JIVE Commerce v. Wine Racks America et al

Filing 44

MEMORANDUM DECISION denying 13 Motion for Preliminary Injunction. It is further ORDERED that the hearing set for 8/21/2018 is STRICKEN. Signed by Judge Ted Stewart on 8/15/18. (jlw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
JIVE COMMERCE, LLC D/B/A VINO
GROTTO, a Utah limited liability company,

MEMORANDUM DECISION AND
ORDER DENYING PLAINTIFF’S
VERIFIED MOTION FOR
PRELIMINARY INJUNCTION

Plaintiff,
v.
WINE RACKS AMERICA, INC. D/B/A
PREMIER WINE CELLARS, a Utah
corporation; and JEFFREY OGZEWALLA,
an individual,

Case No. 1:18-CV-49 TS-BCW
District Judge Ted Stewart

Defendants.

This matter is before the Court on Plaintiff’s Verified Motion for Preliminary Injunction.
After reviewing the materials, the Court has concluded that a hearing on the Motion is not
necessary. For the reasons discussed below, the Court will deny the Motion.
I. BACKGROUND
Plaintiff JIVE Commerce, LLC d/b/a Vino Grotto (“Plaintiff” or “Vino Grotto”) and
Defendant Wine Racks America, Inc. (“WRA”) d/b/a Premier Wine Cellars (“Premier”) are
competitors in the wine rack and wine cellar industry. Plaintiff’s principal, Jason Miller, was
formerly employed by WRA. After a falling out with WRA’s owner, Defendant Jeffery
Ogzewalla, Mr. Miller founded Vino Grotto.
Plaintiff alleges that Defendants have taken a variety of actions to harm its business.
Specifically, Plaintiff alleges that Defendants have used Plaintiff’s Vino Grotto and Home
Collector Series marks in cost-per-click advertisements on Google and other search engines to
redirect consumers to Defendants’ websites. Plaintiff further alleges that Defendants have

1

created a website that copies content, images, trade dress, and look and feel from Plaintiff’s
website. Plaintiff also alleges that Defendants have contacted Plaintiff’s vendors in an attempt to
persuade those vendors not to work with Plaintiff and, in the course of so doing, have made
defamatory comments about Plaintiff and its principal, Mr. Miller. In addition, Plaintiff asserts
that Defendants have posted false and deceptive positive reviews on the Internet, which Plaintiff
contends was done to increase Defendants’ market share and dilute the effect of negative
reviews. Plaintiff also claims that Defendants have forged photographs and address information
on their website to create the illusion of legitimacy and to hide the geographic origin of their
goods.
Plaintiff brings a variety of claims, including claims for unfair competition under the
Lanham Act, common law unfair competition, unfair competition under Utah law, trade libel,
defamation, common law trademark infringement, false advertising in violation of the Lanham
Act, a claim for corrective advertising damages, and tortious interference with economic
relations. 1 Plaintiff now seeks a preliminary injunction.
II. DISCUSSION
To obtain a preliminary injunction, the moving party must demonstrate: “(1) a likelihood
of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the
absence of preliminary relief; (3) that the balance of equities tips in the movant’s favor; and (4)

1

Plaintiff has agreed to the dismissal of its Eleventh Cause of Action. See Docket No.

41.

2

that the injunction is in the public interest.” 2 “A preliminary injunction is an extraordinary
remedy; it is the exception rather than the rule.” 3
A.

LIKELIHOOD OF SUCCESS ON THE MERITS
Plaintiff argues that it has shown a likelihood of success on the following claims: Lanham

Act unfair competition, Utah Unfair Competition Act, tortious interference with economic
relations, and common law trademark infringement. The Court will discuss each claim in turn.
1.

Unfair Competition
a.

False Advertising

Plaintiff seeks injunctive relief under its Lanham Act claim for unfair competition
(Section 43 of the Lanham Act, 15 U.S.C. § 1125(a)). Section 43 of the Lanham Act provides:
Any person who, on or in connection with any goods or services . . . uses in
commerce any . . . false or misleading description of fact, or false or misleading
representation of fact, which-...
(B) in commercial advertising or promotion, misrepresents the nature,
characteristics, qualities, or geographic origin of his or her or another person’s
goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is
likely to be damaged by such act. 4
In order to prevail on a false advertising claim under § 43 of the Lanham Act, Plaintiff
must demonstrate: “(1) that defendant made material false or misleading representations of fact
in connection with the commercial advertising or promotion of its product; (2) in commerce; (3)
that are either likely to cause confusion or mistake as to (a) the origin, association or approval of

2

RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009).

3

GTE Corp. v. Williams, 731 F.2d 676, 678 (10th Cir. 1984).

4

15 U.S.C. § 1125(a)(1).

3

the product with or by another, or (b) the characteristics of the goods or services; and (4) injure
the plaintiff.” 5
Plaintiff complains that Defendants have: (1) posted numerous forged reviews of their
brand and products online; (2) marketed their products using Plaintiff’s marks; (3)
misrepresented the geographic origin of their goods; (4) attempted to bribe vendors to keep
Plaintiff out of the market and threatened to cut off business with vendors who do business with
Plaintiff; and (5) copied images, text, look-and-feel, and descriptions from Plaintiff’s website.
Plaintiff’s second and fourth claims are addressed in relation to Plaintiff’s trademark
infringement and tortious interference claims. Thus, the Court turns to Plaintiff’s complaints
related to the alleged forged reviews, misrepresentation of geographic origin, and copied
website.
i.

Consumer Reviews

The alleged forged reviews take two forms. The first type of reviews are reviews from
Defendants’ employees that are complimentary of Defendants and its products. Plaintiff has
provided evidence demonstrating that Defendants’ employees have left various online reviews.
Plaintiff contends that these reviews contain false representations. However, as will be
discussed, the Court has no information that would suggest the reviews are actionable under the
Lanham Act.
Plaintiff provided a review from Jeremy Lesher, a WRA employee, which states that he
was looking for a wine rack that would fit under his kitchen counter and that he “found the 24

5

Cottrell, Ltd. v. Biotrol Int’l, Inc., 191 F.3d 1248, 1252 (10th Cir. 1999) (internal
citations omitted).

4

bottle table top wine rack fit neatly in that space, arrived quickly, and was very sturdy.” 6
Plaintiff has provided no information to suggest that this statement is untrue. Even if he is a
WRA employee, Mr. Lesher very well could have obtained a wine rack from WRA that fit his
specific needs and was of high quality. Other reviews contain no substantive statements or
simply indicate that WRA is a “great” company that provides “great” wine racks and “top quality
products.” Such statements constitute sales puffery and are not actionable under the Lanham
Act. 7 The only statements of fact contained in these reviews is that WRA is a Utah company and
that the racks it sells are made in the United States. Based upon the information provided to the
Court, both statements appear to be true.
The second type of reviews are reviews for WRA that have been changed into reviews
for Premier, which is a d/b/a of WRA. Plaintiff has not demonstrated any false statements in
these reviews, but complains they are deceptive because they were originally written about one
company (WRA) and now appear to be written for another (Premier). However, WRA is doing
business as Premier. In all actuality, the two companies are one and the same. Thus, it seems to
make no difference who the review was initially written for. Moreover, Plaintiff has failed to
demonstrate any injury as a result of these reviews. For example, there is no evidence that a
particular customer chose to purchase Defendants’ products over Plaintiff’s based on the
existence of these altered reviews. Plaintiff alleges, generally, that Defendants have used these

6

Docket No. 9 Ex. J.

7

Intermountain Stroke Ctr., Inc. v. Intermountain Health Care, Inc., 638 F. App’x 778,
789 (10th Cir. 2016) (holding that a company’s “general declarations concerning best practices
and high-quality care to be merely sales puffery that cannot form the basis of a Lanham Act
claim”).

5

reviews to increase its market share at Plaintiff’s expense and to dilute the effect of legitimate
negative reviews. However, there is no evidence to support this allegation.
ii.

Geographic Origin

Plaintiff also argues that Defendants have made false statements concerning the
geographic origin of their goods and services. On Premier’s website, Defendants list Premiere’s
mailing address as being in Bend, Oregon. Defendants also list a Utah address for returns. In
the “About Us” section of the website, Defendants display a picture of a building. The building
is one that is owned by Defendant Ogzewalla and is located in Utah, not Bend, Oregon. The
actual building has signage stating “Wine Racks America.” However, on the Premier website,
the image of the building has been altered, changing the signage from “Wine Racks America” to
“Premier Wine Cellars.” Plaintiff argues that Defendants are falsely representing that they are an
Oregon company doing business out of Bend.
In response, Mr. Ogzewalla represents that he maintains an office and employees at the
Oregon address listed on Premier’s website. He further states that he owns the building pictured
on Premier’s website and changed the signage on Premier’s website because Premier is a d/b/a of
Wine Racks America.
Based upon the evidence presented, the Court finds that Plaintiff has failed to
demonstrate a likelihood of success on the merits of its false designation of origin claim.
Defendants are not attempting to convince consumers that their products are made in Oregon
when they actually come from Utah. Rather, Defendants have a presence in both states, with
WRA being operated in Utah and its d/b/a Premier operating in Oregon and partially Utah.

6

While there is no building in Oregon, as depicted on the Premier website, which is potentially
deceiving, Plaintiff has failed to demonstrate any injury as a result of the altered image.
iii.

Copied Website

Finally, Plaintiff complains that Defendants have copied images, text, and the overall
look-and-feel from Plaintiff’s website. In response, Defendants argue that any similarity
between the website is because Plaintiff copied its content from Defendants.
Neither party has provided the Court with the information necessary to resolve this
dispute. Plaintiff provides screenshots of both websites, but there is no information from which
the Court can determine which website had what content first. Moreover, with minimal
exceptions, the websites are not substantially similar. The similarities that do exist between the
websites are to be expected from companies that sell similar products and market them in similar
ways. Thus, Plaintiff has failed to demonstrate a likelihood of success as to the websites
generally. As to the one picture identified as being on both websites (a cellar design),
Defendants state that they have not used that image since 2015. 8 Thus, even assuming Plaintiff
had demonstrated a likelihood of success on the merits of this claim, there is no need for
injunctive relief.
b.

Trademark Infringement

“Trademark infringement is a type of unfair competition.” 9 To prevail on its claim,
Plaintiff must show: (1) that its mark is protectable; (2) that Defendant used the trademark “in

8

Docket No. 38 Ex. 1 ¶ 72.

9

Utah Lighthouse Ministry v. Found. for Apologetic Info. & Research, 527 F.3d 1045,
1050 (10th Cir. 2008).

7

connection with any goods or services”; 10 and (3) that Defendants’ use “is likely to cause
confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of
such person with another person, or as to the origin, sponsorship, or approval of his or her goods,
services, or commercial activities by another person.” 11
i.

Protectable Interest

Here, Plaintiff argues that its Vino Grotto and Home Collector Series marks are
protectable. Plaintiff does not allege that it has registered these marks. Therefore, Plaintiff has
the burden to demonstrate they are protectable. 12 “To be protectable, ‘a mark must be capable of
distinguishing the products [or services] it marks from those of others.’” 13 “There are five
different categories of terms with respect to the protection of a mark: generic, descriptive,
suggestive, arbitrary, and fanciful.” 14
A mark is generic if it is a common description of products and refers to the genus
of which the particular product is a species. A mark is descriptive if it describes
the product’s features, qualities, or ingredients in ordinary language or describes
the use to which the product is put. A mark is suggestive if it merely suggests the
features of the product, requiring the purchaser to use imagination, thought, and
perception to reach a conclusion as to the nature of the goods. An arbitrary mark
applies a common word in an unfamiliar way. A fanciful mark is not a real word
at all, but is invented for its use as a mark. 15

10

15 U.S.C. § 1125(a)(1).

11

Id. § 1125(a)(1)(A).

12

Donchez v. Coors Brewing Co., 392 F.3d 1211, 1216 (10th Cir. 2004).

13

Id. (quoting Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 344
(2d Cir. 1999)).
14

Id. (quoting Lane Capital Mgmt., Inc., 192 F.3d at 334).

15

Lane Capital Mgmt., Inc., 192 F.3d at 344.

8

If a term is generic, it is ineligible for protection. 16 “A descriptive mark may be eligible
for protection, but only if it has acquired a ‘secondary meaning’ in the minds of the public.” 17
“Fanciful (made-up words expressly coined to serve as trade or service marks), arbitrary
(common words applied in unfamiliar ways), and suggestive marks (words that connote, rather
than describe, some quality or characteristic of a product or service) are inherently distinctive,
and thus receive the greatest protection against infringement.” 18
Plaintiff presents no evidence or argument as to which category its marks fall under other
than a brief statement in a footnote that its marks are not generic or descriptive. 19 Using the
definitions set forth above, the Court concludes that Plaintiff’s marks are either descriptive or
suggestive. “The determination whether a mark is descriptive or suggestive is difficult, and we
have endorsed a helpful test for distinguishing between the two categories: suggestive terms
‘require the buyer to use thought, imagination, or perception to connect the mark with the
goods,’ whereas descriptive terms ‘directly convey to the buyer the ingredients, qualities, or
characteristics of the product.’” 20
With this distinction, it appears that Vino Grotto is suggestive. Vino is a word for wine
and grotto is a word for cave or cavern. A buyer would have to use thought, imagination, or
perception to connect this phrase with wine cellars or wine racks. Thus, Vino Grotto is subject

16

Donchez, 392 F.3d at 1216.

17

Id. (quotation marks omitted).

18

Id. (quotation marks omitted).

19

Docket No. 13, at 23 n.2 (“Neither of these marks are generic, descriptive or
geographically descriptive.”).
20

Hornady Mfg. Co., Inc. v. Doubletap, Inc., 746 F.3d 995, 1007 (10th Cir. 2014)
(quoting Water Pik, Inc. v. Med-Sys., Inc., 726 F.3d 1136, 1152–53 (10th Cir. 2013)).

9

to protection. Home Collector Series, however, is merely descriptive. It directly conveys to the
buyer the qualities and characteristics of the product: a series of racks designed for home
collectors of wine. As a result, it is only subject to protection if it has taken on secondary
meaning.
“Secondary meaning exists only if most consumers have come to think of the word as not
descriptive at all but as the name of the product [or service].” 21 Plaintiff may “establish
secondary meaning . . . by presenting circumstantial evidence regarding: (1) the length and
manner of its use, (2) the nature and extent of advertising and promotion of the mark and (3) the
efforts made in the direction of promoting a conscious connection, in the public’s mind, between
the name or mark and a particular product or venture.” 22
Here, Plaintiff alleges that its marks have established secondary meaning “given the
nature and extent of advertising as well as member and public recognition.” 23 However, there is
no evidence to support this allegation. Without such evidence, Plaintiff has failed to
demonstrate, at this juncture, that its Home Collector Series is protectable.
ii.

Likelihood of Confusion

Assuming both marks are protectable and Defendants are using them in commerce,
Plaintiff must demonstrate that there is a likelihood of confusion. The Tenth Circuit has
identified six nonexhaustive factors to consider whether there is a likelihood of confusion:
(1) the degree of similarity between the competing marks; (2) the intent of the
alleged infringer in adopting the contested mark; (3) evidence of actual confusion;
(4) the similarity of the parties’ products and the manner in which the parties
21

Donchez, 392 F.3d at 1218 (quotation marks omitted).

22

Id. (quotation marks omitted).

23

Docket No. 9 ¶ 52.

10

market them; (5) the degree of care that consumers are likely to exercise in
purchasing the parties’ products; and (6) the strength of the contesting mark. 24
“No one of the six factors is dispositive.” 25 “The factors are interrelated, and the
‘importance of any particular factor in a specific case can depend on a variety of circumstances,
including the force of another factor.’” 26 “At all times, however, the key inquiry is whether the
consumer is likely to be deceived or confused by the similarity of the marks.” 27
Neither party addressed these factors in any meaningful way. To determine whether
there is a likelihood of confusion, it is helpful to distill the two different types of infringement
claims Plaintiff is making. The first type of claim relates to Defendants’ use of Plaintiff’s marks
in internet advertising, while the second type of claim relates to Defendants’ direct use of the
Home Collector series mark. The Court will address the likelihood of confusion relative to each
claim.
a.

Internet Advertising

As stated, the first type of infringement claim Plaintiff brings relates to Defendants’ use
of Plaintiff’s marks in internet advertising. Defendants admit that they use Plaintiff’s marks in
bidding for keyword advertising. Plaintiff argues that consumers searching for their products
will be confused into purchasing Defendants’ products because of Defendants’ use of Plaintiff’s
marks. This type of potential confusion is called initial interest confusion. “Initial interest

24

Hornady Mfg. Co., Inc., 746 F.3d at 1001 (citing Water Pik, Inc., 726 F.3d at 1143).

25

Id.

26

Id. (quoting Water Pik, Inc., 726 F.3d at 1143).

27

Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831, 833 (10th Cir. 2005) (internal
quotation marks omitted).

11

confusion results when a consumer seeks a particular trademark holder’s product and instead is
lured to the product of a competitor by the competitor’s use of the same or a similar mark.” 28
In 1-800 Contacts, Inc. v. Lens.com, Inc, 29 the Tenth Circuit addressed initial interest
confusion in a case where, as here, a competitor was using the plaintiff’s marks in its internet
advertising. There,
initial-interest confusion would arise as follows: a consumer enters a query for “1–
800 Contacts” on Google; sees a screen with an ad for Lens.com that is generated
because of Lens.com’s purchase of one of the nine Challenged Keywords; becomes
confused about whether Lens.com is the same source as, or is affiliated with, 1–
800; and therefore clicks on the Lens.com ad to view the site. Lens.com has
exploited its use of 1–800’s mark to lure the confused consumer to its website. 30
In that case, the Tenth Circuit warned against applying the likelihood of confusion factors
without attention to context. The court stated:
The specific issue before us is the likelihood that a consumer who conducts an
Internet search for 1–800 Contacts and then sees an ad for Lens.com on the results
page will be confused into thinking that Lens.com has a business association with
1–800. To begin with, even if consumers in general may not much care what
retailer supplies their contact lenses, the consumers relevant to this suit are looking
for a particular retailer. Presumably they have narrowed their search because they
have already selected 1–800 as the preferred retailer and are searching for its
website or perhaps commentary on its performance. Given the purpose of the
search, the shoppers will be attentive to click on those results that will connect them
with sites relating to 1–800. In addition, once the consumers see the results page,
the substantial dissimilarity between “1–800 Contacts” and “Lens.com” (or its
other websites) can be expected to greatly reduce the chance that the consumers
will think that the parties are related enterprises; the similarity of the search term
and 1–800’s mark is of minor relevance. 31

28

Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238 (10th Cir. 2006).

29

722 F.3d 1229 (10th Cir. 2013).

30

Id. at 1244.

31

Id. at 1244–45.

12

Because of these things, the court concluded that “the factors other than evidence of actual
confusion . . . firmly support the unlikelihood of confusion.” 32
A similar result is warranted here, at least in regard to Defendants’ use of Plaintiff’s Vino
Grotto mark. 33 A consumer using the search term Vino Grotto is unlikely to be confused by the
appearance of an advertisement for Defendants. As is demonstrated by Exhibit Q to the Motion,
a consumer will be able to easily distinguish between the advertisement placed by Defendants
and Plaintiff’s actual website. The advertisement is clearly marked as an ad, while Plaintiff’s
website is identified directly below the advertisement. Thus, while certain likelihood of
confusion factors would appear to support Plaintiff’s argument, its claim suffers from the same
deficiencies identified by the court in 1-800 Contacts.
Turning to the other factors, there is a complete lack of evidence of actual confusion.
Plaintiff alleges, without supporting evidence, that “[t]housands of customers have chosen not to
do business with Plaintiff,” 34 but have failed to provide evidence of even a single instance of
actual confusion. While evidence of actual confusion is “not necessary to prevail on a trademark
infringement claim, evidence of actual confusion in the marketplace may be the best indication
of likelihood of confusion.” 35 There is no such evidence here.

32

Id. at 1245.

33

A different conclusion can be reached as to the Home Collector Series because, as will
be discussed, Defendants sold products under that mark in addition to using that mark in internet
advertising. However, as stated above, Plaintiff has failed to demonstrate that its Home
Collector Series mark is protectable.
34

Docket No. 9 ¶ 65.

35

Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964, 974 (10th Cir. 2002).

13

As with the other factors, the parties have failed to present evidence or argument
concerning the degree of care customers exercise in purchasing their products. “A consumer
exercising a high degree of care in selecting a product reduces the likelihood of confusion.” 36
“[B]uyers typically exercise little care in the selection of inexpensive items that may be
purchased on impulse.” 37 “Accordingly, items purchased on impulse are more likely to be
confused than expensive items, which are typically chosen carefully.” 38 “The relevant inquiry
focuses on the consumer’s degree of care exercised at the time of purchase.” 39
The parties sell a variety of wine racks and cellars, ranging from fairly inexpensive wine
racks to customized wine cellars. While customers might not exercise a high degree of care in
purchasing a small wine rack for residential use, they are sure to exercise a high degree of care
when selecting a company to build a custom cellar. As a result, this factor appears relatively
neutral, though weighs slightly against a finding of likelihood of confusion.
The final factor is the strength of the marks. As discussed above, Plaintiff’s marks are
not terribly strong, especially its Home Collector Series mark. Plaintiff alleges that its marks
“have become famous, and the purchasing public, vendors and other entities have come to
recognize Plaintiff’s . . . common law marks as the distinctive identifier which they are.” 40 As
with the majority of Plaintiff’s claims, however, this claim is without evidentiary support.

36

Id. at 975.

37

Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 926 (10th Cir. 1986) (internal
quotation marks omitted).
38

Sally Beauty Co., Inc., 304 F.3d at 975.

39

Id.

40

Docket No. 9 ¶ 54.

14

Therefore, this factor weighs against a finding of confusion. As a result, Plaintiff has failed to
show a likelihood of success on its trademark infringement claim as it relates to Defendants’ use
of Plaintiff’s marks in its advertising.
ii.

Direct Use

The second type of claim relates to the direct use of Plaintiff’s marks. Defendants admit
that they sold a line of products under the Home Collector Series mark during a time in which,
they contend, Plaintiff was not using the mark. With regard to this claim, the first, second, and
fourth factors support a finding of likelihood of confusion. Plaintiff asserts that Defendants are
using the Home Collector Series mark to describe similar products and are doing so in an effort
to benefit from the reputation and good will of Plaintiff. Further, the parties sell similar products
and market them in similar ways. Thus, these factors appear to weigh in Plaintiff’s favor.
However, there is no evidence on the other factors—actual confusion, degree of care, and
strength of the mark. Moreover, Defendants state that they have ceased using this mark.
Therefore, even if Plaintiff could demonstrate a likelihood of success on the merits of this claim,
injunctive relief is unnecessary.
2.

Utah Unfair Competition Act

The Utah Unfair Competition Act provides a private right of action to a person injured by
unfair competition. 41 Unfair competition is defined as
an intentional business act or practice that:
(i)(A) is unlawful, unfair, or fraudulent; and
(B) leads to a material diminution in value of intellectual property; and
(ii) is one of the following:
(A) malicious cyber activity;
41

Utah Code Ann. § 13-5a-103(1)(a).

15

(B) infringement of a patent, trademark, or trade name;
(C) a software license violation; or
(D) predatory hiring practices. 42
Plaintiff argues that Defendants have engaged in malicious cyber activity. Malicious
cyber activity means:
(a) the unlawful use of computing resources to intimidate or coerce others;
(b) accessing a computer without authorization or exceeding authorized access;
(c) willfully communicating, delivering, or causing the transmission of a program,
information, code, or command without authorization or exceeding authorized
access; and
(d) intentionally or recklessly:
(i) intends to defraud or materially cause damage or disruption to any computing
resources or to the owner of any computing resources; or
(ii) intends to materially cause damage or disruption to any computing resources
indirectly through another party’s computing resources. 43
Plaintiff does not acknowledge or address the specific definition of cyber activity
contained in the statute. Rather, Plaintiff simply states that “[m]ost of Defendants’ actions took
place online with an intent to deceive.” 44 The mere fact that Defendants engaged in online
activity is not sufficient to show malicious cyber activity. The statute provides a specific
definition of what conduct constitutes malicious cyber activity. From the information provided
to the Court, there appears to be no evidence that Defendants have engaged in malicious cyber
activity as defined by the statute. Therefore, Plaintiff has failed to demonstrate a likelihood of
success on this claim.

42

Id. § 13-5a-102(4)(a).

43

Id. § 13-5a-102(3).

44

Docket No. 13, at 19.

16

3.

Tortious Interference with Economic Relations

“In order to win a tortious interference claim under Utah law, a plaintiff must now prove
‘(1) that the defendant intentionally interfered with the plaintiff’s existing or potential economic
relations, (2) . . . by improper means, (3) causing injury to the plaintiff.’” 45 The “requirement of
improper means is satisfied where the means used to interfere with a party’s economic relations
are contrary to law, such as violations of statutes, regulations, or recognized common-law
rules.” 46 “Commonly included among improper means are violence, threats or other
intimidation, deceit or misrepresentation, bribery, unfounded litigation, defamation, or
disparaging falsehood.” 47 However, “merely persuading another company to withdraw its
business from a competitor is not, without more, an improper means under Utah law.” 48
Here, Plaintiff complains that Defendants attempted to force vendors to lock Plaintiff out
of the market. Plaintiff asserts that Defendant Ogzewalla contacted seven vendors, insisting they
stop doing business with Plaintiff while also making defamatory comments about Plaintiff and
its principals. The allegations and evidence with respect to each vendor are discussed below.
a.

WhisperKool

Plaintiff states that Ogzewalla contacted WhisperKool and demanded WhisperKool cease
doing business with Plaintiff. Unlike some of the other vendors, Plaintiff does not allege that

45

Eldridge v. Johndrow, 345 P.3d 553, 565 (Utah 2015) (quoting Leigh Furniture &
Carpet Co. v. Isom, 657 P.2d 293, 304 (Utah 1982)). In Eldridge, the Utah Supreme Court
“disavow[ed] all dicta . . . that would allow liability based solely on an improper purpose.” Id.
46

Leigh Furniture & Carpet Co., 657 P.2d at 308.

47

Id. (quoting Top Serv. Body Shop, Inc. v. Allstate Ins. Co., 582 P.2d 1365, 1371 n.11
(Ore. 1978)).
48

SCO Grp., Inc. v. Int’l Bus. Machines Corp., 879 F.3d 1062, 1084 (10th Cir. 2018).

17

Defendants made any misrepresentations or defamatory statements to WhisperKool. Thus,
Plaintiff has failed to show improper means. Additionally, it appears that, despite Defendants’
alleged actions, WhisperKool did act as a vendor for Plaintiff. As a result, Plaintiff has failed to
establish injury.
b.

Creekside Manufacturing

Plaintiff next states that Ogzewalla contacted Creekside Manufacturing and demanded
that they cease doing business with Plaintiff. Plaintiff further asserts Ogzewalla made
defamatory comments about Plaintiff while doing so.
In response, Defendants have provided the Declaration of Wayne Bailey, the President of
Creekside. 49 Mr. Bailey states that Mr. Ogzewalla contacted him, stating that WRA wanted to
do business with Creekside, but did not want to buy from Creekside if Creekside was supplying
to Vino Grotto. Mr. Bailey was reluctant to cut ties with Vino Grotto and refused Mr.
Ogzewalla’s offer to pay off the Vino Grotto receivable. Vino Grotto and Creekside continued
to do business together. Mr. Ogzewalla later contacted Mr. Bailey in July 2017, seeking to buy
products from Creekside. By this time, Vino Grotto had stopped listing Creekside’s products on
its website and Creekside stopped supplying product to Vino Grotto. Thereafter, Creekside
began supplying products to WRA.
Based upon this, Plaintiff has failed to demonstrate that Defendants interfered with
Plaintiff’s relationship with Creekside, that they did so using improper means, or that Plaintiff

49

Plaintiff objects to the declarations submitted by Defendants. Those objections are
without merit.

18

suffered any injury. Rather, according to the Declaration of Mr. Bailey, Creekside stopped
supplying to Plaintiff because Plaintiff stopped listing Creekside’s products on their website.
c.

VintageView

Plaintiff states that Ogzewalla contacted VintageView and demanded VintageView cease
doing business with Plaintiff. In doing so, Plaintiff alleges that Ogzewalla made false and
defamatory statements about Plaintiff. Plaintiff has failed to demonstrate that Defendants
interfered with their relationship with VintageView and has failed to show any injury. Plaintiff
does not assert that VintageView ceased doing business with Plaintiff. Instead, there are
numerous references in the materials suggesting that Plaintiff has and continues to sell
VintageView products. 50
d.

IWA Wine Accessories

Plaintiff states that Ogzewalla contacted IWA Wine Accessories (“IWA”) and demanded
IWA cease doing business with Plaintiff. In doing so, Plaintiff alleges that Ogzewalla made
false and defamatory statements about Plaintiff and its principal.
Defendants have provided the Declaration of Benjamin Argov, the President of IWA.
Mr. Argov states that IWA ceased doing business with a company related to Plaintiff, Walker
Wine Cellars, based on misrepresentations Walker allegedly made while purchasing products
from IWA. Mr. Argov stated that the decision was made independent of Mr. Ogzewalla’s
request that IWA not work with Vino Grotto. Further, beginning in March 2018, IWA agreed to

50

See Docket No. 13 Exs. N, P, Q.

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supply to Vino Grotto despite continuing to sell products to WRA. Based upon this, Plaintiff has
failed to show a likelihood of success as to its claim with respect to IWA.
e.

Freightwire

Plaintiff states that Ogzewalla contacted Freightwire and demanded Freightwire cease
doing business with Plaintiff. In doing so, Plaintiff alleges that Ogzewalla made false and
defamatory statements about Plaintiff.
Defendants have provided the Declaration of Jared Dabling, Vice President of National
Sales at Freightwire. That Declaration states that it was contact from Plaintiff, through Mr.
Miller, that prompted Freightwire to not do business with Plaintiff. After Mr. Miller broke away
from WRA, he contacted Mr. Dabling and requested shipping services at the same discounted
rates it charged to WRA. Mr. Dabling was uncomfortable with the proposal and talked to his
bosses about it. It was agreed that Freightwire would not work with Mr. Miller or Vino Grotto.
Later, after Freightwire made its decision, Mr. Dabling contacted Mr. Ogzewalla about the
situation. Mr. Dabling stated that Mr. Ogzewalla did not ask him to refrain from doing business
with Plaintiff, but that he did not have to because the decision had already been made.
Based upon this, Plaintiff has failed to show that Defendants interfered with their
relationship with Freightwire. Freightwire made an independent decision not to work with
Plaintiff.
f.

Wine Guardian

Plaintiff next states that Ogzewalla contacted Wine Guardian and demanded Wine
Guardian cease doing business with Plaintiff. In doing so, Plaintiff alleges that Ogzewalla made
false and defamatory statements about Plaintiff.

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In response, Defendants have provided the Declaration of Michael Milti, Division
Manager at Wine Guardian. Mr. Milti states that while Mr. Ogzewalla did contact him to request
that he not do business with Vino Grotto, Mr. Milti did not make a commitment either way.
Wine Guardian continued to sell products to Vino Grotto in 2017 and 2018. However, because
there was not adequate support for their products, Wine Guardian made the decision to
discontinue its business with Vino Grotto. Mr. Milti states that this decision had nothing to do
with Ogzewalla’s request. Based upon this, Plaintiff has failed to demonstrate that Defendants
interfered with their relationship with Wine Guardian or that it suffered any injury.
g.

Iron Wine Cellars

Finally, Plaintiff asserts that Ogzewalla contacted Iron Wine Cellars and made
defamatory comments about Plaintiff. However, Plaintiff does not state whether they suffered
any injury. Specifically, there is no information as to whether Iron Wine Cellars refused to act as
a supplier for Plaintiff based on Defendants’ conduct. Without such evidence, Plaintiff has failed
to demonstrate a likelihood of success on this claim.
Based upon all of the above, the Court finds that Plaintiff has failed to demonstrate a
likelihood of success as to its tortious interference claim.
4.

Common Law Trademark Infringement

“The elements of common law trademark . . . infringement are similar to those required
to prove unfair competition under § 43(a) of the Lanham Act.” 51 “[A] plaintiff must establish a
protectable interest in its mark, the defendant’s use of that mark in commerce, and the likelihood

51

Donchez, 392 F.3d at 1219.

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of consumer confusion.” 52 For substantially the same reasons set forth above, Plaintiff has failed
to demonstrate a likelihood of success as to this claim.
B.

IRREPERABLE HARM
To be entitled to a preliminary injunction, Plaintiff must establish irreparable harm absent

the issuance of an injunction. “Because a showing of probable irreparable harm is the single
most important prerequisite for the issuance of a preliminary injunction, the moving party must
first demonstrate that such injury is likely before the other requirements for the issuance of an
injunction will be considered.” 53 The “irreparable harm requirement is met if a plaintiff
demonstrates a significant risk that he or she will experience harm that cannot be compensated
after the fact by monetary damages.” 54 This is “not an easy burden to fulfill.” 55
“Purely speculative harm will not suffice.” 56 The Supreme Court has explained that
“[i]ssuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent
with our characterization of injunctive relief as an extraordinary remedy that may only be
awarded upon a clear showing that the plaintiff is entitled to such relief.” 57 As a result, a

52

Id.

53

Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1260 (10th
Cir. 2004) (quotation marks omitted).
54

Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250, 1258 (10th Cir. 2003)
(internal quotation marks omitted).
55

Id.

56

RoDa Drilling Co., 552 F.3d at 1210.

57

Winter v. Nat’l Res. Defense Council, Inc., 555 U.S. 7, 22 (2008).

22

“conclusory affidavit is not enough to demonstrate irreparable harm.” 58 “Courts require more
than unsupported factual conclusions to support such a finding.” 59
Plaintiff argues that it has shown irreparable harm because “Defendants’ conduct has
eroded and threatens to further erode Plaintiff’s customer and vendor goodwill.” 60 Plaintiff
further argues that Defendants’ “actions threaten to further diminish the competitive value of
Plaintiff’s products in ways that could be difficult to measure.” 61 “Should Defendants persist in
these actions, there is a substantial risk to Plaintiff of lost future profits, damage to its reputation,
and loss of goodwill and loss of competitive market position.” 62
While such things may constitute irreparable harm, Plaintiff has failed to provide any
evidence to suggest that it has suffered any harm, let alone irreparable harm, as a result of
Defendants’ conduct. Nor has Plaintiff adequately demonstrated that a preliminary injunction is
necessary to avoid any future harm. Plaintiff’s conclusory statements, devoid of any factual
support, are insufficient to demonstrate irreparable harm. Therefore, even if Plaintiff could
demonstrate a likelihood of success on the merits, an injunction is not warranted for this reason
alone.

58

Voile Mfg. Corp. v. Dandurand, 551 F. Supp. 2d 1301, 1307 (D. Utah 2008).

59

Id; see also Dominion Video Satellite, Inc., 356 F.3d at 1261 (“The statement is wholly
conclusory and, standing alone, would not justify the issuance of a preliminary injunction.”).
60

Docket No. 13, at 24.

61

Id.

62

Id. at 25.

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C.

REMAINING FACTORS
Because Plaintiff’s Motion fails on the first two factors, the Court need not consider the

remaining factors.
III. CONCLUSION
It is therefore
ORDERED that Plaintiff’s Verified Motion for Preliminary Injunction (Docket No. 13) is
DENIED. It is further
ORDERED that the hearing set for August 21, 2018, is STRICKEN.
DATED this 15th day of August, 2018.
BY THE COURT:

Ted Stewart
United States District Judge

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