Brand Ventures, Inc. v. TAC5, LLC et al
Filing
45
ORDER granting in part and denying in part 7 Motion for Preliminary Injunction. Defendants are hereby enjoined from: (a) using any original work which is the subject of Brand Ventures' Copyright Registrations; and (b)participating in or assisting in the commission of any act that would be a violation of this Order if performed or carried out by an enjoined person or entity. In other respects, Plaintiff's motion is denied. Signed by Judge Paul G. Byron on 2/2/2018. (BAH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
BRAND VENTURES, INC.,
Plaintiff,
v.
Case No: 6:17-cv-1983-Orl-40KRS
TAC5, LLC, NATIONAL ENTERPRISE
GROUP, LLC, JOHNATHAN CURTIS
and JOHN DOES 1–5,
Defendants.
/
ORDER
This cause comes before the Court on Plaintiff’s Motion for Preliminary Injunction
and Memorandum of Fact and Law in Support Thereof (Doc. 7), filed November 29, 2017.
On December 27, 2017, Defendants responded in opposition (Doc. 34). On January 3,
2018, the Court held an evidentiary hearing on Plaintiff’s motion (Doc. 37). Upon
consideration, and with the benefit of oral argument, the Court grants in part Plaintiff’s
motion for preliminary injunction.
I.
BACKGROUND
Brand Ventures, Inc. (“Brand Ventures”) is an “internet product incubation
company that builds specialized solutions for lead generation, consumer content, and
direct-to-consumer e-commerce products.” (Doc. 1, ¶ 22). Brand Ventures offers
numerous products for sale under different trademarks. With respect to the current
litigation, Brand Ventures alleges it owns the marks 1TAC and 1TAC TACTICAL
OUTFITTERS for use with tactical flashlights and other tactical gear (“1TAC marks”), and
the mark 1HYDRO for use with portable water purifiers. (Doc. 1, ¶¶ 23–24). Brand
Ventures began using 1TAC marks in December 2015, and began using 1HYDRO in
March 2016. (R. 39:19–22; 40:16–20). 1 On March 16, 2016, Brand Ventures registered
its 1TAC trademark, however, at this time it does not appear that it has registered 1TAC
TACTICAL OUTFITTERS or 1HYDRO. (Doc. 1-6). To promote its products, Brand
Ventures created an original website and other internet-based content. Brand Ventures
owns the following Copyright Registrations:
Registration No. Title of Works
TX 8-389-190
Website
Registration
VA 2-064-784
Images
Registration
TX 8-390-481
Website
Assets
TX 8-376-158
Catalog
(Doc. 1-7, ¶¶ 2–5) (collectively, “Works”).
In December 2016, Jonathan Curtis (“Mr. Curtis”) and his brother-in-law Chris
Cotroneo (“Mr. Cotroneo”) decided to start an online business and traveled to Thailand to
attend an affiliate conference in order to scout product and learn the trade. (R. 82:18–
83:12; 107:21–108:3). At this conference, the two decided to sell tactical flashlights. Mr.
Curtis paid for the development of the website as well as prelander pages to help drive
business. (R. 84:13–85:11). Mr. Curtis and Mr. Cotroneo allegedly contracted out the
development of its website to a third-party only identified as CSC. (R. 95:16–21). Upon
returning to the United States, Mr. Curtis and Mr. Cotroneo began selling goods in
commerce under the mark TAC5. (R. 107:21–108:5). TAC5, LLC was formed on March
1
Transcript of the hearing is cited to as “(R. __:__).”
2
17, 2017, and was initially wholly owned by National Enterprise Group, LLC. National
Enterprise Group, LLC is owned by Mr. Curtis and his wife, Ms. Cindy Curtis. At some
point, ownership of TAC5, LLC was transferred to Mr. Cotroneo. 2 (R. 100:25–101:3).
On June 19, 2017, Brand Ventures sent TAC5 a cease and desist letter alleging
that TAC5 was violating Brand Ventures’ copyright and trademark rights. (Doc. 7-1). On
June 28, 2017, TAC5 responded to Brand Ventures’ cease and desist. (Doc. 7-2). The
issues were not resolved, and on November 20, 2017, Brand Ventures filed a four-count
Verified Complaint against Defendants TAC5, LLC, National Enterprise Group, LLC,
Jonathan Curtis, and John Does 1 through 5 (collectively, “TAC5”). Brand Ventures’
claims are as follows:
Count I: Copyright Infringement;
Count II: Federal Trademark Infringement;
Count III: Federal Unfair Competition; and
Count IV: Unjust Enrichment.
(Doc. 1 ¶¶ 53–80). Nine days later, on November 29, 2017, Brand Ventures moved for
preliminary injunctive relief.
II.
STANDARD OF REVIEW
The Court is authorized to enter a preliminary injunction by Rule 65, Federal Rules
of Civil Procedure (“Rule(s)”). To prevail on its request for injunctive relief, Brand Ventures
must demonstrate the following four elements:
2
The date at which this transfer occurred is unclear, however, as of June 21, 2017—
when U.S. Trademark Application Serial No. 87499575 was filed for the trademark TAC5
and its related design—the mark was still alleged to have been ultimately owned by
National Enterprise Group, LLC.
3
(1) a substantial likelihood of success on the merits of the underlying case,
(2) the movant will suffer irreparable harm in the absence of an injunction,
(3) the harm suffered by the movant in the absence of an injunction would exceed
the harm suffered by the opposing party if the injunction issued, and
(4) an injunction would not disserve the public interest.
Johnson & Johnson Vision Care. Inc. v. 1-800 Contacts. Inc., 299 F.3d 1242, 1246–47
(11th Cir. 2002). A preliminary injunction is a drastic and extraordinary remedy which
should not be granted unless the movant can clearly establish each of the four
elements. America’s Health Ins. Plans v. Hudgens, 742 F.3d 1319, 1329 (11th Cir. 2014);
see generally, Kevin J. Lynch, The Lock-in Effect of Preliminary Injunctions, 66 FLA. L.
REV. 779 (2015) (noting the problem of the lock-in effect when accessing the merits of a
case at an early stage, based on incomplete information). “The burden of persuasion on
all of the four requirements is at all times upon the plaintiff.” Canal Auth. of Fla. v.
Callaway, 489 F.2d 567, 573 (5th Cir. 1974). The failure to establish an element will
warrant denial of the request for preliminary injunctive relief and obviate the need to
consider the remaining prerequisites. See Pittman v. Cole, 267 F.3d 1269, 1292 (11th
Cir. 2001) (citing Church v. City of Huntsville, 30 F.3d 1332, 1342 (11th Cir. 1994)); see
also Del Monte Fresh Produce Co. v. Dole Food Co., 148 F. Supp. 2d 1326, 1339 n.7
(S.D. Fla. 2001) (“Because Del Monte has not met the first requirement, it is not necessary
to discuss the remaining elements required for a preliminary injunction.”).
In considering a motion for preliminary injunctive relief, “a district court may rely on
affidavits and hearsay materials which would not be admissible evidence for a permanent
injunction, if the evidence is ‘appropriate given the character and objectives of the
4
injunctive proceeding.’ “ Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F.3d 982, 985
(11th Cir. 1995) (citing Asseo v. Pan Am. Grain Co., 805 F.2d 23, 26 (1st Cir.
1986)); see also R. Miller Architecture, Inc. v. Edgington Enters., Inc., No. 6:06-CV-871 ORL-19DAB, 2006 WL 2226297, at *4 (M.D. Fla. Aug. 3, 2006) (“In considering a motion
for preliminary injunctive relief, a district court may rely on affidavits and hearsay
materials that would not be admissible as evidence for entry of a permanent injunction.”).
III.
DISCUSSION
Brand Ventures seeks a preliminary injunction enjoining TAC5’s copyright and
trademark infringement. Brand Ventures alleges that it has met the four required elements
for the Court to issue a preliminary injunction. TAC5 refutes these allegations. However,
before reaching the merits of these arguments, two issues raised by TAC5 must be
addressed. First, whether Brand Ventures’ motion is timely, and, second, whether the
copyright issues are moot.
Brand Ventures has been aware of TAC5’s alleged infringement since as early as
June 2017, nevertheless Brand Ventures did not file suit until November of 2017. (Doc.
7-1). TAC5 has cited a litany of cases to support its claim that Brand Ventures is not
entitled to a preliminary injunction due to unnecessary delay. (Doc. 34, pp. 4–5). However,
these cases are inapposite. For example, Wreal, the only controlling case cited, stands
for the proposition that the Court may deny a party’s motion for preliminary injunction
when the party waited five months after filing its complaint to move for injunctive relief.
Wreal, LLC vs. Amazon.com, Inc., 840 F.3d 1244, 1248–49 (11th Cir. 2016). Here, Brand
Ventures filed its motion only nine days after filing the complaint. (Doc. 7). Prior to filing
suit, Brand Ventures conducted necessary pre-suit investigation and exchanged
5
correspondence with TAC5’s representatives. Brand Ventures should not be punished for
attempting to resolve issues outside the court system, and engaging in necessary presuit investigation—especially given TAC5’s unwarranted threat of Rule 11 sanctions.
(Doc. 7-2). Accordingly, the Court does not find that Brand Ventures unnecessarily
delayed in filing its Motion for Preliminary Injunction.
The second issue is whether the copyright infringement issue is now moot. At the
hearing before this Court, the parties represented that they were working together to
resolve copyright infringement issues, however, Brand Ventures maintained that it was
not fully resolved. (R. 20:25–22:23). TAC5 represented it was working diligently to remove
any images, and that two weeks would be more than sufficient to resolve any remaining
issues. (Id.). Both parties were directed to file notices within fourteen (14) days of the
hearing apprising the Court whether all allegedly infringing images and text had been
removed, thereby mooting the issue. (Id.). On January 17, 2018, both parties filed notices.
(Doc. 40, 41). In light of the conflicting assertions contained in the notices, the Court finds
that the issue is not moot with respect to Brand Ventures’ Motion for Preliminary
Injunction.
a. Copyright
i. Likelihood of Success
The first step in evaluating the likelihood that Brand Ventures will succeed on
the merits is to determine whether it has established the prima facie elements of
a copyright infringement claim: (1) that Brand Ventures owns a valid copyright in the
Works, and (2) that Tac5 copied original elements of the Works. Feist, 499 U.S. 340, 361
6
(1991); Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1214 (11th Cir.2000). Brand Ventures
has carried its burden on both of these elements. 3
In determining whether Brand Ventures established that TAC5 copied original
elements of the Works, the Court conducts a two-step analysis. See Cornerstone Home
Builders, Inc., No. 8:04-CV-2585T24TGW, 2005 WL 1863387, at *2. (M.D. Fla. Aug. 5,
2007) “[I]f there is no evidence of copying . . . [t]hat is, if a plaintiff does not have direct
proof of copying,[ ] the plaintiff may show copying by demonstrating that the defendant
had access to the copyrighted work and that the works are substantially similar.” Id.; see
also Herzog v. Castle Rock Entm’t, 193 F.3d 1241, 1249 (11th Cir. 1999) (“Since it is
virtually impossible to prove copying directly, this element is usually established
circumstantially, by demonstrating that the person who composed the defendant’s work
had access to the copyrighted material and that there is substantial similarity between the
two works.”).
First, Brand Ventures alleges that TAC5 had access to the Works through Brand
Venture’s website, and TAC5 does not dispute that the Works were available on the
internet. Second, “[t]o demonstrate substantial similarity, a plaintiff must establish that ‘an
average lay observer would recognize the alleged copy as having been appropriated from
the copyrighted work.’” Cornerstone Home Builders, Inc., 2005 WL 1863387, at *2
(quoting Herzog, 193 F.3d at 1248). Attached to the Verified Complaint is a declaration
signed by Brand Ventures’ CEO, Mr. Rick Bennink. (Doc. 1-7). In his declaration, Mr.
Bennink presents dozens, if not hundreds, of examples of the wholesale copying of Brand
3
The first element, Brand Ventures’ ownership of a valid copyright in the Works, does
not appear to be disputed.
7
Ventures’ website and marketing material by TAC5. 4 By way of example, Brand Ventures
issued a Spring 2017 Shopping Guide for products marketed under the 1TAC marks.
Shortly thereafter, TAC5 issued its own 2017 Shopping Guide, lifting the exact
language—save for minor changes in product or company names—used by Brand
Ventures throughout:
(Docs. 1-9, p. 1; 1-12, pp. 16).
This egregious copying is found throughout TAC5’s website and marketing
material. Brand Ventures has established a substantial likelihood of success on the merits
4
Moreover, while careful not to acknowledge direct copying in the hearing before the
Court, Mr. Curtis still admitted he was “livid” when he compared the 1TAC website with
TAC5’s website, and acknowledged on a telephone call with is brother-in-law that the
TAC5 website needed to be “cleaned up.” (R. 108:14–109:12)
8
of its claim of copyright infringement based on TAC5’s direct use and reproduction of
Brand Ventures’ Works throughout its website, brochures, and other marketing material.
ii. Irreparable Harm
As the moving party, Brand Ventures “must demonstrate the threat of irreparable
harm by independent proof, or no injunction may issue.” Nivel Parts & Mfg. Co., LLC v.
Textron, Inc., No. 3:17-CV-146-J-32JRK, 2017 WL 1552034, at *1 (M.D. Fla. May 1,
2017) (Corrigan, J.) (internal quotations and citations omitted). “Speculative injury is not
sufficient; there must be more than an unfounded fear on the part of the applicant.” Id. For
the Court to grant a preliminary injunction, Brand Ventures “must show that irreparable
harm is likely.” Id. As explained by the court in Applied Concepts Unleashed, Inc. v.
Matthews,
Harm might be irreparable because the loss is difficult to
replace, or difficult to measure, or because plaintiff should not
be expected to suffer such a loss. Possibility of market
confusion and difficulty of proving loss of sales due
to infringement may qualify harm as irreparable in copyright
infringement cases. Plaintiff’s loss of ability to control its own
reputation may also make harm irreparable. Finally, the court
may consider plaintiff’s delay in seeking relief.
No. 12-14035-CIV, 2012 WL 12831313, at *14 (S.D. Fla. Oct. 1, 2012) (internal citations
omitted).
The harm to Brand Ventures is imminent because TAC5 is currently offering its
products using branding and marketing developed by Brand Ventures. There is a great
possibility of market confusion between Brand Ventures’ goods and TAC5’s goods if
TAC5 is not enjoined from using Brand Ventures’ copyrighted Works. Brand Ventures will
not be able to control its reputation if TAC5 continues to be available in the marketplace.
The only factor that may weigh against finding that Brand Ventures will suffer irreparable
9
harm without a preliminary injunction is Brand Ventures’ delay in seeking relief. However,
under the circumstances presented in the evidence and explained at the hearing and
above, the Court finds that Brand Ventures acted as expeditiously as possible. The Court
finds that Brand Ventures is likely to suffer irreparable harm if the preliminary injunction is
not granted.
iii. Balance of Harms
Brand Ventures must establish that the harm it will suffer outweighs the harm
a preliminary injunction may cause TAC5. See Applied Concepts Unleashed. Inc., 2012
WL 12831313, at *14. TAC5 does not present any argument as to why the balance of
harms weighs in its favor with respect to a preliminary injunction enjoining it from using
Brand Ventures’ Works. Moreover, a “[p]reliminary injunction should not be denied
because
of
the
devastating
effect
on
the
defendant’s
business
built
on copyright infringement.” Id. Accordingly, the Court finds that Brand Ventures has
established that the harm it is suffering from TAC5’s infringement outweighs any harm
that a preliminary injunction may cause TAC5.
iv. Public Interest
The Court must finally determine whether issuing a preliminary injunction will
disserve the public interest. See Brody, 2008 WL 4613046, at *16. Protecting Brand
Ventures’ copyrighted material is not against the public interest. See Applied Concepts
Unleashed, Inc., 2012 WL 12831313, at *15 (“[P]rotecting Plaintiff’s copyright is not
against the public interest. Rather, it will serve that interest.”); Brody, 2008 WL 4613046,
at *16 (“A preliminary injunction would not disserve the public interest; a preliminary
injunction would affirmatively serve the public interest by protecting business from
10
misappropriation of confidential information and resources.”). TAC5 argues that public
interest weighs in favor of having as many entities as possible competing, however, the
injunction is not to stop TAC5 sales—the preliminary injunction is to stop TAC5’s use of
infringing material. The Court finds that a preliminary injunction would not disserve the
public interest.
b. Trademark 5
i. Likelihood of Success
“Under § 32(a) of the Lanham Act, 15 U.S.C. § 1114(1)(a), liability
for trademark infringement occurs when a person ‘use[s] in commerce any reproduction,
counterfeit, copy, or colorable imitation of a registered mark’ which ‘is likely to cause
confusion, or to cause mistake, or to deceive.’” PetMed Express, Inc. v. MedPets.Com,
Inc., 336 F. Supp. 2d 1213, 1217 (S.D. Fla. 2004) (quoting 15 U.S.C. § 1114(1)(a)). Thus,
to prevail on a claim of trademark infringement, plaintiffs “must establish: (1) that they
possess a valid mark, (2) that the defendants used the mark, (3) that the defendants’ use
of the mark occurred ‘in commerce,’ (4) that the defendants used the mark ‘in connection
with the sale . . . or advertising of any goods,’ and (5) that the defendants used the mark
in a manner likely to confuse consumers.” North Am. Med. Corp. v. Axiom Worldwide,
5
In addition to alleged trademark infringement discussed herein, Brand Ventures has also
moved for an injunction barring trade dress infringement. (Doc. 34, p. 11). Brand Ventures
did not sufficiently identify in its motion exactly what constitutes the trade dress infringed
by TAC5. For example, Brand Ventures stated that TAC5 used “identical packaging,” but
does not identify the specific elements constituting the trade dress of the packing, such
as color, shape, material, or other aspects. (Id.) Therefore, without addressing the
substantive merits of Brand Ventures’ ultimate trade dress claim, the Court finds that
Brand Ventures’ motion fails with respect to enjoining trade dress infringement.
11
Inc., 522 F.3d 1211, 1218 (11th Cir. 2008). It does not appear that TAC5 disputes the
second, third, or fourth factors here.
TAC5 asserts that Brand Ventures’ 1TAC marks and 1HYDRO mark do not
function as valid trademarks, and that 1TAC should not have been registered. (Doc. 34,
p. 7). Specifically, TAC5 argues that Brand Ventures’ marks are “descriptive at best” and
“widely used by third parties. (Doc 34, p. 10); see Vision Ctr. v. Opticks, Inc., 596 F.2d
111, 115–16 (5th Cir.1979) (describing the definitions of and the degree of protection for
generic, descriptive, suggestive, and arbitrary or fanciful terms), cert. denied, 444 U.S.
1016 (1980). “A descriptive term identifies a characteristic or quality of an article or
service and, though ordinarily not protectable, may become a valid trade name if it
acquires a secondary meaning.” Id. at 115. “In order to establish secondary meaning, the
plaintiff ‘must show that the primary significance of the term in the minds of the consuming
public is not the product but the producer.’” Id.at 118 (quoting Kellogg Co. v. Nat’l Biscuit
Co., 305 U.S. 111, 118 (1938)).
The marks at issue, 1TAC and 1HYDRO, both contain terms preceded by the
number one. At the hearing before this Court, Brand Ventures’ CEO, Mr. Rick Bennink,
testified that “tac” is short “tactical.” (R. 74:2–3). The Court also notes that the prefix
“hydro-” is often used in the formation of compound words and means water, e.g.,
hydroplane. Hydro- Definition, Dictionary.com, http://www.dictionary.com/browse/hydro(last visited Jan. 20, 2018). When asked what products are marketed under the 1TAC
marks, Mr. Bennink testified “tactical flashlights, accessories, batteries, head lamps,
safety, tactical pins, bracelets, survival tactical flashlight and gear.” (R. 40:25–41:2).
When asked the same question for products under the 1HYDRO mark, Mr. Bennink
12
testified “water filtration bottle series.” (R. 41:4–6). Mr. Bennick also testified that Brand
Ventures has only been using the 1TAC mark since December of 2015 and began using
the 1HYDRO mark a few months thereafter, (R. 39:19–22, 40:16–22), and that he was
aware of other third parties using the term “tac” in connection with flash lights and tactical
equipment. (R. 75:16–19). In addition to Mr. Bennick’s testimony, TAC5 presented
numerous instances of third-parties using the word “tac” as part of a trademark for various
forms tactical gear or using the word “hyrdro” as part of trademarks for water bottles.
(Doc. 34, pp. 7–12). The evidence demonstrates that the terms “tac” and “hydro” both
describe a characteristic or quality of the gear sold under each respective mark, and
therefore at this stage the Court finds the marks merely descriptive.
Once TAC5 overcame the presumption of the trademarks’ validity, the burden
shifted back to Brand Ventures to show a likelihood of success on the merits of proving
that the trademark is either suggestive or descriptive with a secondary meaning. Brand
Ventures presented some testimony regarding advertising costs, however, given the short
time that Brand Ventures had used the trademarks at issue, the Court finds the evidence
regarding secondary meaning unpersuasive at this time. TAC5 has put forth evidence
lending credibility to its argument that the 1TAC and 1HYDRO marks are weak and may
not be protectable. Accordingly, the Court determines that Brand Ventures is not
substantially likely to succeed on the merits of its trademark infringement claim. The Court
need not address likelihood of confusion.
c. Bond
Federal Rules of Civil Procedure 65(c) provides that a preliminary injunction should
not issue “without the giving of security by the applicant sufficient for payment of costs
13
and damages as may be incurred or suffered by any party to have been wrongfully
enjoined.” N. Am. Prods. Corp. v. Moore, 196 F. Supp. 2d. 1217, 1232 (M.D. Fla. 2002).
“The amount of an injunction bond is [a matter ultimately] within the sound discretion of
the district court.” 7–Eleven, Inc., 977 F. Supp. 2d at 1230 (quoting Carillon Imps., Ltd. v.
Frank Pesce Int'l Grp. Ltd., 112 F.3d 1125, 1127 (11th Cir. 1997)). Furthermore, “[t]he
burden of establishing a rational basis for the amount of a proposed bond rests with the
party seeking security,” Medi–Weightloss Franchising USA, LLC, 2010 WL 1837767, at
*8 (M.D. Fla. March 11, 2010) (recommending a $10,000 bond), and “the court may elect
to require no security at all.” BellSouth Telecomms., Inc. v. MCIMetro Access
Transmission Servs., LLC, 425 F.3d 964, 971 (11th Cir. 2005) (quotation omitted). Brand
Ventures contends that no security is required because it has made a high showing of
succeeding on the merits of its claims. TAC5, on the other hand, asserts that Brand
Venture should post a bond in at least the amount of two million dollars. At the hearing
before the Court, TAC5 represented the ease with which the infringing images could be
removed. Accordingly, the Court waives the imposition of a bond.
IV.
CONCLUSION
For the aforementioned reasons it is ORDERED AND ADJUDGED as follows:
1. Plaintiff’s Motion for Preliminary Injunctive Relief and Brief in support (Doc.
7) is GRANTED IN PART.
2. Defendants TAC5, LLC, National Enterprise Group, LLC, and Johnathan
Curtis are hereby enjoined from:
a. Using any original work which is the subject of Brand Ventures’
Copyright Registration Nos. TX 8-389-190, VA 2-064-784, TX 8-390481, and TX 8-376-158 and any derivative works based thereon; and
14
b. Participating in or assisting in the commission of any act that would
be a violation of this Order if performed or carried out by an enjoined
person or entity.
3. In all other respects, Plaintiff’s Motion for Preliminary Injunctive Relief and
Brief in support (Doc. 7) is DENIED.
DONE AND ORDERED in Orlando, Florida on February 2, 2018.
Copies furnished to:
Counsel of Record
Unrepresented Parties
15
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?