Mad Rock Files a Lawsuit Against Climb-X Gear

posted by dpm on 10/15/2010

A Tale of Two Companies
 
The climbing community is full of small tightly knit businesses. Each company can trace its roots to another. Climbing companies and concepts have been born from an incestuous pool of ideas, and there has always been a thin line between innovation and duplication…until now. The rise of a new company named Climb X has showcased the latter side of the spectrum. This new company’s product “design” and business practices have allegedly fallen short of separating itself from other brands.
 
The Case of Mad Rock vs. Climb X:
 
Joe Garland was a Marketing and Sales Manager for Mad Rock during the years of 2002-2009. During his tenure, Garland attended trade shows and over saw the in-house sales staff. In his position at Mad Rock, Garland was allegedly privy to classified information including athlete contacts, business contracts, patent information, and overall company branding standards. He worked for the company from 2002-2009, then in 2010 he departed to pursue new ventures. Upon Garland’s departure, Mad Rock alledges that his desk was cleared out and allegedly a lap top computer was found to be missing. The hard drive of the computer allegedly contained sensitive customer information, as well as photographs of Mad Rock’s products and other proprietary information, including their graphic design and branding standards. The alleged computer was never recovered.
 
          Garland reappeared on the climbing scene months later and launched a new climbing company called Climb X, which was registered in Canada as Climb-X Sports Inc. The new company that Garland formed had undeniably striking similarities to Garland’s past employer Mad Rock. The newly released Climb X ads depicted product photos which are identical to Mad Rock products.
 
 “Joseph Garland, a founding member of Mad Rock Climbing since its inception in 2002 announced his departure from the company in early January has returned to the industry, and is now working for Mad Rock’s parent company and manufacturer.” The press release continued with, “…the original owners and management (of Mad Rock) have decided to take a more prominent role in the direction, product mix and strategy of this business. With this change, a new name had been chosen to set us apart and differentiate this company from the previous one: we are now Climb X. Same sales team. Same distributors. Same production facility. Same product development staff. The same award-winning products.”  The same press release also stated that, “Ken Kim was responsible for most of the company’s designs and innovations and he will remain with Climb X and manage all product development.” 
 
DPM dug through court documents and compared them to official statements issued by Climb X. Our research uncovered that Climb X was created by not one ex-Mad Rock employee, but two, the other being Ken Kim. Kim operated the manufacturing and production facility in China where Mad Rock products were once manufactured. In his position at the production factories, Kim was allegedly privy to confidential information and “particularized product knowledge.” Between the two, Kim and Garland had a global perspective of Mad Rock products from the construction to the pricing margins. This information allegedly allowed both Garland and Kim to represent themselves to the public as founding members of Mad Rock. Young Chu, the owner of Mad Rock, responded to the press release asserting that Joe did in fact work for Mad Rock, but at no time was he a founding member.
 
Public records clearly show that Chu is the sole individual responsible for product development; the records state Young Chu is the owner of the word mark “MAD ROCK” and all its affiliate creations and trademarked items.” Young holds patents for all Mad Rock products including D516783 (shoe heel), 6470599 (concave shoe sole), 6050003 (boot with outside preformed stress relief), and 7107656 (safety buckle).It is clear that the inception of the actual design and the creation of the final products began and ended with Young.
Even with the records firmly in place, several company announcements from Climb X continued to position both Garland & Kim as founding members. However, DPM uncovered a court case in Moab Utah, Garland v. Jonas, Civil No. 0907-77 which painted a different picture. During his testimony, Garland was questioned under oath about his position at Mad Rock.  Garland testified that he was "the sales and marketing manager" at Mad Rock. To some, this comment directly contradicts the numerous press releases that were sent out by Climb X stating that Joe Garland was in fact a founding member of Mad Rock.
 
The press release did accurately state that Garland’s company did take over the manufacturing facility located in China, but it was allegedly due to the fact that Mad Rock was moving its manufactures to Vietnam to better their products.  The information released by Climb X once again painted a different story:
 
Mad Rock is running out of production and has yet to send any samples from its new production facility in Vietnam…it will not be long before word gets out about the working conditions, lack of safety measures and lack of health insurance for the workers at the Vietnam facility. I’m sure the climbers in your country and the staff who work for you will not be happy about this situation. I am sure that Mad Rock products will lead to “recalls, safety issues and sometimes injury or death.” 
 
The company did move production to a new location, but it was in order to keep up with the expansion of the new line and to lower production costs, savings they passed on to their clients. The new Mad Rock factory received the SEA Team’s seal of approval and was allowed to open and begin production. There were no signs of the manufacturing facilites indiscretions mentioned in the Climb X release which depicted, “a lack of safety measures and lack of health insurance for the workers at the Vietnam facility”, nor have any of the conditions such as, “safety issues, and sometimes injury or death”, surfaced.
          
        During the turmoil between the companies, Climb X allegedly still reached out to potential buyers and continued to move the company forward, “as most of you know, I was responsible for sales and marketing in the USA, staffing, sales reps, and advertising from the beginning of Mad Rock till weeks ago. I have over 20 years experience doing this and I feel confident the name change will only lightly affect our ability to continue our business in the USA as we had previously. Our offices will return to where the original offices were located, in Portland, Oregon. No more of the crazy traffic, crime, lack of qualified staff and pollution we were subjected to at our old Los Angeles California location. Longtime customers will be happy to know that some old faces from the Portland (original Mad Rock site) operation will be returning to help out in the office and trade shows.”

At the time of the Summer O.R. show, Garland  was alledgedly served with a cease and desist letter, which asked him to stop manufacturing and selling Climb X products due to trademark infringement. A accusation Garland denies.
 
Currently a lawsuit is being brought forth by Mad Rock to impose a permanent injunction on the company known as Climb X, which would restrict the creation and distribution of Climb X products within the United States. In our conversations with Joe Garland, owner of Climb X, he denied any knowledge of this lawsuit. Undoubtedly, Climb X will respond with their own accusations and formal complaints and the drama will play itself out in the courts. Regardless of the outcome, it will be interesting to watch things unfold. Stay tuned.