Square D Prevails in Counterfeit Suit

The finding by a district court jury that Breakers Unlimited, Noblesville, Ind., purchased and sold counterfeit Square D circuit breakers was just the latest skirmish in a long campaign by Schneider Electric, Palatine, Ill., which owns the Square D brand, to put a stop to the growing problem of commerce in counterfeit electrical products.

The jury in the U.S. District Court for the Southern District of Indiana in Indianapolis on June 25 found in favor of Schneider Electric in the suit, finding Breakers Unlimited guilty of purchasing and selling counterfeit Square D QO breakers. The amount of damages and the scope of any injunctions limiting Breakers Unlimited's future activities have yet to be decided by the court.

Schneider Electric goes to great lengths to protect the integrity of its supply chain, and has been one of the most aggressive electrical manufacturers in pursuing potential sources of counterfeit product. The company currently has 13 lawsuits underway against 35 companies and individuals involving trademark infringement and counterfeiting, said Steve Litchfield, assistant general counsel for Schneider Electric.

The case against Breakers Unlimited emerged from a larger investigation following a suit against Scott Electric Co., Greensburg, Pa., in April, 2006. As part of an injunction in that case, Schneider obtained purchasing and sales records identifying all the suppliers that had sold Square D breakers to Scott Electric over the previous 36 months and all the customers who had bought them. Among the suppliers discovered were Pioneer Breaker & Control Supply of Austin, Texas, and North American Breaker Co., Inc. (NABCO), of Burbank, Calif.

“We developed a spider web of contacts, through the discovery process, of people who deal in counterfeits, some unintentionally, some intentionally,” Litchfield said. “That trail led us to Breakers Unlimited, through records that showed purchases from Pioneer and NABCO, both of whom we had had dealings with prior.”

Breakers Unlimited has been buying and selling surplus circuit breakers since 1986, focusing predominantly on new product in original boxes, said Jim Wolfe, director of marketing and acquisitions for Breakers Unlimited. The company hopes to put the Schneider Electric suit behind it and continue building its relationships with customers.

“We wish they had worked with us instead of vilifying us in the media,” said Wolfe. He pointed out that the jury found Breakers Unlimited not guilty of knowingly purchasing or selling any counterfeit breakers, or of damaging Square D's reputation. However, the effect on Breakers Unlimited's reputation remains to be seen. “Counterfeiting is not only wrong, but it hurts all of us. If we can get a handle on it with them, then it helps the whole market,” said Wolfe.