Mackie Designs Inc. files lawsuit to stop "knockoff" products; Company seeks damages of $327 million

Business Wire, June 18, 1997

WOODINVILLE, Wash.--(BUSINESS WIRE)--June 18, 1997--Mackie Designs Inc. (Nasdaq: MKIE) said today that the company has filed a lawsuit in U.S. District Court in Seattle alleging trademark and trade dress infringement, copyright and patent infringement, and unfair competitive practices by two U.S. entities, a German company, and their chief executive officers and others.

Mackie Designs, a leading developer, manufacturer and marketer of professional audio equipment, is suing Sam Ash Music Corporation of Hicksville, N.Y., and a related company, Samson Technologies, also of N.Y., and Ulrich Bernard Behringer, and his company, Behringer Spezielle Studiotechnick GmbH, (Behringer GmbH), an audio equipment producer. Behringer is a Swiss citizen, and Behringer GmbH is headquartered in Willich, Germany. Sam Ash Music Corporation is currently a leading retailer of Mackie products.

Mackie's lawsuit claims that the defendants conspired to manufacture and distribute copies of Mackie audio products, using copied layouts and identical components to those developed by Mackie with its suppliers. The copies were manufactured and assembled by companies located in China, and were sold at substantially lower prices than authentic Mackie products. The copied products were distributed in the U.S. and Canada through the Sam Ash Companies, which the complaint alleges funded the copying.

Mackie claims the knockoff products have cost the company lost revenues and have damaged its market position. The company's complaint seeks actual damages of $109 million, trebled to $327 million under federal law, plus attorneys' fees and costs.

"Mackie created the market for high quality audio mixers at reasonable prices," said Chief Operating Officer Roy Wemyss. "We intend to protect our business and will pursue predators who illegally copy Mackie products. We have strong intellectual property positions, and will defend our products from what we see as very deliberate copying -- both visually and electronically."

Mackie's 8-Bus mixer series is one of the company's leading and most successful products. Its three models are the 32-channel 32-8, the 24-channel 24-8, and the 16-channel 16-8. All are larger mixing consoles used in a wide variety of multitrack recording and live presentation applications.

Mackie products are all manufactured in the United States. The products and related brochures and other company promotional materials are protected by trademarks, copyrights, and other intellectual property rights.

The company was founded in 1988 by Greg Mackie, initially operating from his Mukilteo, Wash. home. In addition to audio mixers, Mackie Designs develops, manufactures, sells and supports mixing systems, power amplifiers and related equipment. Now a recognized industry leader, the company has grown to revenues of $73.2 million in 1996 with more than 400 employees, and has worked hard to gain a strong and loyal customer following. Its products are distributed through authorized professional audio retail dealers in the U.S. and through distributors in more than 100 countries. -0-

Editors' note: A complete copy of the company's complaint may be found on Mackie Design's Website at www.mackie.com .

CONTACT: Mackie Designs

Roy Wemyss or Alisa Bell

Tel: 206/487-4333 Fax: 206/487-4337