Magpul Industries Corp. v. John Does 1-10

Filing 39

ORDER GRANTING PRELIMINARY INJUNCTION. Signed by Judge Jeffrey S. White on 4/28/14. (jjoS, COURT STAFF) (Filed on 4/28/2014)

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Case4:14-cv-01556-JSW Document36 Filed04/25/14 Page1 of 3 1 JEFFREY C. HALLAM (State Bar No. 161259) E-Mail: 2 LOUIS P. FEUCHTBAUM (State Bar No. 219826) E-Mail: 3 DAVID W. FERMINO (State Bar No. 154131) E-Mail: 4 SIDEMAN & BANCROFT LLP One Embarcadero Center, Twenty-Second Floor 5 San Francisco, California 94111-3711 Telephone: (415) 392-1960 (415) 392-0827 6 Facsimile: 7 Attorneys for Plaintiff MAGPUL INDUSTRIES CORP. 8 UNITED STATES DISTRICT COURT 10 ONE EMBARCADERO CENTER, 22ND FLOOR SAN FRANCISCO, CALIFORNIA 94111-3711 LAW OFFICES SIDEMAN & BANCROFT LLP 9 NORTHERN DISTRICT OF CALIFORNIA, OAKLAND DIVISION 11 12 MAGPUL INDUSTRIES CORP., Plaintiff, 13 14 Case No. 4:14-cv-1556 JSW [PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION v. Judge: Date: Time: Crtrm.: 15 JOHN DOE 1-10, Defendants. 16 Honorable Jeffrey S. White April 28, 2014 11:00 a.m. 5 17 18 19 [PROPOSED] ORDER Defendants JOHN DOE 1-10 (“Defendants”) were ordered to appear in this court on April 20 28, 2014, to show cause why a temporary restraining order [Doc. 28], which freezes assets held in 21 certain financial accounts belonging to them, should not become a preliminary injunction. 22 Defendants have failed to present any facts that would show cause to prevent entry of that 23 preliminary injunction. 24 FINDINGS OF FACT 25 Having considered all filings in this matter, as well as any evidence presented at a hearing, 26 this Court makes the following findings of fact: 27 1. Magpul has filed a Complaint that alleges, inter alia, that Defendants have engaged 28 in a scheme through which they offer to sell Magpul-branded products on (“eBay”), 7758-11\2071732v1 1 [PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION 4:14-cv-1556 JSW Case4:14-cv-01556-JSW Document36 Filed04/25/14 Page2 of 3 1 using the seller names “arctic_trader” (hereinafter “Arctic Trader”), and “thebuzzybeecentral” 2 (hereinafter “Buzzy Bee”), and Defendants sell counterfeit Magpul-branded products. 3 2. Magpul is likely to prevail in its lawsuit against Defendants for trademark 4 counterfeiting (15 U.S.C. § 1114) because there is sufficient evidence to support findings that: 5 Magpul has a protectable ownership interest in various trademarks that are registered with the U.S. 6 Patent and Trademark Office (“Magpul’s Registered Marks”); Defendants have repeatedly sold 7 products that appear identical, or substantially similar to products that are sold by Magpul, which 8 also had Magpul’s Registered Marks affixed to them; these products were not manufactured by 10 likely to cause confusion or deception amongst the consuming public as to the products’ origins, ONE EMBARCADERO CENTER, 22ND FLOOR SAN FRANCISCO, CALIFORNIA 94111-3711 LAW OFFICES SIDEMAN & BANCROFT LLP 9 Magpul, nor by its authority; Defendants’ unauthorized use of Magpul’s Registered Marks are 11 and; that these products are “counterfeit,” as that term is defined at 15 U.S.C. § 1116(d)(B)(i). 12 3. Magpul is likely to establish that Defendants’ trademark counterfeiting was done 13 willfully in that: Defendants were provided notice on at least seventy-seven occasions that they 14 were selling products that infringed upon Magpul’s trademarks, but continued to sell them 15 anyway; Defendants have received numerous notices from its customers who complained through 16 eBay that the products sold by Defendants were inferior, or counterfeit, but continued to sell these 17 products, and; the price at which Defendants were selling their products was so far below the 18 market price for genuine products that they must have known that the products were derived 19 through an illegal source. 20 4. Defendants have used PayPal to process financial transactions associated with their 21 sale of Magpul-branded products. Defendants’ PayPal accounts are identified by the following 22 email addresses: “,” “,” and 23 “” 24 5. Defendants have exhibited behaviors that make it likely that they will seek to avoid 25 legal responsibility that may arise from this lawsuit: Defendants have used multiple addresses to 26 conduct business that are not traceable to them; Defendants use multiple seller names on eBay that 27 seem intended to allow listings under one seller name if the listings are removed under the other 28 seller name; the names used by Defendants are not traceable to them because they are either too 7758-11\2071732v1 2 [PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION 4:14-cv-1556 JSW Case4:14-cv-01556-JSW Document36 Filed04/25/14 Page3 of 3 1 common, or because they have used only initials to identify themselves, and; according to 2 customer complaints, Defendants refused to honor obligations to ship products that had been 3 ordered by those customers. Based upon this finding, it is likely that Defendants will attempt to 4 disperse their assets from PayPal to accounts beyond the jurisdiction of the United States, prior to 5 the time that this matter is finally adjudicated. 6 6. In the likelihood that Magpul prevails in this action, it will be entitled to an 7 accounting of Defendants’ profits. It is necessary that the assets remain in Defendants’ PayPal 8 accounts to provide for this equitable remedy. 7. An Order, freezing the assets in Defendants’ PayPal accounts is necessary to 10 preserve Magpul’s equitable remedies. ONE EMBARCADERO CENTER, 22ND FLOOR SAN FRANCISCO, CALIFORNIA 94111-3711 LAW OFFICES SIDEMAN & BANCROFT LLP 9 11 IT IS THEREFORE ORDERED that the temporary restraining order previously entered 12 by this Court [Doc. 28] shall become a preliminary injunction: 13 A. PayPal shall prevent the disbursement of any assets held in accounts associated 14 with the email addresses: “,” “,” and 15 “” However, PayPal shall still allow the deposit of funds that are destined 16 to those accounts. 17 B. PayPal shall promptly notify the parties of any changes to the balance in these 18 accounts, including the reasons for any change. 19 C. This order shall remain in effect until further notice from this Court. 20 D. 100 Magpul is directed to deposit $_______ with the clerk of this court, to be held as 21 security for any wrongful harm that Defendants experience as a result of this preliminary 22 injunction. 28 23 DATED: April __, 2014 24 25 Judge, United States District Court 26 27 28 7758-11\2071732v1 3 [PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION 4:14-cv-1556 JSW

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