- Posted by lawyeradmin
- On June 28, 2017
As the entire retail sector within the United States continues to experience a drastic downturn in profitability, forcing many companies to downsize or even shut their doors completely, one particular store – a former giant of the industry – has had an exceptionally difficult last quarter.
The large retail supplier, Sears, who was once the symbol of and anchor for many of America’s malls, has found itself fighting on multiple fronts as it struggles to keep its doors open, despite the end of America’s love affair with large brick and mortar department stores. Amidst news that the company has decided to extend closures of stores to include an additional 20 locations, it has recently come to light that the retail giant lost a lengthy courtroom battle it had been fighting against a small father and son tool manufacturing company.
The Bionic Case against Sears…
The case brought against Sears by Loggerhead Tools LLC stemmed from a business agreement that began to sour once the retail giant had allegedly failed to uphold its end of a purchase agreement. At the center of the entire case, was a small wrench designed by the patriarch of the father and son company.
That wrench, which Loggerhead LLC aptly named the Bionic Wrench, became the focal point of one of the most interesting patent infringement lawsuits within recent memory.
A Business Deal Leads to Predatory Practice…
The relationship between the retail giant and the small hand tool manufacturers began late in 2009 as Sears prepared for the upcoming holiday season.
Loggerhead Tools LLC, which had found significant success in selling its patented Bionic Wrench through smaller distributors agreed to provide the retail giant with a significant sale order in anticipation of high sales during the holiday season. And as expected, the product sold extremely well; so much so that Sears approached the small company with a deal that would give Sears exclusive rights to the bestselling product.
This would prove to be the beginning of what would eventually amount to willful infringement by Sears.
Over the next few years, as profits continued to slide throughout the entire retail sector, Sears found itself unable to uphold its end of the 200,000 product order. This and several other disagreements between both parties lead to dissolution of the original deal, which would prove pivotal in framing the company’s actions following the break.
Not long after the Bionic Wrench was no longer available in Sears’s retail spaces, the retail giant began selling its own version of the Bionic Wrench under a different name. It was this decision to engage in what was eventually determined to be a calculated act of patent infringement that led to the lawsuit over the Bionic wrench, and the eventual verdict against Sears.
When the case was brought before a judge, it was decided that individuals within Sears, and the companies they utilize for tool production, had illegally infringed upon Loggerhead Tools’ patent. The resulting penalty for willingly engaging in unscrupulous business tactics would prove costly for the former retail giant as the small father and son company won damages of nearly $6 million dollars while retaining the right to actively seek more damages.
The case between Sears and the small company has since then become a symbol of a small company’s right to exist in the face of large corporate opposition, a David and Goliath type story of success against overwhelming odds.