Antitrust Law Daily Wrap Up, ADVERTISING—3d Cir.: Tool manufacturer falsely advertised its products as ‘Made in the USA’, (Dec 11, 2025)

By Patricia K. Ruiz, J.D.

The false “Made in USA” marketing was material and caused harm to a competitor.

The Third Circuit affirmed a lower court decision in a lawsuit involving two companies that attempted to market themselves as American manufacturing companies and reap the benefits of that image. Specifically, the Third Circuit found no abuse of discretion in the district court’s Lanham Act liability finding, the district court’s decision to delay the defendant’s presentation of its unclean-hands defense until after the liability phase of the trail, and the remedies awarded. The Third Circuit further found no abuse of discretion in its acceptance of the unclean-hands defense or in its reliance on the defendant’s expert regarding disgorgement (Newborn Bros. Co., Inc. v. Albion Engineering Co., No. 24-1548 & 24-3046 (3d Cir. Dec. 10, 2025)).

Background. Albion Engineering Company has been manufacturing and selling caulking guns to industrial customers since 1929. Albion manufactured all of its products in the U.S. until 2001, when it began importing four types of caulking guns (B-Line guns) from Taiwan. Albion stamped these products “Made in Taiwan,” but the stamp was often—and by design—difficult to see. Albion eventually switched out the stamps for hang tags that contained a Taiwan mark on one side. Albion also printed “USA manufacturer and designer” on certain B-Line products. Subsequently, Albion expanded its overseas business to non-B-Line products by exporting component parts to Taiwan before re-importing them all for final assembly at its U.S. plant. Some of these products bore stamps reading “ALBION ENG. CO. PHILA. PA. U.S.A.” or “Made in USA.” During this period, Albion advertised that its products were “designed and manufactured in the USA” and stated that “All Albion Products are Made in America.”

Newborn Bros. Co., Inc., also sells caulking guns and related products. It maintains warehouses in several states and imports its products from overseas. Newborn utilized a logo placing the company name within an outline of a map of the U.S. and listed U.S.-based office and warehouse locations without mention of the products’ exclusively overseas manufacture. Newborn’s efforts to enter the industrial caulk gun market in the 1990s were met with limited success. It believed that its limited success was because Albion, its competitor, manufactured its products in America; in 2012, however, Newborn discovered that certain Albion products were at least partially manufactured overseas. It filed a lawsuit against Albion alleging false advertising in violation of the Lanham Act and New Jersey law.

District court decision. The district court: (1) held Albion liable for false violation of the Lanham Act; (2) accepted Albion’s affirmative defense of unclean hands; (3) awarded Newborn $2.1 million in disgorgement; and (4) issued a permanent injunction. Albion timely appealed, and Newborn filed a timely cross appeal. The Third Circuit denied Albion’s expedited motion to say the permanent injunction pending appeal, finding Albion failed to explain how the appeal would be mooted by compliance with the injunction, and rejected Albion’s claims that the injunction was punitive (Antitrust Law Daily, June 18, 2024).

Appeal. On appeal, Albion challenged the district court’s adverse liability finding, the district court’s decision to delay Albion’s presentation of its unclean-hands defense until after the liability phase of the trail, and the remedies awarded. The third circuit affirmed the district court’s order.

Albion challenged the liability finding on three grounds, contending Newborn failed to introduce evidence of actual deception of the purchasing public, materiality of the deception, and actual harm. As to the first ground, the Third Circuit found that the lack of a consumer survey is not necessary to proving actual deception. As to the second ground, the Third Circuit disagreed that Newborn failed to introduce evidence demonstrating that the deception as material, as Newborn elicited testimony from its own expert, who testified that “Made in the USA” has “tremendous value” and was a “factor in a significant portion of consumer decisions,” and from Albion’s expert, who testified that “sometimes ‘Made in the USA’ is material to some people.” Finally, the Third Circuit disagreed that Newborn failed to show it suffered any harm on account of Albion’s conduct, as Newborn demonstrated injury through diverted sales. Thus, the Third Circuit held that the district court did not err in concluding that Newborn met its burden in providing the elements of its Lanham Act claim by a preponderance of the evidence.

As to Albion’s challenge to the district court’s decision to preclude evidence concerning Albion’s affirmative defense of unclean hands until after the liability phase of the bench trial, the Third Circuit found that Albion failed to explain why this decision constituted an abuse of the district court’s broad discretion. Finally, turning to the remedies awarded by the district court, the Third Circuit found no abuse of discretion, as Albion’s products and marketing materials were still in circulation and because Albion intentionally ignored guidance concerning certain country-of-origin practices.

Cross-appeal. Newborn in its cross-appeal argued that the district court erred by accepting Albion’s unclean-hands defense. The Third Circuit affirmed the district court’s orders, finding that both Newborn and Albion attempted to market themselves as American manufacturing companies and reap the benefits of that image. Further, the Third Circuit held that no evidence of consumer confusion or injury is required in limiting Newborn’s recovery under the unclean-hands doctrine.

Newborn further asserted that the district court erred by admitting and relying on testimony from Albion’s expert in calculating the disgorgement awards. The Third circuit found no abuse of discretion, as the expert’s testimony on consumer behavior falls squarely within the expertise of the expert, who holds a Ph.D. in economics and focuses his practice on providing economic analyses for litigation, including disgorgement calculations.

The Case is No. 24-1548 & 24-3046.

Judge: Chagares, M.

Attorneys: Timothy R. Bieg (Madden & Madden P.A.) for Newborn Bros Co Inc. Kerri E. Chewning (Archer & Greiner P.C.) for Albion Engineering Co.

Companies: Newborn Bros Co Inc.; Albion Engineering Co.

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