Federal judge demanded Port of Charleston release seized water bottles
A federal judge demanded U.S. Customs and Border Patrol agents at the Port of Charleston to release $12 million worth of previously seized water bottles resembling the popular brand S'Well to be released, according to court documents.
The bottles belonged to company ETS, Inc., and were seized at various times over the summer.
ABC News 4 didn't learn of the seizure, though, until this week when the Port of Charleston, along with U.S. Customs and Border Patrol issued a press release. Following the release, we were contacted by Los Angeles-based attorney and lead counsel for ETS, Inc. Marvin Kleinberg.
Kleinberg said the seizures conducted over the summer were done improperly by customs agents. A federal judge granted an injunction on behalf of ETS, Inc. in September.
Kleinberg said neither ETS, Inc. nor S'Well allege the bottles seized were counterfeit. Therefore, Kleinberg can't explain why U.S. Customs and Border Patrol issued a press release stating the Port of Charleston seized millions worth of counterfeit S'Well bottles weeks after a federal judge in New York granted an injunction demanding the port release the goods.
"It was a mistake, an innocent mistake but a mistake nevertheless," said Steven Fink, president of L.A.-based Lexicon Communications Corporation. "S'Well was doing what it needed to do, but they never claimed that they were counterfeit, because they are not counterfeit. The customs folks were seizing them based on something no one ever claimed."
"It was certainly damaging to ETS, because even though they didn't name the company the goods were seized from, they put pictures of the boxes in that photograph," Kleinberg said. "The people who matter most to us, namely our customers, will recognize those boxes come from ETS."
Kleinberg explained the controversy over the bottles began in 2014 when ETS started importing a similar bottle shape to that of S'Well and subsequently received letters from S'Well's attorneys.
Kleinberg said he promptly answered, but he never heard back from S'Well.
Then, two years later, Kleinberg said S'Well got a trademark registration for the design for the bottle. He said the company then registered that design with Customs, as is common practice so Customs can use the registration to seize counterfeit goods.
Kleinberg said S'Well sued ETS in April alleging S'Well is the exclusive user of that particular bottle shape. Kleinberg disagrees and said he has proof.
"At the time they knew there were several on the market including us," he said. "We presented the judge with 46, and we're still looking for additional ones."
Still, Kleinberg said Customs agents in Los Angeles, Savannah and Charleston began delaying and seizing their shipments based on the wrong law -- that their goods were counterfeit.
Kleinberg said even if S'Well's trademark were valid, which he believes it's not, ETS's product would be grandfathered in and, therefore, not counterfeit.
Kleinberg said ETS's bottles were produced long before S'Well's trademark registration. All of this, he said, is why a judge in U.S. District Court for the Southern District of New York ruled in favor of ETS last month.
Kleinberg won't stop there, though. He seeks to cancel S'Well's trademark registration. He also seeks damages of some sort on behalf of the company.
"We think that there was an improper application for registration, because we think that S'Well knew that they were not the exclusive distributor of that design and yet they claimed under oath that they were."
ABC News 4 reached out to S'Well for comment. We have not heard back.