Aecom Energy and Construction, Inc. v. John Ripley et al

Filing 45

ORDER RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION 11 by Judge Ronald S.W. Lew. The Court GRANTS Plaintiff's Motion for Preliminary Injunction and orders Plaintiff to post a bond of $50,000.00 within fourteen days of the Orde r. Within twenty-one days of the date Plaintiff posts the bond described above, each Defendant shall file a sworn affidavit detailing the manner in which that Defendant has complied with this Order. SEE ORDER FOR FURTHER AND COMPLETE DETAILS. (jre)

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1 O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 AECOM ENERGY & CONSTRUCTION, INC., 13 Plaintiff, 14 15 v. 16 JOHN RIPLEY; TODD HALE; 17 GARY TOPOLEWSKI; HENRY BLUM; BUD ZUKALOFF; 18 MORRISON KNUDSEN CORPORATION; MORRISON19 KNUDSEN COMPANY, INC.; MORRISON-KNUDSEN SERVICES, 20 INC.; and MORRISON-KNUDSEN INTERNATIONAL INC., 21 22 23 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2:17-cv-05398-RSWL-SS ORDER RE: PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION [11] Currently before the Court is Plaintiff AECOM 24 Energy and Construction, Inc.’s (“Plaintiff”) Motion 25 for Preliminary Injunction (“Motion”) [11]. Having 26 reviewed all papers submitted pertaining to this 27 Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the 28 Court GRANTS Plaintiff’s Motion. 1 1 I. BACKGROUND 2 A. Factual Background 3 1. 4 MK was a renowned multinational construction and Plaintiff’s Corporate History 5 engineering firm responsible for many notable projects, 6 including the Hoover Dam, the San Francisco-Oakland Bay 7 Bridge, and the Trans-Alaska Pipeline. Decl. of 8 Charles Szurgot (“Szurgot Decl.”) ¶ 6, ECF No. 13. In 9 2014, after MK had already gone through a series of 10 mergers and name changes, Plaintiff acquired MK. 11 ¶ 8. Id. Plaintiff is an engineering and construction firm 12 that has also worked on many notable projects, 13 including the new World Trade Center and the Los 14 Angeles Chargers’ new stadium. Compl. ¶ 21. Plaintiff 15 continues to use MK’s logo and corporate history in 16 many of its promotional materials. Szurgot Decl. ¶ 9, 17 Exs. B-1, B-2, B-3, B-4, ECF Nos. 13-3, 13-4, 13-5, 1318 6; Compl. ¶ 21. 19 2. 20 Plaintiff alleges that, beginning in 2008, Defendants’ Use of MK Name 21 Defendants undertook an elaborate scheme to pass 22 themselves off as MK and take advantage of MK’s good 23 reputation. 24 20. Pl’s. Mot. for Prelim. Inj. (“Mot.”) 4:18- This included reviving dissolved MK entities such 25 as Morrison Knudsen Services, Inc. and Morrison Knudsen 26 Corporation of Viet Nam (“MK Viet Nam”). Decl. of 27 Diana M. Torres (“Torres Decl.”), Ex. 1 at 52-55, Ex. 2 28 at 97-99. In reviving these companies, Defendant 2 1 Topolewski stated under penalty of perjury that he had 2 the authority from the board of directors of these 3 companies to revive the companies. Id. Defendants 4 also changed the names of two of their corporations to 5 include the MK name.1 6 3. 7 Defendants purchased the domain name “www.morrison- Website and Press Release 8” and operate a website there in which they 9 promote MK’s history as their own and offer to sell 10 used construction equipment used in MK’s projects. See 11 id., Ex. 7, ECF No. 19-7; Decl. of Patricia Olson 12 (“Olson Decl.”) ¶ 3, ECF No. 17; Szurgot Decl. ¶¶ 1013 11, Ex. C, ECF No. 13-6. At least some of the 14 Defendants have email addresses associated with the 15 domain See, e.g., Torres Decl. 16 ¶¶ 8, 10, Exs. 6, 8, ECF Nos. 19-6, 19-8.2 Defendants, 17 through Defendant Blum, also distributed a press 18 release titled, “Morrison Knudsen awarded $1.2 Billion 19 Construction and Engineering Contract,” which stated 20 that Defendants had been awarded a contract to 21 construct a harbor for the Indonesian government. Id. 22 ¶ 8, Ex. 6. 23 24 1 Defendants filed Certificates of Amendment with the Nevada 25 Secretary of State to change the names of E Planet Morrison Knudsen 26 Communications, Inc. toWestland PetroleumInternational, Inc., see id., Ex. 3 at 125, and Corporation to 27 Morrison-Knudsen Company, Inc., see id., Ex. 4 at 153. 28 2 For example, as discussed below, Diana Torres exchanged emails with “” 3 1 3. 2 3 Plaintiff’s Employee Discovers Defendants’ Website In April 2013, J. Brandon Davis (who, at that time, 4 worked for Plaintiff) discovered 5 Decl. of J. Brandon Davis (“Davis Decl.”) ¶ 3, ECF No. 6 36. The website confused Davis because it had pictures 7 of actual MK projects, but he knew that MK had since 8 undergone a series of name changes and mergers. Id. 9 Davis then contacted the listed email address on the 10 site to inquire further. 11 Id. ¶ 4, Ex. L, ECF No. 36-1. Davis engaged in an email exchange with a contact 12 from, who told him that Plaintiff 13 sold all MK brand companies to raise capital and MK was 14 now an independent entity. Id. This exchange 15 eventually led to phone conversations between Davis and 16 someone named “Gary.” Id. ¶ 9. The two spoke more 17 about MK, and Davis continued to believe that 18 Defendants were MK. Id. Eventually, in 2015, Davis 19 referred an AECOM colleague to Gary for some work on a 20 project in Las Vegas. Id. ¶ 10. 21 4. 22 On November 10, 2014, Defendant Hale submitted a Defendants’ Attempt to Take Over the MK Marks 23 “change of address” form to the United States Patent 24 and Trademark Office (“USPTO”). Decl. of Annette 25 Bottaro-Walklet (“Bottaro-Walklet Decl.”) ¶ 6, ECF No. 26 14; id., Ex. F, ECF No. 14-1. Defendants changed the 27 contact information listed in USPTO records for two of 28 Plaintiff’s registered trademarks (“MORRISON KNUDSEN” 4 1 and “MKCO MORRISON KNUDSEN”) from Plaintiff’s address, 2 email address, and phone number to Defendants’ address, 3 email address, and phone number. 4 Id. One year later, Defendant Zukaloff submitted a 5 document to the USPTO purporting to assign the 6 registered trademark “MKCO MORRISON KNUDSEN” from 7 Washington Group International (a previous name of 8 Plaintiff) to Defendants in exchange for valuable 9 consideration. 10 Id. ¶ 7, Ex. G., ECF No. 14-2. Plaintiff did not renew its registrations for the 11 “MORRISON KNUDSEN” and “MKCO MORRISON KNUDSEN” marks, 12 so the USPTO cancelled the marks in February 2016. 13 Pl.’s Mot. for Prelim. Inj. (“Mot.”) 8:16-18; Compl. ¶ 14 26. On March 26, 2016, Defendants filed a new 15 application with the USPTO to register the mark 16 “MORRISON KNUDSEN,” declaring that they owned the mark 17 and claiming a first use date of April 18, 1933. 18 Torres Decl. ¶ 7, Ex. 5 at 155, 158. The USPTO granted 19 Defendants’ application on November 8, 2016. Id. 20 5. 21 On May 23, 2017, Michael Gallo, an investigator for Plaintiff Confronts Defendants 22 the law firm representing Plaintiff, emailed 23 “” and asked if some 24 equipment listed for sale on Defendants’ website was 25 still available. Decl. of Michael Gallo (“Gallo 26 Decl.”) ¶ 3, ECF No. 16; id., Ex. K., ECF No. 16-1. 27 Gallo received a response from the address: “Just some 28 older gear that’s getting sold.” 5 Id. 1 On May 30, 2017, Plaintiff, through counsel Diana 2 Torres, sent an email to Defendant Ripley at 3, demanding that Defendants 4 take down the website and stop presenting all MK marks, 5 projects, and services as their own. 6 ¶ 10, Ex. 8. Torres Decl. Ripley responded, stating that 7 Plaintiff’s allegations were “moronic,” “scurrilous,” 8 and “idiotic,” and Ripley had reviewed SEC documents 9 and had found nothing to indicate a relationship 10 between Plaintiff and MK. 11 Id. ¶ 11, Ex. 9. Plaintiff responded to Ripley’s email, detailing 12 Plaintiff’s corporate history and connection with MK. 13 Id. ¶ 12, Ex. 9. Plaintiff’s response also asked 14 Ripley to identify the basis for Defendants’ claim to 15 be Morrison Knudsen Corporation. Id. Plaintiff has 16 received no response as of July 28, 2017. Id. 17 B. Procedural Background 18 On July 21, 2017, Plaintiff filed its Complaint, 19 alleging seven claims: (1) false designation of 20 origin/affiliation/passing off in violation of 15 21 U.S.C. § 1125(a)(1)(A); (2) false advertising in 22 violation of 15 U.S.C. § 1125(a)(1)(B); (3) cyberpiracy 23 in violation of 15 U.S.C. § 1125(d); (4) California 24 common law unfair competition; (5) California statutory 25 unfair competition; (6) California statutory false 26 advertising; and (7) petition for a cancellation of a 27 registered mark. 28 Compl. ¶¶ 48, 53, 57, 61, 66, 70, 74. Plaintiff filed its Motion on August 1, 2017 [11]. 6 1 Defendants filed their Opposition on August 15, 2017. 2 [27]. Plaintiff filed its Reply on August 22, 2017. 3 [34]. 4 II. DISCUSSION 5 A. Legal Standard 6 “A plaintiff seeking a preliminary injunction must 7 establish that he is likely to succeed on the merits, 8 that he is likely to suffer irreparable harm in the 9 absence of preliminary relief, that the balance of 10 equities tips in his favor, and that an injunction is 11 in the public interest.” Am. Trucking Ass’ns v. City 12 of L.A., 559 F.3d 1046, 1052 (9th Cir. 2009)(quoting 13 Winter v. Nat. Res. Def. Council, 555 U.S. 7, 20 14 (2008)). 15 A court employs a sliding scale when considering a 16 plaintiff’s showing as to the likelihood of success on 17 the merits and the likelihood of irreparable harm. 18 Alliance for the Wild Rockies v. Cottrell, 632 F.3d 19 1127, 1131 (9th Cir. 2011). “Under this approach, the 20 elements of the preliminary injunction test are 21 balanced, so that a stronger showing of one element may 22 offset a weaker showing of another.” Id. Therefore, 23 “serious questions going to the merits and a balance of 24 hardships that tips sharply towards the plaintiff can 25 support issuance of a preliminary injunction, so long 26 as the plaintiff also shows that there is a likelihood 27 of irreparable injury and that the injunction is in the 28 public interest.” Id. at 1135. 7 1 B. Discussion 2 1. 3 As discussed more fully below, Plaintiff has made a Likelihood of Success on the Merits 4 showing that it is likely to succeed on the merits of 5 its claims. 6 7 a. False Designation Claim “Section 43(a) of the Lanham Act, 15 U.S.C. 8 § 1125(a), forbids the use of false designations of 9 origin and false descriptions or representations in the 10 advertising and sale of goods and services.” 11 Montoro, 648 F.2d 602, 603 (9th Cir. 1981). Smith v. In a false 12 designation claim, Plaintiff must prove that Defendants 13 “(1) use[d] in commerce (2) any word, false designation 14 of origin, false or misleading description, or 15 representation of fact, which (3) is likely to cause 16 confusion or misrepresents the characteristics of his 17 or another person’s goods or services.” Freecycle 18 Network, Inc. v. Oey, 505 F.3d 898, 902 (9th Cir. 19 2007). Courts have defined “use in commerce” to 20 include “communications made on public websites.” 21 Nat’l Grange of the Order of Patrons of Husbandry v. 22 Cal. State Grange, No. 2:16-201 WBS DB, 2016 U.S. Dist. 23 LEXIS 158144, at *10 (E.D. Cal. Nov. 15, 2016). 24 Here, Plaintiff has clearly established that 25 Defendants have used the MK marks in commerce. 26 Defendants operate a website,, 27 which uses the MK mark in the domain name, and through 28 this website, Defendants represent that they are in 8 1 fact MK, taking credit for MK’s history and 2 achievements. 3 See Szurgot Decl., Ex. C. Next, Plaintiff must establish a likelihood of 4 confusion between the marks. 5 F.3d at 902. Freecycle Network, 505 Courts consider eight factors in 6 determining likelihood of confusion.3 However, at the 7 preliminary injunction stage, the court is not required 8 to consider all of the factors because the court “will 9 have had only a brief opportunity to consider the 10 different factors relevant to the likelihood of 11 confusion determination.” Miss Universe, Inc. v. 12 Flesher, 605 F.2d 1130 (9th Cir. 1979). 13 Even a consideration of some of the factors shows a 14 likelihood of confusion. 15 identical. The uses of the MK marks are In fact, Defendants merely assumed 16 ownership of the MK marks and display them and MK’s 17 history prominently on their website. Further, 18 Plaintiff and Defendants use identical MK marks in the 19 same market to sell the same services and goods, 20 including construction contracts and construction 21 equipment. Torres Decl., Ex. 7. The Ninth Circuit has 22 23 24 25 26 27 28 3 The eight factors include “1) strength of the allegedly infringed mark; 2) proximity or relatedness of the goods; 3) similarity of the sight, sound, and meaning of the marks; 4) evidence of actual confusion; 5) degree to which the marketing channels converge; 6) type of goods and degree of care consumers are likely to exercise in purchasing them; 7) intent of the defendant in selecting the allegedly infringing mark; and 8) likelihood that the parties will expand their product lines.” Metro Pub. v. San Jose Mercury News, 987 F.2d 637, 640 (9th Cir. 1993). 9 1 found it to be clear error “to find no likelihood of 2 confusion when two products with virtually identical 3 marks are in the same market.” Honor Plastic Indus. 4 Co. v. Lollicup USA, Inc., 462 F. Supp. 2d 1122, 1132 5 (E.D. Cal. 2006)(citing Lindy Pen Co. v. Bic Pen Corp., 6 796 F.2d 254, 257 (9th Cir. 1986)). Finally, Plaintiff 7 has provided evidence of actual confusion. Mr. Davis, 8 Plaintiff’s former employee, discovered Defendants’ 9 website and, after contacting one of Defendants’ 10 employees, was convinced that Defendants were MK. 11 Davis Decl. ¶ 9. Accordingly, Plaintiff has shown a 12 likelihood of success on the merits for its false 13 designation claim. 14 Defendants argue that Plaintiff has abandoned its 15 use of the MK marks and therefore has no right to bring 16 its trademark claims under the Lanham Act. 17 16. Opp’n 5:6- To prove abandonment of the MK marks, Defendants 18 must prove “(1) discontinuance of trademark use and (2) 19 intent not to resume such use.” Electro Source, Ltd. 20 Liab. Co. v. Brandess-Kalt-Aetna Grp., Inc., 458 F.3d 21 931, 935 (9th Cir. 2006). “Even a single instance of 22 use is sufficient against a claim of abandonment of a 23 mark if such use is made in good faith.” Carter- 24 Wallace, Inc. v. Proctor & Gamble Co., 434 F.2d 794, 25 804 (9th Cir. 1970). Further, contrary to Defendants’ 26 argument, use of a mark in promotional materials, 27 including “customer presentations and solicitations,” 28 is sufficient use to defeat an argument for 10 1 abandonment. Wells Fargo & Co. v. ABD Ins. & Fin. 2 Servs., Inc., 758 F.3d 1069, 1072 (9th Cir. 2014), as 3 amended (Mar. 11, 2014). This is true even where a 4 company has acquired another company and changed the 5 name of that company but still uses the acquired 6 company’s marks in promotional materials. 7 Id. at 1071. Here, as the exhibits to the Szurgot Declaration 8 evidence, Plaintiff has continued to use the MK marks 9 and name in its promotional materials, including making 10 reference to MK’s past projects. 11 Exs. B-1, B-2, B-3, B-4. See Szurgot Decl., As Plaintiff argues, it 12 purchased the MK brand to profit from MK’s impressive 13 history and to gain a competitive advantage in the 14 marketplace. Reply 10:4-9; see Wells Fargo, 758 F.3d 15 at 1072 (holding that use of a mark “demonstrate[s] 16 Wells Fargo’s business calculation that it could 17 continue to benefit from the goodwill and mark 18 recognition associated with [the company it 19 acquired]”). Because Plaintiff has continued to use 20 the MK marks, Defendants’ abandonment argument must 21 fail. See Cumulus Media, Inc. v. Clear Channel 22 Commc’ns, Inc., 304 F.3d 1167, 1174 (11th Cir. 23 2002)(finding use in promotional materials enough to 24 vitiate an abandonment argument). 25 26 b. False Advertising As a preliminary matter, Defendants argue that 27 Plaintiff does not have standing to bring its false 28 advertising claim because the parties “are not 11 1 competitors.” Opp’n 8:14-18. To allege standing for a 2 false advertising claim under the Lanham Act, the 3 plaintiff must show: (1) an “injury to a commercial 4 interest in sales or business reputation” (2) that is 5 “proximately caused by the defendant’s 6 misrepresentations.” Lexmark Int’l, Inc. v. Static 7 Control Components, Inc., 134 S. Ct. 1377, 1395 (2014). 8 Despite Defendants’ argument, “a plaintiff need not be 9 a direct competitor with a defendant to bring a false 10 advertising claim under the Lanham Act.” Luxul Tech., 11 Inc. v. Nectarlux, LLC, 78 F. Supp. 3d 1156, 1170 (N.D. 12 Cal. 2015)(citing Lexmark, 134 S. Ct. at 1392). 13 Plaintiff alleges Defendants’ misrepresentations as 14 to MK’s involvement in Defendants’ products and 15 services have injured Plaintiff because Plaintiff has 16 “lost control over the goodwill” in the MK name and 17 “Defendants literally transferred Plaintiff’s property 18 into Defendants’ own name and control.” Reply 3:4-10. 19 The Court holds that this is sufficient for standing 20 under a false advertising claim. Because Defendants 21 have essentially stolen the MK brand from Plaintiff, 22 Defendants’ advertising of the MK brand and services 23 under this brand “causes [consumers] to withhold trade 24 from the plaintiff.” Lexmark, 134 S. Ct. at 1391. 25 Defendants’ deception also hurts Plaintiff’s business 26 reputation, which includes the MK brand Plaintiff 27 acquired with the purchase of the MK entities. 28 Accordingly, Plaintiff has standing to bring its false 12 1 advertising claim. 2 To succeed on its claim for false advertising under 3 the Lanham Act,4 Plaintiff must prove: 4 5 6 7 8 9 10 (1) a false statement of fact by the defendant in a commercial advertisement about its own or another’s product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products. 11 12 Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 13 1139 (9th Cir. 1997). 14 Both parties focus on the first element, with 15 Plaintiff arguing that the statements Defendants make 16 on their website are literally false, see Mot. 15:1217 24, and Defendants arguing that because Plaintiff 18 abandoned the MK marks, the statements Defendants make 19 cannot be literally false and are at best ambiguous, 20 see Opp’n 7:6-10. 21 “To demonstrate falsity within the meaning of the 22 Lanham Act, a plaintiff may show that the statement was 23 literally false, either on its face or by necessary 24 25 26 27 28 4 Plaintiff also alleges violations of California Business and Professions Code sections 17200 and 17500, which similarly prohibit misleading advertising. However, these state law claims are not substantively addressed because the state claims are “substantially congruent” to the Lanham Act claims. JHP Pharm., Ltd. Liab. Co. v. Hospira, Inc., 52 F. Supp. 3d 992, 997 n.4 (C.D. Cal. 2014). 13 1 implication, or that the statement was literally true 2 but likely to mislead or confuse consumers.” 3 Sod Farms, 108 F.3d at 1139. Southland “To be ‘literally false’ 4 the statement must be unambiguously false.” Kwan 5 Software Eng’g, Inc. v. Foray Techs., Ltd. Liab. Co., 6 No. C 12-03762 SI, 2014 U.S. Dist. LEXIS 17376, at *16 7 (N.D. Cal. Feb. 11, 2014). 8 Here, the alleged literally false statements 9 include, among others, statements on Defendants’ 10 website that Defendants are in fact MK and taking 11 credit for MK projects including projects prior to 12 Plaintiff’s acquisition of MK as well as Plaintiff’s 13 current projects. 14 47-50. Szurgot Decl. ¶ 11, Ex. C at 41-43, In their argument, Defendants again rely on 15 Plaintiff’s alleged abandonment of the MK marks; 16 however, as discussed above, Plaintiff continues to use 17 the MK marks and therefore has not abandoned these 18 marks. Defendants are claiming to be MK despite 19 Plaintiff’s ownership of the MK entities and brand. 20 Therefore, the MK-related statements on Defendants’ 21 website cannot be true and satisfy the first element of 22 Plaintiff’s false advertising claim. 23 Plaintiff has shown a likelihood of success on the 24 remaining elements of false advertising. “Statements 25 that are literally false are presumed to have a 26 tendency to deceive,” and therefore, Plaintiff need not 27 prove the second element of false advertising. 28 Leatherman Tool Grp., Inc. v. Coast Cutlery Co., 823 F. 14 1 Supp. 2d 1150, 1155 (D. Or. 2011); see McNeil-P.C.C., 2 Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1549 3 (2d Cir. 1991)(“[When] the advertising claim is shown 4 to be literally false, the court may enjoin the use of 5 the claim without reference to the advertisement’s 6 impact on the buying public.”). 7 Additionally, “if the statements at issue are found 8 to be literally false, the court may presume 9 materiality.” Itex Corp. v. Glob. Links Corp., 90 F. 10 Supp. 3d 1158, 1173 (D. Nev. 2015). Even if the Court 11 did not presume materiality, the statements at issue 12 were clearly made to influence consumers, who rely on 13 MK’s brand and long history in the construction 14 industry when making a decision whether to engage 15 Defendants’ services. 16 The statements at issue clearly entered interstate 17 commerce as Defendants published them on their website. 18 See United States v. Sutcliffe, 505 F.3d 944, 953 (9th 19 Cir. 2007)(stating that “the Internet is both an 20 instrumentality and channel of interstate 21 commerce”)(internal quotations and citations omitted). 22 Finally, as to the injury element, “‘a competitor need 23 not prove injury when suing to enjoin conduct that 24 violates section 43(a).’” Healthport Corp. v. Tanita 25 Corp. of Am., 563 F. Supp. 2d 1169, 1181 (D. Or. 26 2008)(quoting Harper House, Inc. v. Thomas Nelson, 27 Inc., 889 F.2d 197, 210 (9th Cir. 1989)). Even so, 28 Plaintiff has provided evidence to show that 15 1 Defendants’ false statements have lessened the goodwill 2 in the MK brand, including that Plaintiff no longer has 3 control over the goodwill remaining in the brand. 4 Consequently, Plaintiff has proven a likelihood on 5 the success of the merits of its false advertising 6 claim. 7 c. 8 Cyberpiracy To succeed on a claim for cyberpiracy under 15 9 U.S.C. § 1125(d), Plaintiff “must establish that its 10 mark is distinctive, that defendants used a mark that 11 is identical or confusingly similar to [Plaintiff’s 12 mark], and that defendant had a bad faith intent to 13 profit from the mark.” Flow Control Indus. v. AMHI, 14 Inc., 278 F. Supp. 2d 1193, 1200 (W.D. Wash. 2003). 15 In looking at whether the mark is distinctive, the 16 Court focuses on whether the mark is distinctive at the 17 time of registration of the domain name.5 GoPets Ltd. 18 v. Hise, 657 F.3d 1024, 1030 (9th Cir. 2011). 19 Plaintiff provided a Whois Record for Defendants’ 20 domain name,, which shows a 21 registration date of March 25, 2008. 22 7. Torres Decl., Ex. At that time, Plaintiff held a valid registered 23 trademark in MORRISON KNUDSEN. 24 Decl. ¶ 5. 25 distinctive. See Bottaro-Walklet A registered trademark is presumed to be Zobmondo Entm’t, Ltd. Liab. Co. v. Falls 26 27 28 5 Defendants do not mention this rule and instead conclusorily argue that Plaintiff’s “claim must fail because it does not have [any] valid trademark.” Opp’n 9:24-25. 16 1 Media, Ltd. Liab. Co., 602 F.3d 1108, 1113-14 (9th Cir. 2 2010)(“Where the PTO issues a registration without 3 requiring proof of secondary meaning, the presumption 4 is that the mark is inherently distinctive.”). 5 Additionally, Defendants’ domain name, morrison6, is identical to Plaintiff’s MORRISON 7 KNUDSEN mark. Therefore, Plaintiff can prove the first 8 two elements of its cyberpiracy claim. 9 Finally, Plaintiff must prove that Defendants had a 10 “bad faith intent to profit” from the MORRISON KNUDSEN 11 mark when they registered their domain name. 12 § 1125(d)(1)(A)(i). 15 U.S.C. “[T]he defendant must intend to 13 profit specifically from the goodwill associated with 14 another’s trademark.” Solid Host, NL v. Namecheap, 15 Inc., 652 F. Supp. 2d 1092, 1109 (C.D. Cal. 2009). The 16 statute lists nine factors to consider when determining 17 whether a defendant has acted with a bad faith intent 18 to profit from the use of a mark. 19 1125(d)(1)(B)(I)-(IX). See 15 U.S.C. § However, courts are not limited 20 to these listed factors in making a determination of a 21 bad faith intent. See Sporty’s Farm L.L.C. v. 22 Sportsman’s Mkt., Inc., 202 F.3d 489, 498 (2d Cir. 23 2000). 24 There is ample evidence of Defendants’ bad faith 25 intent to profit from their use of the MORRISON KNUDSEN 26 mark. First, Defendants did not have any intellectual 27 property rights in the mark at the time they registered 28 the domain name containing the mark. 17 See 15 U.S.C. 1 § 1125(d)(1)(B)(i)(I). In fact, Plaintiff owned the 2 registered MORRISON KNUDSEN mark at the time 3 Defendants’ registered the domain name. 4 Walklet Decl. ¶ 5. See Bottaro- Further, Defendant Hale submitted a 5 “change of address” request to the USPTO seeking to 6 change the address of the registered MORRISON KNUDSEN 7 mark to Defendants’ address. Id. ¶ 6. Defendant Hale 8 did this without any apparent authority from the true 9 owner of the mark, Plaintiff. Id. ¶ 6. Following the 10 cancellation of the MORRISON KNUDSEN mark in February 11 2016, Defendants applied to register the mark with the 12 USPTO, claiming that their first use of the mark in 13 commerce was “at least as early as April 18, 1933,” the 14 date MK, not Defendants, began using the mark. 15 Decl. ¶, Ex. 5 at 155. Torres Finally, Defendants, on the 16 website, tout the architectural 17 accomplishments associated with the MK marks, claiming 18 that these accomplishments are their own. 19 Decl. ¶ 11, Ex. C at 41-43. Szurgot Defendants’ actions with 20 regard to the MORRISON KNUDSEN mark therefore 21 demonstrate a “bad faith intent to profit” from the use 22 of the mark. Plaintiff has established a likelihood of 23 success on the merits of its cyberpiracy claim. 24 2. 25 In addition to demonstrating a likelihood of Irreparable Harm 26 success on the merits of its claims, Plaintiff must 27 demonstrate that it is likely to suffer irreparable 28 harm if the Court does not grant the preliminary 18 1 injunction. Winter, 555 U.S. at 20. While monetary 2 harm is typically not sufficient to demonstrate 3 irreparable harm, see California Pharmacists Ass’n v. 4 Maxwell-Jolly, 563 F.3d 847, 851-52 (9th Cir. 2009), 5 “[e]vidence of loss of control over business reputation 6 and damage to goodwill could constitute irreparable 7 harm,” Herb Reed Enterprises, LLC v. Florida 8 Entertainment Management, 736 F.3d 1239, 1250 (9th Cir. 9 2013). 10 Defendants argue that Plaintiff was aware of the 11 alleged wrongful conduct in May 2017 but did not file 12 the Action until four months later, which suggests that 13 there is no irreparable injury. Opp’n 10:1-5. A “long 14 delay before seeking a preliminary injunction implies a 15 lack of urgency and irreparable harm.” Oakland 16 Tribune, Inc. v. Chronicle Publ’g, 762 F.2d 1374, 1377 17 (9th Cir. 1985). Here, Plaintiff sent Defendants a 18 letter dated May 30, 2017 regarding Defendants’ 19 allegedly infringing conduct to which Defendants 20 responded on June 1, 2017 stating that Plaintiff was 21 the one fraudulently using the MK marks. 22 Exs. 8, 9. Torres Decl., Plaintiff’s counsel responded on June 13, 23 2017 in an email outlining Plaintiff’s history and its 24 acquisition of the MK entities and MK brand. 25 9. Id., Ex. Plaintiff then ordered Defendants’ corporate 26 records, which it received on June 26, 2017. Plaintiff 27 filed suit approximately three weeks later, on July 21, 28 2017 [1], and filed the instant Motion ten days later, 19 1 on August 1, 2017 [11]. The few weeks’ delay in filing 2 the instant Motion, during which Plaintiff likely 3 conducted further investigation on Defendants’ actions 4 necessitating the instant Motion, does not weigh 5 against a finding of irreparable harm. See Disney 6 Enters. v. VidAngel, Inc., No. 16-56843, 2017 U.S. App. 7 LEXIS 16188, at *36 (9th Cir. Aug. 24, 2017)(affirming 8 decision that delay did not negate irreparable harm 9 because plaintiff was investigating defendant’s alleged 10 infringement and defendant made clear it would continue 11 its alleged infringement). 12 Plaintiff has properly established a likelihood of 13 irreparable harm should the Court not grant injunctive 14 relief. According to the Ninth Circuit’s opinion in 15 Herb Reed, plaintiffs seeking injunctive relief must 16 proffer evidence, not just “pronouncements [] grounded 17 in platitudes,” to establish a likelihood of 18 irreparable harm. 736 F.3d at 1250-51. Defendants’ 19 usurpation of the MK brand, including MK’s 20 accomplishments and the MK marks, has prevented 21 Plaintiff from exclusively controlling the brand and 22 its goodwill, something Plaintiff paid to acquire. 23 Plaintiff has offered evidence of Defendants’ 24 fraudulent takeover of the entire MK brand, which 25 Plaintiff argues will continue to harm its business 26 reputation. Mot. 21:3-16. On October 22, 2014, 27 Defendant Topolewski filed a Certificate of Revival for 28 MK Viet Nam. See Torres Decl., Ex. 2 at 97. 20 In the 1 Certificate of Revival, Defendant Topolewski named 2 himself as the President of MK Viet Nam and declared, 3 under penalty of perjury, that he had authorization 4 from the board of directors of MK Viet Nam to revive 5 the company. Id. at 99. Plaintiff, the owner of the 6 MK brand, at no time authorized Defendant Topolewski to 7 revive MK Viet Nam. Then, on November 10, 2016, 8 Defendant Hale submitted a change of address form to 9 the USPTO seeking to change the address of the owner of 10 the MORRISON KNUDSEN mark from Washington Group 11 International, Inc.’s address (the former name of MK 12 prior to Plaintiff’s acquisition) to Defendants’ 13 address. Bottaro-Walklet Decl., Ex. F. In essence, 14 Defendant Hale was assuming ownership of the mark and 15 cutting off Plaintiff’s chain of communication with the 16 USPTO regarding the MORRISON KNUDSEN mark. As 17 explained above, Defendants also renamed a number of 18 their corporations to include the MK name. 19 Decl., Exs. 3, 4. See Torres When Plaintiff discovered Defendants 20 had essentially assumed the identity of the MK brand, 21 Plaintiff sent a cease and desist letter to which 22 Defendants responded that Plaintiff’s letter was a 23 “petty act of extortion and larceny,” and instead, 24 Defendants accused Plaintiff of fraudulently claiming 25 it owned the MK brand. Id., Ex. 9 at 179. Such a 26 response shows Defendants have no intent to stop using 27 the MK brand. 28 As the evidence Plaintiff presented shows, 21 1 Defendants have engaged in deceptive tactics to gain 2 control over the entire MK brand. Defendants’ takeover 3 has allegedly resulted in a billion dollar construction 4 contract under the MK brand. See id., Ex. 6 at 164. 5 Defendants are using the MK brand and its impressive 6 history to gain an advantage in the marketplace. 7 Ultimately, Defendants have “borrow[ed] [Plaintiff’s] 8 reputation, whose quality no longer lies within 9 [Plaintiff’s] own control.” Opticians Ass’n of Am. v. 10 Indep. Opticians of Am., 920 F.2d 187, 195 (3d Cir. 11 1990). Such a complete loss of control over a brand, 12 including the quality of the products and services 13 Defendants offer under this stolen brand, as well as 14 Defendants’ clear intent to continue operating under 15 the MK brand demonstrate that Plaintiff is likely to 16 suffer irreparable harm absent a preliminary 17 injunction. See Toyo Tire & Rubber Co. v. Kabusikiki 18 Kaisha Tokyo Nihoon Rubber Corp., No. 214CV01847JADVCF, 19 2015 WL 6501228, at *4 (D. Nev. Oct. 26, 2015)(finding 20 likelihood of irreparable harm where defendant piggy21 backed off of plaintiff’s success and there was “no 22 indication that defendant [would] cease its infringing 23 activity absent injunctive relief”). 24 3. 25 “In evaluating the balance of hardships a court Balance of Hardships 26 must consider the impact granting or denying a motion 27 for a preliminary injunction will have on the 28 respective enterprises.” Int’l Jensen, Inc. v. 22 1 Metrosound U.S.A., Inc., 4 F.3d 819, 827 (9th Cir. 2 1993). 3 The balance of hardships tip in favor of Plaintiff. 4 Defendants argue that if the Court grants a preliminary 5 injunction, Defendants “would be essentially put out of 6 business.”6 Opp’n 11:21. However, Plaintiff has not 7 authorized Defendants to operate their business using 8 the MK marks and brand. As explained above, 9 Defendants, through their statements to the USPTO and 10 actions in creating several Morrison Knudsen entities, 11 have assumed the MK identity, infringing on Plaintiff’s 12 ownership of the MK marks and brand. “It is no 13 hardship to cease intentionally infringing someone 14 else’s trademark rights.” Diller v. Barry Driller, 15 Inc., No. CV 12-7200 ABC EX, 2012 WL 4044732, at *10 16 (C.D. Cal. Sept. 10, 2012). 17 Additionally, the potential hardship on Defendants 18 is “purely economic,” see id., while the hardship on 19 Plaintiff is a complete loss of control over the brand 20 and history of the MK entities it specifically paid to 21 acquire. Defendants cannot argue an injury that they 22 6 Plaintiff argues 23 Topolewski America Inc.,that Defendants operate another business, which provides construction services and sale of construction equipment, just as Defendants do under the 24 25 26 27 28 MK brand. Reply 13:13-20. Assuming this is true, Defendants can continue to operate under the Topolewski brand. No matter what the name of the company, Defendants can still offer construction services and sell construction equipment. Their only reason for operating under the MK brand is to profit from the long and impressive history of the MK brand, a brand Plaintiff owns. This is just further evidence that the balance of hardships tips in favor of Plaintiff. 23 1 brought upon themselves through deceptively adopting 2 trademarks and an entire brand that are identical to 3 that which Plaintiff owns. See Moroccanoil, Inc. v. 4 Moroccan Gold, LLC, 590 F. Supp. 2d 1271, 1282 (C.D. 5 Cal. 2008). Therefore, the balance of hardships tips 6 in Plaintiff’s favor. 7 4. 8 “A plaintiff seeking an injunction must establish Public Interest 9 that the injunction is in the public interest.” 10 Internet Specialties W., Inc. v. Milon-DiGiorgio 11 Enters., Inc., 559 F.3d 985, 993 (9th Cir. 2009). 12 “[T]he most basic public interest at stake in all 13 Lanham Act cases [is] the interest in prevention of 14 confusion, particularly as it affects the public 15 interest in truth and accuracy.” Kos Pharms., Inc. v. 16 Andrx Corp., 369 F.3d 700, 730 (3d Cir. 2004). “An 17 injunction to prevent intentional trademark 18 infringement not only protects the plaintiff, but 19 protects the public from trademark confusion.” Diller, 20 2012 WL 4044732, at *10. 21 Here, it could not be more clear that enjoining 22 Defendants’ use of the MK brand would promote the 23 public interest in preventing consumer confusion. 24 Defendants have not used a deceptively similar mark, 25 they have taken over the entire MK brand, including 26 using identical trademarks and listing MK’s 27 accomplishments as Defendants’ own. 28 C. Szurgot Decl., Ex. In fact, Plaintiff’s own employee was confused by 24 1 Defendants’ use of the MK brand when he contacted 2 Defendants seeking information about their services. 3 See Davis Decl. Such confusion was only made worse by 4 Defendants’ assurance that Plaintiff had sold the MK 5 brand to make money. See id., Ex. L. It is therefore 6 in the public interest to prevent confusion regarding 7 the ownership of the MK brand by enjoining Defendants’ 8 use of the MK brand. 9 10 5. Request for Bond Federal Rule of Civil Procedure 65(c) provides that 11 “[t]he court may issue a preliminary injunction or a 12 temporary restraining order only if the movant gives 13 security in an amount that the court considers proper 14 to pay the costs and damages sustained by any party 15 found to have been wrongfully enjoined or restrained.” 16 The Ninth Circuit has recognized that Rule 65(c) 17 invests the district court “with discretion as to the 18 amount of security required, if any.” Barahona–Gomez 19 v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999)(citing 20 Doctor’s Assocs., Inc. v. Stuart, 85 F.3d 975, 985 (2d 21 Cir. 1996)). 22 In their Opposition, Defendants request that the 23 Court “impose a bond of at least $5 million.” 24 12:17-21. Opp’n Defendants have not cited to any authority 25 to support this bond amount. Further, Defendants have 26 not even provided an explanation for how they reached 27 the $5 million bond amount or evidence of the loss that 28 they would incur should the Court issue a preliminary 25 1 injunction. Plaintiff argues that because Defendants 2 have failed to prove they will suffer any damages if 3 the Court issues a preliminary injunction, no bond is 4 required. 5 Mot. 15:18-19. While Plaintiff has provided evidence that 6 Defendants operate another business, Topolewski 7 America, which offers the same products and services as 8 their MK company, the Court’s issuance of a preliminary 9 injunction will halt all operation of Defendants’ MK 10 company. However, because Defendants have provided no 11 evidence of potential damages, including lost sales or 12 business, the Court, in its discretion, orders a bond 13 of $50,000.00. 14 15 IV. CONCLUSION Based on the foregoing, the Court GRANTS 16 Plaintiff’s Motion for Preliminary Injunction [11] and 17 orders Plaintiff to post a bond of $50,000.00 within 18 fourteen days of the Order. 19 IT IS SO ORDERED: 20 1. Pursuant to the Court’s Order granting Plaintiff’s 21 Motion, Defendants John Ripley; Todd Hale; Gary 22 Topolewski; Henry Blum; Bud Zukaloff; Morrison 23 Knudsen Corporation; Morrison-Knudsen Company, 24 Inc.; Morrison-Knudsen Services, Inc.; and 25 Morrison-Knudsen International Inc. and their 26 agents, officers, employees, representatives, 27 successors, assigns, attorneys, and those persons 28 acting for, with, by, or under authority of 26 1 Defendants, or in concert or participation with 2 Defendants, are HEREBY ENJOINED FROM: 3 a) using, displaying, or otherwise exploiting the 4 MK trademarks, including MORRISON KNUDSEN and 5 MKCO MORRISON KNUDSEN, in connection with the 6 advertising, distribution, display, sale, or 7 offering for sale of any products or services; 8 b) 9 ( and any associated email 10 11 using the Morrison Knudsen domain name addresses; c) making any statement or representation or 12 performing any act likely to lead members of 13 the public to believe that the business 14 Defendants operate at 2049 Century Park East, 15 Suite 3850, Los Angeles, California 90067 is in 16 any manner, directly or indirectly, associated, 17 affiliated or connected with, or licensed, 18 sponsored, authorized or approved by Plaintiff 19 and the MK brand; 20 d) conducting business, including selling any 21 product or service, under the names Morrison- 22 Knudsen Services, Inc.; Morrison Knudsen 23 Corporation; Morrison Knudsen International 24 Inc.; Morrison-Knudsen Company, Inc.; or any 25 other related entities. 26 2. Plaintiff is ordered to post a bond in the amount 27 of $50,000.00 within fourteen days of the date of 28 this Order. This Order granting preliminary 27 1 injunctive relief to Plaintiff shall only become 2 effective upon the posting of the bond as set forth 3 above within the time limit set by the Court. 4 Failure to do so, absent a court-ordered extension, 5 may result in the withdrawal of this Order and the 6 denial of Plaintiff’s Motion. 7 3. Within twenty-one days of the date Plaintiff posts 8 the bond described above, each Defendant shall file 9 a sworn affidavit detailing the manner in which 10 that Defendant has complied with this Order. 11 12 DATED: September 27, 2017 s/ RONALD S.W. LEW 13 HONORABLE RONALD S.W. LEW Senior U.S. District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28

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