Audio-Technica Corporation et al v. Music Tribe Commercial NV Inc. et al

Filing 52

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION 27 by Judge Otis D. Wright, II. (lc)

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United States District Court
Central District of California

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Case № 2:21-cv-09009-ODW (ASx)

AUDIO-TECHNICA CORP., et al.,

ORDER DENYING PLAINTIFF’S
MOTION FOR PRELIMINARY
INJUNCTION [27]

Plaintiffs,
v.
MUSIC TRIBE COMMERCIAL MY
SDN. BHD.,

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Defendant.
I.

INTRODUCTION

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This is a trademark infringement case. Plaintiffs Audio-Technica Corporation

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and Audio-Technica U.S., Inc. (together, “Audio-Technica”) manufacture the AT2020

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microphone, an entry-level professional studio microphone. Defendant Music Tribe

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Commercial MY Sdn. Bhd. (“Music Tribe”) introduced a competing microphone, the

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BX2020, into the United States consumer market. Audio-Technica alleges that Music

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Tribe’s microphone is a knockoff and asserts claims for federal trademark and trade

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dress infringement along with state common-law and statutory claims for unfair

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competition. Audio-Technica now moves for a preliminary injunction prohibiting

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Music Tribe from distributing or selling any more units of its allegedly infringing

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microphone pending trial. (Mot. Prelim. Inj. (“Motion” or “Mot.”), ECF Nos. 27–28;

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see also Opp’n, ECF No. 32; Reply, ECF No. 38.)

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On March 14, 2022, the Court held a hearing on the Motion. Having carefully

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considered the arguments presented at the hearing and in the papers filed in connection

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with the Motion, the Court now DENIES Audio-Technica’s Motion.
II.

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BACKGROUND

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Audio-Technica developed the AT2020 microphone and introduced it to

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consumers in 2004. (Decl. Gary Boss (“Boss Decl.”) ¶ 10, ECF No. 30.) Since then,

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Audio-Technica has marketed and sold the AT2020 continuously in the United States

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and elsewhere. (Id.) The AT2020’s design incorporates two vertical bars on either side

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of the microphone with two circular enclosures near the top and bottom, a small portion

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of the microphone’s mesh protruding above the top circular enclosure, and a threaded

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adapter with rounded hinges and a tapered bottom containing the microphone’s cord

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port.

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The “AT” in the product name stands for Audio-Technica. (See id. ¶¶ 4–5.) The

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“2020” has no connection to the product’s functionality or release date. Instead, the

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first two numbers refer to the Audio-Technica series of which the model is a part (the

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50 Series, 40 Series, or 20 Series), and the next two digits are essentially arbitrary. (See

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id. ¶¶ 5–6.) The AT2020 is available from the standard retailers microphone consumers

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would expect, including big-box stores such as Best Buy and online retailers such as

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Sweetwater and Amazon.com. (Decl. Kristina S. Azlin (“Azlin Decl.”) ¶¶ 3, 25, ECF

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No. 29; id. Exs. 2, 21, ECF Nos. 29-2, 29-21; Boss Decl. ¶ 19.)

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The AT2020 typically sells in the United States for $99. (Boss Decl. ¶¶ 10–11.)

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It is widely used in the United States by entry-level and professional content creators,

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including musicians, video streamers, and podcasters. (Id. ¶ 13.) Sales of the AT2020

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have grown steadily since 2004 and have “skyrocketed” in recent years, due in part to

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its popularity among those creating content from their own homes or small studios. (Id.

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¶¶ 13–14.) Online reviewers and commentators have variously remarked that the

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AT2020 is “iconic,” is one of “The Top 10 Best Condenser Microphones on Earth,” and

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is “probably the most famous condenser microphone among home studios and creators

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in general.” (Mot. 5.)

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In the summer of 2021, Music Tribe, through its brand Behringer, began

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advertising its BX2020 microphone. The BX2020 is similar in design and appearance

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to the AT2020, as follows:

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Both the AT2020 and BX2020 are packaged in boxes with minimalist packaging design,

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containing a photograph of the microphone against a stark white background.

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Audio-Technica now asserts the following trademark rights: (1) product design

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and packaging trade dress rights in the design and packaging of the AT2020; and

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(2) trademark rights in the name “AT2020.” Nothing in the record indicates that either

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party has a USPTO trademark registration for any of their respective marks used in

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connection with these microphones.

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After this dispute arose, Music Tribe agreed to rename the BX2020 to the BM1.

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(Azlin Decl. ¶ 29.) It sold only thirty units of the BX2020 in the United States before

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changing the product name. (Decl. Uli Behringer (“Behringer Decl.”) ¶ 5, ECF No. 35.)

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Moreover, although at some point the BM1 page of Behringer’s website displayed a

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link to a promotional video identifying its microphone as the “BX2020,” Music Tribe

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has since removed that link from Behringer’s website. (Opp’n 22.) Music Tribe now

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sells its microphone under the “BM1” designation exclusively, and it has no intention,

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regardless of the outcome of this litigation, of using the name “BX2020” in the United

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States any time in the future. (Behringer Decl. ¶ 6.)

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On November 17, 2021, Audio-Technica brought suit against Music Tribe,

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setting forth claims for (1) federal trademark infringement, trade dress infringement,

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and unfair competition (15 U.S.C. § 1125(a)); (2) common law unfair competition; and

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(3) unfair competition under California law (Cal. Bus. & Prof. Code § 17200). Audio-

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Technica moved for a preliminary injunction shortly thereafter.

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III.

LEGAL STANDARD

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A preliminary injunction is an “extraordinary remedy” courts may grant to

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preserve the status quo pending trial in order to prevent immediate and irreparable

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injury. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008); Fed. R. Civ.

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P. 65(a). To obtain a preliminary injunction, the plaintiff must clearly establish: (1) a

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likelihood of success on the merits; (2) a likelihood that he will suffer irreparable harm

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if the preliminary relief is not granted; (3) that the balance of equities tips in his favor;

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and (4) that the injunction is in the public interest. See Winter, 555 U.S. at 20. Under

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15 U.S.C. § 1116(a) as modified by the Trademark Modernization Act of 2020, a

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plaintiff seeking an injunction to prevent trademark infringement is entitled to a

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rebuttable presumption of irreparable harm upon a finding of likelihood of success on

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the merits. Cisco Sys. v. Wuhan Wolon Commc’n Tech. Co., No. 5:21-cv-04272-EJD,

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2021 WL 4962661, at *7 (N.D. Cal. July 23, 2021) (quoting Pub. L. No. 116-260

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(2020)); cf. Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612 n.3 (9th Cir. 1989)

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(“In trademark infringement or unfair competition actions, once the plaintiff establishes

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a likelihood of confusion, it is ordinarily presumed that the plaintiff will suffer

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irreparable harm if injunctive relief is not granted.”).

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“The purpose of a preliminary injunction is merely to preserve the relative

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positions of the parties until a trial on the merits can be held.” Univ. of Tex. v.

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Camenisch, 451 U.S. 390, 395 (1981). The party moving for the preliminary injunction

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bears the burden of establishing its need. Stanley v. Univ. of S. Cal., 13 F.3d 1313, 1326

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(9th Cir. 1994). The moving party must meet this burden with a “clear showing” that

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the preliminary injunction is warranted. Conn. Gen. Life Ins. Co. v. New Images of

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Beverly Hills, 321 F.3d 878, 881 (9th Cir. 2003). In ruling on an application for

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preliminary injunction, the Court may consider evidence that would not be admissible

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at trial. See, e.g., Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) (“A district

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court may . . . consider hearsay in deciding whether to issue a preliminary injunction.”).
IV.

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DISCUSSION

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“In the trademark context, ‘state common law claims of unfair competition and

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actions pursuant to the California Business and Professions Code § 17200 are

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substantially congruent to claims made under the Lanham Act.’” Alixir Co. v. Qué Onda

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Beverage, Inc., No. 2:20-cv-08368-RGK-RAO, 2021 WL 971057, at *6 (C.D. Cal.

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Jan. 6, 2021) (quoting Cleary v. News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994)).

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Neither party disputes this principle, and their briefs are accordingly focused on the

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Lanham Act claim. The Court takes its cue from the parties and similarly focuses its

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analysis on the Lanham Act claim.

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Audio-Technica brings its trademark claim against Music Tribe under

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section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)) for trade dress infringement,

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trademark infringement, and false designation of origin. Although both marks are

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unregistered, section 43(a) “protects against infringement of unregistered marks and

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trade dress as well as registered marks.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d

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1199, 1204–05 (9th Cir. 2000).

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Audio-Technica attempts to meet its burden on this motion by showing a

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likelihood of success on its trade dress claim and its trademark claim. For the following

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reasons, Audio-Technica fails in this burden.

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A.

Trade Dress Infringement

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Trade dress refers to “the total image of a product and may include features such

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as size, shape, color or color combination, texture, graphics, or even particular sales

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techniques.” Nova Wines, Inc. v. Adler Fels Winery LLC, 467 F. Supp. 2d 965, 975

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(N.D. Cal. 2006) (quoting Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 808

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n.13 (9th Cir. 2003)). Here, Audio-Technica asserts trade dress rights in the AT2020’s

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design, which incorporates (1) two vertical bars on either side of the microphone with

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two circular enclosures near the top and bottom, (2) a small portion of the microphone’s

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mesh protruding above the top circular enclosure, and (3) a threaded adapter with

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rounded hinges and a tapered bottom containing the microphone’s cord port.

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Audio-Technica’s unregistered trade dress claim requires it to show that its trade

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dress is (1) nonfunctional, (2) distinctive, and that (3) Music Tribe’s use of the trade

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dress creates a likelihood of consumer confusion. Moroccanoil, Inc. v. Zotos Int’l, Inc.,

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230 F. Supp. 3d 1161, 1171 (C.D. Cal. 2017) (citing Int’l Jensen, Inc. v. Metrosound

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U.S.A., Inc., 4 F.3d 819, 822 (9th Cir. 1993)). Audio-Technica makes a weak showing

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of both distinctiveness and likelihood of confusion.

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Distinctiveness

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Trade dress rights can be established in either the product’s packaging or the

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product’s design. Product packaging trade dress can be “distinctive” in one of two

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ways: (1) by being inherently distinctive, or (2) by acquiring secondary meaning. Wal-

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Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210–11 (2000). However,

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product design trade dress can never be inherently distinctive and therefore always

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requires a showing of secondary meaning. See id.

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Audio-Technica’s primary argument is that it has trade dress rights in the

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AT2020’s distinctive design. Audio-Technica does not argue that the AT2020’s design

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is inherently distinctive; instead, Audio-Technica argues that the AT2020 trade dress

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has acquired distinctiveness by developing secondary meaning. (Mot. 14). A product

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design has secondary meaning when “consumers associate the design features with a

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particular producer.”

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2021 WL 3598747, at *3 (C.D. Cal. Apr. 29, 2021); see also Samara Bros., 529 U.S.

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at 211 (describing secondary meaning as existing when, “in the minds of the public, the

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primary significance” of a trade dress “is to identify the source of the product rather

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than the product itself”). To determine whether a mark has acquired a secondary

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meaning, the trier of fact considers: “(1) whether actual purchasers of the product

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bearing the claimed trademark associate the trademark with the producer, (2) the degree

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and manner of advertising under the claimed trademark, (3) the length and manner of

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use of the claimed trademark, and (4) whether use of the claimed trademark has been

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exclusive.” Yellow Cab Co. of Sacramento v. Yellow Cab of Elk Grove, Inc., 419 F.3d

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925, 930 (9th Cir. 2005) (quoting Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352,

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1358 (9th Cir. 1985) (en banc)).

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Tee Turtle, LLC v. ABmask, No. CV 21-3572-CBM E(x),

Here, Audio-Technica’s showing that its AT2020 trade dress has a secondary

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meaning is weak.

The canonic way of demonstrating secondary meaning is by

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conducting a survey. Levi Strauss & Co., 778 F.2d at 1358 (“An expert survey of

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purchasers can provide the most persuasive evidence on secondary meaning.”). To

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conduct the survey, an expert shows consumers the trade dress in question and asks

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them if they associate that trade dress with a particular producer. See id. The results of

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the survey can demonstrate that the product has taken on a secondary meaning. Here,

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Audio-Technica presents no such survey, or anything like it. When, as here, the plaintiff

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is financially capable of conducting a survey, the failure to do so may allow “an

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inference that the results of such a survey would be unfavorable.” Cairns v. Franklin

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Mint Co., 24 F. Supp. 2d 1013, 1041 (C.D. Cal. 1998); Allstate Ins. Co. v. Kia Motors

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Am., Inc., No. CV 16–6108 SJO (AGRx), 2017 WL 6550669, at *15 (C.D. Cal.

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Dec. 22, 2017).

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Instead, Audio-Technica relies on the vague declaration of one of its principals

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regarding the high volume of AT2020 advertising and sales in the United States since

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2004. (Boss Decl. ¶¶ 14–15.) Boss’s Supplemental Declaration provides further details

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about the volume of sales and advertising for the AT2020. (Suppl. Decl. Gary Boss

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(“Suppl. Boss Decl.”) ¶¶ 3–5, ECF No. 41.) But sales and advertising volume are only

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two of the factors courts consider, and such data, without more, fails to clearly

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demonstrate a secondary meaning. Indeed, high sales volume, on its own, means little

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in the distinctiveness analysis; a manufacturer might generate $100 million in annual

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revenue selling plain white t-shirts, but selling a large number of plain white t-shirts

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does nothing to make them any more distinctive. Beyond mere volume, Plaintiff makes

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no showing of any concrete association in the minds of consumers between the shape

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and design of the AT2020, on one hand, and Audio-Technica as its manufacturer, on

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the other hand.

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Music Tribe, for its part, presents evidence that casts further doubt on whether

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Audio-Technica has made the required “clear” showing. Music Tribe presents evidence

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indicating that there are several microphones on the market that look similar to the

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AT2020. (Behringer Decl. ¶ 7, Ex. 3.) The design elements of several of these

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microphones include vertical bars and mesh protruding over the top of the frame, as

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does the AT2020. Music Tribe’s showing that the market is crowded with similar

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models further confirms that, without direct survey-type evidence establishing a

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connection in the consumer’s mind between the trade dress and the producer, it is

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unlikely that the AT2020 trade dress has acquired a secondary meaning. Yellow Cab

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Co., 419 F.3d at 930.

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Additionally or alternatively, Audio-Technica argues that the AT2020’s product

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packaging is protected trade dress, but this argument is also unavailing. The foregoing

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analysis applies in even greater measure to Audio-Technica’s contentions regarding the

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AT2020’s packaging.

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microphone consumer associates minimalist packaging with white backgrounds and

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clean product photos with Audio-Technica in particular. And Music Tribe demonstrates

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that the electronics market is crowded with products packaged in minimalist packaging

Audio-Technica makes no concrete showing that any

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using white backgrounds and clean product photos. (Opp’n 13; Decl. Brian K. Brookey

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Ex. 2 (“Minimalist Packaging Compendium”), ECF No. 33-2.)

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For these reasons, it is unlikely that Audio-Technica will be able to establish that
the AT2020’s product design or product packaging is distinctive.
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Likelihood of Confusion

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The Court now turns to whether Audio-Technica clearly demonstrates a

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likelihood of confusion arising from Music Tribe’s use of its trade dress. In the Ninth

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Circuit, courts apply the eight factors from AMF Inc. v. Sleekcraft Boats, 599 F.2d 341

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(9th Cir. 1979), when determining whether an infringer’s product is likely to confuse.

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These factors are (1) strength of the mark; (2) proximity of the goods; (3) similarity of

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the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) the degree

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of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the

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mark; and (8) likelihood of expansion of the product lines. Id. at 348–49. Depending

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on the nature of the case, certain of these Sleekcraft factors may be more or less

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important, with evidence of actual confusion often being the most important factor. See,

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e.g., Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1147

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(9th Cir. 2011).

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Applying these factors to Audio-Technica’s asserted right in the product design

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of the AT2020, these factors rather securely indicate a low likelihood of confusion.

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First, and most importantly, Audio-Technica presents no evidence of actual confusion.

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Audio-Technica had the ability to submit confusion surveys demonstrating that

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consumers were confused about the origin of the two products, but it did not. Moreover,

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Audio-Technica does not present any other direct evidence of confusion, such as

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evidence that purchasers of the BX2020 contacted Audio-Technica believing they had

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purchased an Audio-Technica product.

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Instead, Audio-Technica repeatedly and emphatically points to writings by online

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reviewers and commentators that Audio-Technica argues demonstrate a likelihood of

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confusion. However, these writings support the opposite conclusion at least as much as

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they support Audio-Technica’s desired conclusion, if not more so. The online reviewers

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and commentators variously observe that the BX2020 is a “knockoff” or a “clone” of

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the AT2020 and that it was an “absolutely shameless” copy. (Mot. 8–11.) These

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reviews indicate that writers and readers understand very well that the AT2020 and the

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BX2020 are manufactured by different producers, supporting the absence of confusion.

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See JL Beverage Co. v. Beam, Inc., 899 F. Supp. 2d 991, 1005 (D. Nev. 2012) (finding

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evidence of consumers noting the goods look alike showed a lack of confusion, as

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consumers understood the goods were distinct products). No reviewer was under the

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impression that the two microphones came from the same manufacturer; instead, they

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were all well aware that the microphones were made by two different manufacturers,

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and one of the purposes of the reviews was to describe the differences between the two

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microphones. For these reasons, the online reviews do not demonstrate a likelihood of

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confusion.

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Music Tribe makes an additional point regarding housemarks that further

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weakens Audio-Technica’s showing of a likelihood of confusion. The few copies of

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BX2020s sold in the United States all bore the word “Behringer” as a housemark on the

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side of the microphone. “The consistent use of a housemark can reduce the likelihood

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of confusion . . . when the housemark is . . . conspicuous . . . and serves to indicate the

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source of origin to the public.” Charles Schwab & Co. v. Hibernia Bank, 665 F. Supp.

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800, 808 (N.D. Cal. 1987). Although the presence of a housemark alone does not

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“negate the likelihood of confusion,” its presence contributes to a finding that confusion

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is unlikely. New Flyer Indus. Canada ULC v. Rugby Aviation, LLC, 405 F. Supp. 3d

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886, 901 (W.D. Wash. 2019).

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Audio-Technica argues that the consumers of AT2020s are often entry-level

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purchasers who are more likely than more experienced purchasers to confuse the

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AT2020 with the BX2020. (Mot. 17–18.) This argument, however, is grounded in

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Audio-Technica’s unsupported assertion about the types of consumers who purchase

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AT2020s and the experiences they may have had. Ultimately, Audio-Technica’s

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argument on this issue is little more than speculation.

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Finally, although Audio-Technica makes a relatively strong showing that Music

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Tribe intended to copy the design of the AT2020, the defendant’s intent is ultimately

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only one factor in the analysis, and here, the overall balance of the factors indicates a

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very low likelihood of confusion with respect to product design trade dress.

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For these reasons, it is rather unlikely that Audio-Technica will successfully

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establish a likelihood of confusion arising from Music Tribe’s use of Audio-Technica’s

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alleged product design trade dress.

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For many of these same reasons, Audio-Technica’s demonstration of a likelihood

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of confusion about its product packaging trade dress is even weaker. As stated above,

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Audio-Technica’s product packaging trade dress is a weak mark at best and may not

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exist at all. And Audio-Technica presents no evidence of consumer confusion based on

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the similarity of its product packaging to that of the BX2020.

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In summary, as to trade dress, it is unlikely Audio-Technica will be able to

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establish distinctiveness, and it is also unlikely it will be able to establish a likelihood

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of confusion. These two elements are independent, and a failure of either of them would

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be a complete bar to recovery for trade dress infringement. The low chances of success

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on each of these points compounds, such that it is clear that Audio-Technica fails to

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demonstrate a likelihood of success on the merits. Thus, an injunction directed toward

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trade dress infringement based on either the AT2020’s design or packaging is not

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appropriate.

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B.

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Trademark Infringement
The second component of Audio-Technica’s trademark claim concerns its

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asserted rights in the unregistered “AT2020” mark.

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clarification, much of the trademark aspect of Audio-Technica’s Motion is moot. Music

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Tribe has stopped marketing and selling its microphone under the “BX2020”

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designation, now designating it as “BM1.” (Behringer Decl. ¶ 6.) And Audio-Technica

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As a preliminary point of

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presents no evidence that refutes Music Tribe’s principal’s assertion that it has no plans

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whatsoever to reintroduce its microphone under the BX2020 designation any time in

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the future. Audio-Technica therefore lacks standing to pursue an injunction preventing

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Music Tribe from manufacturing or distributing its microphone under the BX2020

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designation, or, alternatively, Audio Technica’s request for this injunction in particular

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is now moot.

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Because Music Tribe no longer distributes microphones under the BX2020 mark,

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the only remaining issue is whether the Court should issue a preliminary injunction

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compelling Music Tribe to make efforts to recall the already-distributed BX2020

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microphones. Preliminarily, the Court notes that Audio-Technica presents no language

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in its Proposed Order that might achieve this narrower effect. (Proposed Order, ECF

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No. 27-1.) Substantively, such an injunction would be a mandatory injunction because

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it would require Music Tribe to take affirmative action to recall any remaining BX2020

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units from its downstream retailers. See Garcia v. Google, Inc., 786 F.3d 733, 740

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(9th Cir. 2015) (defining mandatory injunction as one that “orders a responsible party

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to take action” (internal quotation marks removed)). District courts should deny

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mandatory injunctions “unless the facts and law clearly favor the moving party.”

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Anderson v. United States, 612 F.2d 1112, 1114 (9th Cir. 1979). “In plain terms,

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mandatory injunctions should not issue in doubtful cases.” Garcia, 786 F.3d at 740

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(internal quotation marks removed). This is a very doubtful case.

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“To establish common law rights in an unregistered mark, a plaintiff must show

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either (1) that its mark is inherently distinctive, or (2) that the mark has acquired a

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secondary meaning.” Alixir, 2021 WL 971057, at *4 (cleaned up). As with its trade

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dress claim, Audio-Technica does not argue that its AT2020 mark is inherently

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distinctive. Instead, Audio-Technica argues that the mark has a secondary meaning.

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(Mot. 20.) The secondary meaning analysis for a trademark is the same as for a trade

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dress. Alixir, 2021 WL 971057, at *4. Here, Audio-Technica fails in its burden of

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showing its “AT2020” word mark has secondary meaning; it submits no survey

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suggesting the existence of secondary meaning for “AT2020” and relies on general

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assertions about sales volume and consumer demographics.

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Applying the Sleekcraft factors to determine whether there is a likelihood of

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confusion arising from Music Tribe’s use of the BX2020 mark, the Court finds Audio-

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Technica fails in its burden, for the same reasons discussed above in connection with

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the trade dress claim. There is no evidence of actual confusion, and the evidence

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submitted suggests that, if anything, consumers understand that the two products are

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different products made by different manufacturers. The presence of the Behringer

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housemark on the microphone housing further erodes the possibility that consumers will

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be confused.

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Moreover, the two word marks themselves are not particularly similar. Audio-

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Technica ultimately concedes that it is asserting a trademark in “AT2020” and not

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“2020.” (Reply 10 (“Audio-Technica is obviously claiming ‘AT2020’ as its trademark.”

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(capitalization modified)).) Thus, the question is not whether “2020” and “2020” are

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confusingly similar; the question is whether “AT2020” and “BX2020” are confusingly

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similar, and the answer is “likely not.” The distinguishing letters come at the beginning

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of each mark and are naturally interpreted as referring to the respective manufacturers,

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Audio-Technica and Behringer. These differences make consumer confusion even less

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likely. Audio-Technica bears the burden of making a showing sufficient to dispel the

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Court’s doubts regarding the appropriateness of a mandatory injunction.

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Technica’s showing leaves the Court with substantial doubts regarding the mark itself

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and the likelihood of confusion.

Audio-

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To summarize, a mandatory injunction relating to trademark infringement is not

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appropriate because Audio-Technica fails to meet the applicable burden, and a

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prohibitory injunction relating to trademark infringement is not appropriate because

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Music Tribe is no longer using the mark in question. Thus, the Court will not issue an

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injunction relating to trademark infringement.

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V.

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CONCLUSION

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For the reasons discussed above, Audio-Technica fails in its burden of showing

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entitlement to a preliminary injunction of any type. The Court therefore DENIES

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Audio-Technica’s Motion. (ECF No. 27.)

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IT IS SO ORDERED.

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May 5, 2022

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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