Bikinvention 2 CC v. Squirt, LLC et al

Filing 14

ORDER granting in part and denying in part 10 Motion for TRO. By Judge Christine M. Arguello on 05/02/2014. (athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 14-cv-01178-CMA-MEH
BIKINVENTION 2 CC, a South African corporation,
Plaintiff,
v.
SQUIRT, LLC, a Utah limited liability company, and
JOHN TUCKER, an individual,
Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
MOTION FOR A TEMPORARY RESTRAINING ORDER

This matter is before the Court on Plaintiff’s motion for a Temporary Restraining
Order. (Doc. # 10.) For the following reasons, the Court grants the motion in part and
denies it in part.
I. BACKGROUND
A. PROCEDURAL HISTORY
This case concerns a dispute about bike-chain lube. Plaintiff Bikinvention 2 CC
alleges that Defendants Squirt, LLC, and John Tucker, are producing a counterfeit and
inferior version of Plaintiff’s “Squirt” brand of bike-chain lubricant and that Defendants
plan to introduce their own lubricant brand, Enduro, in the near future. In particular,
Plaintiff alleges that Defendants, who are former distributors of Squirt, are peddling their
own version of bike lubricant in bottles that look nearly identical to the ones that contain

real Squirt. See, e.g., (Doc. # 10-2 (showing pictures of the nearly identical real and
counterfeit Squirt bottles).) While the bottles are indistinguishable, what is inside is not:
as Plaintiff alleges, “[t]he counterfeit product is more yellow in color than Squirt Lube,
is sticky rather than smooth like Squirt, has a lower viscosity, indicating a probability of
lower wax content, and is an inferior product.” (Doc. # 10, at 4 (citing affidavits from
persons who have seen or used the allegedly counterfeit Squirt).)
As Plaintiffs allege, the near-identical labelling presents a problem to Plaintiff
because confused bike customers who use the counterfeit product might blame Plaintiff
for deficiencies that were in fact created by Defendants. Plaintiffs further allege that
Defendants are intentionally trying to diminish the value of the Squirt brand as one
step in a plan to introduce onto the bike-lubricant market a rival product, Enduro, that
Defendants can market as a superior product to the brand they sought to sabotage.
(Id. at 4.)
Plaintiff alleges that Defendants’ conduct violates, among other things, 15 U.S.C.
§ 1125(a)(1), which states in pertinent part:
Any person who, on or in connection with any goods or services, or any
container for goods, uses in commerce any word, term, name, symbol,
or device, or any combination thereof, or any false designation of
origin, false or misleading description of fact, or false or misleading
representation of fact, which –
(A) is likely to cause confusion, or to cause mistake, or to deceive as
to the affiliation, connection, or association of such person with another
person, or as to the origin, sponsorship, or approval of his or her goods,
services, or commercial activities by another person, . . .

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shall be liable in a civil action by any person who believes that he or she
is or is likely to be damaged by such act. 1
B. TEMPORARY RESTRAINING ORDER
In its motion, Plaintiff seeks a temporary restraining order to enjoin Defendants
from:
(a) imitating, copying, or making any use of the “Squirt” mark or trade
dress including, but not limited to, the sale of goods under the Squirt mark
or trade dress, or operating websites with domain names containing the
words “Squirt,” and maintaining online social media, business, or
networking accounts or sites under a name containing the words “Squirt”
including, but not limited to, blogs, LinkedIn, Facebook, and Twitter, or
using third party payor accounts such as Amazon, PayPal, or EBay;
(b) using any unauthorized colorable imitation of the “Squirt” mark or trade
dress, or any other trademark, name, or designation which, either alone or
in combination, is likely to cause confusion, mistake or deception as to
source, origin, sponsorship, endorsement or affiliation, in connection with
the promotion, advertisement, display, sale, offering for sale, production,
import, export, circulation, or distribution of any product or service in such
manner as to relate or connect, or tend to relate or connect, such product
or service in any way with Plaintiff Bikinvention;
(c) using any false designation of origin, false description or false
representation, and from making any false representations or from
engaging in any act or acts which, either alone or in combination,
constitute deceptive or unfair competition by Defendants with Plaintiff
Bikinvention;
(d) engaging in any other activity constituting unfair competition with
Plaintiff Bikinvention or violations of the Colorado Consumer Protection
Act, C.R.S. § 6-1-101, et seq., or constituting infringement of the Squirt
mark, or of Bikinvention’s rights in, or its right to use or exploit, such
trademark, including the sales and marketing of any bicycle lubricant
such as “Enduro”; and

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It is also well established that this Court can provide injunctive relief against such forms of
unfair trade practices. See, e.g., Gen. Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1226
(10th Cir. 2007).

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(e) requiring that Defendants provide a list of all customers, including
address, telephone numbers and email addresses, to whom sales of
the counterfeit Squirt product were made so that they may be notified
that the product is counterfeit.
(Doc. # 10, at 1-2.)
Plaintiff further certified that it has provided notice of this cause of action
and this motion for a temporary restraining order by emailing all pleadings in this
case to Defendants at the named Defendant’s personal and work email
addresses. See (Doc. # 11.)
II. STANDARD
This Court’s review of Plaintiffs’ motion is governed by Federal Rule of Civil
Procedure P. 65(b), which states:
(b) Temporary Restraining Order.
(1) Issuing Without Notice. The court may issue a temporary
restraining order without written or oral notice to the adverse party
or its attorney only if:
(A) specific facts in an affidavit or a verified complaint clearly
show that immediate and irreparable injury, loss, or damage
will result to the movant before the adverse party can be
heard in opposition; and
(B) the movant’s attorney certifies in writing any efforts made
to give notice and the reasons why it should not be required.
In essence, a TRO “is designed to preserve the status quo until there is an
opportunity to hold a hearing on the application for a preliminary injunction and may
be issued with or without notice to the adverse party.” Charles Alan Wright, et al.,
11A Fed. Prac. & Proc. Civ. § 2951 (3d ed. Apr. 2014 update). Moreover, while “[t]he
issuance of a temporary restraining order is a matter that lies within the discretion of
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the district court,” a party must demonstrate “irreparable injury” as “an essential
prerequisite to a temporary restraining order.” Id. And most courts hold that a party
“must demonstrate at least a reasonable probability of prevailing on the merits” in order
to obtain such relief. Id.
Finally, while a motion for a temporary restraining order is distinct from a motion
for a preliminary injunction, some courts in the District of Colorado adhere to the same
familiar four-part test for granting a preliminary injunction when considering whether to
grant a temporary restraining order. See, e.g., Salba Corp., N.A. v. X Factor Holdings,
LLC, No. 12-CV-01306-REB-KLM, 2014 WL 128147 (D. Colo. Jan. 14, 2014). That
standard requires a plaintiff to demonstrate likelihood of success and irreparable harm
but also “that the balance of equities tips in [Plaintiff’s] favor, and that an injunction is in
the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). 2
III. APPLICATION
Plaintiff fulfills the standard for a temporary restraining order. As an initial matter,
Plaintiff has met the technical requirements of Rule 65(b) by alleging with specificity in
an affidavit the immediate loss or injury that will be caused by Defendants’ actions, see
(Doc. # 10-3), and by certifying in writing that it has provided notice to Defendant, see
(Doc. # 11).
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While Courts in this district have considered these latter two factors, they can be considered
at the discretion of the Court. See, e.g., Charles Alan Wright, et al., 11A Fed. Prac. & Proc. Civ.
§ 2951 (3d ed. Apr. 2014 update) (“The court also may balance the harm that might be suffered
by defendant if the order were issued against the injury that would result to plaintiff if the
application for the restraining order were denied. This balancing of the hardships approach
is fairly common, particularly when one of the parties is a governmental unit. More generally,
it also may be appropriate for the court to consider the effect of the requested order on the
public interest.” (footnotes omitted)).
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Further, this Court is persuaded that Plaintiff’s request to enjoin Defendants from
further distribution of counterfeit Squirt meets the standard required for issuance of a
temporary restraining order. First, Plaintiffs have established a reasonable probability of
success at least on their claim that Defendants violated 15 U.S.C. § 1125(a)(1). Indeed,
the counterfeit Squirt bottles, which look almost exactly like the real Squirt bottles, offer
a textbook example of a “misleading representation” that “is likely to . . . deceive . . . as
to the affiliation, connection, or association” of Defendants’ product with the product
produced by Plaintiff.
Second, Plaintiff has established that failing to issue a Temporary Restraining
Order will cause irreparable harm. Common sense dictates that the counterfeit Squirt,
which is alleged to be of an inferior quality, will diminish the Squirt brand in ways that
Plaintiff will find difficult to correct. And Plaintiffs have provided examples of persons
who can attest to how the counterfeit Squirt has affected their impression of the brand.
See, e.g., (Doc. 10-11, at 1 (affidavit of a bicycle mechanic from North Carolina who
could not tell the difference between the real and counterfeit Squirt but explained why
the counterfeit product “did not perform nearly as well as the actual Squirt Lube”)
Third, the balance of equities tips in Plaintiff’s favor, rather than in favor of
alleged counterfeiters. Fourth, the public interest also tips in favor of preventing
Defendants from introducing more of their counterfeit goods into the market. 3

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This injunction also maintains the status quo: that is, the “last peaceable uncontested status
existing between the parties before the dispute developed.” O Centro Espirita Beneficiente
Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (en banc) (quoting 11A
Charles Alan Wright, et al., Fed. Prac. & Proc. Civ., § 2948 (2d ed. 1995)), aff’d and remanded
sub nom. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006).
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At the same time, Plaintiff’s motion for a TRO requests injunctive relief beyond
preventing the continued distribution of counterfeit Squirt. Plaintiff also seeks to prevent
Defendants from using any “false descriptions” that “constitute deceptive or unfair
competition;” “engaging in any other activity constituting unfair competition with Plaintiff
or violations of the Colorado Consumer Protection.” Finally, Plaintiffs seeks an
affirmative inunction to require Defendants to provide a list of all customers and contact
information for customers who have purchased a counterfeit Squirt product. (Doc. # 11
at 2.)
These latter requests for injunctive relief are insufficiently specific to pass muster
under Rule 65. Further, Plaintiff cites no authority for the proposition that a TRO is
a proper mechanism to provide the affirmative relief he seeks, and Plaintiff does not
explain why it will be irreparably harmed absent an order directing Defendants to
provide contact information for its customers. Thus, the Court denies this portion
of the request for a TRO.
IV. CONCLUSION
For the foregoing reasons, it is
ORDERED that Plaintiff’s Motion for a Temporary Restraining Order is granted
in part and denied in part. It is further
ORDERED that Defendants are enjoined from:
(a) imitating, copying, or making any use of the “Squirt” mark or trade
dress including, but not limited to, the sale of goods under the Squirt mark
or trade dress, or operating websites with domain names containing
the words “Squirt,” and maintaining online social media, business, or
networking accounts or sites under a name containing the words “Squirt”

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including, but not limited to, blogs, LinkedIn, Facebook, and Twitter, or
using third party payor accounts such as Amazon, PayPal, or EBay; and
(b) using any unauthorized colorable imitation of the “Squirt” mark or trade
dress, or any other trademark, name, or designation which, either alone or
in combination, is likely to cause confusion, mistake or deception as to
source, origin, sponsorship, endorsement or affiliation, in connection with
the promotion, advertisement, display, sale, offering for sale, production,
import, export, circulation, or distribution of any product or service in such
manner as to relate or connect, or tend to relate or connect, such product
or service in any way with Plaintiff Bikinvention.
It is further
ORDERED that Plaintiff’s Motion for a Temporary Restraining Order is denied
without prejudice in all other respects beyond what is ordered above. It is further
ORDERED that, pursuant to Fed. R. Civ. P. 65(b)(2), this order shall expire
on May 16, 2014, absent good cause shown for why the order should be extended,
or consent by Defendants to extend the order. It is further
ORDERED that, pursuant to Fed. R. Civ. P, 65(c), Plaintiff shall post a bond
of $1000 as security. It is further
ORDERED that Plaintiff shall provide notice of this order to Defendants.
It is further
ORDERED that the Parties are instructed to call chambers together on a
conference call (303-335-2174) in order to schedule time for a preliminary injunction
hearing. It is further

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ORDERED that Plaintiff are to submit briefing as to why this Court should grant
a motion for a preliminary injunction by no later than 5:00 p.m. on May 7, 2014. 4
Defendants are to submit a response no later than 5:00 p.m. on May 9, 2014.
DATED: May 2, 2014
TIME: 11:15 a.m.
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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In this briefing, Plaintiff can advance an argument as to why it is entitled to injunctive relief beyond what
is provided by this order, though it must support its position with sufficient factual support and legal
authority.

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