Article from the Portland Oregonian:
21 years ago, an Oregon man started making classic guitars -- now he's in the legal battle of his life.
CLATSKANIE, OREGON - Mar 11, 2014 - Jack Charles, the owner of Phantom Guitarworks, has been making guitars out of his home studio since 1992. Now he's being sued by Korg, a rival corporate manufacturer.
Jack Charles was in the sixth grade when he turned on “The Ed Sullivan Show” and saw the guitar that would become his passion.
"The Stones (were on) and Brian Jones was playing a teardrop. I thought that was the coolest-looking guitar I'd ever seen in my life," he said.
More than two decades later, after his own career as a rock musician, Meussdorffer set up shop in Clatskanie, Ore., and began making his own instruments, inspired by the one he saw Jones playing. But after building a reputation for 21 years as the maker of his trademarked Teardrop, Phantom and MandoGuitars, he’s now facing a lawsuit that threatens to topple his business.
On Sept. 3, 2013, the multinational company Korg Inc. and its affiliates filed a complaint against Meussdorffer and his Phantom Guitar Works company, seeking to cancel several of Meussdorffer's long-held trademarks and claiming "tortious interference" with the brand's own models. Meussdorffer and his legal team filed a counter-claim, and the case has slogged on ever since.
There is no assembly line in Meussdorffer’s Clatskanie workshop: it’s too cluttered with the tools and assembled pieces and wires he uses to hand-make his instruments. In a year, he’ll produce between 250 and 400 instruments styled after the seminal guitars introduced by the British company Vox in the 1960s. But Korg’s instrument production has threatened his sales. Its legal action could do much worse.
Korg's primary legal argument against Meussdorffer is that his trademarks, the Phantom and Teardrop names and shapes, have become generic and thus public domain. Eastern District New York Magistrate Judge Gary R. Brown found Korg's evidence for some of its claims "lackluster," but his advice for a preliminary injunction, which could halt either side’s production, recommended protecting only Meussdorffer’s Phantom trademark -- not the Teardrop, citing the trademark as "less distinctive." That was in February: the lawyers are still arguing about it, with another judge still to face.
A long and winding road
Meussdorffer and Korg have engaged in a legally complex relationship since the musician began making and selling the guitars in 1993. Vox fell into hard times after its '60s heyday, and Korg, founded in Japan in 1963, snapped up the company in 1992, seeking to capitalize on the brand's British Invasion legacy with amp and instrument reissues, including its current Apache line.
Unlike Meussdorffer’s consistent production, Korg has manufactured its versions only intermittently since acquiring Vox, ramping up in 2012 with the Apache models. One of these instruments is currently available at Urban Outfitters, marketed under the Phantom name in flagrant disregard for Meussdorffer’s trademarks. On its own site, Vox is less deceptive, crediting Phantom Guitar Works with the ownership of the Phantom and Teardrop names. Phantom Guitar Works' upscale models run from $750 to $999, but Korg's -- made in Asia, not Oregon -- are half the price, and Meussdorffer has policed his trademarks rigorously as the powerful company pushed into his market.
Apart from its Vox line, Korg makes an array of musical equipment distributed to hundreds of stores: it’s best known for synthesizers such as the MicroKorg. A private company, Korg Inc. does not release its sales figures, but its official website states it has 290 employees: Meussdorffer calls them a "$40 million company." Korg’s publicity department did not respond to multiple Oregonian requests for comment.
The pair’s relationship wasn't always contentious. Meussdorffer began his dealings with the company at the National Association of Music Merchants trade show in the '90s, where he debuted his instruments: in their first encounter, Meussdorffer even loaned Korg representatives his guitars to go with their vintage amps.
"They showed up to the NAMM show with their AC30 amplifiers and came to my booth and said, 'We're Korg and we now own Vox, can we borrow your guitars for our booth?'" he said. "And I said 'Sure.' We were getting along just fine."
Negotiations went back and forth for years. At one point, "they wanted to hire me," Meussdorffer said, and the two parties were discussing licensing before Korg filed its claims last year. He's been a staunch protector of his trademarks on the guitar names and designs, "painstakingly" digging through eBay listings to prevent the terms being applied to similar instruments. He sent out cease-and-desist letters, worried that Korg's editions would confuse customers.
"Korg got sick of it and now have decided I shouldn't have the trademarks," he said.
How did Meussdorffer register trademarks on another company’s vintage guitars? Quite simply, they were available: neither government records nor the case’s legal filings indicate the original Vox ever held U.S. trademarks on “phantom” or “teardrop” (a term Vox didn’t officially use in its '60s marketing), and with his own productions in place, Meussdorffer was able to successfully acquire trademarks on both names and body shapes for his instruments. His legal protections seemingly in hand, Meussdorffer was able to build a business that revived and improved the instruments for a new generation of players.
His trademarks are old enough to be incontestable, a legal status that protects against some but not all of the arguments against them. Lydia Loren, professor of advocacy and ethics at Lewis & Clark School of Law, said the design trademarks could still be under fire for functionality, which is the domain of patent law -- in other words, if the guitar shape has a functional capacity and not just a stylistic look, a trademark can't protect that -- while the name marks, as with the "less distinctive" Teardrop, can be challenged as generic if they're well-known beyond a specific brand. (Like using "Google" as a verb for searching, for instance.)
"That's the fundamental baseline for trademark law, making sure consumers don't get confused," Loren said.
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