When you license your brand name for a 3rd party product, you expect the arrangement to be all upside. But if that product turns out to be defective, can you be liable—even if you didn’t have anything to do with the design, manufacturing, or sale of the product?
A recent case involving Emerson Electric Co.’s RIDGID [sic] brand brought this question to the forefront.
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The Ridgid Table Saw Case
The case is Shukrullo Dzhunaydov v. Emerson Elec. Co. The plaintiff, Shukrullo Dzhunaydov, injured his hand while operating a 10″ table saw. From the Memorandum and Order in the link:
The saw that injured Dzhunaydov’s hand bore the “Ridgid” trademark. The mark is owned by Ridgid, Inc., a wholly-owned subsidiary of Emerson. Emerson licensed the Ridgid mark to Home Depot pursuant to a licensing agreement. Home Depot used the mark to market a line of power tools, which were designed and manufactured by other companies on Home Depot’s behalf.
Dzhunaydov filed suit against several parties, including Emerson, in the U.S. District Court for the Eastern District of New York. This is a Federal court.
Remember that Emerson had nothing to do with the saw other than having lent its RIDGID brand name to the product. The court noted that “Dzhunaydov has not produced any evidence to demonstrate that Emerson contributed to the saw’s chain of distribution.”
However, in order to avoid a claim of “naked licensing,” Emerson had to exercise some control over how its mark was used. From the court document: “Under the licensing agreement, Emerson retained limited authority over the Ridgid mark, akin to a right to approve for quality control.”
But, importantly, that quality control only extended to the saw’s non-functional design features, such as the color and appearance of the RIDGID label.
Emerson filed for summary judgment—meaning, they asked the court to dismiss Dzhunaydov’s claims against them at an early stage in the legal proceedings.
Although this case was in Federal court, the court applied New York law for this particular issue. They noted, citing a prior case:
Under New York law, “[a]trademark licensor cannot be held liable for injuries caused by a defective product bearing its label where the licensor did not design, manufacture, sell, distribute or market the allegedly defective item.”
Accordingly, the court granted Emerson’s petition, so they were dismissed from the case.
What Does This Mean for Licensors?
While the law does vary from state to state, this accords with most states’ positions on the issue. For more detailed information, see this law review article: “Products Liability and Intellectual Property Licensors.”
In general, as long as you aren’t exercising control over the functional aspects of the product itself, it’s not likely that, as a licensor, you are liable for defects in the product. But, of course, you should always consult an attorney for advice on your specific issue.
