Michael Kors, L.L.C. v. Activejewelry et al

Filing 29

ORDER GRANTING PLAINTIFF'S APPLICATION FOR PRELIMINARY INJUNCTION. re 1 Complaint, filed by Michael Kors, L.L.C. Signed by Judge Marcia G. Cooke on 9/2/2015. (tm) Modified on 9/2/2015 (tm).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 15-61659-Civ-COOKE/TORRES
MICHAEL KORS, L.L.C.,
Plaintiff,
vs.
ACTIVEJEWELRY, et al.,
Defendants.
_______________________________/
ORDER GRANTING PLAINTIFF’S APPLICATION FOR PRELIMINARY
INJUNCTION
THIS MATTER is before me on Plaintiff Michael Kors, L.L.C.’s Application for
Preliminary Injunction against Defendants1 pursuant to 15 U.S.C. § 1116 and Federal Rule of
Civil Procedure 65, for alleged violations of the Lanham Act, 15 U.S.C. §§ 1114, and 1125(a)
(the “Application for Preliminary Injunction”) (ECF No. 7). I have reviewed the Application for
Preliminary Injunction and accompanying attachments, the record, and the relevant legal
authorities.
Defendants have not responded to the Application for Preliminary Injunction, nor made
any filing in this case, nor have Defendants appeared in this matter either individually or through
counsel. Defendants were on notice that failure to appear at the hearing may result in the
imposition of a preliminary injunction. ECF No. 12 at IV(15).For the reasons discussed below,
Plaintiff’s Application for Preliminary Injunction (ECF No. 7) is GRANTED.

1

Defendants are the Individuals, Partnerships and Unincorporated Associations identified on Schedule “A”
hereto and Does 1-10.

I.

FACTUAL BACKGROUND2

Plaintiff Michael Kors, L.L.C. is the registered owner of the following trademarks on the
Principal Register of the United States Patent and Trademark Office (collectively, the “Michael
Kors Marks”):
Trademark

Registration

Registration

Number

Date

MICHAEL KORS

2,520,757

MICHAEL KORS

3,160,981

MK MICHAEL
KORS
MK MICHAEL
KORS
MICHAEL KORS

3,438,412

3,535,310

4,052,748

December 18,
2001
October 17,
2006

Class(es) / Relevant Goods

IC 018; credit card cases, handbags

IC 014; watches

May 27, 2008 IC 018; handbags
November 18,
2008
November 8,
2011

IC 014; watches

IC 014; jewelry
IC 009; protective cases, covers and carrying

MICHAEL KORS

4,334,410

May 14, 2013

cases for mobile phones, portable media
players, personal digital assistants, laptops and
tablet computers

(See Declaration of Chandni Patel in Support of Plaintiff’s Application for Preliminary
Injunction [“Patel Decl.”] ¶ 4.) The Michael Kors Marks are used in connection with the
manufacture and distribution of goods in the categories identified above. (Id.)
Defendants, through the operation of Internet e-commerce stores under their seller
identification names identified on Schedule “A” hereto (collectively the “Seller IDs”), have
2

The factual background is taken from Plaintiff’s Complaint (ECF No. 1), Plaintiff’s Application for
Preliminary Injunction (ECF No. 7), and supporting evidentiary submissions. Plaintiff filed declarations and
exhibits annexed thereto in support of its Application for Preliminary Injunction. The declarations are
available in the docket at the following entries: Declaration of Chandni Patel (ECF No. 8), Declaration of
Kathleen Burns (ECF No. 9), Declaration of Eric Rosaler (ECF No. 11), and Declaration of Christine Ann
Daley (ECF No. 10).

2

advertised, promoted, offered for sale, or sold goods bearing what Plaintiff has determined to be
counterfeits, infringements, reproductions or colorable imitations of the Michael Kors Marks.
(See Patel Decl. ¶¶ 10-16.)
Although each Defendant may not have copied and infringed each of the Michael Kors
Marks for each category of goods protected, Plaintiff has submitted sufficient evidence showing
each Defendant has infringed at least one or more of the Michael Kors Marks at issue. (Id.)
Defendants are not now, nor have they ever been, authorized or licensed to use, reproduce, or
make counterfeits, reproductions, or colorable imitations of the Michael Kors Marks. (See Patel
Decl. at ¶ 10.)
Plaintiff retained Aries Claim Services and AED Investigations, Inc., both licensed
private investigative firms, to investigate the sale of counterfeit versions of Plaintiff’s products
by Defendants. (See Patel Decl. at ¶ 11; Declaration of Kathleen Burns in Support of Plaintiff’s
Application for Preliminary Injunction [“Burns Decl.”] ¶ 3; Declaration of Eric Rosaler in
Support of Plaintiff’s Application for Preliminary Injunction [“Rosaler Decl.”] ¶ 3.) Kathleen
Burns, a partner at Aries Claims Services, accessed the e-commerce store under the Seller ID
identified on Schedule “B-­‐1” hereto via an Internet based social media platform and placed an
order for the purchase of a product bearing at least one of Plaintiff’s trademarks at issue in this
action, and requested the product be shipped to her address in the Southern District of Florida.
(See Burns Decl. ¶ 4.) Following the submission of her order, Ms. Burns was instructed that she
could finalize her purchase by making payment to Defendant’s PayPal account, which is
identified on Schedule B-1. (Id.) While accessing the e-commerce store, Ms. Burns also captured
and downloaded webpages reflecting the products being sold and all purchase transaction and
payment instructions. (Id.)
Additionally, Eric Rosaler, an officer of AED Investigations, Inc., accessed the Internet
based e-commerce stores operating under the Seller IDs identified on Schedule “B-­‐2” hereto, and
placed orders from each Seller ID for the purchase of various products, all bearing at least one of
Plaintiff’s trademarks at issue in this action, and requested each product to be shipped to his
address in the Southern District of Florida. (See Rosaler Decl. ¶ 4.) Following submission of his
orders, Mr. Rosaler was likewise instructed that he could finalize his purchase by making
payment to Defendants’ respective PayPal accounts, which are identified on Schedule B-2. (Id.)

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While accessing each e-commerce store, Mr. Rosaler also captured and downloaded webpages
reflecting the products being sold and all purchase transaction and payment instructions. (Id.)
Plaintiff’s representative visually inspected the items offered for sale under the Michael
Kors Marks on the e-commerce stores operating under each of the Seller IDs, and determined the
products were not genuine versions of Plaintiff’s products. (See Patel Decl. ¶¶ 12-16.)
On August 12, 2015 Plaintiff filed its Ex Parte Application for Entry of Temporary
Restraining Order, Preliminary Injunction, and Order Restraining Transfer of Assets (the “Ex
Parte Application”) (ECF No. 7). On August 18, 2015, I issued a Sealed Order Granting
Plaintiff’s Ex Parte Application for Entry of Temporary Restraining Order (ECF No. 12) thereby
temporarily restraining Defendants from infringing the Michael Kors Marks at issue. On August
20, Plaintiff served Defendants in the manner set forth in the Order Granting Plaintiff’s Ex Parte
Application for Entry of Temporary Restraining Order, and on September 1, 2015, filed proofs
of service. (ECF Nos. 24 and 25.)
II.

LEGAL STANDARD

In order to obtain a preliminary injunction, a party must demonstrate “(1) [there is] a
substantial likelihood of success on the merits; (2) that irreparable injury will be suffered if the
relief is not granted; (3) that the threatened injury outweighs the harm the relief would inflict on
the non-movant; and (4) that the entry of the relief would serve the public interest.” Schiavo ex.
rel Schindler v. Schiavo, 403 F.3d 1223, 1225–26 (11th Cir. 2005); see also Levi Strauss & Co.
v. Sunrise Int’l. Trading Inc., 51 F.3d 982, 985 (11th Cir. 1995) (applying the test to a
preliminary injunction in a Lanham Act case).
III.

ANALYSIS

The declarations Plaintiff submitted in support of its Application for Preliminary
Injunction support the following conclusions of law:
A.

Plaintiff has a strong probability of proving at trial that consumers are likely to be

confused by Defendants’ advertisement, promotion, sale, offer for sale, or distribution of goods
bearing counterfeits, reproductions, or colorable imitations of the Michael Kors Marks, and that
the products Defendants are selling and promoting for sale are copies of Plaintiff’s products that
bear copies of the Michael Kors Marks.
B.

Because of the infringement of the Michael Kors Marks, Plaintiff is likely to

suffer immediate and irreparable injury if a preliminary injunction is not granted. The following

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specific facts, as set forth in Plaintiff’s Complaint, Application for Preliminary Injunction, and
accompanying declarations demonstrate that immediate and irreparable loss, damage, and injury
will result to Plaintiff and to consumers because it is more likely true than not that:
1.

Defendants own or control e-commerce stores via, at least, two Internet

marketplace websites and one social media platform operating under their seller identification
names which advertise, promote, offer for sale, and sell products bearing counterfeit and
infringing trademarks in violation of Plaintiff’s rights;
2.

There is good cause to believe that more counterfeit and infringing

products bearing Plaintiff’s trademarks will appear in the marketplace; that consumers are likely
to be misled, confused, or disappointed by the quality of these products; and that Plaintiff may
suffer loss of sales for its genuine products;
C.

The balance of potential harm to Defendants in restraining their trade in

counterfeit and infringing branded goods if a preliminary injunction is issued is far outweighed
by the potential harm to Plaintiff, its reputation, and goodwill as a manufacturer and distributor
of quality products, if such relief is not issued.
D.

The public interest favors issuance of the preliminary injunction in order to

protect Plaintiff’s trademark interests and protect the public from being defrauded by the
palming off of counterfeit goods as Plaintiff’s genuine goods.
E.

Under 15 U.S.C. § 1117(a), Plaintiff may be entitled to recover, as an equitable

remedy, the illegal profits gained through Defendants’ distribution and sales of goods bearing
counterfeits and infringements of the Michael Kors Marks. See Reebok Int’l, Ltd. v. Marnatech
Enters., Inc., 970 F.2d 552, 559 (9th Cir. 1992) (quoting Fuller Brush Prods. Co. v. Fuller Brush
Co., 299 F.2d 772, 777 (7th Cir. 1962) (“An accounting of profits under § 1117(a) is not
synonymous with an award of monetary damages: ‘[a]n accounting for profits . . . is an equitable
remedy subject to the principles of equity.’”)).
F.

Requesting equitable relief “invokes the district court’s inherent equitable powers

to order preliminary relief, including an asset freeze, in order to assure the availability of
permanent relief.” Levi Strauss & Co., 51 F.3d at 987 (11th Cir. 1995) (citing Federal Trade
Commission v. United States Oil and Gas Corp., 748 F.2d 1431, 1433-34 (11th Cir. 1984)).
G.

In light of the inherently deceptive nature of the counterfeiting business, and the

likelihood that Defendants have violated federal trademark laws, Plaintiff has good reason to

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believe Defendants will hide or transfer their ill-gotten assets beyond the jurisdiction of this
Court unless those assets are restrained.
IV.

CONCLUSION

For the foregoing reasons, it is ORDERED AND ADJUDGED that Plaintiff’s
Application for Preliminary Injunction (ECF No. 7) is GRANTED as follows:
(1)

Each Defendant, its officers, directors, employees, agents, subsidiaries,

distributors, and all persons in active concert or participation with any Defendant having notice
of this Order are hereby restrained and enjoined until further Order of this Court:
a. From manufacturing, importing, advertising, promoting, offering to sell,
selling, distributing, or transferring any products bearing the Michael Kors
Marks, or any confusingly similar trademarks, other than those actually
manufactured or distributed by Plaintiff; and
b. From secreting, concealing, destroying, selling off, transferring, or
otherwise disposing of: (i) any products, not manufactured or distributed
by Plaintiff, bearing the Michael Kors Marks, or any confusingly similar
trademarks; or (ii) any evidence relating to the manufacture, importation,
sale, offer for sale, distribution, or transfer of any products bearing the
Michael Kors Marks, or any confusingly similar trademarks.
(2)

Each Defendant, its officers, directors, employees, agents, subsidiaries,

distributors, and all persons in active concert or participation with any Defendant having notice
of this Order shall immediately discontinue, until further Order of this Court, the use of the
Michael Kors Marks or any confusingly similar trademarks, on or in connection with all Internet
based e-commerce stores operated or controlled by them under their Seller IDs;
(3)

Each Defendant, its officers, directors, employees, agents, subsidiaries,

distributors, and all persons in active concert or participation with any Defendant having notice
of this Order shall immediately discontinue, until further Order of this Court, the use of the
Michael Kors Marks, or any confusingly similar trademarks within metatags or other markers
within website source code, from use on any webpage (including as the title of any web page),
from any advertising links to other websites, from search engines’ databases or cache memory,
and any other form of use of such terms which is visible to a computer user or serves to direct
computer searches to Internet based e-commerce store businesses registered by, owned, or

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operated by each Defendant, including the e-commerce stores operating under their respective
Seller IDs;
(4)

Each Defendant shall not transfer ownership of the Internet based e-commerce

store businesses under their Seller IDs during the pendency of this Action, or until further Order
of the Court;
(5)

Each Defendant shall preserve, and continue to preserve, copies of all their

computer files relating to the use of any of the Internet based e-commerce store businesses under
their Seller IDs and shall take all steps necessary to retrieve computer files relating to the use of
the Internet based e-commerce stores under their Seller IDs that may have been deleted before
the entry of this Order;
(6)

Upon receipt of notice of this Order, PayPal, Inc. (“PayPal”)3 and its related

companies and affiliates shall, to the extent not already done, immediately restrain all funds, as
opposed to ongoing account activity, in or which hereafter are transmitted into the PayPal
accounts related to Defendants and associated payment accounts and e-mail addresses identified
on Schedule “A” hereto, as well as all funds in or which are transmitted into (i) any other related
accounts of the same customer(s), (ii) any other accounts which transfer funds into the same
financial institution account(s), and/or any of the other PayPal accounts subject to this Order; and
(iii) any other PayPal accounts tied to or used by any of the Seller IDs identified on Schedule
“A” hereto;
(7)

PayPal shall also immediately, to the extent not already done, divert to a holding

account for the trust of the Court all funds in all PayPal accounts related to Defendants and
associated payment accounts and e-mail addresses identified on Schedule “A” hereto, and any
other related accounts of the same customers as well as any other accounts which transfer funds
into the same financial institution account(s) as any of the other PayPal accounts subject to this
Order;
(8)

PayPal shall further, to the extent not already done, within five business days of

receiving this Order, provide Plaintiff’s counsel with all data which details (i) an accounting of
the total funds restrained and identifies the PayPal account(s) which the restrained funds are
related to, and (ii) the account transactions related to all funds transmitted into the PayPal
3

PayPal is licensed to do business in the State of Florida by the Florida Office of the Controller and is
therefore subject to personal jurisdiction in this Court. (See Declaration of Christine Ann Daley in Support of
Plaintiff’s Application for Preliminary Injunction ¶ 4.)

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account(s) which have been restrained. Such restraining of the funds and the disclosure of the
related financial institution account information shall be made without notice to the account
owners, until those accounts are restrained.

No funds restrained by this Order shall be

transferred or surrendered by PayPal for any purpose (other than pursuant to a chargeback made
pursuant to PayPal’s security interest in the funds) without the express authorization of the
Court;
(9)

This Order shall apply to the Seller IDs, associated e-commerce stores, and any

other Seller IDs, e-commerce stores, or PayPal accounts which are being used by Defendants for
the purpose of counterfeiting the Michael Kors Marks at issue in this action and/or unfairly
competing with Plaintiff;
(10)

PayPal or any Defendant or financial institution account holder may petition the

Court to modify the asset restraint set out in this Order;
(11)

Pursuant to 15 U.S.C. § 1116(d)(5)(D) and Federal Rule of Civil Procedure 65(c),

Plaintiff shall maintain its previously posted bond in the amount of Ten Thousand Dollars and
Zero Cents ($10,000.00), as payment of damages to which Defendants may be entitled for a
wrongful injunction or restraint, during the pendency of this action, or until further Order of the
Court. In the Court’s discretion, the bond may be subject to increase should an application be
made in the interest of justice;
(12)

This Preliminary Injunction shall remain in effect during the pendency of this

action, or until further Order of this Court.
DONE AND ORDERED in chambers, at Miami, Florida, this 2nd day of September
2015.

Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge
Counsel of Record
All Defendants via email

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SCHEDULE “A”
DEFENDANTS BY SELLER ID AND ASSOCIATED PAYPAL ACCOUNT
Defendant
Number
1
2
2
2
2
3
4
5
6
7
8
8
8
8
8
9
10
11
12

Defendant / Seller ID
Activejewelry
cabe2an
CropDistro
malungpar
selamet2
fanterbox
Roundsquare
watcheslondon
bonzuser_xxmqv
ulichkina
agen_x
customyourown
Karimata
MiraAccessories
moon_beam
ae43sh56
monkey-sh0p
gxf474274
acquistichic

PayPal Account
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]

9

SCHEDULE “B”
DEFENDANTS’ RESPECTIVE PAYPAL ACCOUNTS
Schedule “B-­‐1” -­‐ Kathleen Burns’ Investigation
Defendant Number Defendant / Seller ID
12

acquistichic

Defendant Type
Instagram, Inc.,
Seller ID

10

PayPal Account
[e-mail]

Schedule “B-­‐2” -­‐ Eric Rosaler’s Investigation
Defendant
Number

Defendant / Seller ID

1

Activejewelry

2

cabe2an

2

CropDistro

2

malungpar

2

selamet2

3

fanterbox

4

Roundsquare

5

watcheslondon

6

bonzuser_xxmqv

7

ulichkina

8

agen_x

8

customyourown

8

Karimata

8

MiraAccessories

8

moon_beam

9

ae43sh56

10

monkey-sh0p

11

gxf474274

Defendant Type

PayPal Account

Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID

[e-mail]

Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
Bonanza, Inc. Seller
ID
iOffer, Inc. Seller ID

[e-mail]

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[e-mail]

[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]