Mitchell Group USA, LLC et al v. Udeh et al

Filing 9

ORDER GRANTING PRELIMINARY INJUNCTION AND OTHER RELIEF -- For the reasons set forth in the ATTACHED WRITTEN ORDER FOR CONSENT PRELIMINARY INJUNCTION, EXPEDITED DISCOVERY, TO UNSEAL THE ACTION AND USE OF SEIZED BUSINESS RECORDS IN FURTHERANCE OF THE A CTION, Plaintiffs' request for a preliminary injunction, expedited discovery, use of seized business records, and to unseal this case is GRANTED. This matter is referred to the magistrate judge to set an expedited initial conference and discover y schedule. Plaintiffs are directed to serve a copy of this Electronic Order on pro se defendants within five days of the date of this Order and immediately thereafter file proof of such service via ECF. The Clerk of the Court is directed to unseal this case. SO ORDERED by Judge Dora Lizette Irizarry on 10/7/2014. (Irizarry, Dora)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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MITCHELL GROUP USA LLC; and GAPARDIS
:
HEALTH AND BEAUTY, INC.,
:
:
Plaintiffs,
:
:
-against:
:
NKEM UDEH, individually and d/b/a “BEAUTY
:
RESOURCE”, JOHN DOES 1-10; and UNKNOWN
:
ENTITIES 1-10,
:
:
Defendants.
:
:
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DORA L. IRIZARRY, United States District Judge:

14-cv-5745 (DLI) (JO)

ORDER FOR CONSENT PRELIMINARY INJUNCTION, EXPEDITED
DISCOVERY, TO UNSEAL THE ACTION AND USE SEIZED BUSINESS
RECORDS IN FURTHERANCE OF THE ACTION
On October 1, 2014, the Court granted the ex parte request of Mitchell Group
USA LLC and Gapardis Health and Beauty, Inc. (collectively, “Plaintiffs”) for a
temporary restraining order, expedited discovery to be scheduled by a magistrate judge,
and an order of seizure of inventory and assorted business records, upon Plaintiffs’ sworn
allegations that Defendants were unlawfully infringing upon their trademark rights by
selling counterfeit goods and other products bearing Plaintiffs’ trademarks. The October
1 Order also directed Defendants to show cause at a hearing to be held before the Court
on October 7, 2014, why a preliminary injunction should not issue and why the Court
should not grant Plaintiffs the additional relief they requested.
On October 4, 2014, Plaintiffs executed the Order of Seizure of Inventory and
Business Records. On October 7, 2014, Plaintiffs filed with the Court, inter alia, an
inventory of the items seized pursuant to said seizure order.

On October 7, 2014, the Court held a hearing, at which Plaintiffs’ counsel
appeared and Defendant Nkem Udeh appeared pro se.

No counsel appeared for

Defendant Beauty Resource. At this hearing, Defendant Udeh consented to the entry of
Plaintiffs’ requested preliminary injunction.
Having duly considered the arguments and authority presented by Plaintiffs in
their moving papers and all other subsequent filings pertaining to this matter, Plaintiffs’
motion for a preliminary injunction, expedited discovery, use of seized business records,
and to unseal this case is GRANTED.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Trademark infringement is defined as follows:
“Any Person who shall, without the consent of the registrant use in commerce
any reproduction, counterfeit, copy or colorable imitation of a registered mark in
connection with the sale, offering for sale, distribution, or advertising of any
goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive: or reproduce, counterfeit, copy, or
colorably imitate a registered mark and apply such reproduction, counterfeit,
copy, or colorable imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods
or services on or in connection with which such use is likely to cause confusion,
or to cause mistake, or to deceive, shall be liable in a civil action by the
registrant for the remedies hereinafter provided.”

15 U.S.C. §1114 (1)(a).
The test for determining whether a mark is a counterfeit is essentially the same as
whether a suspect mark infringes a registered mark. See Chauvin International Ltd. v.
Goldwitz, 832 F. Supp. 35 (D. Conn. 1993). The standard for determining whether a
suspect mark infringes a registered mark is whether “numerous ordinary prudent
purchasers are likely to be misled or confused as to the source of the product in question

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because of the entrance in the marketplace of defendant’s mark.” Playtex Prods. v.
Georgia-Pacific Corp., 390 F.3d 158, 161 (2d Cir. 2004). In order to determine whether
a likelihood of confusion exists, courts in the Second Circuit apply the eight factor test set
forth in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961).
Playtex Prods., 390 F.3d at 162. These factors include: (1) the strength of the plaintiff’s
mark; (2) the similarity of the parties’ marks; (3) the proximity of the parties’ products in
the marketplace; (4) the likelihood that the plaintiff will “bridge the gap” between the
products; (5) actual consumer confusion between the two marks; (6) the defendant’s
intent in adopting its mark; (7) the quality of the defendant’s product; and (8) the
sophistication of the relevant consumer group. Id. Where items are counterfeit, however,
“the Court need not undertake a factor-by-factor analysis under Polaroid because
counterfeits, by their very nature, cause confusion.”

Gucci Am., Inc. v. DutyFree

Apparel, Ltd., 286 F. Supp. 2d 284, 287 (S.D.N.Y. 2003). The Lanham Act defines
“counterfeit” as “a spurious mark which is identical with, or substantially
indistinguishable from, a registered mark.” 15 U.S.C. § 1127.
To obtain a preliminary injunction in a trademark case a movant must
demonstrate a likelihood of success on the merits, and that: (1) they are likely to suffer
irreparable injury in the absence of an injunction; (2) remedies at law, such as monetary
damages, are inadequate to compensate plaintiffs for that injury; (3) the balance of
hardships tips in plaintiffs’ favor; and (4) the public interest would not be disserved by
the issuance of a preliminary injunction. See Salinger v. Colting, 607 F.3d 68, 80 (2d
Cir. 2010) (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006)).

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Plaintiffs presented sworn allegations of facts, supplemented by photographs,
demonstrating that their investigator, Bradford Cole, visited Defendants’ store and
purchased unauthorized counterfeit products bearing the Plaintiffs’ registered trademarks.
Following entry of the temporary restraining order (“TRO”) on October 1, 2014,
Plaintiffs, along with the U.S. Marshals Service, conducted seizures and served
Defendants Nkem Udeh and Beauty Resource with the Complaint, TRO, Motion for Ex
Parte Order, and supporting documents.
The following counterfeit goods were recovered:
Product

Quantity

Lemonvate Cream 30 gram

22

Neoprosone Body Lotion 500 mL

1

Neoprosone Gel 30 gram

40

Based on the findings following the seizure at the Defendants’ location, as well as
Plaintiffs’ Complaint, Memorandum of Law in Support of the TRO under 15 U.S.C. §
1116 and supporting declarations, the Court finds that there is a substantial likelihood of
success on the merits.
Although irreparable harm may not be presumed upon a showing of a likelihood
of success, see eBay, 547 U.S. at 393; Salinger, 607 F.3d at 80, “[i]rreparable harm exists
in a trademark case when the party seeking the injunction shows that it will lose control
over the reputation of its trademark . . . because loss of control over one's reputation is
neither ‘calculable nor precisely compensable.’” U.S. Polo Ass’n, Inc. v. PRL USA
Holdings, Inc., 800 F. Supp. 2d 515, 540 (S.D.N.Y. 2011). Further, it has been

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recognized that counterfeiting specifically may also lead to irreparable harm. “Injecting
the market with counterfeit products will not only result in lost sales, but will impair
plaintiffs’ reputation achieved through considerable time and effort. This type of harm
cannot be redressed by monetary damages available at law.” N. Atl. Operating Co. v.
Evergreen Distributors, LLC, 2013 WL 5603602 (E.D.N.Y. Sept. 27, 2013) report and
recommendation adopted, 2013 WL 5603596 (E.D.N.Y. Oct. 11, 2013).
The Court finds that there is irreparable injury to the Plaintiffs because
Defendants have engaged in the act of selling goods bearing marks that are almost
identical to Plaintiffs’ marks, but not identical in composition or in warnings to
consumers.

Thus, Defendants’ acts of selling these goods causes a likelihood of

confusion and harm to Plaintiffs and the goodwill and reputation built in their trademarks.
Such damage is neither precisely measurable, nor compensable.
The balance of hardships in the case also favors Plaintiffs. In weighing the
hardships, hardship to a defendant based on his or her own wrongful acts is not legally
cognizable.

Philip Morris USA Inc. v. 5 Bros. Grocery Corp., 2014 WL 3887515

(E.D.N.Y. Aug. 5, 2014) (“Absent an injunction, there will be further erosion of
plaintiff's good will and reputation. Defendants, on the other hand, will be called upon to
do no more than refrain from what they have no right to do in the first place.”) Here, the
potential harm to the Defendants in restraining their trade in counterfeit products is
outweighed by the potential harm to Plaintiffs’ reputation and goodwill.
The public interest also favors a preliminary injunction to protect Plaintiffs’
registered trademarks and to protect the public from being misled by the Defendants’ sale
of counterfeit and gray market goods. “Trademark laws exist to protect the public from

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confusion.” Hermes Int'l v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104, 107–08 (2d
Cir. 2000). “[T]he public has an interest in not being deceived-in being assured that the
mark it associates with a product is not attached to goods of unknown origin and quality.”
New York City Triathlon v. NYC Triathlon Club, Inc., 704 F. Supp. 2d 305 (S.D.N.Y.
2010). The public interest would not be disserved by enjoining Defendants’ sale of
unauthorized and counterfeit versions of Plaintiffs’ products.
Based on the foregoing findings of fact, conclusions of law, and Defendant
Udeh’s consent,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1) Pursuant to 15 U.S.C. §1116, the Defendants, Nkem Udeh and Beauty
Resource, (collectively, “Defendants”) their agents, employees, affiliates, and any
business entities and/or persons controlled directly or indirectly by them or acting on
their behalf or in concert with them, are hereby enjoined and restrained from using on or
in connection with the importation, sale, offering for sale, and distribution the
NEOPROSONE and LEMONVATE Marks, the typestyle utilized by Plaintiffs in
association with the NEOPROSONE and LEMONVATE Marks or any other trademarks
or trade dress in combination with other words or symbols, or any other marks or
symbols which are confusingly or deceptively similar to, or colorably imitative of
Plaintiffs’ trademarks

and trade dress, specifically the NEOPROSONE and

LEMONVATE Marks, as shown in U.S. Registration Nos.:
3,108,357 (NEOPROSONE)
3,457,390 (LEMONVATE)
distinctive designs, and packaging;
2) Pursuant to 15 U.S.C. §1125, 28 U.S.C. § 1651, and under the Court’s

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equitable powers under Fed. R. Civ. P. 65, the Defendants, their agents, employees,
affiliates, and any business entities and/or persons controlled directly or indirectly by
them or acting on their behalf or in concert with them, are hereby enjoined and restrained
from using on or in connection with the importation, sale, offering for sale, and
distribution the FAIR & WHITE and PARIS FAIR & WHITE Marks, the typestyle
utilized by Plaintiffs in association with the FAIR & WHITE and PARIS FAIR &
WHITE Marks or any other trademarks or trade dress in combination with other words or
symbols, or any other marks or symbols which are confusingly or deceptively similar to,
or colorably imitative of Plaintiffs’ trademarks and trade dress, specifically the FAIR &
WHITE and PARIS FAIR & WHITE marks, as shown in U.S. Registration Nos.:
2,839,374 (FAIR & WHITE)
2,497,918 (PARIS FAIR & WHITE)

distinctive designs, and packaging;
3) Defendants, their agents, employees, affiliates, and any business entities and/or
persons controlled directly or indirectly by them or acting on their behalf or in concert
with them, are hereby enjoined and restrained from destroying, altering, removing or
secreting any books and records, including but not limited to invoices, purchase orders,
receipts, banking records, safe deposit box records, shipping labels, or tax returns,
including all records stored on computer discs or tapes or within computer terminals, hard
drives, servers or otherwise, which contain any information whatsoever concerning the
business or finances of any of the Defendants related to or otherwise reflecting
transactions of any kind involving counterfeit, imitation, infringing, or other goods
bearing Plaintiffs’ NEOPROSONE, LEMONVATE, FAIR & WHITE, and PARIS FAIR

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& WHITE marks, distinctive designs and packaging;
4) If, after this Order is served on them, Defendants or any of their agents,
employees or others controlled by them or acting on their behalf or in concert with them,
obtain the possession or presently are in the possession, custody or control of any
additional quantity of the above-described items (e.g., counterfeit or imitation or
materially different goods, business records, or computerized information), they will
immediately notify the Plaintiffs’ attorneys, and retain without sale or destruction, or
other harm or transfer, such items until further Order of this Court; and
5) Upon Plaintiffs’ application and pursuant to 15 U.S.C. § 1116(d)(8), the Clerk
of the Court is directed to unseal the case.
Pursuant to 15 U.S.C. § 1116(d)(7), the Plaintiffs may use the records seized
pursuant to this Court’s October 1, 2014 Seizure Order in furtherance of the action,
except insofar as they might colorably be claimed to be confidential, private, proprietary,
or privileged. The accepted records are to be presented to the Court for appropriate
rulings.
SO ORDERED.
DATED: Brooklyn, New York
October 7, 2014
____________/s/_____________
DORA L. IRIZARRY
United States District Judge

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