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Small Business Legal Clinic

RLF Ceramic Design Center, LLC - Client Profile

November 13, 2018

  • Moon rocks from RLF Ceramic Design Center LLC

When Ruth Flores of RLF Ceramic Design Center LLC discusses her small business, she tells a compelling story full of grit, hard work, and surprises. Ruth’s business makes aquarium décor from ceramic materials. To grow her business over the past 28 years, Ruth underwent a remarkable journey. She built a national company from scratch, made an incredible discovery, was ousted from her own company after a legal dispute, and eventually was able to regain much of what she lost through federal trademark registration and hard work.

Ruth’s business first started in 1990 as Underwater Galleries, but she wasn’t able to secure federal trademark protections for that name until she came through the SBLC in 2017. Ruth met with SBLC volunteer attorney Jackson MacDonald. Jackson conducted research on competitors’ trademarks and helped Ruth file an application to federally register her trademark. Reflecting on the experience, Jackson said “it was a joy working with Ruth and learning about her Underwater Galleries business. Ruth persevered through a difficult situation to get her business back on track and I was happy I could assist Ruth in regaining ownership of her Underwater Galleries trademark.”

Ruth went into business so her ceramics would enhance home aquariums and help new aquarists succeed in creating fun, healthy environments for their fish. While her story has a happy ending, her journey from start-up to stable business was fraught with difficulties. Underwater Galleries grew quickly over the first three years, amassing 72 distributors across the country. But as the business flourished, overseas competitors flooded the market with aquarium décor made from cheap, synthetic resin plastic. Distributors started dropping Underwater Galleries, and the business began to struggle. Around this time, Walmart sought to expand into Oregon, so they held a small business fair to discover local products. Approximately 300 small businesses participated in Walmart’s fair. From that crowd of hopefuls, Walmart picked two products to feature in Oregon stores. To Ruth’s delight, one was Underwater Galleries’ Moon Rock.

All eight Walmart stores in Oregon eventually stocked most of Ruth’s product line. Underwater Galleries enjoyed steady, uninterrupted success for over a decade. However, by 2008, none of Ruth’s distributors had enough flex space to accommodate Ruth’s products; they had turned Ruth down for fourteen times. Ruth realized that she needed strong industry connections and a large influx of funds to move forward. She asked a former VP of Marketing to buy in, and she sold half of her beloved company.

 Soon after, Ruth began using a formula for glow-in-the-dark ceramic glaze. Using this breakthrough, Ruth created the Moon Rock, which was her first product that Walmart sold nationally. Going from supplying 220 stores to supplying 3,220 stores caused serious growing pains for Ruth’s business. Ruth also learned that funds from Underwater Galleries and her business partner’s hardware stores were co-mingling. Although Ruth confronted her business partner, the co-mingling did not stop, and a harsh legal battle began for the ownership of Underwater Galleries.

As the dispute continued over the next two years, the company found major success with the Moon Rock, built a stellar reputation among its buyers, and established a fruitful relationship with the Chinese factory that produced and packaged the merchandise. But in 2013, Ruth’s business partner won the right to purchase the rest of Ruth’s company. Ruth ended up losing Underwater Galleries and all of her capital investment. This was a very difficult time for Ruth, who felt that everything she had built over the last 23 years was suddenly taken from her.

Ruth eventually started a new company, Ruth L Flores Ceramic Design Center LLC, and she began designing new products under a different brand, Underwater Gal. Forming another business proved to be financially difficult, so Ruth turned to Micro Enterprise Services of Oregon (MESO), a Portland organization that offers financial assistance to small businesses. With a $10,000 loan from MESO, Ruth’s new business managed to stay afloat. Ruth also benefited from the trust and goodwill that she had painstakingly built with her manufacturer in China. The manufacturer allowed her to pay after receiving the product. Thanks to this support, Ruth’s new business was able to slowly move forward.

In 2016, Ruth received a phone call from Walmart, asking if she could supply them with the Moon Rock. Her old business, Underwater Galleries, had filed for bankruptcy due to mismanagement of funds. Walmart needed Ruth’s expertise. Suddenly, the market for Ruth’s product was open again, and Ruth was perfectly equipped to fill the void. It was at this time that the SBLC was able to match Ruth up with Jackson, and she was able to gain a trademark for Underwater Galleries. This allows her to sell her products under that established brand name, which she still uses to this day. The SBLC is very happy to have helped secure this valuable intellectual property for many years of future success as Underwater Galleries.