Stanley Black & Decker filed a federal lawsuit this week claiming that Sears has violated an agreement that limited how the struggling retailer could market the Craftsman brand of tools.
Stanley cited unflattering social media posts to prove that Sears is causing confusion among customers by marketing a new Craftsman line that Stanley did not authorize.
Stanley paid $900 million in 2017 to acquire the Craftsman brand and all related trademarks from Sears, an agreement that gave the Connecticut-based tool maker with divisions headquartered in Towson control over how to “strategically plan for and position” the popular line of Craftsman products.
But two weeks after Sears emerged from bankruptcy Feb. 8, the reorganized retailer “launched its own new line of professional-grade mechanics’ tools under the sub-brand ‘Craftsman Ultimate Collection,’” states the lawsuit, filed Wednesday in U.S. District Court in Manhattan.
Sears’ announcement of the new line states that the company is “the real home of the broadest assortment of Craftsman,” the news Feb. 21 release states.
The launch of a new line of tools under the Craftsman Ultimate Collection “sub-brand constitutes a direct and material breach of the license agreement,” the lawsuit states.
By calling itself the “real home,” Sears “falsely implies” that only products carried in its stores are “genuine Craftsman products or that the sale of Craftsman products elsewhere is somehow illegitimate,” the lawsuit states.
Stanley claims that the marketing strategy by Sears “disparages” Craftsman products sold through Stanley’s retail outlets “and dilutes and tarnishes the value of the famous Craftsman trademark for which Stanley paid hundreds of millions of dollars to acquire,” the lawsuit states.
In addition, Stanley alleges that Sears is causing customer confusion and “poses an imminent threat of irreparable harm to Stanley.”
Sears officials did not return requests for comment Thursday.
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Stanley has asked the court to impose a temporary halt to Sears’ marketing, advertisement and sales of the Craftsman Ultimate Collection.
After Stanley acquired the Craftsman brand, the company “invested heavily” to rapidly expand sales, in part, through a strategic alliance it announced in May 2018 with Lowe’s to carry certain lines of the product. And in September, Stanley launched a full line of Craftsman tools, “including the introduction of over 1,200 new tools and products” to be released through an expanded network that includes Lowe’s, Ace Hardware and Amazon.com.
To demonstrate customer confusion, Stanley included several social media posts about the Craftsman Ultimate Collection.
In the Craftsman Tool Collectors Facebook group, a consumer asked: “Anyone know anything about the Craftsman Ultimate Collection?” One response: “This is just Stanley garbage repackaged and rebranded.”
The lawsuit claims that two customers responding to Sears’ social media post about the Ultimate Collection confirms that the brand is causing confusion. One customer wrote, “I can tell you these new ultimate series are top notch, much better than the Stanley owned variations.”
Stanley has asked the court to issue a cease and desist order to Sears and to award damages and attorney’s fees in addition to other penalties.
In addition to being represented by a New Jersey law firm, Stanley’s other counsel is Jessica duHoffman from Baltimore-based Miles & Stockbridge, according to the lawsuit.