The McBride Organization LLC v. Phantom Athletics et al

Filing 23

ORDER DENYING 7 PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION. Signed by Judge Rosanna Malouf Peterson. (AY, Case Administrator)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF WASHINGTON

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THE MCBRIDE ORGANIZATION,
LLC, a Washington limited liability
company,
Plaintiff,

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NO: 2:17-CV-231-RMP
ORDER DENYING PLAINTIFF’S
MOTION FOR PRELIMINARY
INJUNCTION

v.
DOMINIQUE WENGER, an
individual; and PHANTOM
ATHLETICS, a foreign entity doing
business in the United States,

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Defendants.
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BEFORE THE COURT is Plaintiff’s motion for a preliminary injunction,

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ECF No. 7. On June 30, 2017, the Court heard oral argument, telephonically, on the

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motion from Laraine M. I. Burrell, appearing for Plaintiff, and David P. Gardner,

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appearing for Defendants. Defendant Dominique Wenger also listened to the

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argument by telephone from Austria. Having considered the parties’ filings and oral

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argument regarding Plaintiff’s motion, the remaining record, and the relevant law,

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ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY
INJUNCTION~1

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the Court denied Plaintiff’s motion at the conclusion of the hearing. This Order

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memorializes that oral ruling.

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Background

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Plaintiff sells a product described as Defendant Phantom Athletic’s

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(“Phantom’s”) Thin Line Training Mask (“PA Mask”), bearing Defendant

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Phantom’s marks, through Plaintiff’s own website and the Shopify platform on the

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internet. Plaintiff also advertises the PA Mask through Facebook and has set up a

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PayPal account to facilitate sales transactions for the mask. However, the parties

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dispute whether the masks Plaintiff is selling are manufactured by Phantom or are

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counterfeit.
Phantom is a company based in Salzburg, Austria, owned by Defendant

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Dominque Wenger. Plaintiff sells PA Masks that Plaintiff alleges are purchased

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from distributor AliExpress. Plaintiff alleges that Mr. Wenger recently has made

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various efforts to prevent Plaintiff from selling the PA Mask, including contacting

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Shopify, PayPal, and Facebook with complaints that Plaintiff is selling counterfeit

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products. See ECF No. 8 at 2-3.

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Plaintiff filed this action seeking: (1) a declaratory judgment of non-

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counterfeiting and non-infringement under 28 U.S.C. § 2201(a); (2) preliminary and

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permanent injunctive relief; and (3) damages based on a claim of federal unfair

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competition and false designation of origin and false and misleading representations

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under the Lanham Act, 15 U.S.C. § 1125(a), common law unfair competition,
ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY
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business disparagement, and intentional interference with prospective economic

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advantage. ECF No. 1. For purposes of the present motion, Plaintiff seeks to enjoin

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Defendants from pursuing “any complaints of trademark infringement and

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counterfeiting against the Plaintiff with entities in the United States pending

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resolution of this action[.]” ECF No. 18 at 4-5. Plaintiff also seeks a preliminary

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injunction to require non-parties Shopify, Paypal, and Facebook to “reinstate

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Plaintiff’s accounts pending the resolution of this action.” ECF No. 18 at 5.

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Discussion

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“[A] preliminary injunction is an extraordinary and drastic remedy, one that

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should not be granted unless the movant, by a clear showing, carries the burden of

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persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). To obtain a

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preliminary injunction, the moving party must demonstrate “that he is likely to

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succeed on the merits, that he is likely to suffer irreparable harm in the absence of

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preliminary relief, that the balance of equities tips in his favor, and that an injunction

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is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20

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(2008).

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Provided the Court considers all four parts of the Winter test, the Court may

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supplement its preliminary injunction by considering whether “the likelihood of

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success is such that ‘serious questions going to the merits were raised and the

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balance of hardships tips sharply in [plaintiff’s] favor.’” Alliance for the Wild

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Rockies v. Cottrell, 632 F.3d 1127, 1132 (9th Cir. 2011) (quoting Clear Channel
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Outdoor, Inc. v. City of L.A., 340 F.3d 810, 813 (9th Cir. 2003)). Otherwise stated,

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the “serious questions” consideration survives Winter, “so long as the plaintiff also

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shows that there is a likelihood of irreparable injury and that the injunction is in the

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public interest.” Alliance for the Wild Rockies, 632 F.3d at 1135.

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Plaintiff did not show a likelihood of any irreparable harm in the absence of a

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preliminary injunction. Although Plaintiff alleged that the PayPal account was

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closed as a harm, counsel reported at argument that the account is no longer

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disabled. There also were representations by Defendant, uncontested by Plaintiff,

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that Plaintiff’s Shopify and Facebook pages were functional again after access

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previously had been interrupted.
Plaintiff also did not demonstrate any significant or irreparable injury to date.

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Although counsel conceded that any losses would be quantifiable, counsel did not

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provide any evidence regarding Plaintiff’s exact losses to date due to Defendant’s

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alleged actions, or the proportion of Plaintiff’s overall sales that the PA Mask

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represents. Any future damages may be quantified and presented at trial, if in fact

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Plaintiff is successful on the merits.

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The Court further finds that substantial concerns undermine Plaintiff’s

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likelihood to succeed on the merits. Specifically, Plaintiff’s complaint and motion

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for preliminary injunction raise questions as to whether jurisdiction is appropriate,

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whether the appropriate party or parties have been named given the relief that

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ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY
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Plaintiff seeks, and whether Defendants actually are barred from asserting

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counterclaims, as Plaintiff asserts.

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Lastly, the Court considers whether the balance of equities tips in favor of

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Plaintiff and whether an injunction is in the public interest. At the outset of this

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litigation, Defendants argue that their trademark and business name is being diluted

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by Plaintiff’s selling products with Defendant Phantom’s name that are counterfeit.

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Conversely, Plaintiff argues that it is losing sales and potentially some reputation.

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With the limited information available to the Court at this moment, the evidence

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supports Defendants’ position and the equities tip toward Defendants rather than

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Plaintiff. Likewise, the public interest would not be well served by enjoining

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Defendants from asserting that the safety and/or exercise masks being sold by

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Plaintiff are not authentic products manufactured by Defendants.

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Accordingly, IT IS HEREBY ORDERED that:

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1. Plaintiff’s Motion for a Preliminary Injunction, ECF No. 7, is DENIED.

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2. The Court’s Courtroom Deputy will set an expedited scheduling

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conference.
The District Court Clerk is directed to enter this Order and provide copies to
counsel.
DATED July 3, 2017.
s/ Rosanna Malouf Peterson
ROSANNA MALOUF PETERSON
United States District Judge
ORDER DENYING PLAINTIFF’S MOTION FOR PRELIMINARY
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