AL INFINITY LLC, Plaintiff-Appellant, v. HERSCHEL SPALTER, ISSER BOYARSKY, DOES 1-10, Defendants-Appellees,CROWN CELL INC., Defendant-Third-Party-Plaintiff-Appellee, WESTVIEW INDUSTRIES, INC., Third-Party-Defendant. 24-1412, (Second Circuit July 15, 2025)
District Court’s Error on Authorization and Burden of Proof:
◦ The district court initially granted summary judgment for the defendants because it found that AL Infinity had failed to present evidence that Fenda was not authorized to manufacture the speakers.
◦ It reasoned that information about authority was “uniquely within [AL Infinity’s] control” and found the “absence of evidence” telling, given that Fenda “was at one point authorized to produce Altec Lansing goods”.
◦ The district court concluded that if the goods were not “inauthentic”—meaning manufactured without legal authority—then the predicate for all of AL Infinity’s claims (including trademark counterfeiting, trademark infringement, and related New York state law claims) no longer existed.
• Appellate Court’s Reversal Based on AL Infinity’s Evidence:
◦ The appellate court disagreed, concluding that AL Infinity did create a genuine dispute of fact.
◦ Sworn Affidavit: AL Infinity’s principal asserted by sworn affidavit that AL Infinity, as the owner of the Altec Lansing brand, had not consented to Fenda’s production of the speakers. This affidavit further stated that the specific speaker models had not been part of AL Infinity’s product line since its acquisition of the brand in 2012, nor in the prior owner’s line for years before that. The court found this “sufficient evidence to support an inference that the Altec Lansing branded speakers that Fenda supplied to Crown Cell in 2016 and 2017 were manufactured without the consent of the owner of the trademark”.
◦ Rejection of Defendants’ “Prior Authorization” Argument: The defendants argued that AL Infinity had conceded Fenda and Westview were once authorized, and therefore AL Infinity bore the burden to prove these authorizations were terminated. The appellate court rejected this:
▪ Fenda’s Past Authorization: While Fenda (or its affiliate Fenda Industrial) had past agreements (like the 2004 MOU and 2009 agreement) to manufacture goods as a supplier to prior Altec Lansing owners, these agreements did not suggest Fenda had the authority to manufacture the speakers on its own account or for sale to other purchasers like Westview, especially not in 2016 or 2017. The court found these documents did not provide a basis to require AL Infinity to prove the termination of Fenda’s limited authority.
▪ Westview’s Past Authorization: The court noted that the Amendment to Sales Representative Agreement, which reflected Westview’s past authority to solicit orders for Altec Lansing products, itself stated that Westview “shall no longer be appointed to solicit orders for the Altec Lansing Products” as of December 1, 2009. This document effectively satisfied any potential burden on AL Infinity to show the cessation of Westview’s authority.
◦ Insufficient Rebuttal: The court found that the specific evidence presented by Crown Cell regarding past authorizations did not conclusively rebut AL Infinity’s sworn statement that the speakers were manufactured without authorization. The court implied that if Crown Cell wished to contend the speakers were manufactured before 2012 under a prior authorization, or solicited under existing authority, Crown Cell would need to present evidence to support that.
In essence, the holding is based on the appellate court’s determination that AL Infinity provided sufficient evidence (via its principal’s sworn affidavit) to create a genuine factual dispute over whether the speakers were unauthorized, thereby meeting its prima facie burden for trademark infringement and counterfeiting. The defendants’ arguments relying on past, limited authorizations were deemed insufficient to eliminate this factual dispute, as those authorizations did not pertain to the independent manufacturing and sale activities in question. This meant the case was not ripe for summary judgment, and the factual dispute needed to be resolved in further proceedings.