Reference no: EM131473586

Question: Tommy Larsen, a Danish citizen, produces aesthetically pleasing functional objects, such as furniture. Larsen designed a compact disc holder called the "CD 25," which holds 25 CDs. At first, Larsen distributed his product only in Europe, but he soon began exporting the CD 25 to the United States. Soon thereafter, Larsen looked for a U.S. distributor for his product and entered into a limited distributorship with Terk Technologies Corp. Terk placed an order for 11,232 units at $1 per piece. Although the distribution agreement was not exclusive, Larsen treated it as though it were, allowing all orders in the United States to be fulfilled by Terk. Despite the success of the CD 25 in high-end retail stores, Terk did not place additional orders with Larsen, stating that demand did not warrant more units. In fact, however, Terk had placed an order with Allen Machine Products for 11,000 counterfeit units of the CD 25. Terk marketed these Allen-made CD 25s as the "TOMMY LARSEN" and "CD 25." The counterfeit holders also had markings indicating that the design was Danish and the product was produced in Denmark. The counterfeits were actually produced in New York. Larsen, suspicious about the lack of orders from Terk, examined several of the distributed products and discovered the counterfeiting. He sued Terk, arguing that Terk had engaged in passing-off in violation of the Lanham Act. Has Terk violated the Lanham Act? Why, or why not?