint, filed in December 2020 in the United States District Court for the Western District of North Carolina, accused Blue Works of “trademark infringement, false advertising, counterfeiting, passing off, false designation of origin, unfair competition, and related claims, all in violation of the Lanham Act, as well as North Carolina statutory and common law.”
Blue Works was accused of false advertising and counterfeiting several types of salt cell replacements on multiple websites. Hayward alleged that Blue Works passed off their replacement salt cells — particularly Hayward’s T-CELL-15 — as its own. For example, when consumers searched advertisements on Amazon and other websites for Hayward’s T-CELL-15 salt cell, they were instead directed to “Blue Works T-15-Cell compatible with Hayward Goldline AquaRite Systems.”
In another example, Blue Works used the word “Turbo Cell” in advertising their product, of which Hayward owns the federally registered trademark.
According to the lawsuit, through Amazon, a retailer can buy keywords that it expects a consumer might enter when looking for products. When those keywords are entered, the retailer’s advertisement appears in the search results.
The complaint stated that Blue Works purchased Amazon keywords based on Hayward’s products.
“On information and belief, defendants purchase from Amazon keywords that are based on the Hayward marks to improve their chances of appearing in searches for Hayward salt cells,” the complaint stated.
Furthermore, on its website, Blue Works advertised “Generic Hayward” products, such as flow switch kits and salt cell replacements.
“Hayward does not manufacture, advertise or sell any generic products,” the complaint stated.
According to Hayward, these ads, and others like them, constitute trademark infringement as well as false advertising and unfair business practices under North Carolina Unfair and Deceptive Practices Act.
In February, the case was heard by a North Carolina jury, which agreed with Hayward on the false advertising charges. The jury ordered Blue Works to pay Hayward $4.9 million for lost profits.
In addition, because of the Uniform Deceptive Trade Practices Act, this amount was tripled, meaning the total damages for false advertising is $14.9 million.
