Burnaby business sued in alleged counterfeit dumbbell conspiracy

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Burnaby business sued in alleged counterfeit dumbbell conspiracy


Purchase of adjustable dumbbells at Brentwood Fitness Town sparks lawsuit from PowerBlock

In the fall of 2020, a customer walked into a Burnaby fitness equipment business and walked out with a set of adjustable dumbbells that would spark an international legal battle that has now entangled stores in Vancouver, North Vancouver, Port Coquitlam, Surrey and Langley.

The man bought the dumbbells at Fitness Town on Lougheed Highway, close to the Vancouver border, according to documents filed in B.C. Supreme Court. 

On Nov. 10, 2020, however, he reached out to customer service at PowerBlock, an American company that makes adjustable dumbbells.

“I just bought what I think are a pair of powerblocks from a Canadian fitness store called Fitness Town in Vancouver,” stated his email, quoted in court documents. “However, once I got home I became suspect that they are knock off versions.”

In an ensuing email exchange, a PowerBlock representative asked the customer if he’d be willing to go back into the store and do a little snooping around for the American company.

“Would you be able to go back into Fitness Town Burnaby and capture some photos?” the representative asked. “If this does go anywhere, you wouldn’t have to testify in any way but we are just curious of the layout and stock displayed. We have PI’s going in but our legal team needs to cover some tasks prior to entering and we’d like to capture something before all product may be sold out.”

The customer agreed to take some videos at the store and to ship PowerBlock the adjustable dumbbells he had bought there.

The PowerBlock representative then offered the customer his pick of PowerBlock products.

“Take a look at our website to see what set you want to replace yours with,” stated the email.

Lawsuit

Less than two months later, the American company launched a lawsuit against Fitness Town for trademark violations, accusing the business of misleading members of the public into believing the “counterfeit goods” it had sold were genuine PowerBlock Dumbbells.

The company claimed Fitness Town had “made a profit and been unjustly enriched” to the “deprivation” PowerBlock, according to a notice of civil claim filed in B.C. Supreme Court.

PowerBlock further accused Fitness Town of conspiring with unidentified other parties to get an unlawful and unfair competitive advantage over PowerBlock.

It is suing Fitness Town for damages and for what it calls the business’s “wrongful gains” from the sale of the dumbbells.

PowerBlock is also seeking court injunctions to stop Fitness Town from selling the alleged counterfeit dumbbells.

In its response, Fitness Town – which has been an authorized PowerBlock distributor since as early as 2010 – denied PowerBlock’s allegations.

James Newman (the sole director and officer of Fitness Town Inc., of which all the Lower Mainland Fitness Towns are wholly-owned affiliates) has testified his company ordered various weights and other products, including adjustable kettlebells, from its supplier.

Instead of the adjustable kettlebells, however, he said the supplier had sent adjustable dumbbells. 

He said Fitness Town decided to sell through the dumbbells and never order them again.

“They were called Fitness Town Direct adjustable dumbbells and he states instructions were given to store employees not to refer to them as PowerBlocks,” stated a court ruling this week.

‘Commercially sensitive information’

Multiple applications have been filed in the case.

In January, PowerBlock applied to the court for an order forcing Fitness Town to provide unredacted copies of a purchase order and invoice from Fitness Town’s Chinese supplier, Rizhao Land Sea Fitness Goods Co. Ltd, as well as unredacted copies of Fitness Town’s product sheet and sales receipts.

Fitness Town, however, argued the redacted purchase order, invoice and product sheet contained “confidential and commercially sensitive information.”

It described PowerBlock’s application as a “fishing expedition” filed in the hope of finding evidence to support its sweeping allegations.

Fitness Town also argued against releasing the redacted sales receipts, including the names, addresses and telephone numbers of customers who bought the alleged counterfeit dumbbells.

The company said it was concerned PowerBlock would “once again” offer those customers “improper incentives in order to solicit favourable evidence” as Fitness Town suggested PowerBlock had done with the Burnaby customer who originally contacted them.

Latest ruling

In a ruling Monday, however, B.C. Supreme Court Master John Bilawich ultimately ruled the customer information was “relevant and ought to be produced.”

He also ordered Fitness Town to supply PowerBlock with non-redacted copies of the purchase order, invoice and product sheet.

Bilawich called Fitness Town’s evidence about the commercial sensitivity of the redacted information “largely non-specific” and said the risk of disclosure could be mitigated with a specific confidentiality order if needed.

The lawsuit continues to make its way through B.C. Supreme Court.

The allegations of the two parties have not been proven in court.

Follow Cornelia Naylor on Twitter @CorNaylor

Email cnaylor@burnabynow.com





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