Miles Moore, Senior Washington Reporter
YAKIMA, Wash. (May 20, 2014) — A Washington federal court judge has granted OTR Wheel Engineering Inc.’s request for a preliminary injunction in a trade secrets case against West Worldwide Services Inc., a Clive, Iowa-based tire and tube distributor.
Judge Lonny R. Suko enjoined West Worldwide May 14 against making any commercial use of OTR Wheel’s “Outrigger” tire tread design or using any of OTR Wheel’s proprietary trade secrets for any reason.
Judge Suko scheduled the injunction to go into effect as soon as OTR Wheel posted a bond of $1.8 million. West Worldwide stands to lose $150,000 a month from the loss of sales according to OTR Wheel’s attorneys, and the case probably will take at least a year to come to trial, Judge Suko said.
“The amount of the injunction bond should…be sufficient to compensate defendants for loss of revenue and destruction of customer relationships in the event defendants ultimately prevail on the merits,” he said.
Rome, Ga.-based OTR Wheel, a private-brand/contract tire distributor, filed suit April 2 against West Worldwide in the Eastern Washington federal district court. In the document, the company said it holds a patent on the Outrigger tire design.
“In addition to a lower profile and flat tread face, OTR created, designed and authored a distinctive trade dress for the Outrigger tire tread designs,” OTR Wheel said. “The improved tires and unique design came at substantial expense and years of effort, but the Outrigger tire and its trade dress is now the leading tire in the AWP (aerial work platform) industry.”
In 2007 Camoplast Inc. — the predecessor company to the current Camoplast Solideal and a 49-percent owner of Blackstone/OTR, a separate marketing/distribution company controlled by OTR Wheel's top executive, Fred Taylor — made a deal with the Chinese tire maker Shandong Hawk Rubber Co. Ltd., also known as Superhawk, for Superhawk to make Outrigger tires in China for OTR Wheel/Blackstone.
As part of the deal, Campoplast revealed the patented Outrigger design to Superhawk.
In the suit, OTR Wheel accuses Superhawk and West Worldwide of misappropriating OTR Wheel’s trade secrets and other intellectual property rights to make tires for West Worldwide to sell under the Outrigger name.
When Camoplast demanded Superhawk stop making the infringing tires, Superhawk merely moved production to another company with the same ownership as Superhawk, OTR Wheel alleges.
“Defendants’ sale and distribution of tires containing the trade dress constitutes a deliberate, intentional attempt to trade and capitalize on the substantial goodwill of OTR Wheel’s trade dress,” OTR Wheel said.
The company asked the court for preliminary and permanent injunctions against West Worldwide for making or distributing the allegedly imitation tires, as well as lost profits and revenues, damages, attorneys’ fees and post-judgment interest.
In its brief opposing a preliminary injunction, West Worldwide said the Outrigger tire tread pattern was “functional and generic,” rendering OTR Wheel’s claim without merit.
“Plaintiffs were not the first or only party to use the tire tread at issue, and plaintiffs fail to cite any evidence they have indicating the tread design is a trademark or indeed a registered trademark,” West Worldwide said in the April 16 document, which provides as evidence more than a half-dozen tires from other manufacturers and distributors that are similar to the Outrigger.
Judge Suko, however, ruled there was “a likelihood” OTR Wheel would win the case on the merits of its trade secret claims.
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How have tire prices been in the last few months?
|They've gone up 1-5%||
|They've increased 6-10%||
|They've stayed flat||
|They've gone down between 1 and 5%||
|They've gone down 6-10%||
|They've dropped more than 10%||