The Clorox Co., (NYSE:CLX) sues Mexican company for copyright infringement

Denver, CO, 07/29/2013 (Avauncer.com) – Shares of The Clorox Co., (NYSE:CLX) rose 0.75% to close at $85.97 in its last trading session. This was closer to the higher end of its 52-week price range of $69.67 to $90.10.

The company, in a recent litigation, has filed a complaint with the U.S. International Trade Commission, seeking blocking of Mexican based companies products – Cloralex and Pinol. The company alleges that they infringe upon the trademarks of the company’s well known product, Clorox and Pine – Sol brand of house cleaners. The company alleges that sales by the new company in its established market will deceptively capitalize on the brand image of the company, by deceptive brand names and similar product packaging. The suit seeks to put a limited exclusion order on the products of the Mexican companies, along with a cease and desist order, which would bar the Mexican company from improving such products in the U.S. Also, the cease order will blanket all such powers that will allow company’s products to be taken into custody, if they are found to be within the U.S. territory, or until the matter stands resolved.

The company has a reputation of being a safe stock, which has generated gross margins of over 40% in the past few turbulent times. This has been on the back of a dedicated expense management principle which is instilled in the management of the company right from start. However, it is only in the recent quarter that its sales declined by 20 basis points to 42.1% of sales. The logistics cost is a substantial expense of the company, which has been troubling the company in recent times. However, with favorable cost saving mechanism and an incremental pricing strategy, the company has been able to partially offset the cost increase. The company, as a result has generated half of its current valuation from its free cash flows.