Shenzhenshi Haitiecheng Science and Technology Co., Ltd. v. Rearden LLC et al

Filing 243

ORDER DENYING DIGITAL DOMAIN 3.0, INC.'S MOTION TO MODIFY THE PRELIMINARY INJUNCTION ORDER AND VIRTUE GLOBAL HOLDINGS LIMITED'S MOTION TO STAY OR MODIFY THE PRELIMINARY INJUNCTION PENDING APPEAL by Judge Jon S. Tigar denying 206 Motion to Stay; denying 208 Motion TO MODIFY PRELIMINARY INJUNCTION ORDER. (wsn, COURT STAFF) (Filed on 7/15/2016)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

VIRTUE GLOBAL HOLDINGS LIMITED,

Case No. 15-cv-00797-JST

Plaintiff,
8
v.
9
10

REARDEN LLC, et al.,
Defendants.

United States District Court
Northern District of California

11
12

ORDER DENYING DIGITAL DOMAIN
3.0, INC.’S MOTION TO MODIFY THE
PRELIMINARY INJUNCTION ORDER
AND VIRTUE GLOBAL HOLDINGS
LIMITED’S MOTION TO STAY OR
MODIFY THE PRELIMINARY
INJUNCTION PENDING APPEAL
Re: Dkt. Nos. 206, 208

13
14

Before the Court is non-party Digital Domain 3.0, Inc.’s (“DD3”) motion to modify the

15

preliminary injunction order and Plaintiff Virtue Global Holdings Limited’s (“VGH”) motion to

16

modify or stay the preliminary injunction order pending appeal. See ECF Nos. 206, 208. DD3

17

and VGH request that the Court make three modifications to the preliminary injunction order: (1)

18

remove the restriction that enjoins them from “using” the MOVA assets, (2) remove the transfer

19

requirement, and (3) substitute those requirements with less restrictive provisions. See ECF No.

20

206 at 8; ECF No. 208 at 7-8, 18. The Court denies both motions because it lacks jurisdiction.

21

Because a notice of appeal has been filed, this Court’s jurisdiction to suspend or modify

22

the preliminary injunction is limited. See Nat. Res. Def. Council, Inc. v. Sw. Marine Inc., 242

23

F.3d 1163, 1166 (9th Cir. 2001); ECF No. 195. The Court may suspend or modify the preliminary

24

injunction only to preserve the status quo established by the preliminary injunction order or to

25

secure the opposing party’s rights. See id. (“The district court retains jurisdiction during the

26

pendency of an appeal to act to preserve the status quo.”); Fed. R. Civ. P. 62(c) (“While an appeal

27

is pending from an interlocutory order or final judgment that grants, dissolves, or denies an

28

injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or

other terms that secure the opposing party’s rights.”). For example, a district court has jurisdiction

2

to modify a preliminary injunction pending appeal to clarify the requirements imposed by, and to

3

ensure compliance with, the original preliminary injunction order. See, e.g., Nat. Res. Def.

4

Council, Inc., 242 F.3d at 1166-67 (holding that the modifications “were minor adjustments that

5

effectuated the underlying purposes of the original requirements” and therefore “[t]hese

6

modifications did not materially alter the status of the consolidated appeal”). However, a district

7

court does not have jurisdiction to remove restrictions imposed on the appealing party pending

8

appeal. See, e.g., Small v. Operative Plasterers’ & Cement Masons’ Int’l Ass’n Local 200, AFL-

9

CIO, 611 F.3d 483, 495 (9th Cir. 2010) (holding that the district court lacked jurisdiction to delete

10

a paragraph of the preliminary injunction order that imposed restrictions on the party appealing the

11
United States District Court
Northern District of California

1

preliminary injunction).

12

Applying the foregoing rules to the motions at hand, this Court lacks jurisdiction to stay

13

the injunction or make the requested modifications because doing so would materially alter the

14

status of the case on appeal. The modifications requested by VGH and DD3 would not maintain

15

the status quo established by this Court’s preliminary injunction order. Rather, as in Small, these

16

modifications would alter the status quo by removing the use prohibition and transfer requirements

17

imposed on VGH and DD3 by this Court’s preliminary injunction order. See ECF No. 188 at 15-

18

16. Nor would these modifications secure Rearden’s rights as the opposing party. Because the

19

Court lacks jurisdiction to remove the use and transfer provisions, it also declines to substitute

20

those provisions with the less restrictive provisions proposed by DD3.
VGH cites LifeScan, Inc. v. Shasta Techs., LLC as an example of a case where this Court

21
22

has modified a preliminary injunction pending appeal. See ECF No. 220 at 4. That case is

23

inapposite, however, because the modifications to the preliminary injunction were adopted

24

pursuant to stipulation. See LifeScan, Inc. v. Shasta Techs., LLC, No. 12-CV-06360-JST, 2013

25

WL 3200629, at *2 (N.D. Cal. June 24, 2013) (explaining that the opposing party “request[ed] that

26

the Court modify the injunction to explicitly permit the use of their logos or trade dress so long as

27

///

28

///
2

1

any such use complies with the nominative fair use test”). Thus, unlike in the present case, it was

2

clear that the opposing party’s rights were not adversely affected by the modifications.

3
4
5
6

IT IS SO ORDERED.
Dated: July 15, 2016
______________________________________
JON S. TIGAR
United States District Judge

7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3