FOLLOW US

In a twist worthy of a courtroom drama, the Second Circuit Court of Appeals has revived a trademark infringement and counterfeiting lawsuit brought by speaker giant Altec Lansing against a U.S. importer accused of selling unauthorized branded products sourced from a Chinese manufacturer.

At the heart of the revived case is a murky chain of speaker sales—and whether Shenzhen Fenda Technology Co. Ltd. had any legal right to produce Altec Lansing-branded speakers without the company’s consent.

Appeals Panel Questions Summary Judgment

On Tuesday, a three-judge panel unanimously sent the case back to the Southern District of New York, effectively reversing an August 2023 summary judgment in favor of defendant Crown Cell Inc. The panel found that plaintiff AL Infinity LLC, the entity that owns Altec Lansing’s brand, had raised a “genuine dispute” about whether the speakers at issue were made with authorization.

“AL Infinity’s principal asserted by sworn affidavit that AL Infinity owned the Altec Lansing brand and had not consented to Fenda’s production,” the panel said. “These models hadn’t been in AL Infinity’s line since its 2012 acquisition, nor in the prior owner's line for years before.”

The Origins of the Dispute: Old Speakers, New Controversy

The lawsuit stems from Crown Cell’s 2016 and 2017 purchases of two speaker models bearing the Altec Lansing name. The units were bought from Westview Industries, which in turn sourced them from Fenda in China. But the speakers raised red flags: AL Infinity sent a cease-and-desist letter in May 2017, prompting Crown Cell to remove the products from at least one online retailer’s website.

AL Infinity subsequently filed a 2020 lawsuit, alleging trademark infringement and counterfeiting. Crown Cell fired back with a third-party claim against Westview, citing indemnity and breach of implied warranty.

The Licensing Tangle: What Fenda Could and Couldn’t Do

Westview and Fenda claimed they once had a right to make and sell Altec Lansing products. But the panel pointed to a 2004 memorandum of understanding between Fenda and Altec Lansing Technologies Inc., the former trademark owner. The agreement authorized Fenda only as a supplier, and explicitly prohibited it from selling Altec products unless licensed.

“The agreements suggest Fenda was once authorized—but not to manufacture and sell on its own account,” the judges wrote.

That contractual distinction, the court said, was critical and enough to defeat summary judgment.

What’s Next: Back to Trial Court

With the case now heading back to federal court in New York, the litigation is expected to dive deeper into the ownership history of the brand, product authentication, and supply chain responsibilities.

An attorney for AL Infinity hailed the decision as a victory, stating, “We think the Second Circuit made the right call.”

Counsel for Crown Cell has not yet commented on the ruling.