Why Herman Miller is making a big deal out of lawsuit
Updated Apr 03, 2019; Posted Sep 21, 2015
By Shandra Martinez | smartinez@mlive.com
Update: The lawsuit has been settled, according to Herman Miller.
ZEELAND, MI -- Herman Miller's Aeron chair is one of several of the company's iconic designs sitting in the permanent collection of the Museum of Modern Art and other museums around the world.
The Zeeland furniture-maker has a history of taking legal action against companies that copy those high-end designs and sell their knockoffs for less.
Herman Miller is now going after a businesses it says confuses and misleads consumers in a different way.
It is taking a New York firm, Madison Seating, to court for giving the impression that its refurbished Herman Miller furniture is new.
For CEO Brian Walker, Madison Seating's actions fall into the same category as selling counterfeit products. Both hurt the brand's value.
Walker derided them as misleading business practices that are the "scourge of the industry" in a statement announcing the company's legal action against Madison Seating last month.
"They negatively impact the entire category by confusing and frustrating customers and consumers, and damaging the brands and reputations of companies like Herman Miller and others that are committed to creating and selling authentic, innovative, high-quality products that last for generations," Walker said.
Herman Miller filed a lawsuit in the Northern District of Illinois court in August against Madison Seating for unauthorized use of its trademarks, improper marketing and sales of its products, including its best-selling Aeron chair.
The suit noted Madison Seating's promotional material promised customers "... the chance to own the chair everyone has been raving about at a fraction of the cost."
That price is $599 compared to $1,003, the ad said.
One reason Herman Miller is taking the unusual step of broadcasting its legal battle with Madison Seating is because the company is owned by Levi Cohen, who tangled with the office furniture maker nearly a decade ago on the same issue when he owned LuxuryChair.com.
Herman Miller contends Cohen is violating a consent agreement with terms that explicitly prohibit Cohen from engaging in Madison Seating's current activities and imposes specific penalties for violating the judgment.
Both Herman Miller and competitor Steelcase sued Cohen and LuxuryChair.com in 2006, claiming Cohen's company bought Google ads so when their bestselling Aeron and Leap chairs were searched, links popped up directing people to LuxuryChair.com before the companies' own websites.
Neither Madison Seating nor Cohen responded to MLive's requests for a comment. But Cohen did talk about his previous legal battle with Herman Miller.
"We started to make a dent in this business and now these huge companies are coming after us," Cohen told The Grand Rapids Press in 2006.
Cohen said his company was launched in a small New York warehouse not long after his father received 10 Aeron chairs from someone who owed him money, as a way of paying off the debt. The chairs went on eBay.com and a business model was born.
In that 2006 interview, Cohen said his company tried to work with manufacturers and listed all its products as "open box" returns, even though he says only about 10 percent fit the description.
He added he believed his company was singled out from others that also sold the chairs at deep discounts because his customers included Microsoft.
Cohen said he spent more than $500,000 defending himself in the Herman Miller case.
Two years after Cohen signed an agreement with Herman Miller, the furniture-maker agreed to a $750,000 settlement to end an antitrust lawsuit brought by New York State, and joined by Michigan and Illinois.
That settlement said that retailers were legally allowed to advertise lower prices for Aeron chairs and other furniture, but noted that Herman Miller also had the legal right to stop doing business with the retailers.
At the time, Herman Miller insisted that it could still require retailers not to advertise below a certain price but acknowledged it could no longer forge formal agreements to do so. The agreement also only applied to advertisements, allowing retailers the flexibility to cut their profits to sell the chairs for less.
"They are really protective about how much their products can be sold for," said Rob Kirkbride, who writes about the industry for Monday Morning Quarterback, a Chicago-based trade publication.
He remembers reporting on Herman Miller's fury over Costco buying its Aeron chairs from a distributor and then selling them $200 below "best price" in 2002, when he was a Grand Rapids Press reporter.
"Herman Miller became unglued," said Kirkbride. "They were not happy about it."
One of the benefits of buying new is that the purchases comes with a 12-year warranty, says Thor Sorensen, whose family owns Design Quest. The modern and contemporary furniture store, at 4081 28th St. SE, is one of Herman Miller's longtime authorized retailers.
Kentwood Office Furniture sells refurbished Aeron chairs with the blessing of Herman Miller, and frequently is called in to buy back products customers want to trade in when they are ready to buy new.
The relationship works because Kentwood follows the manufacturer's rules, which cuts down on the firm competing with Herman Miller dealers, said Art Hasse, president of Kentwood Office Furniture and a former Herman Miller executive.
"Because we have demonstrated that we will do what we say and pay what we say we will pay, Herman Miller trusts us to treat them and their customers with integrity," Hasse said. "Unfortunately, that has not been true for many other buyers of used office furniture on a national level."
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