Mid-States Energy enjoined from selling or offering for sale any lubricant products in five-gallon buckets or 55-gallon drums bearing a label with CITGO trademark or name.
Mid-States Energy Inc. (MSE) was established in Lake Wales Florida in 1957. The company has been a distributor of CITGO lubricants since 1994. Under its agreement with CITGO, MSE is authorized to repackage bulk lubricants purchased from CITGO and use the CITGO name and trademarks in connection with the resale of these products.
Whereas many in the lubricants business are familiar with such common repackaging agreements, the train came off the tracks on this one when MSE and its Highland Oil Division allegedly put something other than CITGO in the drums and pails it sold with CITGO labels.
According to court filings, CITGO became aware of this issue when a representative of the Independent lubricant Manufacturers Association (ILMA) notified CITGO that samples of TRANSGARD Tractor Hydraulic Fluid it purchased and had tested failed to meet CITGO's stated performance specifications. And beyond not meeting CITGO's stated specification for this product, it allegedly did not meet the basic industry standard for tractor hydraulic fluid.
After receiving this information, to the credit of CITGO, it checked its records of sales to MSE and found that whereas MSE had not purchased TRANSGARD THF from CITGO since 2008, it obtained CITGO packaging labels for TRANSGARD THF from a CITGO vendor as recently as February 2012. Based on these discoveries, CITGO preceded to have the full line of CITGO lubricants sold by MSE tested. These products included motor oils, EP compounds, hydraulic fluid, transmission fluid, and gear oil. According to CITGO's complaint, five of the 10 products repackaged and sold by MSE under the CITGO brand were not CITGO products.
Based on these findings and facts, the court found that CITGO had demonstrated a reasonable likelihood that MSE infringed upon CITGO's trademark and that such acts constitute false advertising, unfair competition and trademark counterfeiting.
As a result, the court concluded last month that public interest will be served by the issuance of a preliminary injunction and ordered that MSE and Highlands Oil Co. are enjoined from selling or offering for sale any lubricant products in five-gallon drums bearing a label with the CITGO trademark or name. In addition, MSE was ordered to quarantine any products and labels bearing CITGO's marks.