NORTHEASTERN LUMBER MANUFACTURERS ASSOCIATION v. SKY OF NEW YORK CORPORATION et al

Filing 7

OPINION. Signed by Judge John Michael Vazquez on 12/29/16. (rg, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

NORTHEASTERN LUMBER
MANUFACTURERS ASSOCIATION,

Civ. Action No. 16-9487

Plaintiff,
V.

SKY OF NEW YORK CORP., and TONG-IN
INTERNATIONAL USA INC.
Defendants.

OPINION

John Michael Vazguez. U.S.D.J.
I.

INTRODUCTION

This matter comes before the Court on Plaintiff Northeastern Lumber Manufacturers
Association’s (“NeLMA” or “Plaintiff’) motion seeking a temporary restraining order (“TRO”)
and a preliminary injunction hearing schedule. On December 29, 2016, the Court held a hearing
to address Plaintiffs requested relief. Defendants were not present at the hearing and have not
made an appearance on the record.’ For the reasons that follow, the Court grants the TRO and
will set a briefing schedule for a preliminary injunction hearing.
II.

BACKGROUND
a. Facts2

Defendant Sky of New York Corporation was served with notice of the hearing and motion at
9:49a.m. on December28, 2016. D.E. 6.
2

The facts are taken from Plaintiffs Complaint and supporting documents.

NeLMA is a corporation offering “certification and inspection services to facilities that
produce wood packaging materials (such as boxes, crates, skids. pallets) used to export goods” to
other countries. Complaint (“Compl.) at j 14 (D.E. 1). In connection with its services, NeLMA
uses two registered trademarks as a “stamp” on wood packaging to certify that the wood meets
certain international packaging standards. Id. at

¶

6, 21, 22. The NeLMA stamp indicates that

the wood packaging came from a NeLMA approved and inspected facility, and comports with a
wood-treatment procedure known as ISPM 15. Id. at

¶flJ

16, 20-22. ISPM 15 is a procedure that

reduces the phytosanitaiy concerns related to global trade and the significant spread of pests
through wood packaging materials. Id. at

¶

16.

On or about May 13, 2010, Defendant Tong-IN International USA Inc. (“Tong-IN”)
entered into an agreement with NeLMA permitting Tong-IN to use the NeLMA mark in
connection with Tong-IN’s wood packaging and freight forwarding business. Id. at

¶ 26.

Tong-

IN was issued two certification stamps bearing the NeLMA mark and facility identification
number 091156. Id. at

¶

28. The parties’ agreement stated that the NeLMA mark was to be

applied only to wood packaging that complied with ISPM 15 and only at the facility to which the
mark was assigned. Id. at

¶ 29.

On March 6, 2012, a NeLMA inspector went to the Tong-IN facility and discovered that
it was padlocked with all of its contents removed. Id at

¶

37. On multiple occasions, NeLMA

attempted to contact Tong-IN, but Tong-In could not be reached or located. Id. at
Tong-In did not return the NeLMA certification stamps. Id. at
licensing agreement with Tong-In in 2012. Id. at

¶

¶IJ

39-41.

41. NeLMA terminated its

¶ 42.

The fill name of ISPM 15 is the International Standard for Phytosanitarv Measures
Guidelines for Regulating Wood Packaging Material in International Trade, Publication Number
15. Compl. at ¶ 15. That procedure was developed by the International Plant Protection
Convention. Id.
--

On December 7, 2016, while inspecting the facility of another NeLMA licensee, a
NeLMA inspector discovered two newly constructed boxes that had been stamped with the
NeLMA mark and the Tong-1N facility identification number. Id. at

¶ 43.

Through its licensee,

NeLMA learned that Defendant Sky of New York Corporation (“Sky of NY”) had made the
boxes and applied the NeLMA stamp, which was subsequently confirmed by Sky of NY. Id. at

111 47-49.
On December 13, 2016. a NeLMA inspector traveled to the Sky of NY facility and
observed the Tong-I[N identification number and NeLMA mark being used to stamp certain
boxes. Id. at

¶

50. The NeLMA inspector photographed and seized the boxes bearing the mark.

Declaration of Frederick Gladfelter (“Gladfelter Dec.”) (D.E. 1-2).

Neither Sky of NY nor

Tong-In was authorized at that time to use the NeLMA certification stamp and trademark.
Compl. at 9951-52.
b. Procedural History
On December 27, 2016, Plaintiff filed a complaint and a motion seeking an cx pane
seizure order, temporary restraints, and a preliminary injunction hearing schedule alleging,
among other things, that Defendants infringed on its NeLMA trademark. D.E. 1. That same day,
the Court held an exparte hearing with Plaintiffs counsel. The Court denied the exparre order
of seizure because, as of December 13, 2016, Sky of NY was aware that NeLMA photographed
and seized the stamped boxes. Instead, the Court issued an Order which required Plaintiff to
“serve Defendants with th[e] order as well as all documents previously filed with the Court in
connection with Plaintiffs motion” as well as file proof of service. D.E. 4. The Court also
ordered counsel for both parties to appear on December 29, 2016 for a hearing regarding
Plaintiffs application for temporary restraints. Id. On December 28, 2016, Plaintiff served Sky

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of NY. D.E. 6. On December 29, 2016, Plaintiff appeared for the TRO hearing, but Defendants
did not.
III.

LEGAL STANDARD AND ANALYSIS

According to Federal Rule of Civil Procedure 65(b), a court may issue a temporary
restraining order when “there is a possibility that irreparable injury will occur before the hearing
on a preliminary injunction required by Rule 65(a) can be held.” Int’l Foodsource, LLC
Grower Direct Mit Co.. No. 16-3140. 2016 WL 4150748, at *6 (D.N.J. Aug. 3. 2016) (quoting
Trefelner cx ref. Trefelner

i’.

Burrell School Dist., 655 F. Supp. 2d 581, 588 (W.D. Pu. 2009)).

“The grant or denial of a temporary restraining order or a preliminary injunction is within the
discretion of the Court” Fed ½ of State Massage Therapy Boards v. Acad. of Oriental Therapy,
LLC, No. 13-06317, 2013 WL 5888094, at *1 (D.N.J. Oct. 28, 2013) (citing American Exp.
Travel Related Services, Inc. v. Sidamon—Eristoff 669 F.3d 359, 366 (3d Cir.20 12)).
“The standard used to evaluate whether the issuance of a temporary restraining order is
warranted is the same as that used to evaluate whether the issuance of a preliminary injunction is
appropriate.” Intl Foodsource, 2016 WL 4150748, at *6 (internal quotation marks omitted).
That standard requires that a party show: “(I) a likelihood of success on the merits; (2) that it
will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will
not result in even greater harm to the nonmoving party; and (4) that the public interest favors
such relief.” Kos Pharm., Inc. v. Andrx Cot p., 369 F.3d 700, 708 (3d Cir. 2004).
In order to show a likelihood of success on the merits of Plaintiffs trademark
counterfeiting claim, it “must demonstrate that the “(1) defendants infringed a registered
trademark in violation of the Lanham Act, 15 U.S.C.

11 14(1)(a), and that (2) the alleged

infringer intentionally used the trademark with knowledge of its counterfeit nature, or remained

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willfully blind to the product’s counterfeit nature.” Chanel, Inc.

1’.

Matos, 133 F. Supp. 3d 678,

685-86 (D.N.J. 2015) (internal quotation marks omitted). Plaintiff has satisfied the first factor,
likelihood of success on the merits, by presenting competent evidence that its NeLMA marks are
trademarked and were improperly used by Sky of NY.
As to irreparable harm, the Third Circuit originally held that in trademark infringement
actions, irreparable injury is presumed. Kos Phann., Inc. v. Andix Corp., 369 F.3d 700, 726 (3d
Cir. 2004) (“Trademark infringement amounts to irreparable injury as a matter of law.”). Since
that decision, the United States Supreme Court held that in patent cases, irreparable harm is not
presumed when there has been a showing of likelihood of success on the merits. eBay Inc. v.
McrcExchange, L.L.C., 547 U.S. 388, 392-93 (2006). After eBav, the Third Circuit concluded
“that there is no presumption of irreparable harm afforded to parties seeking injunctive relief in
Lanham Act cases.” Ferring Pliar,;,., Inc. v. Watson Pharm., Inc., 765 F.3d 205, 216 (3d Cir.
2014); see also

BUZZ

Bee Toys, Inc. v Swimways Coip., 20 F. Supp. 3d 483, 511-12 (D.N.J.

2014) (“[Ajfter eBav, irreparable harm must be established as a separate element, regardless of
whether a plaintiff has shown infringement.”). Here, Plaintiff has adequately demonstrated that
Defendants’ continued unauthorized use of its mark vil1 cause irreparable harm by damaging its
reputation and causing a loss of goodwill. See FerringPharni., 765 F.3d at 212 n.6.
In balancing the harms to the parties, the Court finds that this factor favors Plaintiff. Sky
of NY is not harmed by being precluded from using a trademark that it had no right to use in the
first place. Additionally, Sky of NY is not hanried because it is not prohibited from engaging in
business as long as it does not use NeLMA’s mark.

Plaintiff, on the other hand, would be

harmed by Defendants continued unauthorized use of its trademark.

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Finally, the public interest weighs in favor of Plaintiff because it benefits the public when
valid trademarks are respected and not counterfeited.
IV.

CONCLUSION

For those reasons, Plaintiffs motion for a temporary restraining order is granted.

An

appropriate order accompanies this opinion. A second order will set forth a hearing schedule
regarding Plaintiffs request for a preliminary injunction.

Dated: December29, 2016

,,7
John Michael Vazquez,

6

S..