Magpul Industries Corp. v. John Does 1-10

Filing 28

AMENDED ORDER Granting Asset Freeze. Signed by Judge Jeffrey S. White on April 16, 2014. (jswlc3, COURT STAFF) (Filed on 4/16/2014)

Case4:14-cv-01556-JSW Document25 Filed04/15/14 Page1 of 3

JEFFREY C. HALLAM (State Bar No. 161259)
E-Mail:
[e-mail]
LOUIS P. FEUCHTBAUM (State Bar No. 219826)
E-Mail:
[e-mail]
DAVID W.FERMINO (State Bar No. 154131)
E-Mail:
[e-mail]
SIDEMAN & BANCROFT LLP
One Embarcadero Center, Twenty-Second Floor
San Francisco, California 94111-3711
Telephone: [phone]
Facsimile:
[phone]
Attorneys for Plaintiff
MAGPUL INDUSTRIES CORP.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

MAGPUL INDUSTRIES CORP.,
Plaintiff,

Case No.
[AMENDED PROPOSED]ORDER
GRANTING ASSET FREEZE

v.
JOHN DOE 1-10,
Defendants.

ORDER

Plaintiff MAGPUL INDUSTRIES CORP.'S ("Magpul's")Ex Parte Application seeking
an Order to freeze assets held in certain accounts held by Defendants JOHN DOE 1-10
("Defendants"), and other relief, with supporting papers, were presented to this Court. After full
consideration of the matter and for good cause shown, Magpul's Application is GRANTED.
FINDINGS OF FACT

Based upon the Declarations filed concurrently with Magpul's ex parte application, and the
pleadings filed in this matter, the Court makes the following findings of fact:
1.

Magpul has filed a Complaint that alleges, inter alia, that Defendants have engaged

in a scheme through which they offer to sell Magpul-branded products on eBay.com ("eBay"),
using the seller names "arctic trader"(hereinafter "Arctic Trader"), and "thebuzzybeecentral"
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(hereinafter "Buzzy Bee"), and Defendants sell counterfeit Magpul-branded products.
2.

Magpul is likely to prevail in their lawsuit against Defendants for trademark

counterfeiting (15 U.S.C. § 1114) because there is sufficient evidence to support findings that:
Magpul has a protectable ownership interest in various trademarks that are registered with the U.S.
Patent and Trademark Office ("Magpul's Registered Marks"); Defendants have repeatedly sold
products that appear identical, or substantially similar to products that are sold by Magpul, which
also had Magpul's Registered Marks affixed to them; these products were not manufactured by
Magpul, nor by its authority; Defendants' unauthorized use of Magpul's Registered Marks are
likely to cause confusion or deception amongst the consuming public as to the products' origins,
and; that these products are "counterfeit," as that term is defined at 15 U.S.C. § 1116(d)(B)(i).
3.

Magpul is likely to establish that Defendants' trademark counterfeiting was done

willfully in that: Defendants were provided notice on at least seventy-seven occasions that they
were selling products that infringed upon Magpul's trademarks, but continued to sell them
anyway; Defendants have received numerous notices from its customers who complained through
eBay that the products sold by Defendants were inferior, or counterfeit, but continue to sell these
products, and; the price at which Defendants were selling their products was so far below the
market price for genuine products that they must have known that the products were derived
through an illegal source.
4.

Defendants have used PayPal to process financial transactions associated with their

sale of Magpul-branded products. Defendants' PayPal accounts are identified by the following
email addresses: "[e-mail],""[e-mail]," and
"[e-mail]."
5.

Defendants have exhibited behaviors that make it likely that they will seek to avoid

legal responsibility that may arise from this lawsuit: Defendants have used multiple addresses to
conduct business that are not traceable to them; Defendants use multiple seller names on eBay that
seem intended to allow listings under one seller name if the listings are removed under the other
seller name; the names used by Defendants are not traceable to them because they are either too
common, or because they have used only initials to identify themselves, and; according to
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customer complaints, Defendants refused to honor obligations to ship products that had been
ordered by those customers. Based upon this finding, it is likely that Defendants will attempt to
disperse their assets from PayPal to accounts beyond the jurisdiction ofthe United States, if they
were to receive notice that those assets were at risk in this litigation.
6.

In the likelihood that Magpul prevails in this action, it will be entitled to an

accounting of Defendants' profits. It is necessary that the assets remain in Defendants' PayPal
accounts to provide for this equitable remedy.
7.

An Order, freezing the assets in Defendants' PayPal accounts is necessary to

preserve Magpul's equitable remedies.
IT IS THEREFORE ORDERED that:

A.
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PayPal shall prevent the disbursement of any assets held in accounts associated

with the email addresses: "[e-mail],""[e-mail]," and
"[e-mail]." However, PayPal shall still allow the deposit offunds that are destined

7.1

to those accounts.

0

B.

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10

Defendants are Ordered to appear in this Court in fourteen days, on April 28 ,at

O'Clock to show cause why this temporary restraining order should not become a

LL

LL.
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preliminary injunction. Defendants shall file and serve any papers in support of their position by
April 18, 2014
. Magpul shall file and serve any reply to Defendants by April 22, 2014
To the extent Magpul has not yet been able to serve a defendant, it shall
DATED: April 16, 2014
serve copies of the Orders entered in this case, in addition to its complaint
and application for a temporary restraining order by no later than 12:00
p.m. on April 16, 2014, and shall file proof of such service by close of
business on
Judge, United States District Court
April 16, 2014.
7758-11\2061993v1

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[AMENDED PROPOSED]ORDER GRANTING ASSET FREEZE