An online retail giant is suing a small ski manufacturer in Michigan and dozens of other organizations around the country it says are infringing on its "backcountry" trademark.
The legal battle waged by Backcountry.com, whose private equity parent TSG Consumer Partners has $5 billion in assets under management, could be the demise of Marquette Backcountry Ski, which does around $30,000 in yearly revenue with no permanent employees.
But its owner David Ollila, a Flint-based entrepreneur, said TSG chose the wrong small business to pick on. Ollila is itching for the fight because there's more at stake than saving his "tiny side hustle."
"Large companies know full well small companies can't stand up and fight," he said. "That's part of the tactic."
Utah-based Backcountry.com LLC, owned by San Francisco-based TSG, filed a lawsuit in September against Ollila's Snapperhead Inventions LLC, parent of Marquette Backcountry, in U.S. District Court for the Southern District of California.
The lawsuit alleges that the ski company infringes on Backcountry.com's trademarks. It makes the same argument in dozens of lawsuits and complaints to the U.S. Patent and Trade Office filed over the past year.
Organizations targeted by the e-retailer of outdoor gear range from companies including California-based Backcountry Denim Co. and Utah-based Backcountry eBikes to California-based women's skiing clinic Backcountry Babes. Some have given in and stopped using the word. Others have agreed to use a different variation of it. Ollila said he thinks he's the first one to fight back. He said he plans to countersue.
"We believe they are infringing on our mark, and I believe in an eye for an eye," he said.
Backcountry.com's lawsuit spree, reported last week by The Colorado Sun, prompted an outpouring of protest on social media and spawned a new Facebook group called Boycott Backcountry.com.
TSG declined to comment.
Ollila is president and chief innovation officer at Flint-based venture capital firm Skypoint Ventures, owned by former Diplomat Pharmacy CEO Phil Hagerman. As co-founder of the firm's nonprofit arm 100k Ideas, Ollila oversees the Flint Ferris Wheel Innovation Center, an entrepreneur incubator opened in 2017. He also founded [email protected], which helps high- and low-tech businesses in the Upper Peninsula, where Ollila grew up in Marquette.
A lot of entrepreneurs look up to him. Perseverance through adversity is a cornerstone of his curriculum, he said. That's why, when he received notice of the lawsuit, the "David vs. Goliath" stage was set.
"How can I profess that people should take the risk and that prosperity is through entrepreneurship and fold the minute I'm challenged?" he said.
Backcountry.com was founded in 1996 by friends John Bresee and Jim Holland, who sold a majority stake in the company to TSG in 2015. In the lawsuit, the company said it has held "backcountry" trademarks since 2007, and it bought the backcountry.com domain in 2004.
Ollila formed Snapperhead in 2010, according to state records. He trademarked the Marquette Backcountry Ski name in 2013.
Backcountry.com's trademark is for "retail store services, mail order services, and computerized on-line retail store services," according to filings with the U.S. Patent and Trademark Office. Ollila's trademark is for "sporting goods for outdoor activities, namely, skis, ski poles, and Nordic walking poles."
Backcountry.com was denied last year an effort to broaden its "backcountry" trademark because it is "descriptive and in light of a likelihood of confusion with a number of prior registrations and prior applications," according to a case document. Shortly after, Backcountry.com began its wave of lawsuits against organizations using the word. There are138 records of "backcountry" being part of a trademark in some variation, according to the trademark office's database.
In its lawsuit against Ollila, the company argues that its rights to the "backcountry" name are senior to the rights claimed by Ollila.
His usage of Marquette Backcountry Ski "will continue to cause irreparable harm to (Backcountry.com's) rights in the Backcountry Marks and Backcountry Registrations and to its business reputation and goodwill," the lawsuit said.
Backcountry.com is suing Ollila and Marquette Backcountry Ski for three times his lifetime profit, all legal fees and a penalty yet to be assessed. Because Ollila is named personally in the lawsuit, any property he does not own jointly could be at risk.
Ollila said he could lose anywhere from zero to $1 million and losing the lawsuit would bankrupt the company and put it out of business. He hired Royal Oak-based Howard & Howard Attorneys PLLC as defense and said he thinks he has a strong case in the countersuit.
Backcountry.com is selling Backcountry-branded skis, which violates Ollila's trademark protecting the name in relation to sporting goods and skis, he argues. He plans to file his countersuit within a week.
"They are actually infringing on our already granted mark, and we will defend it with vigor," he said.
Ollila launched Marquette Backcountry Ski after winding down with Viosport, a startup he founded in 2000, predating GoPro, that sold $20 million worth of helmet cameras. His goal with the ski company was to see if he could bring a product to market by himself, while keeping the manufacturing in Michigan, with less than $100,000.
It took him nine months and $90,000. With a bit of lead time, he said, he can churn out 100 pairs of skis, retailing online for $189, per day. They are made by a plant in Coldwater in the south-central part of the state that also manufactures running boards for the Jeep Wrangler. He said he runs the company on his phone, and his intent has never been to scale it.
"The end game for me is to maintain my mark and the business that it supports," Ollila said.
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November 05, 2019 at 11:25PM
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Online retail giant sues small Michigan ski maker, which promises big fight - Crain's Detroit Business
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