Hand and Nail Harmony, Inc. et al v. International Nail Co. et al

Filing 27

PRELIMINARY INJUNCTION by Judge S. James Otero: Defendant Defendant International Nail Co., d/b/a Rockstar Nails, their officers, agents, etc, and any other person or entity who is in active concert or participation with any of Defendants, including but not limited to PayPal, Inc. (PayPal), Stamps.com, Inc. (Stamps.com) and the host of the Website (collectively, the Enjoined Parties), are preliminarily enjoined and restrained re plaintiffs copyrights (SEE DOCUMENT FOR SPECIFICS). IT IS FURTHER ORDERED that any and all third-party vendors, such as PayPal and Stamps.com, and any other business or entity affiliated with notice of this Order, pending further order of the Court, shall continue to hold all funds frozen pursuant to this Courts prior TRO in this action until further order of the Court. (lc)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE CENTRAL DISTRICT OF CALIFORNIA

10 HAND & NAIL HARMONY, INC.,

)
)
)
)
Plaintiffs
)
)
vs.
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INTERNATIONAL NAIL CO. d/b/a
ROCKSTAR NAILS, and DOES 1-10, )
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inclusive,
)
)
)
Defendants

CASE NO.: CV 15-02718 SJO (AJWx)

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ORDER GRANTING PRELIMINARY
INJUNCTION

and NAIL ALLIANCE, LLC,

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Complaint Filed: May 6, 2015

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On May 18, 2015, this Court conducted a show cause hearing, as ordered on

19 May 6, 2015, pursuant to the Court’s Temporary Restraining Order (“TRO”), Order
20 to Show Cause (“OSC”) Regarding Preliminary Injunction, and Order for Leave for
21 Alternative Service.

(ECF No. 12.)

Plaintiffs Hand & Nail Harmony, Inc.

22 (“Harmony”) and Nail Alliance, LLC (“Nail Alliance”) (collectively, “Plaintiffs”)
23 appeared through their counsel of record, Todd M. Malynn of Feldman Gale, P.A.
24 Defendant International Nail Co., d/b/a Rockstar Nails made no appearance, even
25 though it was served as directed by the Court (see ECF No. 14) and, as reported by
26 Plaintiffs’ counsel, received actual notice of the Court’s TRO and OSC re:
27 Preliminary Injunction.
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1

ORDER

1

Upon review of Plaintiffs’ Complaint, Ex Parte Application for Temporary

2 Restraining Order and Motion for Order to Show Cause Regarding Preliminary
3 Injunction (the “Application”) (ECF No. 3), evidentiary submissions and supporting
4 papers, the TRO, and having heard oral argument and GOOD CAUSE appearing
5 therefore, the Court issues the following Orders:
6

I.

FINDINGS OF FACT

7

In the Complaint filed concurrently with the Application, Plaintiffs allege the

8 following. Plaintiff Harmony creates, promotes, and sells high-quality nail care
9 products and nail care accessories, including soak-off gel polishes ("Harmony
10 Products") under the brand name "Gelish" and other trademarks ("Harmony
11 Marks"). (See Compl. ¶¶ 3, 24-26, ECF No. 1.) Plaintiff Nail Alliance owns the
12 Harmony Marks, and exclusively licenses the Harmony Marks to Harmony. (Compl.
13 ¶¶ 10, 29.) The Harmony Marks are protected by multiple federal trademark
14 registrations, as well as California common law, and the brand name of each Gelish
15 color is protected under the Lanham Act. (Compl. ¶¶ 25, Ex. A, 27-28.) Further, the
16 photographs of Harmony Products and product packaging used on Harmony's
17 website, as well as other promotional material distributed by Harmony (the
18 "Harmony Works"), are subject to United States Copyright Registrations and
19 protected under federal law. (Compl. ¶¶ 36-38, Ex. B.)
20

Using a limited number of qualified distributors, Harmony sells Harmony

21 Products to salons and boutiques throughout the world. (Compl. ¶ 8.) Plaintiffs
22 carefully monitor and police the use of the Harmony Marks and Harmony Products,
23 and Harmony's qualified distributors are contractually obligated to exclusively sell
24 Harmony Products to salons and boutiques that are properly trained to apply its
25 products. (Compl. ¶¶ 9, 32.) Harmony's distributor agreements also inform
26 authorized distributors of Plaintiffs' policy against diversion and expressly prohibit
27 the sale of Harmony Products to unauthorized distributors, re-distributors, and
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2

ORDER

1
1 diverters, as well as the online sale of Harmony Products. (Compl. ¶ 40.) This is

2 imperative because proper application of Gelish brand gel polish requires
3 application of base coat product, polish product, and top coat product, as well as
4 irradiation of each coat with ultraviolet light. (Compl. ¶ 9.) Application of Harmony
5 Products by a person without proper training and equipment yields uncured and
6 marred finishes. (Compl. ¶ 9.) Further, removal of the cured finishes by a person
7 without proper training can take excessive time, aggravate the user, or result in
8 bacterial infections of the nail bed that cause painful and permanent injuries, all of
9 which injure Harmony's goodwill and reduce Harmony's sales to salon customers.
10 (Compl. ¶¶ 9, 39.)

Harmony uses a number of domain names, including www.gelish.com and

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12 www.nailharmony.com, to promote the Harmony Products. (Compl. ¶¶ 3, 35.)
13 Additionally, other domain names direct traffic to Harmony's domains. (Compl. ¶
14 3.) At an unspecified time, Defendants International Nail Co. d/b/a Rockstar Nails
15 ("Rockstar")

and Does 1 through 10 ("Doe Defendants") (collectively,

16 "Defendants") registered in bad faith the domain name www.harmonygelish.co.uk
17 (the "Domain Name") to improperly associate themselves with Harmony and
18 unlawfully profit at the expense of Harmony. (Compl. ¶¶ 4, 14, 18, 43.)

Using the Domain Name, Defendants operate a website formed entirely of

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20 copyrighted images and trademarks misappropriated from Harmony's website (the
21 “Website”) in order to directly compete with Harmony and its authorized
22 distributors. (Compl. ¶ 4, 18, 49, 51-53, 55.) The singular purpose of the Website is
23 to sell unauthorized and infringing Harmony products (the “Merchandise”) which
24 they knowingly obtained "in violation of [Harmony's] distributor agreements."
25 (Compl. ¶¶ 5, 49, 57.) In selling the Merchandise, Defendants do not concern
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1

Harmony's distributor agreements prohibit the online sale of Harmony Products

27 precisely to “avoid, inter alia, sales to untrained or unskilled salons or individuals,

as well as any violation of the Hazardous Materials Transportation Act.” (Compl.

28 ¶¶ 56-57.)

3

ORDER

1 themselves with whether a salon or retail customer is trained or qualified to apply
2 Harmony Products to an individual's nails, which in turn harms Harmony's brand
3 and reputation and creates health risks for unsuspecting users of its products.
4 (Compl. ¶¶ 5, 56.) Further, Defendants have “undertaken exceptional efforts” to
5 hide their true identities by obliterating the serial numbers from the gel polish
6 bottles sold on the Website so that Plaintiffs cannot determine which of its
7 distributors is providing Harmony Products to Defendants. (Compl. ¶ 50.)
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Plaintiffs also allege the following in information and belief. Rockstar

9 engaged in bad faith, fraudulent and unlawful conduct by: (1) registering a domain
10 name comprised of the Harmony Marks; and (2) providing false, inaccurate, or
11 misleading information to its Registrar during the registration of the Domain Name.
12 (Compl. ¶ 18.) Additionally, Rockstar and its owners, operators, and directors used
13 false, inaccurate, or misleading information in order to conceal their identities while
14 conducting their illegal activities using the Domain Name and Website. (Compl. ¶¶
15 19, 50.) Finally, Doe Defendants, whose identities are unknown to Plaintiffs, have
16 distributed, supplied, or sold the allegedly infringing Merchandise in violation of the
17 law. (Compl. ¶ 20.) Plaintiffs maintain that there is no legitimate business purpose
18 to Defendants' Website because it is designed exclusively to facilitate the "unlawful
19 advertisement and sale of Infringing Merchandise." (Compl. ¶¶ 50, 59-60.)
20

Plaintiffs filed the instant lawsuit on April 13, 2015. In the Complaint,

21 Plaintiffs bring six causes of action for: (1) cybersquatting pursuant to § 43(d) of the
22 Lanham Act, 15 U.S.C. § 1125 (Compl. ¶¶ 62-69); (2) trademark infringement
23 pursuant to § 32 of the Lanham Act, 15 U.S.C. § 1114 (Compl. ¶¶ 70-76); (3)
24 trademark infringement pursuant to § 42 of the Lanham Act, 15 U.S.C. § 1125
25 (Compl. ¶¶ 77-83); (4) copyright infringement, 17 U.S.C. §§ 501 et seq. (Compl. ¶¶
26 84-94); (5) intentional interference with contractual relations or prospective business
27 advantage (Compl. ¶¶ 95-105); and (6) unfair competition in violation of
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4

ORDER

1 California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et
2 seq. (Compl. ¶¶ 106-11.)
3

In order to carry out the terms and intent of this Order, any Finding of Fact

4 contained herein may be deemed to be a Conclusion of Law and any Conclusion of
5 Law may be deemed to be a Finding of Fact. Based upon aforementioned Findings
6 of Fact, the Court makes the following Conclusions of Law.
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II.

CONCLUSIONS OF LAW
A.

Personal Jurisdiction

Due to the ambiguity surrounding Defendants’ location (Malynn Decl. ¶ 7;

10 Haile Decl. ¶ 19, ECF No. 5-1), and because “[a] district court must have personal
11 jurisdiction over a party before it can enjoin its actions," Ins. Corp. of Ireland, Ltd.
12 v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 711 n.1 (1982), before turning
13 to the merits of the preliminary injunction, the Court addresses the issue of personal
14 jurisdiction. As a general matter, “[t]he plaintiff bears the burden of establishing
15 that the court has personal jurisdiction," Fields v. Sedgwick Associated Risks, Ltd.,
th
16 796 F.2d 299, 301 (9 Cir. 1986); see also Ziegler v. Indian River Cnty., 64 F.3d

17 470, 473 (9th Cir. 1995) (citation omitted), and courts accept allegations in the
18 complaint as true for purposes of jurisdiction. Fields, 796 F.2d at 301 (citing Pac.
19 Atl. Trading Co. v. M/V Main Express, 758 F.2d 1325, 1327 (9th Cir. 1985)).
20

Here, the Complaint alleges that although Defendants' Domain Name is

21 registered to the Bismarck Address neither Rockstar Nails nor International Nail Co.
22 is registered to conduct business in North Dakota or organized under its laws.
23 (Compl. ¶¶ 14-15.) Further, when Plaintiffs retained an Investigator to purchase
24 Merchandise sold on the Website, the purchased goods included a Santa Monica,
25 California return address, and the terms and conditions on Defendants' website
26 purport to be "governed by the laws of the State of California." (Compl. ¶ 16.)
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5

ORDER

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1 Based on the foregoing, Plaintiffs allege, on information and belief, that "Rockstar

2 is a business entity" that "resides and operates within this judicial district in the State
3 of California." (Compl. ¶¶ 16, 22.) Because "[a] federal court can exercise general
4 personal jurisdiction as to persons domiciled within the forum state at the time the
5 action is commenced," Lietzke v. Cnty. of Montgomery, No. CV 06-01410 ST, 2006
6 WL 2947118, at *2 (D. Or. Oct. 16, 2006) (citing Milliken v. Meyer, 311 U.S. 457
7 (1940)), such allegations are sufficient to establish personal jurisdiction.

Further, even assuming the Defendants are not California residents,3 the Court

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9 finds that Plaintiffs have sufficiently alleged facts establishing personal jurisdiction
10 for the following reasons. California's long-arm statute "allows courts to exercise
11 personal jurisdiction over defendants to the extent permitted by the Due Process
12 Clause of the United States Constitution." Harris Rutsky, 328 F.3d at 1129 (citing
13 Cal. Civ. Proc. Code § 410.10). Courts may exercise personal jurisdiction over a
14 non-resident defendant if the defendant has "at least 'minimum contacts' with the
15 relevant forum such that the exercise of jurisdiction 'does not offend traditional
16 notions of fair play and substantial justice.'" Dole Food Co. v. Watts, 303 F.3d 1104,
17 1110-11 (9th Cir. 2002) (citation omitted). Under the Ninth Circuit's three-prong
18 test, a court may exercise specific personal jurisdiction over a non-resident
19 defendant when: (1) the non-resident defendant purposefully directs his activities or
20 consummates some transaction with the forum or resident thereof; or performs some
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2

For allegations based upon "information and belief" to be facially plausible,
either the facts on which the allegations are based must be "peculiarly within the
possession and control of the defendant," or the belief must be based on factual
information that makes the inference of culpability plausible." Vavak v. Abbott
Labs., Inc., No. CV 10–01995 JVS, 2011 WL 10550065, at *2 (C.D. Cal. June 17,
2011) (quoting Arista Records, LLC v. Doe, 604 F.3d 110, 120 (2d Cir. 2010)).
Here, because Defendants have apparently undertaken efforts to conceal their
identities, the location of the Rockstar business entity is information "peculiarly
within the possession and control" of Defendants.
3
At this Court’s May 18, 2015 hearing, Plaintiffs’ counsel represented that
Defendants’ contact information, received from third party vendors PayPal and
Stamps.com, further support a finding that Defendants are residents of California
within this judicial district.
6

ORDER

1 act by which he purposefully avails himself of the privileges of conducting activities
2 in the forum, thereby invoking the benefits and protections of its laws; (2) the
3 plaintiff's claim arises out of or relates to the defendant's forum-related activities;
4 and (3) the forum's exercise of jurisdiction comports with fair play and substantial
5 justice. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.
6 2004) (citation omitted).
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"In the internet context, the Ninth Circuit utilizes a sliding scale analysis

8 under which 'passive' websites do not create sufficient contacts to establish
9 purposeful availment, whereas interactive websites may create sufficient contacts,
10 depending on how interactive the website is." Allstar Mktg. Grp., LLC v. Your Store
11 Online, LLC, 666 F. Supp. 2d 1109, 1121 (citations and quotation marks omitted).
12 While "'passive' websites . . . merely display information, such as an advertisement .
13 . . 'interactive' websites . . . function for commercial purposes and [allow] users [to]
14 exchange information." Am. Auto. Ass'n, Inc. v. Darba Enters., Inc. ("AAA"), No.
15 CV 09-00510 SI, 2009 WL 1066506, at *4 (N.D. Cal. Apr. 21, 2009) (citations
16 omitted). Thus, "[p]ersonal jurisdiction is appropriate 'when an entity is conducting
17 business over the internet.'" Id. (quoting Stomp, Inc. v. NeatO, LLC, 61 F. Supp. 2d
18 1074, 1078 (C.D. Cal. 1999)).
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Here, Plaintiffs allege that "Defendants are subject to personal jurisdiction in

20 this judicial district because they direct business activities toward and conduct
21 business with consumers within the State of California . . . through . . . the fully
22 interactive commercial Internet website www.harmonygelish.co.uk." (Compl. ¶ 22.)
23 Accepting Plaintiffs' allegations as true, see Fields, 796 F.2d at 301, the Court finds
24 that Plaintiffs have established that Defendants purposefully availed themselves of
25 the privileges of conducting business in California by directing business toward and
26 conducting business with customers in California via the Website. See
27 Schwarzenegger, 374 F.3d at 802; Stomp, 61 F. Supp. 2d at 1078.
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7

ORDER

Plaintiffs have also established the second prong for personal jurisdiction: that

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2 "the claim asserted in the litigation arises out of [the] defendant's forum related
3 activities.'" Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998).
4 When examining this prong, courts "must determine whether plaintiff would not
5 have been injured but for defendant's forum-related activities." AAA, 2009 WL
6 1066506, at *5 (citing Panavision, 141 F.3d at 1322). Here, Plaintiffs allege that
7 Defendants have used the Website, which advertise the allegedly infringing
8 Merchandise using Harmony's registered copyrights, to conduct business with
9 California consumers. (Compl. ¶¶ 22, 51-52.) Further, Defendants' Website has
10 harmed Plaintiffs' brands, reputation, and relationships with its authorized
11 distributors and customers by permitting its products to be sold to untrained,
12 unqualified persons, thereby increasing the risk of customer dismay and injury. (See
13 Compl. ¶¶ 5-6, 40.) Finally, Plaintiffs maintain that by selling the allegedly
14 infringing Merchandise, Defendants are in "direct competition with Plaintiffs and
15 authorized distributors." (Compl. ¶ 55.) Based on the foregoing, the Court finds that
16 Plaintiffs have established that they would not have been harmed but for
17 Defendants' forum-related activities. See AAA, 2009 WL 1066506, at *5.

Finally, based on the foregoing, the Court finds that the exercise of personal

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19 jurisdiction over Defendants would be reasonable based on the factors articulated by
4
20 the Ninth Circuit in Panavision. Because the burden is on Defendants to "present a

21 compelling case that the presence of some other considerations would render
22 jurisdiction unreasonable," Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1487
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Those factors are: "(1) the extent of a defendant's purposeful interjection; (2) the
burden on the defendant in defending in the forum; (3) the extent of conflict with the
26 sovereignty of the defendant's state; (4) the forum state's interest in adjudicating the
dispute; (5) the most efficient judicial resolution of the controversy; (6) the
27 importance of the forum to the plaintiff's interest in convenient and effective relief;
and (7) the existence of an alternative forum." Panavision, 141 F.3d at 1323 (citing
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985)).
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8

ORDER

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1 (9th Cir.1993), and because there is no indication at this time that the exercise of

2 personal jurisdiction over Defendants, who Plaintiffs allege are California residents,
3 (Compl. ¶¶ 22-23), would be unreasonable, the Court finds that Plaintiffs have
4 established that the Court has personal jurisdiction over Defendants.

B.

5

Preliminary Injunction Analysis

To obtain preliminary injunctive relief, the moving party must show: (1) a

6

7 likelihood of success on the merits; (2) a likelihood of irreparable harm to the
8 moving party in the absence of preliminary relief; (3) that the balance of equities
9 tips in favor of the moving party; and (4) that an injunction is in the public interest.
10 Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); see also Save Our
11 Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1120 (9th Cir. 2005). The Ninth Circuit
12 also employs an alternative, sliding scale test whereby the existence of "serious
13 questions going to the merits and a balance of hardships that tips sharply towards the
14 plaintiff can support issuance of a preliminary injunction, so long as the plaintiff
15 also shows that there is a likelihood of irreparable injury and that the injunction is in
16 the public interest." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135
17 (9th Cir. 2011) (internal quotation marks omitted).

1.

18

Likelihood of Success on the Merits

"A preliminary injunction is an extraordinary remedy never awarded as of

19

20 right." Winter, 555 U.S. at 9. As a result, a plaintiff seeking injunctive relief must
21 demonstrate a "likelihood of success on the merits." Munaf, 553 U.S. at 676
22 (internal quotations marks omitted) (citation omitted). Such an inquiry, in turn,
23 looks at the "probable outcome [of plaintiff's claim] on the merits." Mayo v. U.S.
24 Gov't Printing Office, 839 F. Supp. 697, 700 (N.D. Cal. 1992). Here, Plaintiff's
25 request for a preliminary injunction centers on its claims for copyright and
26
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5

As of the May 18, 2015 show cause hearing, Defendants have been noticed
through the Court’s authorized alternative service, (see ECF No. 14), but have not
28 appeared or objected to this Court’s exercise of personal jurisdiction over them.
9

ORDER

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1 trademark infringement, cybersquatting, and unfair competition. (See generally

2 Compl.; Mem.) Thus, the Court must determine whether Plaintiffs are likely to
3 succeed on the merits of these claims.

a.

4

Copyright Infringement

"Plaintiffs must satisfy two requirements to present a prima facie case of

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6 direct [copyright] infringement: (1) they must show ownership of the allegedly
7 infringed material and (2) they must demonstrate that the alleged infringers
8 violate[d] at least one exclusive right granted to copyright holders under 17 U.S.C. §
th
9 106." A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9 Cir. 2001).

10 Under 17 U.S.C. § 106, "the owner of copyright . . . has the exclusive right[] to
11 [reproduce] and to authorize [others] . . . to reproduce the copyrighted work in
12 copies." 17 U.S.C. § 106(1).

Harmony's copyright registrations demonstrate that it is owner of the

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14 allegedly infringed material. (Haile Decl. ¶ 14; see generally Mem. Ex. B
15 ("Copyright Registrations").) Additionally, Defendants have reproduced dozens of
16 Harmony Works on their Website, (see Malynn Decl. ¶ 3; Mem. Ex. C), infringing
17 upon Harmony's exclusive right to reproduce its copyrighted works. See 17 U.S.C. §
18 106(a). Thus, Plaintiffs have establish a prima face case of direct copyright
19 infringement. See Napster, Inc., 239 F.3d at 1013.

Notably, "the fair use of a copyrighted work, including . . . copies . . . for

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21 purposes such as criticism, comment, news reporting, teaching (including multiple
22 copies for classroom use), scholarship, or research, is not an infringement of
23 copyright." 17 U.S.C. § 107 (emphasis added); see also Napster, 239 F.3d at 1014.
24
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Because the injunctive relief Plaintiffs seek is available for (1) trademark
infringement, 15 U.S.C. § 1116(a), (2) copyright infringement, 17 U.S.C. § 502, and
27 (3) unfair competition in violation of the UCL, Korea Supply Co. v. Lockheed
Martin Corp., 29 Cal. 4th 1134, 1144 (2003), the Court limits its analysis to the
28 merits of these claims.
10

ORDER

1 In determining whether an alleged infringer's use of a copyrighted work is "fair use",
2 courts consider:
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(1)

[T]he purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes;

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(2)

the nature of the copyrighted work;

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(3)

the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and

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(4)

the effect of the use upon the potential market for or value of the
copyrighted work.

10 17 U.S.C. § 107.
11

Here, Defendants are using the Harmony Works reproduced on the Website

12 for the commercial purpose of selling allegedly infringing Merchandise outside of
13 Harmony's authorized distributor network. (See Haile Decl. ¶¶ 16, 18, 22-23;
14 Fernandez Decl. ¶¶ 3-5; Malynn Decl. ¶¶ 2-4.) Further, the Website "appears
15 exclusively dedicated to selling Harmony [Products]" because the Website "shows
16 no other competitor's nail care products advertised or offered for sale." (Malynn
17 Decl. ¶ 4.) Finally, Defendants' use of the Harmony Works to sell unauthorized
18 Harmony Products at the allegedly infringing Domain Name is harming the value of
19 the copyrighted works by: (1) alienating Harmony's authorized distributors; and (2)
20 increasing the risk that consumers will come to associate Harmony products with
21 unsafe or poor quality nail care products. (See Haile Decl. ¶¶ 3, 9-10, 18, 20, 22-23.)
22 Based on the foregoing, the Court concludes that Defendants' use of the Harmony
23 Works does not constitute "fair use," and that Plaintiffs are likely to succeed on the
24 merits of their copyright infringement claim. See Munaf, 553 U.S. at 676.
25
26

b.

Cybersquatting

"[C]ybersquatting occurs when a person other than the trademark holder

27 registers the domain name of a well known trademark and then attempts to profit
28 from this . . . by using the domain name to divert business from the trademark
11

ORDER

1 holder to the domain name holder." Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672,
2 680 (9th Cir. 2005) (citing DaimlerChrysler v. The Net Inc., 388 F.3d 201, 204 (6th
3 Cir. 2004)). "In 1999, Congress passed the Anticybersquatting Consumer Protection
4 Act ('ACPA'), 15 U.S.C. § 1125(d), as an amendment to the Lanham Act to prohibit
5 cybersquatting." Bosley, 403 F.3d at 680. The ACPA provides that:
6

A person shall be liable in a civil action by the owner of a mark, including a

7

personal name which is protected as a mark under this section, if, without

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regard to the goods or services of the parties, that person–

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(i) has a bad faith intent to profit from that mark, including a personal

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name which is protected as a mark under this section; and

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(ii) registers, traffics in, or uses a domain name that–

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(I) in the case of a mark that is distinctive at the time of

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registration of the domain name, is identical or confusingly

14

similar to that mark;

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(II) in the case of a famous mark that is famous at the time of

16

registration of the domain name, is identical or confusingly

17

similar to or dilutive of that mark; or

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(III) is a trademark, word, or name protected by reason of section

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706 of Title 18 or section 220506 of Title 36.

20

15 U.S.C. § 1125(d)(1)(A). Thus, under the ACPA, depending on whether the

21 mark is "distinctive" or "famous," a cybersquatter is liable to the owner of a
22 protected mark if the cybersquatter has "a bad faith intent to profit from that mark . .
23 . and registers, traffics in, or uses a domain name" that is: (1) "identical or
24 confusingly similar" to a distinctive mark; or (2) "identical or confusingly similar to
25 or dilutive" of a famous mark. Interstellar Starship Servs., Ltd. v. Epix, Inc., 304
26 F.3d 936, 946 (9th Cir. 2002); 15 U.S.C. § 1125(d)(a)(A).
27

"A finding of 'bad faith' is an essential prerequisite to finding an ACPA

28 violation." Interstellar, 304 F.3d at 946. Congress has enumerated nine factors
12

ORDER

1 which courts may consider in determining whether a person has a bad faith intent.
2 See 15 U.S.C. § 1125(d)(1)(B)(i). These include, among other things: (1) "the
3 trademark or other intellectual property rights of the person, if any, in the domain
4 name"; (2) "the person's intent to divert consumers from the mark owner's online
5 location to a site . . . that could harm the goodwill represented by the mark, either
6 for commercial gain or with the intent to tarnish or disparage the mark, by creating a
7 likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of
8 the site"; and (3) "the person's provision of material and misleading false contact
9 information when applying for the registration of the domain name." 15 U.S.C. §
10 1125(d)(1)(B)(i)(I), (V), (VII). This list of factors is non-exhaustive, and "the most
11 important grounds for finding bad faith are the unique circumstances of the case,
12 which do not fit neatly into the specific factors enumerated by Congress."
13 Interstellar, 304 F.3d at 946-47 (citation and quotation marks omitted).
14
15

i.

Distinctiveness

"Distinctiveness is . . . required to sustain an ACPA claim." Lahoti v.

16 VeriCheck, Inc., 586 F.3d 1190, 1197 (9th Cir. 2009). While "[d]eciding whether a
17 mark is distinctive or merely descriptive 'is far from an exact science' . . . the
18 'primary criterion' for distinguishing between a suggestive and a descriptive mark 'is
19 the imaginativeness involved in the suggestion, that is, how immediate and direct is
20 the thought process from the mark to the particular product.'" Id. at 1198 (citing
21 Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 59 F.3d
22 902, 911 (9th Cir. 1995)). Thus, "[a] mark is suggestive if imagination or a mental
23 leap is required in order to reach a conclusion as to the nature of the product being
24 referenced," Lahoti, 586 F.3d at 1197 (citation and quotation marks omitted), but is
25 merely descriptive if it "define[s] a particular characteristic of the product in a way
26 that does not require any exercise of the imagination." Yellow Co. of Sacramento v.
27 Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 927 (9th Cir. 2005).
28
13

ORDER

Here, Plaintiffs argue that the Harmony Marks, including Gelish, are

1

7
2 distinctive. (Mem. 16.) Indeed, several of the Harmony Marks are registered with

3 the United States Patent and Trademark Office ("PTO"), (see generally Compl. Ex.
4 A ("Trademark Registrations"), and "[r]egistered trademarks are presumed to be
5 distinctive and should be afforded the utmost protection." Americana Trading Inc. v.
6 Russ Berrie & Co., 966 F.2d 1284, 1287 (9th Cir. 1992) (citation omitted). Further,
7 the Court finds that those Harmony Marks that are not registered with PTO are
8 distinctive because the marks "Harmony," "Hand & Nail Harmony," and "Gelish,"
9 require imagination and a mental leap in order to discern that nature of the product
10 being offered: soak-off polish and nail care accessories. See Lahoti, 586 F.3d at
11 1197. This is not a situation where the mark at issue is merely descriptive, such as a
12 restaurant chain called "Delicious Foods" or a clothing company called "Ready
13 Wear," id., because there is nothing inherently "harmonious" about gel polish or
14 other nail care accessories. Based on the foregoing, the Court finds that the
15 Harmony Marks are sufficiently distinctive to sustain an ACPA claim. See id.

ii.

16

Identical or Confusingly Similar Domain
Name

17

"[T]he [Lanham] Act is designed to protect consumers who have formed

18

19 particular associations with a mark from buying a competing product using the same
20 or substantially similar mark and to allow the mark holder to distinguish his product
21 from that of his rivals." Bosley, 403 F.3d at 676 (citing Avery Dennison Corp. v.
22 Sumpton, 189 F.3d 868, 873 (9th Cir. 1999)). Thus, the Court must compare "the
23 mark and the allegedly offensive domain name" to determine whether the Harmony
24 Marks and the Domain Name are identical or confusingly similar. See N. Light Tech.
25 v. Northern Lights Club, 97 F. Supp. 2d 96, 117 (D. Mass. 2000).
26

7

Although Plaintiffs contend the Harmony marks were "distinctive or famous" at

27 the time the Domain Name was registered, (Mem. 16), because Plaintiffs arguments

and allegations track the distinctiveness analysis, (see generally Mem.), the Court

28 exclusively examines whether the Harmony Marks are distinctive.
14

ORDER

1

Here, Defendants registered the allegedly infringing Domain Name

2 www.HarmonyGelish.co.uk. (Compl. ¶ 4.) This domain name incorporates
3 Plaintiffs' registered trademark "Gelish" and part of Plaintiffs' registered mark
4 "Hand & Nail Harmony." (See Trademark Registrations 1-4.) Thus, while the
5 Domain Name is not identical to any of the Harmony Marks, because it is closely
6 related to the Harmony Marks and incorporates two of Plaintiffs' Registered
7 Trademarks, (Malynn Decl. ¶ 4), which themselves are frequently used by Plaintiffs
8 in close proximity to one another, (see Haile ¶ 6), the Court finds that the Harmony
9 Marks and Defendants' Domain Name are confusingly similar. See N. Light Tech.,
10 97 F. Supp. 2d at 117.

iii.

11
12

Bad Faith Intent

As indicated, Congress identified nine non-exclusive factors to aid courts in

13 determining whether an alleged cybersquatter has acted in bad faith. See 15 U.S.C. §
14 1125(d)(1)(B)(i). Here, Plaintiffs argue that "enumerated factors (I)-(III), (V), and
15 (VIII) are highly indicative of Defendants' bad faith intent." (Mem. 18.) Those
16 factors are:
17

(I) [T]he trademark or other intellectual property rights of the person, if any,

18

in the domain name;

19

(II) the extent to which the domain name consists of the legal name of the

20

person or a name that is otherwise commonly used to identify that person;

21

(III) the person's prior use, if any, of the domain name in connection with the

22

bona fide offering of any goods or services; . . .

23

(V) the person's intent to divert consumers from the mark owner's online

24

location to a site accessible under the domain name that could harm the

25

goodwill represented by the mark . . . for commercial gain . . . by creating a

26

likelihood of confusion as to the source, sponsorship, affiliation, or

27

endorsement of the site; . . .

28
15

ORDER

1

(VIII) the person's registration or acquisition of multiple domain names which

2

the person knows are identical or confusingly similar to marks of others that

3

are distinctive at the time of registration of such domain names, or dilutive of

4

famous marks of others that are famous at the time of registration of such

5

domain names, without regard to the goods or services of the parties[.]

6 15 U.S.C. § 1125(d)(1)(B)(i). The Court examines each of those factors below.

Factor (I), which examines the alleged cybersquatter's trademark or other

7

8 intellectual property rights in the domain name, see 15 U.S.C. § 1125(d)(1)(B)(i)(I),
9 supports a finding of bad faith intent on the part of Defendants because Plaintiffs are
10 the only owners and licensors of the Harmony Marks. (Haile Decl. ¶¶ 4-5.) Factor
11 (II) also suggests bad faith because the Domain Name www.HarmonyGelish.co.uk
12 does not include any part of the name with which Defendants associate: "Rockstar
13 Nails." See 15 U.S.C. § 1125(d)(1)(B)(i)(II). (See Haile Decl. ¶¶ 16, 18; Malynn
14 Decl. ¶ 2.) Factor (III), which considers the alleged cybersquatter's prior use of the
15 domain name in connection with the bona fide offering of goods or services, see 15
16 U.S.C. § 1125(d)(1)(B)(i)(III), further supports a finding of bad faith intent because
17 the only sales resulting from Defendants' Domain Name appear to be unauthorized
8
18 sales of Harmony Products. (Haile Decl. ¶ 20; Malynn Decl. ¶¶ 2, 4.) Factor (VIII),

19 which looks at whether the alleged cybersquatter used misleading information when
20 applying for the domain name, see 15 U.S.C. § 1125(d)(1)(B)(i)(VIII), also appears
21 to favor a finding of bad faith intent because Defendants registered the Domain
22 Name to the Bismarck Address even though neither Rockstar Nails nor International
23 Nail Co. are organized under the laws of North Dakota or registered to do business
24 in North Dakota. (Malynn Decl. ¶ 6.)
25
26
27

8

In his declaration, Malynn states that Defendants' Website does not appear to
advertise or offer any nail care products apart from Harmony Products. (Malynn
28 Decl. ¶ 4.)
16

ORDER

1

Factor (V), which examines the alleged cyberquatter's "intent to divert

2 consumers from the mark owner's online location" to the cybersquatter's domain
3 name "for commercial gain" and in a way that "could harm the goodwill represented
4 by the mark . . . by creating a likelihood of confusion as to the source, sponsorship,
5 affiliation, or endorsement of the [allegedly infringing domain name]," 15 U.S.C. §
6 1125(d)(1)(B)(i)(V), also suggests bad faith on the part of Defendants. Defendants,
7 who are unaffiliated with Plaintiffs, are selling Harmony Products on their Domain
8 Name and deriving income from that sale. (See Haile Decl. ¶¶ 16-18, 20; Fernandez
9 Decl. ¶¶ 3-5.) These unauthorized sales harm Plaintiffs' relationships with their
10 authorized distributors and create a risk that the Harmony Products will be
11 improperly applied by untrained, inexperienced persons, resulting in "a degradation
12 of the quality and safety associated with the Gelish brand." (Mem. 18; see Haile
13 Decl. ¶¶ 3, 9-10, 22-23; Malynn Decl. ¶ 4.) Thus, it appears that Defendants' sale of
14 Harmony Products via the subject Domain Name and Website is for commercial
15 gain and could harm the goodwill associated with the Harmony Marks. Specifically,
16 Defendants could damage Plaintiffs' relationship with their authorized distributors,
17 who are not permitted to sell Harmony Products online, (Haile Decl. ¶ 22), and
18 increase the odds that consumers will perceive Harmony Products as poor quality,
19 ineffective, or injurious. See 15 U.S.C. § 1125(d)(1)(B)(i)(V).
20

Finally, Plaintiffs argue that Defendants' use of the Domain Name solely to

21 reproduce Plaintiffs' copyrighted works, as well as advertise and sell Harmony
22 Products, supports a finding of bad faith intent. (Mem. 19; see Malynn Decl. ¶ 4.)
23 Courts have found that where "the only goods or services offered for sale on the
24 website" appear to infringe upon the plaintiff's trademarks, such facts weigh in favor
25 of finding bad faith intent. See, e.g., Audi AG v. D'Amato, 381 F. Supp. 2d 644, 666
26 (E.D. Mich. 2005). Thus, Plaintiffs have demonstrated that Defendants are using the
27 Domain Name in bad faith. Based on the foregoing, the Court finds that Plaintiffs
28
17

ORDER

1 are likely to succeed on the merits of their cybersquatting claim. See Munaf, 553
2 U.S. at 676.

c.

3

Trademark Infringement

Here, Plaintiffs' Complaint alleges a complaint for trademark infringement

4

5 under section 32 of the Lanham Act ("Section 32"). (Compl. ¶¶ 70-76.) "Section 32 .
6 . . provides the registered owner of a trademark with an action against anyone who
7 without consent uses a 'reproduction, counterfeit, copy, or colorable imitation' of the
8 mark in such a way that 'is likely to cause confusion or to cause mistake, or to
9 deceive.'" Enesco Corp. v. Price/Costco Inc., 146 F.3d 1083, 1085 (9th Cir. 1998)
10 (quoting 15 U.S.C. § 1114(1)) (footnote omitted). "To establish a trademark
11 infringement claim under [Section 32] . . . [the plaintiff] must establish that [the
12 defendant] is using a mark confusingly similar to a valid, protectable trademark of
13 [the plaintiff's]." Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d
14 1036, 1046 (9th Cir. 1999) (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348
15 (9th Cir. 1979)) (footnote omitted).

As indicated above, because several of the Harmony Marks are registered

16

17 with the PTO, (see generally Trademark Registrations), Plaintiffs have made a
18 prima facie showing that they have a valid, protectable interest in the registered
9
19 Harmony Marks. See Applied Info. Serv. Corp. v. eBay, Inc., 511 F.3d 966, 970

20 (9th Cir. 2007) (footnote omitted). Thus, the Court next examines whether
21 Defendants have used the Harmony Marks in a way that is likely to cause confuse or
22 mistake, or to deceive. See Enesco, 146 F.3d at 1085.

As a general matter, "[a] trademark owner's right under the Lanham Act to

23

24 control distribution of its own products is limited by the 'first sale' doctrine." Id.
25 (citing Sebastian Int'l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073, 1074 (9th Cir.
26
27

9

Importantly, "[a] registered trademark holder's protectable interest is limited to
those goods or services described in its registration." eBay, 511 F.3d at 970
28 (citations omitted)
18

ORDER

1 1995)). Under the "first sale" doctrine, "resale by the first purchaser of the original
2 article under the producer's trademark is generally neither trademark infringement
3 nor unfair competition," because "trademark law is designed to prevent sellers from
4 confusing or deceiving consumers about the origin or make of a product," and such
5 "confusion ordinarily does not exist when a genuine article bearing a true mark is
6 sold." Enesco, 146 F.3d at 1085 (citations and quotation marks omitted). Courts,
7 however, recognize a "quality control" exception to the first sale doctrine where
8 "'[d]istribution of a product that does not meet the trademark holder's quality control
9 standards may result in the devaluation of the mark by tarnishing its image.'" Id. at
10 1087 (citing Warner-Lambert Co. v. Northside Dev. Corp., 86 F.3d 3, 6 (2d Cir.
11 1996); El Greco Leather Prods. Co., Inc. v. Shoe World, Inc., 806 F.2d 392, 395 (2d
12 Cir. 1986)). This theory exists because "[o]ne of the most valuable and important
13 protections afforded by the Lanham Act is the right to control the quality of the
14 goods manufactured and sold under the holder's trademark." El Greco, 806 F.2d at
15 395. Thus, if a defendant is distributing the trademark holder's goods in a way that
16 does not meet the trademark holder's quality control standards, and such conduct
17 may devalue the mark by tarnishing its image, "the non-conforming product is
18 deemed for Lanham Act purposes not to be the genuine product of the holder, and
19 its distribution constitutes trademark infringement." Warner-Lambert, 86 F.3d at 6;
20 Enesco, 146 F.3d at 1085. Plaintiffs argue that, under the particular circumstances of
21 this case, the quality control exception to the first sale doctrine applies. (Mem. 20.)
22 The Court agrees.
23

Harmony has shown that it takes special care to assure the quality of the

24 Harmony Products by selling them directly to professional boutiques and salons
25 through its qualified distributors. (Haile Decl. ¶¶ 3, 8.) Limiting its sales to these
26 networks "is important to help ensure that the Gelish brand products are applied and
27 removed properly," and to avoid the risk of marred finishes or even injury
28 associated with improper applications by inexperienced or unqualified persons.
19

ORDER

1 (Haile Decl. ¶¶ 3, 9-10.) To assure the proper use of its products, Harmony does not
2 sell its products over the internet, and its distributors are prohibited from selling
3 Harmony Products to unauthorized distributors, re-distributors, or diverters. (Haile
4 Decl. ¶ 10.) By contrast, Defendants sell allegedly infringing Merchandise on the
5 Website and remove the batch codes Plaintiffs have laser-etched onto their products.
6 (Haile Decl. ¶¶ 18, 20; Malynn Decl. ¶¶ 2, 4, 8.) The obliteration of Plaintiffs' batch
7 codes, in turn, undermines Plaintiffs' ability to determine the source of Defendants'
8 Merchandise and thereby thwarts Plaintiffs' efforts to assure quality control by
9 managing the networks through which consumers can acquire Harmony Products.
10 (Haile Decl. ¶ 20; Malynn Decl. ¶ 8.) Based on the foregoing, the Court finds that
11 the quality control exception to the first sale doctrine applies to Defendants' sale of
12 the Merchandise, see Warner-Lambert, 86 F.3d at 6, and Plaintiffs are likely to
13 succeed on their trademark infringement claim. See Munaf, 553 U.S. at 676.
14
15

d.

Unfair Competition under the UCL

The UCL's scope is "broad," Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel.

16 Co., 20 Cal. 4th 163, 180 (1999), and its provisions prohibit "unfair competition" in
17 the form of "any unlawful, unfair or fraudulent business act or practice." Cal. Bus. &
18 Prof. Code §§ 17200, et seq. Further, "[b]ecause section 17200's definition is
19 'disjunctive,' the statute is violated where a defendant's act or practice is unlawful,
20 unfair, [or] fraudulent." S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal.
21 App. 4th 861, 878 (1999) (citation omitted); see also Perea v. Walgreen Co., 939 F.
22 Supp. 2d 1026, 1040 (C.D. Cal. 2013) ("Each prong of the UCL is a separate and
23 distinct theory of liability.") (citation and footnote omitted). "By proscribing any
24 unlawful business practice, section 17200 borrows violations of other laws and
25 treats them as unlawful practices that the [UCL] makes independently actionable."
26 Cel-Tech, 20 Cal. 4th at 180 (citation and quotation marks omitted).
27

Here, the Court has found that Plaintiffs are likely to succeed on their

28 copyright infringement, cybersquatting, and trademark infringement claims.
20

ORDER

1 Because Plaintiffs have shown that Defendants' conduct likely violates the
2 Copyright and Lanham Acts, the UCL makes these unlawful practices
3 independently actionable. See Cel-Tech, 20 Cal. 4th at 180. Thus, the Court finds
4 that Plaintiffs are likely to succeed on the merits of their UCL claim. See Munaf,
5 553 U.S. at 676.

2.

6
7

Likelihood of Irreparable Harm

With regard to irreparable harm, Plaintiffs argue that "[w]here a plaintiff

8 demonstrates a substantial likelihood of success on the merits of an infringement
9 action, as is the case here, the plaintiff will normally be presumed to suffer
10 irreparable injury and be entitled to preliminary injunctive relief." (Mem. 21.)
11 Although the Ninth Circuit once held that "[i]rreparable injury is ordinarily
12 presumed upon a showing of a likelihood of success" in the trademark infringement
13 context, Abercrombie & Fitch Co. v. Moose Creek, Inc., 486 F.3d 629, 633 (9th Cir.
14 2007), in the wake of Winter, the Ninth Circuit has concluded that the likelihood of
15 irreparable harm must be shown by Plaintiffs, not merely presumed by the Court.
16 See Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc., 736 F.3d 1239, 1249 (9th
17 Cir. 2013). This is true whether Plaintiffs are seeking an injunction pursuant to their
18 copyright or trademark infringement claims. See id.; Flexible Lifeline Sys., Inc. v.
19 Precision Lift, Inc., 654 F.3d 989, 998 (9th Cir. 2011).
20

For the following reasons, the Court finds that Plaintiffs have shown that,

21 absent injunctive relief, irreparable harm is likely. First, with regard to their
22 trademark

infringement claim, "[e]vidence of loss of control over business

23 reputation and damage to goodwill could constitute irreparable harm." Herb Reed,
24 736 F.3d at 1249 (citing Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., Inc.,
25 240 F.3d 832, 841 (9th Cir. 2001)). Here, Plaintiffs have presented evidence that
26 they use their distribution agreements to carefully control the sale of Harmony
27 Products and assure that only boutiques, salons, and licensed cosmetologists sell,
28 apply, and remove their gel polish. (Haile Decl. ¶¶ 3, 9, 10.) In order to assure the
21

ORDER

1 proper use of its products, Harmony does not engage in online sales despite
2 marketing its products via the Internet. (Haile Decl. ¶¶ 10-12.) Although Harmony
3 has not presented evidence of harm to its goodwill with customers, its President's
4 declaration stating that authorized distributors have complained about the online sale
5 of the allegedly infringing Merchandise evinces a likelihood that Harmony's
6 relationships with its authorized distributors, and its distribution network generally,
7 will be damaged by Defendants' activities. (Haile Decl. ¶¶ 1, 22-23.)
8

Further, in the copyright context, "where it will be impossible to collect an

9 award for past and/or future infringements perpetrated by a defendant," courts have
10 found that the likelihood of irreparable harm warrants injunctive relief. Metro11 Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1217 (C.D.
12 Cal. 2007); see also Lava Records LLC v. Ates, No. CV 05-01314 JJ, 2006 WL
13 1914166, at *3 (W.D. La. July 11, 2006) (finding that "the need to prevent
14 irreparable harm to Plaintiffs, which will not be remedied by a damage award that
15 may or may not be collectible," in part, warranted injunctive relief). Here,
16 Defendants have endeavored to prevent Plaintiffs from discovering their identities
17 by obliterating the batch codes from Plaintiffs' products, (Haile Decl. ¶ 21; Malynn
18 Decl. ¶ 8), and registering the Website's Domain Name to a Bismarck Address
19 despite that neither Rockstar Nails nor International Nail Co. are registered as North
20 Dakota business entities. (Malynn Decl. ¶ 6.) Defendants' efforts to mask their
21 activities have necessitated that Plaintiffs retain an Investigator in order to discern
22 Rockstar's identity and location, (see Haile Decl. ¶ 19; Fernandez Decl. ¶¶ 1-5;
23 Malynn Decl. ¶¶ 7, 10), and, absent injunctive relief, Defendants may abscond with
24 the proceeds derived from their infringing activities by transferring their online
25 business and accounts outside of this Court's jurisdiction. (Malynn Decl. ¶ 11.)
26
27

3.

Balance of Equities

In balancing equities between parties, the Court must weigh the effect of harm

28 to either party. Earth Island Inst. v. Carlton, 626 F.3d 462, 475 (9th Cir. 2010)
22

ORDER

1 ("The assignment of weight to particular harms is a matter for district courts to
2 decide."). The Court also examines the degree to which parties have acted in good
3 faith and whether the moving party's need for an injunction is self-imposed.
4

Here, Plaintiffs argue that although they will likely suffer irreparable harm

5 absent injunctive relief, Defendants will either suffer: (1) no injury, because they
6 lack a cognizable legal interest in the Domain Name and Plaintiffs' Marks and
7 Works, (Haile Decl. ¶¶ 4-5, 14, 16; Malynn Decl. ¶ 2-4); or (2) "limited, purely
8 monetary" injury as the result of the Court temporarily freezing their assets and use
9 of the Domain Name. (Mem. 22.) The Court agrees. Because the Court has found
10 that Plaintiffs are likely to suffer irreparable harm absent injunctive relief the Court
11 finds that any injury Defendants may suffer if they are wrongfully enjoined is likely
12 to be temporary and monetary in nature. Thus, the Court finds that the balance of the
13 equities favors Plaintiffs.
14
15

4.

Public Interest Considerations

Finally, in determining whether to grant injunctive relief, the Court considers

16 the effect of an injunction on the public at large. In making this determination, the
17 Court "primarily addresses impact on non-parties rather than parties." Sammartano
18 v. First Judicial Dist. Ct., in & for Cnty. of Carson City, 303 F.3d 959, 974 (9th Cir.
19 2002) (abrogated on other grounds by Winter, 555 U.S. at 24). Because the public
20 interest favors protecting trademarks and copyrights against infringement, see
21 Brookfield, 174 F.3d at 1066; Grokster, 518 F. Supp. 2d at 1222, the Court finds that
22 the public interest weighs against granting injunctive relief.
23
24

5.

Preliminary Injunction Conclusion

For the aforementioned reasons, the Court finds that Plaintiffs have shown

25 that they are (1) likely to succeed on the merits of their claims; (2) likely to suffer
26 irreparable harm in the absence of preliminary relief; (3) that the balance of equities
27 tips their favor; and (4) that an injunction is in the public interest. See Winter, 555
28 U.S. 7, 20. Further, courts are empowered to freeze a defendant's assets in order to
23

ORDER

1 assure that the possibility that the plaintiff may be awarded equitable relief,
2 including lost profits. See Reebok, 970 F.2d at 559; Roederer v. Treister, 2 F. Supp.
3 3d 1153, 1163 (D. Or. 2014) ("[A] Court has the power to issue a preliminary
4 injunction in order to prevent a defendant from dissipating assets in order to
5 preserve the possibility of equitable remedies") (citation omitted).
6

III.

ORDER FOR PRELIMINARY INJUNCTION

7

IT IS HEREBY ORDERED that Defendants, their officers, agents, servants,

8 employees, attorneys, and any other person or entity who is in active concert or
9 participation with any of Defendants, including but not limited to PayPal, Inc.
10 (“PayPal”), Stamps.com, Inc. (“Stamps.com”) and the host of the Website
11 (collectively, the “Enjoined Parties”), are preliminarily enjoined and restrained
12 pending trial of this action from:
13

1.

Operating

any

website

at

or

with

the

domain

name

14

www.harmonygelish.co.uk or any other domain name which is

15

confusingly similar or likely to lead consumers to believe that

16

Defendants are affiliated with Plaintiffs or licensed to use their

17

trademarks, including Hand & Nail Harmony® and/or Gelish®

18

(the “Infringing Websites”);

19

2.

Reproducing,

publishing

or

displaying

any

of

Plaintiffs’

20

copyrighted works, including those identified by U.S. Copyright

21

Registration Nos. VA-1-880-732, VA 1-880-751, VA 1-880-769,

22

VA 1-880-736, VA 1-880-744, VA 1-874-516, VA 1-880-735, VA

23

1-880-747, VA 1-874-655, VA 1-880-730, VA 1-880-109, 1-880-

24

731, VA 1-880-748, VA 1-880-728, VA 1-880-668, VA 1-880-

25

742, VA 1-880-745, VA 1-880-698, and VA 1-880-740 (the

26

“Harmony Works”), or any artwork substantially similar to the

27

Harmony Works;

28
24

ORDER

1

3.

Selling or offering for sale any goods manufactured, promoted

2

and/or sold by Harmony (the “Harmony Goods”) that have been

3

altered through the removal or obstruction of serial codes on a

4

container or bottle otherwise visible upon inspection;

5

4.

Hazardous Materials Transportation Act of 1975;

6
7

Transporting or shipping any Harmony Goods in violation of the

5.

Transferring, selling, relocating or otherwise hypothecating any

8

assets in any accounts, including any accounts with PayPal or

9

Stamps.com, related to the Infringing Websites, except to transfer,
interplead or deposit said assets with the Court; and

10
11

6.

Transferring, selling, relocating or otherwise hypothecating the

12

Infringing Websites and/or any related domain name, or registering

13

or purchasing any other domain name which is confusingly similar

14

with the Harmony Marks, except to transfer the domain name to

15

Plaintiffs or deposit the domain name with the Court.

16

IT IS FURTHER ORDERED that any and all third-party vendors, such as

17 PayPal and Stamps.com, and any other business or entity affiliated with notice of
18 this Order, pending further order of the Court, shall continue to hold all funds frozen
19 pursuant to this Court’s prior TRO in this action until further order of the Court.
20
21 DATED: May 22, 2015
22

______________________________
The Hon. S. James Otero
UNITED STATES DISTRICT JUDGE

23
24
25
26
27
28
25

ORDER