ZAGG Inc. v. Ichilevici, 2026 WL 63142, No.
23-cv-20304-ALTMAN/Reid (S.D. Fla. Jan. 8, 2026)

ZAGG sells a variety of screen protectors, power management
solutions, mobile keyboards, cases, and personal audio products, including my
beloved Mophie. Defendant DVG resells products, including ZAGG products,
through Amazon. ZAGG sued DVG for false advertising and trademark infringement;
DVG counterclaimed for false advertising/unfair competition/defamation. Here,
the court rejects the parties’ cross motions for summary judgment on trademark
and also leaves for the jury the related question of whether DVG’s listing of its
ZAGG products as “new” was false advertising, while dismissing the rest of the
counterclaims.

DVG bought its ZAGG products in a liquidation pallet from a
wholesaler. ZAGG argued that DVG’s advertisements are false because “Amazon’s
guidelines require a product listed for sale as in ‘New’ condition to be ‘brand
new’ and [ ] covered by a manufacturer’s warranty.”

Both parties produced Amazon pages supporting their views: it
seems that Amazon’s buyer-facing “Condition Guidelines” define “New” as: “Just
like it sounds. A brand-new item. Original manufacturer’s warranty, if any,
still applies, with warranty details included in the listing comments. Original
packaging is present for most New items but certain items like shoes may be
re-boxed.” However, the Amazon FBA Guidelines and Seller Central, in defendants’
telling, “simply require that the item is brand-new and unused, free of
blemishes, smudges or dirt, and in the original packaging,” and defendants
submitted an expert report in support of this view.

Past cases haven’t involved listings where a seller, like
DVG here, notifies purchasers that “it is not an authorized reseller” of ZAGG
products and urges them to “check with the manufacturer to see if a warranty
may apply.” Thus, there was a disputed question of material fact on literal
falsity.

The court also sent the “liquidation” theory of falsity to
the jury, though I’m not sure it should have under its own standards, given
that ZAGG had the burden of proof here. The “thrust” of ZAGG’s argument was
that, because DVG couldn’t “verify the full chain of custody or history of each
individual item,” it couldn’t confirm that was actually selling “brand new”
items.  Sure sounds like lack of
substantiation to me.

Later, the court found that ZAGG submitted enough to get to
the jury on injury: “diversion of sales to a direct competitor [is] the
paradigmatic direct injury from false advertising.” “There’s no question that
ZAGG and DVG are direct competitors and that they sell the exact same products.”

Trademark infringement: Again, ZAGG argued that defendants
had the burden of proving a complete chain of custody, back to sale by ZAGG,
before they could raise a first sale defense. (So much for selling your used stuff!)
The court’s research did not find any cases imposing this trace-to-manufacturer
requirement. DVG disclosed the identity of its supplier and produced documents
and testimony about that supplier’s sales to DVG. The circumstances weren’t
suspicious, as in another case where defendant claimed to have “found [products]
in storage units he acquired,” and the plaintiff submitted “proof that the
products [the defendant sold] were returned product not to be resold.”

There was no record evidence behind ZAGG’s speculation that
DVG was selling counterfeit or damaged goods; it conceded that all the products
it bought in test buys were genuine. DVG also attested (under oath) that all
the ZAGG products it buys are “independently sorted and graded in accordance
with Amazon’s condition guidelines before sending them to Amazon’s warehouses”
and that “[m]any of the products come in their original case packs from the
factory.”

“So, while DVG may not know where its supplier gets its ZAGG
inventory, that break in the custodial chain isn’t sufficient, standing alone
and at summary judgment, to render the first-sale doctrine inapplicable as a
matter of law. We’ll therefore permit DVG to assert its first-sale defense at
trial.” Still to come: who has the ultimate burden of proof here? I would think
it would have to be ZAGG, even if first sale is labeled a “defense” for convenience: The burden is still on ZAGG to show that defendants sold infringing products, and, just as the defense “this mark isn’t confusing because it’s different enough” would not shift the burden of proof to defendants, “this mark isn’t confusing because it’s a legitimate good from the TM owner” seems like it shouldn’t do so either. 

There were also disputed issues on the “material difference”
exception to the first-sale doctrine. “A material difference is one that
consumers consider relevant to a decision about whether to purchase a product.
Because a myriad of considerations may influence consumer preferences, the
threshold of materiality must be kept low to include even subtle differences
between products.” ZAGG argued that some of the products have been “opened,
repackaged, restickered, or damaged,” and DVG’s products don’t “carry the
manufacturer’s warranty.” DVG argued that it “meets or exceeds” the terms of
ZAGG’s warranty because it offers to replace customers’ defective items without
charging them a $10 shipping fee. This was a jury question, including on DVG’s
expert testimony that any damage to the products’ packaging likely occurred in
transit.

DVG’s defamation counterclaim based on ZAGG’s trademark
reports to Amazon was dismissed because it didn’t show falsity or negligence. One
claim that a test buy product had been “altered” and three that the product was
“wrong” were not shown to be false: the first had been opened and the packaging
seal removed, and the other three had different SKUs than listed. DVG didn’t
meet its burden of showing that the different SKUs didn’t matter.

from Blogger http://tushnet.blogspot.com/2026/01/court-rejects-tm-owners-attempt-to.html