NINA Y. WANG, Magistrate Judge.
This matter is before the court on Plaintiff Ball Dynamics International, LLC's ("BDI" or "Plaintiff") Motion for a Temporary Restraining Order ("Motion for TRO"). [#41, filed October 17, 2016]. The undersigned Magistrate Judge disposes of the Motion for TRO pursuant to her authority under 28 U.S.C. § 636(c), Fed. R. Civ. P. 73, and D.C.COLO.LCivR 72.2. See [#15]. The court has considered the Motion for TRO and associated briefing, the applicable case law, and the comments offered by counsel during the October 21, 2016 Motion Hearing. For the following reasons, the Motion for TRO is
BDI initiated this civil action on February 26, 2016, to assert six common law claims for breach of contract, bad faith and unfair dealing, unjust enrichment, unfair competition/misappropriation of trade secrets, intentional interference with existing and prospective business relations, and civil conspiracy. [#1 at 16-22]. The action arises out of an ultimately unsuccessful business relationship between BDI and Defendant Deborah G. Saunders for services related to BDI's FitPAWS brand. See [#1; #22]. On April 18, 2016, Defendants Deborah G. Saunders, d/b/a Wizard of Paws, a/k/a Deborah Saunders, a/k/a Dr. Debbie Gross, a/k/a Dr. Debbie Saunders ("Dr. Gross"), Martha McCormick, and Toto Fit, LLC (collectively, "Defendants") filed an Answer and the following counterclaims: intentional misrepresentation; negligent misrepresentation; tortious interference with prospective business relations; and breach of the covenant of good faith and fair dealing. [#16]. BDI filed an Answer to Defendants' counterclaims on May 2, 2016. [#20].
On May 3, 2016, the court held a Scheduling Conference at which it set certain pre-trial dates and deadlines, including a discovery deadline of November 4, 2016 and a dispositive motions deadline of December 16, 2016. [#21; #22]. On August 17, 2016, Dr. Gross filed a Motion for Partial Judgment on the Pleadings. [#29]. BDI and Dr. Gross finished briefing the Motion for Partial Judgment on the Pleadings on September 26, 2016. See [#39; #40].
BDI filed the Motion for TRO on October 17, 2016. [#41]. In the ensuing twenty-four hours, Defendants filed a Response [#43] and BDI filed a Reply [#44], followed by an unopposed First Amended Complaint. See [#46]. The First Amended Complaint ("FAC") adds the following claims: violation of the Colorado Consumer Protection Act ("CCPA"), C.R.S. § 6-1-101, et seq.; violation of the Anti-Cybersquatting Consumer Protection Act, ("ACPA"), 15 U.S.C. § 1125(d); violation of the Lanham Act, 15 U.S.C. 1125(a); and trademark infringement in violation of 15 U.S.C. § 1114. The court held argument on the Motion for TRO on October 21, 2016, at which time Defendants tendered the Declaration of Jonathan Hochman. See [#48 at 48-2]. The court took the Motion under advisement and instructed Plaintiff to respond to the Hochman Declaration on or before October 28, 2016. Plaintiff filed a timely Response on October 27, 2016. See [#51]
The following facts are derived from the Complaint, the Motion for TRO, and the Response thereto. BDI launched the FitPAWS brand in 2009. The brand is specifically designed as "canine conditioning and rehabilitation products." [#41 at 5]. On June 1, 2010, BDI registered the trademark "FitPAWS" with the United States Patent and Trademark Office ("USPTO") for a variety of classes of goods and services. BDI lists its marks as follows:
[#41 at 5 (citing #41-1)]. BDI asserts that mark Reg. No. 3,797,098 has achieved "incontestable" status and thus cannot be challenged in litigation. [Id. at 6].
BDI has maintained and operated the website
On October 13, 2015, Dr. Gross and Ms. McCormick organized Defendant Toto Fit, LLC ("TotoFit"). [#1 at ¶ 43]. On or around November 19, 2015, Dr. Gross ended her relationship with BDI. [Id. (citing #41-3)]. The termination and duration of Dr. Gross and BDI's Agreement are in dispute in this action. [#41 at 6]; see also [#1 at ¶¶ 70-76]. On or about November 19, 2015, TotoFit filed a federal trademark application for TotoFit for goods BDI contends are identical to FitPAWS's products; the application specifies September 17, 2015 as the date the goods were first used in commerce. [#1 at ¶ 48]. Following a round of correspondence with Dr. Gross and Ms. McCormick about the Parties' obligations under the Agreement, BDI commenced an effort to enforce its legal rights under the Agreement. See [#41 at 6]; see also [#1 at ¶¶ 49-55].
By January 1, 2016, Ms. McCormick and TotoFit had purchased the following domain names: fitpaws.info; fitpaws.net; fitpaws.org; fitpawsusa.biz; fitpawsusa.info; fitpawsusa.net; fitpawsusa.org; and fitpawsusa.training (collectively, "FitPAWS URLs"). [#41 at 6-7 (citing #41-2)]. At the October 20, 2016 Motion Hearing, the Parties informed the court that a total of eleven URLs had been disclosed. BDI asserts that it did not authorize or otherwise approve Defendants' use of its trademark for the FitPAWS URLs.
Federal Rule of Civil Procedure 65 authorizes the court to enter preliminary injunctions and issue temporary restraining orders. Fed. R. Civ. P. 65(a), (b). "When the opposing party actually receives notice of the application for a restraining order, the procedure that is followed does not differ functionally from that on an application for a preliminary injunction and the proceeding is not subject to any special requirements." 11A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure: Civil § 2951 (3d ed.) Because Defendants have notice of the Motion for TRO, and, indeed, filed a Response, the court treats the Motion for TRO as a motion for preliminary injunction.
A preliminary injunction is considered an extraordinary remedy. See, e.g., Winter v. Nat'l Res. Defense Council, Inc., 555 U.S. 7, 24 (2008) (citation omitted). Thus, the right to such relief must be "clear and unequivocal." Petrella v. Brownback, 787 F.3d 1242, 1256 (10th Cir. 2015) (quoting Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC, 562 F.3d 1067, 1070 (10th Cir. 2009)). A party seeking preliminary injunctive relief must satisfy four factors: a likelihood of success on the merits; a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; that the balance of equities tips in the movant's favor; and that the injunction is in the public interest. Id. at 1257.
The primary goal of a preliminary injunction is to preserve the pre-trial status quo. "Status quo" is defined to be the last uncontested status between the parties that preceded the controversy until the outcome of the final hearing. See Schrier v. University of Colorado, 427 F.3d 1253, 1260 (10th Cir. 2005). Therefore, courts view the following types of injunctions with caution: (1) preliminary injunctions that alter the status quo; (2) preliminary injunctions that require the nonmoving party to take affirmative action ("mandatory preliminary injunctions"); and (3) preliminary injunctions that give the movant all the relief it would be entitled to if it prevailed in a full trial. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (per curiam), affirmed, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006)). Movants who seek a disfavored injunction must demonstrate a substantial likelihood of success on the merits, as well as a heightened showing of the other three elements. Id. (citing O Centro, 389 F.3d at 980).
BDI asserts that Defendants "must be restrained to preserve the status quo and protect against further irreparable injury." As discussed above, the status quo is "the last uncontested status between the parties which preceded the controversy until the outcome of the final hearing." Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1155 (10th Cir. 2001) (quoting SCFC ILC, Inc. v. Visa, USA Inc., 936 F.2d 1096, 1100, n.8 (10th Cir. 1991)). In determining the status quo for preliminary injunctions, the court "looks to the reality of the existing status and relationship between the parties and not solely to the parties' legal rights." Id.
BDI asserts that the "last uncontested status between that parties [sic] which preceded the controversy would be prior to the `launch' of the TotoFit.com website and its Facebook page." [#41 at 9]. Defendants frame the Parties' status quo as "Plaintiff is operating its business and Defendants are operating their business." [#43 at 5]. The court is not fully persuaded by either Party's assertion, and finds, rather, that the status quo dates to on or around November 19, 2015, when Dr. Gross terminated the Agreement. Based on the Complaint, Dr. Gross and Ms. McCormick had organized TotoFit and launched the associated Facebook page by November 19, 2015. See [#1 at ¶¶ 42, 43]. Were the court to date the status quo to "prior to the `launch'" of TotoFit, it would effectively rule on the merits of the bulk, if not the entirety, of BDI's claims. A preliminary injunction is not intended to produce such an outcome or disposition.
The court now turns to the factors identified above, and begins by noting that BDI seeks a mandatory injunction because it would have the court compel Defendants to take certain action. BDI also seeks a prohibitory injunction because it would have the court prohibit Defendants from taking certain actions. Therefore, with respect to requests such as, and for example, compelling Defendants to publish a communication in the trade press informing the public that they directed FitPAWS internet traffic to themselves, BDI must satisfy the heightened showing required in this Circuit. In the end, however, under either standard, this court reaches the same conclusion.
The court paraphrases BDI's request for injunctive relief as follows. First, Plaintiff asks the court to restrict Defendants from: using the "FitPAWS" or "FitPAWSUSA" marks; using any "unauthorized colorable imitation of the `FitPAWS' or `FITPAWSUSA' marks"; engaging in false representations, descriptions, or designation of origin with respect to these marks; engaging in activity that constitutes a violation of the CCPA, the ACCPA, and the Lanham Act; operating the website located at
In support of this requested relief, BDI asserts that it never authorized or approved Defendants to use its trademarks for FitPAWS URLs, Defendants never indicated through disclosures or discovery responses that their FitPAWS URLs existed, and BDI did not suspect that the FitPAWS URLs existed. [#41 at 7]. BDI contends that on October 14, 2016, it discovered eight URLs containing BDI's FitPAWS and FitPAWSUSA marks, and learned that five of these URLs had "redirected" public internet traffic to Defendants'
Defendants respond that the Motion for TRO is unnecessary because the URLs complained of herein have been shut down, they do not oppose Plaintiff amending its Complaint to add facts pertinent to the URLs, and they will not object to additional discovery. [#43 at 2]. Defendants also allude to alleged discovery violations perpetuated by Plaintiff, but this court declines to address those arguments as they are not germane to the instant Motion.
BDI asserts that it is "likely to prevail" on its claims that Defendants are liable for trademark infringement and have violated the Lanham Act and ACPA. [#41 at 10-12]. Plaintiff did not assert these claims in its Complaint, but rather introduced them in the FAC that it filed after the Motion for TRO.
In the FAC, Plaintiff asserts that Defendants are liable for trademark infringement under
15 U.S.C. § 1114. "[I]n order to establish trademark infringement, a plaintiff must prove the validity of the mark it seeks to protect and must also prove that the use of a similar mark by defendant is `likely to cause confusion in the market place concerning the source of the different products.'" USA Network v. Gannett Co., Inc., 584 F.Supp. 195, 198 (D. Colo. 1984) (quoting Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 940 (10th Cir. 1983)).
As to the first factor, the registration of a mark is prima facie evidence of the owner's exclusive right to use the mark as registered in connection with services stated in the registration. USA Network, 584 F. Supp. at 198 (citing 15 U.S.C. §§ 1057(b) and 1115(a)). As to the second factor, "[c]onfusion occurs when consumers make an incorrect mental association between the involved commercial products or their producers." John Allan Co. v. Craig Allen Co., 540 F.3d 1133, 1138 (10th Cir. 2008) (quoting Jordache Enter. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1484 (10th Cir. 1987)). Whether the use of a mark will result in likelihood of confusion is a question of fact. Id. (citation omitted). Courts examine six non-exhaustive factors to determine likelihood of confusion: (1) the degree of similarity between the marks; (2) the intent of the alleged infringer in adopting the mark; (3) evidence of actual confusion; (4) similarity of products and manner of marketing; (5) the degree of care likely to be exercised by purchasers; and (6) the strength or weakness of the marks. Id. (internal quotations omitted). "The party alleging infringement has the burden of proving likelihood of confusion." Id. See also KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004) ("It is evident...that § 1115(b) places a burden of proving likelihood of confusion (that is, infringement) on the party charging infringement even when relying on an incontestable registration...").
BDI asserts only that its FitPAWS mark has been registered with the USPTO for multiple classes of goods and services, one mark has attained "incontestable" status, and that Defendants' use of the FitPAWS mark has caused confusion in the marketplace. [#41 at 10]. Plaintiff has submitted the registration of the word mark, "FitPAWS," which is live on the Principal Trademark Register since June 1, 2010, and pertains to physical rehabilitation and physical therapy equipment for animals and exercise and conditioning equipment for animals. [#41-1]. While Defendants generally appear to contest the validity of the trademark, they fail to specifically raise a validity contention in their Response to the Motion for TRO. Therefore, for the sole purpose of considering the instant Motion, the court concludes that Plaintiff is likely to prevail that the mark is valid.
However, BDI offers no argument or accompanying support for the second inquiry regarding confusion. Plaintiff has the burden to demonstrate confusion, and in this Circuit, the likelihood of confusion is a question of fact. See General Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1227 (10th Cir. 2007). The Parties presented no evidence in their papers or at the hearing to establish confusion among consumers. At the hearing, Defendants offered a Declaration of Jonathan Hochman, who attested that "[t]here is no evidence presented in the Motion that anybody in the market was made aware of the [] URLs." [#48-2 at ¶ 7]. Plaintiff urges the court to ignore Mr. Hochman's statements. [#51]. The court need not credit Mr. Hochman's statement to find that Plaintiff has failed to carry its burden of offering some evidence that it is likely to succeed on the merits regarding confusion. There is no evidence of actual confusion, such as a third-party statement that she or he reached these URLs inadvertently while seeking Plaintiff's products. To succeed on the Motion for TRO, Plaintiff must offer more than bare allegations. See Whitington v. Ortiz, 307 F. App'x 179, 194-96 (10th Cir. 2009); Ogden v. Sedgwick Cty. Dist. Attorney's Office, No. 11-3124-SAC, 2012 WL 235575, at *1 (D. Kan. Jan. 25, 2012) ("Plaintiff has the burden to establish his right to such [preliminary injunctive] relief by clear proof, and he may not rest on bare allegations."). Furthermore, Plaintiff carries a heightened burden because it seeks a disfavored injunction. BDI does not acknowledge this distinction, and has not demonstrated a substantial likelihood of success on the merits of this claim.
BDI next asserts that Defendants are liable for Trademark Infringement and False Designation of Origin under 15 U.S.C. § 1125(a). "Section 43(a) of the Lanham Act, prohibiting the use of false designations of origin, protects against service mark infringement even if the mark has not been federally registered." Donchez v. Coors Brewing Co., 392 F.3d 1211, 1215 (10th Cir. 2004) (quotation marks and citation omitted). In order to prevail on an action under § 43(a), a plaintiff must establish (1) the mark is protectable; and (2) "the defendant's use of an identical or similar mark is likely to cause confusion among consumers." Id. at 1215 (brackets, quotation marks, and citation omitted). "To be protectable, a mark must be capable of distinguishing the products or services it marks from those of others." Id. at 1216 (brackets, quotation marks, and citation omitted). The test examining the "likelihood of confusion" applicable to trademark infringement applies equally to BDI's claim of false designation of origin in violation of 15 U.S.C. § 1125(a).
Again, for the purpose of the instant Motion, the court concludes that Plaintiff has established that the mark is protected. But BDI again fails to demonstrate a substantial likelihood of success on the merits because there is insufficient evidence of confusion among consumers. Plaintiff states only, "Defendants' marketing and sales of canine products to FitPAWS customers in an industry in which the `FitPAWS' and `FitPAWSUSA' marks have been synonymous with BDI/FitPAWS for over seven years and use of BDI's `FitPAWS' and `FitPAWSUSA' marks in the process...is likely to continue to cause confusion..." [#41 at 11]. Cf. Electrology Laboratory, Inc. v. Kunze, 169 F.Supp.3d 1119, 1157 (D. Colo. 2016) (citing evidence of nonparties' confusion resulting from defendant's intentional use of plaintiff's product as his own). There is no information in the record regarding the size of the market, the sophistication of the consumers, or the number of consumers who even had access to the offending URLs. The court has received insufficient evidence (indeed, no evidence) at this juncture supporting Plaintiff's claim for violation of 15 U.S.C. § 1125(a), and thus I cannot conclude that BDI has a likelihood, let alone a substantial likelihood, of prevailing on the merits of this claim.
Finally, in support of the Motion for TRO, BDI asserts a likelihood of success on the merits of its ACPA claim.
15 U.S.C. § 1125(d)(1)(A). Accordingly, BDI must demonstrate: (1) its mark is protected as specified in the statute and was so protected at the time of registration of its domain name; (2) the FitPAWS URLs are identical or confusingly similar to the BDI's mark; and (3) Defendants used or registered the FitPAWS URLs with bad faith intent to profit. Cleary Building Corp., 674 F.Supp.2d at 1263 (citing Utah Lighthouse Ministry v. Foundation for Apologetic Info. & Res., 527 F.3d 1045, 1057 (10th Cir. 2008)).
Based on the registration of the "FitPAWS" word mark and Defendants' failure to argue otherwise, this court concludes for the purpose of this ACPA claim that BDI's mark is sufficiently protected. See USA Network, 584 F. Supp. at 198 (citing 15 U.S.C. §§ 1057(b) and 1115(a)). Unlike the trademark claims, BDI need not establish a likelihood of confusion from the perspective of a third-party, only "an identical or confusingly similar" mark. The court finds that Plaintiff is likely to succeed in establishing that the FitPAWS URLs (fitpaws.info, fitpaws.net, fitpaws.org, fitpawsusa.biz, fitpawsusa.info, fitpawsusa.net, fitpawsusa.org, and fitpawsusa.training) are confusingly similar to Plaintiff's FitPAWS mark, as they expressly incorporate "fitpaws" and merely change the domain extension. See Cleary, 674 F. Supp. 2d at 1264 (citing McCarthy on Trademarks § 25:78 ("The addition in the accused domain name of generic or descriptive matter to the mark will usually not prevent a finding of confusing similarity"); DaimlerChrysler v. The Net Inc., 388 F.3d 201 (6th Cir. 2004) (accused domain name "foradodge.com" is confusingly similar to the trademark DODGE for autos)).
Therefore, this court must next consider whether Plaintiff has adequately proven likelihood of success on the merits as to the element of bad faith. As the Cleary court observed, the Senate Judiciary Committee in its report on the ACPA advised that the consideration of "bad faith" within the context of the statute means "intent to trade on the goodwill of another's mark." 674 F. Supp. 2d at 1264 (citing S.Rep. No. 106-140, at 9 (1999) (Conf.Rep.)). "The ACPA enumerates nine nonexclusive factors to assist the court in determining whether the use of a trademark involves a bad faith intent to profit." Id. (citing 15 U.S.C. § 1125(d)(1)(B)(i)).
The court expressly notes that its finding is based on limited evidence, certainly evidence less complete than in a trial on the merits. See Heideman v. S. Salt Lake City, 348 F.3d 1182, 1188 (10th Cir. 2003) (citing University of Texas v. Camenisch, 451 U.S. 390, 395 (1981)). And, the Federal Rules of Evidence do not apply to preliminary injunction hearings. See id. (citations omitted). BDI quoted many of the factors courts consider in determining bad faith, see [#41 at 11-12], and yet did not fully address or apply any of those factors to the circumstances here. Thus, the court reminds the Parties that the disposition with respect to the ACPA claim is not a disposition on the merits; liability is left for another day.
A plaintiff establishes irreparable harm by demonstrating "a significant risk that [it] will experience harm that cannot be compensated after the fact by monetary damages." RoDa Drilling, 552 F.3d at 1210 (quoting Greater Yellowstone Coal. v. Flowers, 321 F.3d 1250, 1258 (10th Cir. 2003)). See also Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982) (The grounds for injunctive relief "in the federal courts has always been irreparable injury and the inadequacy of legal remedies," and "to protect property rights against injuries otherwise irremediable") (citations omitted). To constitute irreparable harm, the injury cannot be speculative but "must be certain, great, actual and not theoretical." Heideman v. South Salt Lake City, 348 F.3d 1182, 1189 (10th Cir. 2003) (internal quotations and citations omitted). In addition, conclusory statements are insufficient to establish irreparable harm. Dominion Video Satellite, 356 F.3d at 1261. The court must also determine if the harm is likely to take place before a ruling on the merits. RoDa Drilling, 552 F.3d at 1210.
BDI argues that it has "no way of knowing that all infringing websites will remain `shut down'" or that "all websites were indeed `shut down.'" [#41 at 14]. BDI additionally asserts that information may be "hidden" or "coded" in the
The court takes at face value defense counsel's representation as an officer of the court; however, the court also ponders that without some type of order, nothing serves to prevent Defendants from reactivating the websites.
In light of the above findings, the court finds that the balance of equities tips slightly in favor of Plaintiff with respect to a preliminary injunction as to the FitPAWS URLs. The court thus enjoins Defendants from using the FitPAWS URLs pending the outcome of this litigation, noting Defendants' willingness to cease and desist. As for the additional relief sought by Plaintiff, this court finds that BDI has failed to carry its burden of establishing a right to such extraordinary preliminary relief, particularly given that Plaintiff seeks all (and in some cases, more than) the relief to which it would be entitled should it prevail in this action. See Gen. Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1230 (10th Cir. 2007) (affirming the denial of plaintiff's motion for preliminary injunction and holding that the district court "properly considered the financial hardship to [defendant] that would result from a preliminary injunction"); see also Buca, Inc. v. Gambucci's, Inc., 18 F.Supp.2d 1193, 1211 (D. Kan. 1998) (denying a motion for preliminary injunction because the requested injunctive relief would disturb the status quo and seriously impair defendant's ability to continue operating).
BDI asserts that "actual consumers and the public at large will be protected from Defendants' continued deception and misrepresentations," and by granting the preliminary injunction, the court upholds commercial ethics and prevents consumer confusion. [#41 at 15]. Defendants do not address the question of the public's interest. At this juncture in the proceedings, this final factor is neutral to the court's analysis.
For the reasons set forth herein,
15 U.S.C. § 1125(d)(1)(B)(i).
