Advertisement
  1. Business

PODS sues to keep $41 million settlement away from franchisees

PODS Enterprises, a Clearwater-based storage company, is taking its franchisees to court to protect its multi
PODS Enterprises, a Clearwater-based storage company, is taking its franchisees to court to protect its multi
Published Nov. 30, 2017

CLEARWATER — PODS Enterprises has a message for its franchisees following a massive trademark case: back off. After being awarded a multi-million-dollar settlement for trademark infringement, the Clearwater-based storage company is now going to court to prevent its franchisees from taking a share of the award.

"A declaration of rights is necessary and appropriate to establish that PODS has no obligation to share with the (franchisees) any portion of the settlement," the complaint, filed Nov. 21, said.

PODS is a storage company that specializes in storage units that are delivered to a customer, packed and sent back for temporary keeping.

In 2014, a court awarded PODS $60.7 million — later lowered to $41.4 million — over a trademark dispute with storage competitor U-Haul. The Clearwater company took U-Haul to court after U-Haul branded its storage boxes as "U-Box pods" in 2009. The use of "pods," PODS argued, was confusing for consumers and "harming the goodwill associated with the PODS trademarks."

Related coverage: PODS win $62 million award in trademark infringement lawsuit against U-Haul>

Despite U-Haul's argument that the term was generic, the court ruled otherwise.

In its lawsuit in Hillsborough County Court against 46 franchisees, PODS maintains that they are not entitled to the settlement money.

Jonathan Sbar, lawyer for PODS, declined to comment, citing his firm's policy. A representative for the franchisees could be reached for comment.

According to the complaint, franchisees named in the suit collectively approached PODS in October requesting an "unspecified portion" of the settlement money. Attempts to come to an agreement, a process required under the franchise agreement, were unsuccessful.

"Thus, there is a substantial and ongoing controversy in need of immediate resolution," the complaint said.

The franchisees, the complaint said, accuse PODS of breaching its contract by not doling out a portion of the settlement, as they were also hurt by U-Haul's trademark infringement.

But PODS says it doesn't owe them anything because the company's "trademarks and all associated goodwill are owned entirely by PODS."

And, the complaint said, the franchisees are asking for reward without shouldering any of the burden — including participation during the litigation process.

"The claimaints did not contribute to the significant fees and costs incurred by PODS in the U-Haul litigation," the complaint read. "However, the claimants have received a substantial benefit from the success of the U-Haul litigation."

Contact Malena Carollo at mcarollo@tampabay.com or (727) 892-2249. Follow @malenacarollo on Twitter.