CreeLED, Inc. v. Individuals, Partnerships, and Unincorporated Associations identified on Schedule A, No. 1:2023cv20163 - Document 23 (S.D. Fla. 2023)
Court Description: ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION. The Clerk is directed to UNSEAL all filings. By February 10, 2022, the Plaintiff must add all of the Defendants as parties through CM/ECF. Signed by Judge Beth Bloom on 2/6/2023. (pes)
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CreeLED, Inc. v. Individuals, Partnerships, and Unincorporated Associations identified on Schedule A Doc. 23 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. 23-cv-20163-BLOOM/Otazo-Reyes CREELED, INC., Plaintiff, v. INDIVIDUALS, PARTNERSHIPS, AND UNINCORPORATED ASSOCIATIONS IDENTIFIED ON SCHEDULE A, Defendants. ________________________________/ ORDER GRANTING PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION THIS CAUSE is before the Court upon Plaintiff’s Motion for Entry of Preliminary Injunction, ECF No. [6] (“Motion”). Plaintiff, CreeLED, Inc. (“CreeLED” or “Plaintiff”) moves, for entry of a preliminary injunction against the Defendants, Individuals, Partnerships, and Unincorporated Associations Identified on Schedule “A”, ECF No. [13], (collectively “Defendants”) and an order restraining the financial accounts used by Defendants pursuant to 15 U.S.C. § 1116, 17 U.S.C. § 502, Federal Rule of Civil Procedure 65, and The All Writs Act, 28 U.S.C. § 1651(a). The Court conducted a hearing on February 6, 2023, at which only counsel for Plaintiff appeared and presented evidence supporting the Motion. For the reasons set forth below, the Court grants Plaintiff’s Motion for Preliminary Injunction as to all Defendants. Dockets.Justia.com Case No. 23-cv-20163-BLOOM/Otazo-Reyes I. FACTUAL BACKGROUND 1 Plaintiff is the owner of the federally registered trademarks identified in Schedule B (“CreeLED Marks”) attached to the Declaration of David Marcellino (“Marcellino Decl.”), ECF No. [6-3], filed with the Motion. Plaintiff has expended substantial time, money, and other resources developing, advertising, and otherwise promoting the CreeLED Marks. Id. at ¶¶ 6-10, 16. CreeLED actively polices and enforces its trademarks. Id. at ¶¶ 11-14. CreeLED suffers irreparable harm to its goodwill, as well as a direct monetary loss, any time third parties, including Defendants, sell goods using identical or substantially similar unauthorized copies or derivatives of the CreeLED Marks. Id. at ¶ 18. Defendants do not have, nor have they ever had, the right or authority to use the CreeLED Marks for any purpose. See Id. at ¶ 11. Despite their known lack of authority to do so, Defendants are promoting and otherwise advertising, distributing, selling and/or offering for sale, through their respective Seller IDs, goods using the CreeLED Marks without authorization (“Defendants’ Goods”). Id.; see also Declaration of Javier Sobrado, ECF No. [6-4] at ¶ 4. Given Defendants’ blatant counterfeiting and infringement of the CreeLED Marks, Defendants’ Goods are indistinguishable to consumers, both at the point of sale and post-sale. Plaintiff is suffering irreparable harm and damage by the incalculable profit Defendants are deriving by using Plaintiff’s CreeLED Marks to drive consumers to the e-commerce stores and commercial websites operating under the Seller IDs. ECF No. [6-3] at ¶¶ 15-18. Plaintiff investigated the promotion and sale of counterfeit and infringing versions of 1 The factual background is taken from Plaintiff’s Amended Complaint, Motion, and supporting Declarations submitted by Plaintiff. 2 Case No. 23-cv-20163-BLOOM/Otazo-Reyes Plaintiff’s branded products by the Defendants. See Id. at ¶¶ 11-14. Plaintiff accessed each of the e-commerce stores operating under Defendants’ Seller IDs, initiated the ordering process for the purchase of a product from each of the Seller IDs, bearing counterfeit copies and infringements of Plaintiff’s CreeLED Marks, and requested each product to be shipped to an address in the Southern District of Florida. See id.; see also ECF No. [6-4] at ¶ 5. Plaintiff conducted a review and visually inspected the Defendants’ Goods and determined the products were nongenuine, unauthorized versions of Plaintiff’s products bearing the CreeLED Marks. See id. II. LEGAL STANDARD To obtain a preliminary injunction, a party must demonstrate “(1) a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered if the relief is not granted; (3) that the threatened injury outweighs the harm the relief would inflict on the nonmovant; and (4) that the entry of the relief would serve the public interest.” Schiavo ex. Rel Schindler v. Schiavo, 403 F.3d 1223, 1225–26 (11th Cir. 2005); see also Levi Strauss & Co. v. Sunrise Int’l. Trading Inc., 51 F.3d 982, 985 (11th Cir. 1995) (applying the test to a preliminary injunction in a Lanham Act case). III. CONCLUSIONS OF LAW The declarations Plaintiff submitted in support of its Motion for Preliminary Injunction support the following conclusions of law: A. Plaintiff has a strong probability of proving at trial that consumers are likely to be confused by Defendants’ advertisement, promotion, sale, offer for sale, or distribution of goods bearing and/or using counterfeits and infringements of the CreeLED Marks. B. Because of the infringement of the CreeLED Marks, Plaintiff is likely to suffer immediate and irreparable injury if a preliminary injunction is not granted. The following specific 3 Case No. 23-cv-20163-BLOOM/Otazo-Reyes facts, as set forth in Plaintiff’s Amended Complaint, Motion, and accompanying declarations, demonstrate that immediate and irreparable loss, damage, and injury will result to Plaintiff and to consumers in view of the following considerations: 1. Defendants own or control Internet based e-commerce stores and websites which advertise, promote, offer for sale, and sell products bearing counterfeit and infringing trademarks in violation of Plaintiff’s rights; and 2. There is good cause to believe that more counterfeit and infringing products bearing Plaintiff’s CreeLED Marks will appear in the marketplace; that consumers are likely to be misled, confused, and disappointed by the quality of these products; and that Plaintiff may suffer loss of sales for its genuine products and an unnatural erosion of the legitimate marketplace in which it operates. C. The balance of potential harm to Defendants in restraining their trade in counterfeit and infringing branded goods if a preliminary injunction is issued is far outweighed by the potential harm to Plaintiff, its reputation, and its goodwill as manufacturers and distributors of quality products if such relief is not issued. D. The public interest favors issuance of a preliminary injunction to protect Plaintiff’s trademark interests, to encourage respect for the law, to facilitate the invention and development of innovative products, and to protect the public from being defrauded by the illegal sale of counterfeit goods. E. Under 15 U.S.C. § 1117(a), Plaintiff may be entitled to recover, as an equitable remedy, the illegal profits gained through the Defendants’ distribution and sales of goods bearing counterfeits and infringements of the CreeLED Marks. See Reebok Int’l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 559 (9th Cir. 1992) (quoting Fuller Brush Prods. Co. v. Fuller Brush Co., 299 4 Case No. 23-cv-20163-BLOOM/Otazo-Reyes F.2d 772, 777 (7th Cir. 1962) (“An accounting of profits under § 1117(a) is not synonymous with an award of monetary damages: ‘[a]n accounting for profits . . . is an equitable remedy subject to the principles of equity.’”)). F. Requesting equitable relief “invokes the district court’s inherent equitable powers to order preliminary relief, including an asset freeze, in order to assure the availability of permanent relief.” Levi Strauss & Co., 51 F.3d at 987 (citing Federal Trade Commission v. United States Oil & Gas Corp., 748 F.2d 1431, 1433-34 (11th Cir. 1984)). G. In light of the inherently deceptive nature of the counterfeiting business, and the likelihood that the Defendants have violated federal trademark laws, Plaintiff has good reason to believe Defendants will hide or transfer their ill-gotten assets beyond the jurisdiction of this Court unless those assets are restrained. Upon review of Plaintiff’s Complaint, Motion, and supporting evidentiary submissions, the Court hereby ORDERS AND ADJUDGES that Plaintiff’s Motion for Preliminary Injunction, ECF No. [6], is GRANTED, under the terms set forth below: (1) Each of the Defendants, its officers, directors, employees, agents, subsidiaries, distributors, and all persons in active concert or participation with any of the Defendants having notice of this Order are restrained and enjoined until further order from this Court as follows: a. From manufacturing, importing, advertising, promoting, offering to sell, selling, distributing, or transferring any products bearing the CreeLED Marks, or any confusingly similar trademarks, other than those actually manufactured or distributed by Plaintiff; b. From secreting, concealing, destroying, selling off, transferring, or otherwise disposing of: (i) any products, not manufactured or distributed by Plaintiff, bearing 5 Case No. 23-cv-20163-BLOOM/Otazo-Reyes and/or using the CreeLED Marks; (ii) any evidence relating to the manufacture, importation, sale, offer for sale, distribution, or transfer of any products bearing and/or using the CreeLED Marks; or (iii) any assets or other financial accounts subject to this Order, including inventory assets, in the actual or constructive possession of, or owned, controlled, or held by, or subject to access by, any of the Defendants, including, but not limited to, any assets held by or on behalf of any of the Defendants. (2) Each of the Defendants, its officers, directors, employees, agents, subsidiaries, distributors, and all persons in active concert or participation with any of the Defendants having notice of this Order shall immediately discontinue the unauthorized use of the CreeLED Marks on or in connection with all Internet based e-commerce stores owned and operated, or controlled by them, including the Internet based e-commerce stores operating under the Seller IDs. (3) Each of the Defendants shall not transfer ownership of the Seller IDs during the pendency of this action, or until further Order of the Court. (4) Upon receipt of notice of this Order, Defendants and any third party financial institutions, payment processors, banks, escrow services, money transmitters, or marketplace platforms who is providing services for any of the Defendants, including but not limited to, AliExpress, Alipay, Dhgate, Dhpay, Joom, Wish, Wishpay, Amazon, Amazon Pay, Ebay, Etsy, and/or Taobao, and their related companies and affiliates (collectively, the “Third Party Providers”), shall after receipt of notice of this Order, restrain the transfer of all funds, including funds relating to ongoing account activity, held or received for the Defendants’ benefit or to be transferred into the Defendants’ respective financial accounts, restrain any other financial accounts tied thereto, and immediately divert those restrained funds to a holding account for the trust of the Court. Such restraining of the funds and the disclosure of the related financial institution account 6 Case No. 23-cv-20163-BLOOM/Otazo-Reyes information (as provided below) shall be made without notice to the account owners or the financial institutions until after those accounts are restrained. No funds restrained by this Order shall be transferred or surrendered by any Third Party Provider for any purpose (other than pursuant to a chargeback made pursuant to their security interest in the funds) without the express authorization of this Court. (5) Any Defendant or Third Party Provider subject to this Order may petition the Court to modify the asset restraint set out in this Order. (6) This Order shall apply to the Seller IDs, associated ecommerce stores and websites, and any other seller identification names, e-commerce stores, domain names, websites, or financial accounts which are being used by Defendants for the purpose of counterfeiting and infringing the CreeLED Marks at issue in this action and/or unfairly competing with Plaintiff. (7) This Order shall remain in effect during the pendency of this action, or until such further dates as set by the Court or stipulated to by the parties. (8) Pursuant to 15 U.S.C. § 1116(d)(5)(D) and Federal Rule of Civil Procedure 65(c), Plaintiff shall maintain its previously posted bond in the amount of Ten Thousand Dollars and Zero Cents ($10,000.00), as payment of damages to which Defendants may be entitled for a wrongful injunction or restraint, during the pendency of this action, or until further Order of the Court. (9) The Clerk is directed to UNSEAL all filings. (10) The Plaintiff filed a Notice of Filing Schedule A to the Complaint, ECF No. [6], in compliance with this Court’s Order, ECF No. [7]. But, because the Plaintiff failed to name the Defendants in its Complaint, ECF No. [1], those Defendants have not been added as parties to this 7 Case No. 23-cv-20163-BLOOM/Otazo-Reyes case. By February 10, 2022, the Plaintiff must add all of the Defendants as parties through CM/ECF. DONE AND ORDERED in Chambers at Miami, Florida, on February 6, 2023. _________________________________ BETH BLOOM UNITED STATES DISTRICT JUDGE cc: Counsel of Record 8
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