Avalon Acoustics Settles Dispute with Silverline Audio

One of the industry's nastier legal disputes is over. Boulder, CO-based Avalon Acoustics, Inc. has withdrawn a threatened "trade dress infringement" lawsuit against competitor Silverline Audio Technology, Inc. of Concord, CA, according to an Avalon press release circulated December 7. "Trade dress infringement" is a legalism referring to a competitor's use of a design that has become so closely associated in the public mind with a particular brand that it amounts to a virtual trademark.

The nearly year-long feud, over the use of beveled-corner cabinet designs, was settled out of court in early December, with Silverline agreeing to pay undisclosed legal expenses incurred by Avalon in its effort to have Silverline halt production and marketing of two loudspeakers that bore a strong resemblance to Avalon's. Silverline discontinued the disputed models—the Sonatina and Sonata—last summer, and has since redesigned both products to comply with the agreement.

The dispute had its origins in Silverline's impressive demonstrations of the two models at HIFI '99 in Chicago. The company generated considerable interest ( 1, 2) among journalists, several of whom later wrote praise-filled reviews of Silverline loudspeakers, noting an excellent price/performance ratio—and a visual similarity to certain Avalon models. None mentioned mistaking one company's product for the other's, however, which is the legal basis for a "trade dress" suit. The intended markets for the companies' products also differed: the Sonatina and Sonata were priced below Avalon's entry-level product, the two-way Avatar, which last year retailed for approximately $6000/pair. Nevertheless, Avalon sought legal remedies for what it perceived as a threat to its share of the audio market.

Avalon Acoustics' official announcement:

A Settlement agreement has been reached by Avalon Acoustics, Inc. in the dispute over the infringement of its proprietary designs by Silverline Audio Technology, Inc. Avalon Acoustics has agreed to withdraw the pending action against Silverline in US District Court in return for monetary compensation and the immediate cessation of worldwide manufacturing and marketing of certain infringing loudspeaker designs. These offending loudspeakers would include any product that might be confused with Avalon Acoustics' proprietary trademark beveled cabinet designs.

It is the hope of the management of Avalon Acoustics, Inc. that this case will set a precedent in discouraging the copying of designs throughout the high-end industry by unscrupulous opportunists. Avalon Acoustics will continue to pursue any future piracy of it.

Curiously, Avalon Acoustics has not filed suit against other companies, Sony Corporation, for example, or Harman International's Infinity Systems, both of whom manufacture loudspeakers with ostensibly similar cabinet designs to Avalon's.