La Michoacana Natural, LLC v. Maestre et al
Filing
30
ORDER Granting 22 Plaintiff's Motion for Preliminary Injunction. Signed by District Judge Robert J. Conrad, Jr on 6/1/2018. (Pro se litigant served by US Mail.)(jaw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:17-cv-00727-RJC-DCK
LA MICHOACANA NATURAL, LLC,
Plaintiff,
vs.
LUIS MAESTRE, an individual, d/b/a
LA MICHOACANA and/or LA LINDA
MICHOACANA; ADRIANA TERAN,
an individual, d/b/a LA MICHOACANA
and/or LA LINDA MICHOACANA; and
LA MICHOACANA, a business entity,
form unknown.
Defendants.
_______________________________________
ORDER
THIS MATTER is before the Court on Plaintiff’s Motion for Preliminary
Injunction. (Doc. No. 22). Upon consideration of the parties’ briefs and the evidence
presented in the record, the Court GRANTS the Plaintiff’s motion and preliminarily
enjoins the conduct of Defendants LUIS MAESTRE; ADRIANA TERAN (aka
ADRIANA MAESTRE); and LA LINDA MICHOACANA (“Defendants”) as set forth
in the following order.
SUMMARY OF THE FACTS
A. Procedural History
Plaintiff LA MICHOACANA NATURAL, LLC is a North Carolina limited
liability company, which since 2014 has owned and operated two ice cream parlors in
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Charlotte, North Carolina under the name LA MICHOACANA, who owns nine (9)
North Carolina Trademark registrations for the marks “LA MICHOACANA”, “La
MICHOACANA es… Natural” (and design)
and
(Indian girl doll
design) in connection with ice cream products, retail store services, and ice cream
parlor services respectively. Plaintiff is also the exclusive North Carolina licensee of
the Federally applied for marks, owned by its Mexican Licensor, namely
MICHOACANA”,
“La MICHOACANA Natural”
“LA
, as well as the
Federally registered trademarks, namely LA FLOR DE MICHOACAN and LA FLOR
DE MICHOACAN (and design)
(U.S. TM Cert. of Registrations Nos. 2830401
and 3249113.) Plaintiff is also the exclusive North Carolina user and licensee of a
derivative mark, namely
which was created by Plaintiff’s founder’s sister in
2014.
On December 19, 2017, Plaintiff filed its Complaint, (Doc. No. 1), against the
Defendants alleging the unlawful use of Plaintiff’s North Carolina Registered
trademarks as well as Plaintiff’s licensed trademarks and derivatives.
Plaintiff
asserted eight causes of action: (1) Trademark infringement under the Lanham Act;
(2) Unfair competition and False Designation of Origin under the Lanham Act; (3)
Federal Trademark Dilution under the Lanham Act; (4) Cybersquatting under the
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Lanham Act; (5) Infringement of Copyright under the Copyright Act; (6) Statutory
Trademark Infringement under North Carolina Gen. Stats. §80 et. seq.; (7) Unfair
and Deceptive Trade Practices under North Carolina Gen. Stats. §75 et. seq.; and (8)
Common law unfair competition and trademark infringement.
After receiving the First Amended Complaint, Defendants filed a Motion to
Dismiss pursuant to Rule 12(b)(2), (Doc. No. 7), to which Plaintiff’s filed a
Memorandum in Opposition (Doc. No. 8). Defendants then filed a Reply. (Doc. No. 9).
This Court issued an Order to Show Cause on March 19, 2018.
(Doc. No. 11).
Defendants thereafter filed a Response to the Court’s Order, (Doc. No. 16), refiled
their Motion to Dismiss pursuant to Rule 12(b)(2), (Doc. No. 13), and Defendants’
counsel filed a Motion to Withdraw, (Doc. No. 15). On April 23, 2018, Plaintiff filed
its preliminary injunction against Defendants, (Doc. No. 22). On June 1, 2018, a
hearing was held. Defendants Luis Maestre and Andriana Teran appeared pro se.
No counsel appeared to represent Defendant La Michoacana.
Based on the new acts and recent conduct of Defendants as well as newly
discovered evidence as is detailed in the Declaration of Stephen L. Anderson (Doc.
No. 22-1), Plaintiff LA MICHOACANA NATURAL, LLC has moved for a Preliminary
Injunction (Doc. No. 22) to preserve the status quo and to restrain Defendants from
selling
or
transferring
the
www.lamichoacanapaleteria.com,
to
allegedly
restrain
infringing
Defendants
domain
from
offering
name
and
distributing software applications via the World Wide Web, and to stop Defendants
from unlawfully copying, infringing and using Plaintiff’s Registered North Carolina
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Marks, namely, “LA MICHOACANA”, “La MICHOACANA es… Natural”
,
, its Licensor’s Federally Registered marks LA FLOR DE MICHOACAN and
as well as its longstanding Federally applied-for Marks, namely
MICHOACANA”, “La MICHOACANA Natural”
derivatives, namely
“LA
, and closely related
, and/or any other colorable simulation or mark which is
likely to cause consumer confusion or deception therewith.
CONCLUSIONS OF LAW
A preliminary injunction is an extraordinary remedy, the primary function of
which is to protect the status quo and to prevent irreparable harm during the
pendency of a lawsuit. In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 525 (4th
Cir. 2003). Courts evaluating a request for a preliminary injunction “must balance
the competing claims of injury and must consider the effect on each party of the
granting or withholding such request.” Amoco Prod. Co. v. Vill. of Gambell, Alaska,
480 U.S. 531, 542 (1987). A plaintiff seeking a preliminary injunction must establish
the following four elements: (1) it is likely to succeed on the merits; (2) it is likely to
suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities
tips in its favor; and (4) an injunction is in the public interest. Winter v. Natural Res.
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Def. Council, Inc., 555 U.S. 7, 20 (2008). In this case, all four elements have been
established by Plaintiff.
A. Plaintiff is likely to succeed on the merits.
To prevail on a trademark infringement claim, the plaintiff must show that it
owns a valid and protectable mark, that the defendants used a “re-production,
counterfeit, copy, or colorable imitation” of that mark in commerce without the
plaintiff’s consent, and that use of the mark is likely to cause confusion. Swatch AG
v. Beehive Wholesale, LLC, 739 F.3d 150, 158 (4th Cir. 2014). This Court finds that
Plaintiff is likely to prove that its Marks are valid and protectable. Plaintiff’s North
Carolina Registrations (N.C. Registration Nos. T-22395 to T-22403) are prima facie
evidence of the validity of their North Carolina Marks, ownership by the registrant,
and proper registration under the Lanham Act. Rebel Debutante LLC v. Forsythe
Cosmetic Grp., Ltd., 799 F. Supp. 2d 558, 569 (M.D.N.C. 2011). Defendants bear the
burden of overcoming this presumption of validity, and they have not done so. This
Court concludes that Plaintiff is likely to establish the first element of its claim,
ownership of a valid and protectable trademark.
This Court finds that Plaintiff is also likely to establish the second element of its
infringement claim. A visual comparison of the Marks at issue in this case shows that
Defendants have used identical and colorable simulations of Plaintiff’s Marks in
various forms, including in and on their ice cream parlor stores and products, on their
websites, and in their downloadable software applications which Defendants are
distributing worldwide in several different languages.
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This Court also finds that Plaintiff has shown that it is likely to prove a likelihood
of confusion. In determining the likelihood of confusion, courts in the Fourth Circuit
apply the Pizzeria Uno/Sara Lee multi-factor test, which evaluates: (1) “the strength
or distinctiveness of the mark;” (2) “the similarity of the two marks;” (3) “the
similarity of the goods/services the marks identify;” (4) “the similarity of the facilities
the two parties use in their businesses;” (5) “the similarity of advertising used by the
two parties;” (6) “the defendant's intent;” (7) “actual confusion;” “(8) the quality of the
defendant's product; and (9) the sophistication of the consuming public.” Pizzeria Uno
Corp. v. Temple, 747 F.2d 1522, 1527 (4th Cir. 1984) (setting forth factors one through
seven); Sara Lee Corp v. Kayser-Roth Corp., 81 F.3d 455, 463–64 (4th Cir. 1996)
(identifying factors eight and nine). Based on the record evidence, this Court finds
that the first seven factors and the ninth factor weigh in favor of Plaintiff. The eighth
factor is at least neutral; however, the factors are not of equal importance, nor are
they all relevant in every case. Id. Notably, at this time the important second, third,
and fourth factors weigh in favor of Plaintiff. The marks are highly similar, contain
the same commercial connotation and they are associated with identical goods and
services—ice cream and ice cream parlors. The parties also use identical facilities in
their business: both Plaintiff’s and Defendants’ products are sold in retail ice cream
parlors. Given the weight of these factors and the pre-discovery status of this case,
the Court finds that consumer confusion is likely.
Plaintiff has also asserted that the Defendants are in violation of the
Cyberpiracy Prevention provisions of the Lanham Act.
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Plaintiff has submitted
evidence showing that Defendant Luis Maestre, doing business as “maid express”,
claimed to be residing in a Post Office Box in North Carolina while according to
Defendants’ own submissions to this Court, he has been out of the Country, living in
Colombia, South America, since 2016. Plaintiff has also shown that after filing a
Motion in this action, Defendants recently concealed their ownership and
whereabouts and changed the registrant contact data for the domain name
lamichoacanapaleteria.com to “private” and has designated a private domain
registration service as the Registrant of such domain name. Further, Plaintiff has
shown that Defendants have recently publicly listed the domain name (which is the
subject of the Fourth Cause of Action) as being offered for sale for the sum of $85,000,
and has also verbally threatened to sell such infringing domain name to a “man in
Panama for $40,000”. (Decl. of Stephen L. Anderson, Doc. 22-1).
B. Plaintiff is likely to suffer irreparable harm without an injunction.
In a Lanham Act trademark infringement case in the Fourth Circuit, “a
presumption of irreparable injury is generally applied once the plaintiff has
demonstrated likelihood of confusion, the key element in an infringement case.”
Scotts Co. v. United Indus. Corp., 315 F.3d 264, 273 (4th Cir. 2002); see also Rebel
Debutante LLC v. Forsythe Cosmetic Grp., Ltd., 799 F. Supp. 2d 558, 579-80
(M.D.N.C. 2011) (noting that this “commonly-applied presumption” has not been
altered by the Supreme Court’s holding in eBay Inc. v. MercExchange, L.L.C., 547
U.S. 388 (2006)). In this case, the Plaintiff and its predecessors in-interest have been
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using the mark in Mexico, since approximately 1942, in Florida since 1999 and in
North Carolina since 2014.
Each of the parties utilizes internet websites, and Facebook pages to promote
their businesses and each of the parties’ ice cream stores located in the same general
proximity.
The Court concludes from the record evidence and testimony that the consumer
confusion that is likely to result from Defendants’ use of the LA MICHOCANA marks
at issue would cause irreparable harm, especially because it would be very difficult
to quantify. Moreover, Defendants’ cyber activity, its apparent intent in adopting a
similar mark as was used previously by Plaintiff in this State, and Defendants acts
of offering and distributing an infringing software application worldwide is further
likely to cause Plaintiff irreparable harm for which monetary damages would not
suffice.
B. The balance of equities tips in Plaintiff’s favor.
Courts considering preliminary injunctions must balance the immediate and
irreparable harm to the plaintiff against any harm to the defendant. Meineke Car Care
Centers, Inc. v. Catton, 3:10-CV-000234-RLV-DSC, 2010 WL 2572875 (W.D.N.C.
June 24, 2010). The record evidence and testimony demonstrate that Plaintiff’s
Marks have been in use throughout Mexico since the 1940s, in as many as 18 ice
cream stores in Florida since 1999 and at two stores in Charlotte, North Carolina
since 2014.
On the other hand, Defendants have not presented any evidence that
they would suffer cognizable harm that would counterbalance the likely irreparable
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harm to Plaintiff’s goodwill and its revenue from its longstanding LA MICHOACANA
Marks; therefore, the Court finds that the equities weigh in favor of Plaintiff.
D. A preliminary injunction would serve the public interest.
Trademarks exist to protect the public from “being misled as to the identity of
the enterprise from which goods and services are obtained.” AMP Inc. v. Foy, 540 F.2d
1181, 1185–86 (4th Cir. 1976). Preventing trademarks from being used deceptively
protects the public and serves the public interest. Toolchex, v. Trainor, 634 F. Supp.
2d 586, 594 (E.D. Va. 2008) (citing Bowe Bell & Howell Co. v. Harris, 145 F. App’x
401, 404 (4th Cir. 2005) (unpublished) (affirming a grant of a preliminary
injunction)). In addition, protecting the interests of trademark owners serves the
public interest. Toolchex, 634 F. Supp. 2d at 594 (citing NaturaLawn of Am., Inc. v.
W. Group, LLC, 484 F.Supp.2d 392, 404 (D. Md. 2007)).
Granting an injunction serves the public interest because enjoining
Defendants’ use of Plaintiff’s LA MICHOACANA and the Indian girl doll designs in
connection with ice cream goods and services, both online and in physical stores, will
protect the public from confusion, lessen the likelihood of deception and temporarily
protect Plaintiff’s ownership interest in its Marks.
Finding that all four elements necessary for a preliminary injunction are
established, the Court turns to the question of a bond. The Federal Rules of Civil
Procedure state that a “court may issue a preliminary injunction … only if the movant
gives security in an amount that the court considers proper to pay the costs and
damages sustained by any party found to have been wrongfully enjoined or
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restrained.” Fed. R. Civ. P. 65(c). The amount of bond is within the Court’s discretion.
Pashby v. Delia, 709 F.3d 307, 332 (4th Cir. 2013); Hoechst Diafoil Co. v. Nan Ya
Plastics Corp., 174 F.3d 411 (4th Cir. 1999).
This Court determines that an appropriate bond amount is ten thousand
dollars ($10,000).
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Preliminary
Injunction, (Doc. No. 22), is GRANTED and the Court hereby preliminarily enjoins
all Defendants, their directors, officers, agents, servants, employees and attorneys,
and all others in active concert or participation with them, from:
1. engaging either directly or indirectly in any activity involving the
marketing, advertising, promotion, or selling of any goods or services in
connection with Plaintiff’s North Carolina Marks (N.C. Registration Nos.
T-22395 to T-22403), applied for Federal Marks (U.S. Application Serial
Nos. 78/954,490 and 85/405,347), and/or any colorable simulation,
designation or mark which is likely to be confused therewith until the final
disposition of the above-captioned matter. Defendants shall have at least
10 days after entry of this Order to remove, or cause to be removed, all
signage, menus, brochures, decals, uniforms, logos, product packaging, cups
and tableware, products, display material, marketing and advertising
materials and the like, and any other publically displayed materials that
were previously put into commerce that bear Plaintiff’s LA MICHOACANA
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Marks or any colorable simulation or confusingly similar marks and shall
cause the same to be destroyed.
2. using, distributing, selling, offering, providing or displaying any software
applications which feature, contain or display any of Plaintiff’s trademarks
and/or any other colorable simulation or mark which is likely to be confused
therewith or otherwise engaging in any unfair or deceptive trade practices
or misappropriation of Plaintiff’s trademarks and goodwill by, among other
things, using or displaying any of the aforementioned trademarks,
websites, software applications and images until the final disposition of the
above-captioned matter; and
3. transferring, selling, moving, hypothecating or and/or offering for sale, the
Internet domain name and further
ordering that the domain name www.lamichoacanapaleteria.com be locked
and may not be sold or transferred to anyone other than the Plaintiff until
the final disposition of the above-captioned matter.
Signed: June 1, 2018
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