IP Law Daily, TRADEMARK—S.D.N.Y.: Retailer and distributor prevail in ‘Maximum Impact’ aerosol canisters counterfeiting dispute, (Mar 3, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

At the bench trial, the manufacturer failed to demonstrate that the seized aerosol canisters bearing the asserted mark were counterfeit or sold by the retailer.

In a trademark infringement and counterfeiting lawsuit filed by a manufacturer of aerosol canisters, a federal district court in New York entered judgment in favor of a Manhattan retailer and its distributor after a four-day bench trial, holding that the manufacturer failed to prove that products bearing its registered “Maximum Impact” mark were counterfeit or that the retailer sold counterfeit goods. The court found that although the plaintiff owned a valid federal trademark registration entitled to a presumption of distinctiveness, it did not carry its burden on its Lanham Act counterfeiting theory. Because the plaintiff offered insufficient evidence that the products at issue were fake or traceable to the retailer, the court rejected the infringement and counterfeiting claims in their entirety (AFAB Industrial Services, Inc. v. Little Chelsea, Inc., No. 1:23-cv-03095-MMG (S.D.N.Y. Mar. 2, 2026)).

Background. The plaintiff, AFAB Industrial Services, Inc., is a manufacturer and distributor of chemical products, including an ethyl chloride aerosol spray marketed under the name “Maximum Impact.” The defendant, Little Chelsea, Inc., does business as “Chelsea Exclusive,” a retail store located in Manhattan. The third-party defendant, VDAN Sales Inc., operates as a wholesaler and served as an authorized distributor of AFAB products. AFAB alleged that Little Chelsea sold counterfeit versions of its product and asserted that if the goods did not originate directly from the retailer, they were supplied by VDAN.

The dispute centered on AFAB’s federally registered trademark “Maximum Impact,” registered for use in connection with an ethyl chloride aerosol product. The registration conferred a presumption that the mark was valid and inherently distinctive.

AFAB filed suit after canisters labeled “Maximum Impact” were discovered in the bedroom of Steven Gopaul. AFAB alleged that these canisters were counterfeit and that Gopaul purchased them from Little Chelsea in May 2019. It brought claims under the Lanham Act, advancing a counterfeiting theory of liability. Little Chelsea denied selling counterfeit goods and contended that any products it sold were genuine. It further argued that if any counterfeit goods existed, they did not originate from its store. Little Chelsea filed a third-party complaint against VDAN, asserting that any liability would rest with the distributor as the supplier. VDAN denied distributing counterfeit merchandise. The case proceeded to a bench trial.

Validity of the mark. The court first addressed whether AFAB owned a valid and protectable trademark. AFAB established that “Maximum Impact” was federally registered for use in connection with an ethyl chloride aerosol product. The registration created a presumption that the mark was inherently distinctive and entitled to protection. Citing Gruner + Jahr USA Publishing v. Meredith Corp., 991 F.2d 1072, 1076–77 (2d Cir. 1993), the court explained that federal registration constitutes prima facie evidence of validity and exclusive right to use the mark. Because neither Little Chelsea nor VDAN rebutted that presumption, the court held that AFAB satisfied the first element of its Lanham Act claim.

Counterfeiting theory. The court clarified that AFAB proceeded solely on a counterfeiting theory and did not attempt to prove likelihood of confusion under the traditional Polaroid framework. As a result, AFAB bore the burden of proving two elements: that the seized canisters were counterfeit and that Little Chelsea sold them. The court found that AFAB failed on both prongs.

On the issue of whether the canisters were counterfeit, the court found substantial evidentiary gaps. AFAB argued that it had ceased manufacturing or distributing “Maximum Impact” and suggested that products appearing in circulation thereafter must have been counterfeit. However, the record showed that another entity, ACME, had manufactured and distributed “Maximum Impact” after acquiring trademark rights from AFAB. The court noted that AFAB introduced no evidence regarding ACME’s manufacturing practices, labeling variations, or packaging differences. Without such evidence, the court concluded that variations in crimping, labeling, or nozzle design did not establish that the products were fake rather than genuine goods produced by an authorized successor.

The court also scrutinized AFAB’s testimony regarding its production history. AFAB claimed that it stopped manufacturing due to declining demand and rising insurance costs. The court found the explanation unpersuasive in light of evidence that ACME continued manufacturing and distributing the same product years later. These inconsistencies undermined AFAB’s attempt to rely on inference rather than concrete proof.

Failure to link retailer to goods. Even assuming arguendo that AFAB had established counterfeiting, the court held that AFAB failed to prove that Little Chelsea sold the specific canisters at issue. AFAB relied primarily on testimony that Gopaul purchased “Maximum Impact” from the retailer in May 2019. Yet the court observed that AFAB was still producing genuine products at that time. The seized canisters were recovered in April 2021—nearly two years after AFAB claimed to have stopped production. AFAB produced no sales records, inventory documentation, or forensic evidence linking the seized items to Little Chelsea’s store. In the absence of direct or circumstantial evidence tying the specific goods to the retailer, the court found AFAB’s theory speculative.

The court emphasized that a Lanham Act plaintiff bears the burden of proving counterfeiting by a preponderance of the evidence. While trademark registration establishes a presumption of validity, it does not relieve the plaintiff of proving that the accused goods are counterfeit and that the defendant trafficked in them. Because AFAB did not present persuasive evidence on these dispositive issues, the court concluded that it failed to carry its burden.

Disposition. Having determined that AFAB did not establish that the Gopaul canisters were counterfeit or that Little Chelsea sold counterfeit goods, the court entered judgment for Little Chelsea and VDAN.

The Case is No. 1:23-cv-03095-MMG.

Judge: Garnett, M.

Attorneys: M. Kelly Tillery (Saxton & Stump LLC) for AFAB Industrial Services, Inc. Natalie Sulimani (Sulimani Law Firm, PA) for Little Chelsea, Inc.

Companies: AFAB Industrial Services, Inc.; Little Chelsea, Inc.

Cases: Trademark NewYorkNews