FLP LLC v. Wolf

Filing 77

ORDER denying 62 Motion for Preliminary Injunction; denying 70 Motion to Strike; denying request for attorneys' fees and costs. Signed by Judge David G Campbell on 7/26/2018.(DGC, nvo)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 FLP LLC, Plaintiff, 10 11 v. 12 No. CV-17-00214-PHX-DGC CV-17-00773 PHX DGC (Consolidated) Kimberly Wolf, ORDER 13 Defendant. 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff FLP LLC moves for a preliminary injunction prohibiting Defendant Kimberly Wolf and her company Liv-It! LLC (“Liv-It”) from using FLP’s federally registered trademark, “LIVIT”. Doc. 62. Ms. Wolf moves to strike a footnote from FLP’s reply. Doc. 70. The motions are fully briefed, and no party requests oral argument. For the reasons stated below, the Court will deny both motions.1 I. Background. FLP and Liv-It are competing companies in the houseware industry. Both sell their products to retail stores which then sell directly to consumers. FLP sells its products under many names and trademarks. Doc. 62 at 2. FLP alleges that its chief executive officer first thought of using the names “LIVE IT” and “LIVIT” in 2001, and finalized artwork and a business plan for the names in August 2015. Id. at 2-3. In September 26 27 1 28 The Court notes that FLP cites no legal basis for its requested injunctions against Liv-It and Thomas Wolf who are not named as defendants in FLP’s complaint or amended complaint. See Docs. 1, 36. 1 2015, FLP contracted for the manufacture of 266,400 product units “of the type FLP sells 2 in its usual course of business” with the “LIVIT” name displayed on the packaging. Id. 3 at 3. 4 Later that month, FLP filed an application with the U.S. Patent and Trademark 5 Office (“USPTO”) for trademark protection of the standard character mark “LIVE IT”. 6 Id. at 3-4. In November 2015, FLP also applied for trademark protection of the mark 7 “LIVIT” (the “Mark”). Id. at 4. Ms. Wolf then applied for trademark protection of the 8 mark “Liv-It!” in December 2015. Id. In October 2016, the USPTO granted FLP’s 9 application for “LIVIT” and suspended action on Ms. Wolf’s application for “Liv-It!” 10 because FLP’s application was filed first. Id. at 7. FLP abandoned its application for the 11 “LIVE IT” mark. See Doc. 64-1 at 19-20. 12 In February 2016, FLP discovered that Ms. Wolf was using the Mark on Liv-It’s 13 products and stopped using the Mark “to mitigate any losses that might occur because of 14 a potential challenge to the FLP Mark by the Wolf Parties.” Doc. 62 at 5. FLP submits 15 photographs of Liv-It’s products and website reflecting the Mark, some of which display 16 the ® symbol next to the Mark. Doc. 62-1 at 3-5, 16, 18-21. FLP alleges that it has sold 17 “tens of thousands of products bearing” the Mark and “gained substantial goodwill and 18 consumer recognition” of the Mark. Doc. 62 at 4-5. FLP further alleges that Liv-It’s use 19 of the Mark has caused consumer confusion and has prevented certain retail stores from 20 purchasing FLP’s products bearing the Mark. Id. at 11-12. 21 FLP’s amended complaint asserts claims for trademark infringement under the 22 Lanham Act and tortious interference with business expectancy. See Doc. 36. FLP filed 23 this motion for a preliminary injunction after it participated in a houseware industry trade 24 show in Chicago in March 2018 and observed Liv-It’s exhibit containing the Mark. Id. 25 at 11; Doc. 62-1 at 23. 26 II. Legal Standard. 27 “A preliminary injunction is an extraordinary remedy never awarded as a matter of 28 right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To obtain a -2- 1 preliminary injunction, a plaintiff must show “that he is likely to succeed on the merits, 2 that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 3 balance of equities tips in his favor, and that an injunction is in the public interest.” Id. 4 at 20; see also All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). 5 The burden is on FLP to make a “clear showing” that it is entitled to a preliminary 6 injunction. See Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012). 7 III. Discussion. 8 FLP seeks preliminary relief only on its trademark infringement claim under the 9 Lanham Act, 15 U.S.C. §§ 1114, 1117, 1125. See Doc. 62. The Court therefore will not 10 address the parties’ arguments regarding FLP’s other claims. Nor will the Court address 11 FLP’s arguments regarding damages. See Doc. 62 at 13-14 (discussing entitlement to 12 costs, attorneys’ fees, profits, compensatory damages, and punitive damages). 13 To prevail on a trademark infringement claim, FLP must prove “(1) that it has a 14 protectible ownership interest in the mark; and (2) that [Ms. Wolf’s] use of the mark is 15 likely to cause consumer confusion, thereby infringing upon [FLP’s] rights to the mark.” 16 Dep’t of Parks & Recreation for State of Cal. v. Bazaar Del Mundo Inc., 448 F.3d 1118, 17 1124 (9th Cir. 2006). 18 confusion, which asks whether a reasonably prudent consumer is “likely to be confused 19 as to the origin of the good or service bearing one of the marks.” Rearden LLC v. 20 Rearden Commerce, Inc., 683 F.3d 1190, 1214 (9th Cir. 2012). This determination is 21 made by applying the well-established Sleekcraft factors: (1) strength of the mark, 22 (2) proximity of the goods, (3) similarity of the marks, (4) evidence of actual confusion, 23 (5) marketing channels used, (6) types of goods and degree of care exercised by 24 consumers, (7) defendant’s intent in selecting the mark, and (8) likelihood of expansion 25 of the product lines. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). 26 This eight-factor test is a “pliant” one, in which “the relative importance of each 27 individual factor will be case-specific.” Brookfield Commc’ns, Inc. v. W. Coast Entm’t 28 Corp., 174 F.3d 1036, 1054 (9th Cir. 1999). The touchstone for trademark infringement is likelihood of -3- 1 With respect to ownership, FLP’s federal registration of the Mark is “prima facie 2 evidence of its ownership[.]” Dep’t of Parks & Recreation for State of Cal., 448 F.3d 3 at 1124. But Ms. Wolf argues that she owns the Mark because she can show prior use in 4 commerce. Doc. 64 at 11. She submits evidence that she organized Liv-It with the 5 Illinois Secretary of State in August 2015, more than two weeks before FLP placed its 6 purchase order and over three months before FLP applied for trademark protection of 7 “LIVIT.” Doc. 64-1 at 17. Ms. Wolf alleges that FLP’s principals knew of her company 8 and filed for trademark protection only to interfere. Doc. 64-1 at 8-9. She submits 9 declarations from two industry professionals who worked as broker representatives for 10 FLP, are familiar with FLP’s products, and never saw “LivIt” or “Live It” appear on any 11 FLP product or trade show exhibit. Doc. 64-1 at 27, 30. FLP’s reply disputes Ms. 12 Wolf’s assertions, but does not present evidence refuting the assertions or establishing its 13 own use of the Mark in commerce. See Doc. 69 at 3-5, 7. The Court cannot conclude 14 that FLP is likely to succeed in proving ownership where Ms. Wolf has presented 15 unchallenged evidence tending to rebut FLP’s prima facie evidence of ownership. 16 With respect to the likelihood of consumer confusion, FLP cites the Sleekcraft 17 factors but offers almost no analysis of their application to this case. See Doc. 62 at 15- 18 17. The only analysis FLP offers is that the parties are in “direct competition selling the 19 same types of household general merchandise[,]” and consumers are not likely to 20 exercise the diligence necessary to distinguish such inexpensive household items. Id. 21 at 17. The remainder of FLP’s motion simply offers legal standards followed by bare 22 conclusions. See, e.g., Doc. 62 at 15-17. 23 Moreover, although FLP presents evidence of Liv-It’s packaging and advertising 24 containing the Mark (Doc. 62-1 at 3-5, 16, 18-21, 23), it submits no evidence depicting or 25 describing how the Mark appeared on FLP’s products to allow the Court to compare the 26 two. Nor does FLP present any evidence to support its assertions regarding the strength 27 of the Mark and the extent to which it has become associated with FLP. Without a more 28 thorough analysis of the relevant factors and supporting evidence, the Court cannot -4- 1 conclude that FLP is likely to succeed in proving that Ms. Wolf’s use of the Mark is 2 likely to cause consumer confusion. 3 FLP also asserts that it is entitled to a preliminary injunction “regardless of the 4 presence or absence of actual or likely confusion . . . or of actual economic injury” under 5 15 U.S.C. § 1125(c). 6 “famous” trademarks by blurring or tarnishment. See 15 U.S.C. § 1125(c)(1). FLP does 7 not allege, let alone present evidence to support, such a claim. And FLP provides no 8 authority for the proposition that this section entitles it to a preliminary injunction 9 without satisfying the Winter factors. Doc. 62 at 13. That section addresses claims for dilution of 10 FLP’s overall lack of analysis seems to be based on an assumption that its motion 11 need not make the clear showing required because it can do so at a hearing on the motion. 12 See, e.g., Doc. 69 at 7 (“Even if the issue is deemed to be in genuine dispute, it is not a 13 summary bar to injunctive relief, and is more properly the subject of an evidentiary 14 hearing.”), 8 (“This is subject to proof at an evidentiary hearing.”). FLP is mistaken. 15 First, neither FLP nor Ms. Wolf has requested a hearing. Second, even if the Court were 16 to hold a hearing, this would not relieve FLP of its burden of explaining – in its motion – 17 the grounds that entitle it to a preliminary injunction, along with supporting evidence. 18 E.g., Sprint Nextel Corp. v. Ezcom, Inc., No. CV1200222JFWVBKX, 2012 WL 19 12882422, at *1 (C.D. Cal. Feb. 13, 2012) (denying the plaintiffs’ motion for preliminary 20 injunction without a hearing because the “evidence in support of [the motion was] 21 woefully insufficient to demonstrate a likelihood of success on the merits”). 22 FLP has not submitted sufficient evidence or analysis to establish a likelihood of 23 success. Indeed, as Ms. Wolf notes in her response, FLP’s motion is almost entirely 24 copied from its complaint (see Doc. 6), with only four original paragraphs. Doc. 64 at 5. 25 While such a summary of facts and legal authority might be sufficient to state a claim for 26 purposes of Rule 12(b)(6), it falls fall short of the clear showing required to obtain the 27 extraordinary remedy of a preliminary injunction.2 28 2 FLP does not argue that it can satisfy the lesser standard of “serious questions -5- 1 IV. Ms. Wolf’s Requests. 2 A. 3 Motions to strike are viewed with disfavor and are not frequently granted. S. 4 Gensler, Federal Rules of Civil Procedure, Rules and Commentary at 302 (2017) (citing 5 cases). They “should not be granted unless it is clear that the matter to be stricken could 6 have no possible bearing on the subject matter of the litigation.” 7 Blockbuster, Inc., No. C06-02361 WHA, 2006 WL 2458717, at *8 (N.D. Cal. Aug. 22, 8 2006). The Court’s local rules attempt to curtail the overuse of motions to strike. See 9 LRCiv 7.2(m). 10 Motion to Strike. Netflix, Inc. v. Ms. Wolf moves to strike a footnote from FLP’s reply because it allegedly 11 contains irrelevant false statements about a nonparty, Thomas Wolf. 12 Doc. 69 at 2 n.4. Ms. Wolf cites Ethical Rule 4.4 as the basis for her motion. Id. The 13 Court is aware of no authority holding that this rule provides a legal basis for granting 14 motions to strike. Moreover, the information contained in the footnote is irrelevant to 15 deciding FLP’s motion for injunctive relief and therefore has not been considered by the 16 Court. The Court will deny Ms. Wolf’s motion as unnecessary. Doc. 70; see 17 The Court also notes that has not considered the irrelevant information submitted 18 by both parties in the briefing on Ms. Wolf’s motion to strike. See Docs. 72, 73. The 19 parties are cautioned to avoid such unnecessary filings in the future. 20 B. 21 Ms. Wolf requests that the Court award her attorneys’ fees and costs “for having 22 to file a third motion related to claims this Court has dismissed previously in two Orders 23 and for having to respond to FLP Parties[’] meritless [motion for a preliminary Attorneys’ Fees. 24 25 26 27 28 going to the merits.” See Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th Cir. 2013) (quoting All. fFor the Wild Rockies, 632 F.3d at 1135). Under this standard, FLP still must demonstrate a “fair chance of success on the merits.” See Cascadia Wildlands v. Scott Timber Co., 715 F. App’x 621, 624-25 (9th Cir. 2017) (quoting Republic of the Philippines v. Marcos, 862 F.2d 1355, 1362 (9th Cir. 1988)). The Court finds that FLP’s summary of facts and legal standards does not create serious questions going to the merits. -6- 1 injunction].” Doc. 64 at 15-16. Ms. Wolf provides the Court with no legal basis for such 2 an award. The Court therefore will deny the request. 3 IT IS ORDERED: 4 1. 5 6 (Doc. 62) is denied. 2. 7 8 9 10 FLP’s second and condensed application for preliminary injunction Ms. Wolf and Liv-It’s motion to strike portions of FLP’s reply (Doc. 70) is denied. 3. Ms. Wolf’s request for attorneys’ fees and costs (Doc. 64 at 15-16) is denied. Dated this 26th day of July, 2018. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7-

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