MARCO A. HERNANDEZ, District Judge.
Plaintiffs Zachary Mertens and Idylwilde, Inc. ("Idylwilde") bring this action against Umpqua Feather Merchants, LLC ("Umpqua"), Mirabel, Inc. ("Mirabel"), and Bien Tan. Plaintiffs bring claims for unregistered trademark and trade dress infringement
In the fall of 1997, Mertens and Tan entered a Working Agreement to "produce top quality [fishing] flies in the Philippines." Mertens Decl., Ex A, p. 1. On January 21, 1998, Mertens incorporated Idylwilde, Inc.
Plaintiffs claim that where most fly companies "push" their products into retail channels through sales representatives and then rely upon retailers to sell the products to consumers, "Idylwilde . . . changed the industry by creating a `pull market' for Idylwilde's flies." Pls.' Mem., p. 4. Plaintiffs represent that "Idylwilde . . . contracted with a limited number of talented fly designers, called `signature tyers' — a total of 33 in 2013-to submit unique patterns to Idylwilde for mass production."
According to Plaintiffs, "Idylwilde promotes the signature tyers as sub-brands within Idylwilde by affixing the designer's name to the patterns they designed for Idylwilde in Idylwilde's sales catalog (print version and on-line) and on the packaging for the flies, and through posts on Idylwilde's Facebook page and Idylwilde's blog...."
Plaintiffs also state that the "majority of Idylwilde's sales (80-85%) come from pre-season orders placed in the fall[,]" and that "[d]elivery occurs the following spring and summer, generally between April and July."
On September 10, 2013, Umpqua announced that it had entered into a "long-term agreement to partner with a well-established factory in the Philippines" and "released the `Thrilla from Manila'" campaign, which Plaintiffs assert sells flies "that Idylwilde . . . paid [Tan] to produce for the 2013 season."
"A preliminary injunction is an extraordinary remedy never awarded as of right."
Plaintiffs contend they are entitled to a preliminary injunction because Defendants are unlawfully using Plaintiffs' unregistered trademarks in the name "Idylwilde" and the name of and item codes for each signature, custom, and "Idyl"
The unregistered trademarks alleged by Plaintiffs fall within the ambit of the Lanham Act.
As a threshold issue, the parties disagree as to whether the Joint Venture has been dissolved. Plaintiffs argued at oral argument on December 3, 2013, that the Joint Venture still exists because Mertens, as the majority owner of the Joint Venture, has not yet consented to dissolve the Joint Venture and thus, the Joint Venture can only be dissolved by a judicial determination under ORS 67.290.
Plaintiffs' position that Mertens did not give his express written consent to dissolve the Joint Venture belies the record. The evidence shows that Mertens dissolved the Joint Venture when he, as the majority shareholder of the partnership, gave his express written consent to do so. Tan Decl., Ex. 1, p. 2. In a letter to Tan dated June 7, 2013, Mertens expressly stated that if Tan did not provide "shipping documents" showing that Tan had shipped the "2013 flies" by "Tuesday, June 11, 2013, then Idylwilde [would] conclude that it [was] no longer bound by the [Joint Venture]." It is undisputed that Tan did not ship the "2013 flies" by June 11, 2013, or any other date, and did not provide Mertens with the requested shipping documents. It is also undisputed that Mertens stopped using Mirabel for the production of flies after June 11, 2013, and had secured "manufacturing in Sri Lanka" with another manufacturer. Fryhover Decl., Ex. L, p. 1.
The undisputed evidence shows that Mertens dissolved the Joint Venture on June 11, 2013, when he expressly stated that he would no longer be bound by the terms of the Joint Venture.
Tan and Mirabel argue that Plaintiffs do not own the purported trademarks or trade dress because Mertens transferred the name Idylwilde to the Joint Venture pursuant to the Joint Venture Agreement. Tan and Mirabel also assert that Plaintiffs do not own the purported trademarks or trade dress because the names of and item codes for each signature, custom, and Idyl fly belong to the Joint Venture. Plaintiffs contend that the purported trademarks and trade dress belong to them because any transfers Mertens made to the Joint Venture were limited to the point in time that the Joint Venture Agreement was consummated on April 24, 1998, and because the Joint Venture Agreement does not specifically address trademarks and trade dress.
Plaintiffs' arguments fail. The evidence before me does not establish that Plaintiffs alone own the name Idylwilde. The undisputed evidence shows that Mertens "transferred" the name "Idylwilde Flies" and all "personal property used in the business" to the Joint Venture. Mertens Decl., Ex. C, p.1. Plaintiffs point to no language in the Joint Venture Agreement showing that the name Idylwilde or any of Mertens' other "personal property used in the business" were to be transferred back to Mertens or that the transfers were only temporary. The Joint Venture Agreement also lacks any language addressing who would own any of the trademarks or trade dress arising out of the partnership between Mertens and Tan. Although the Joint Venture Agreement specifically states that the Joint Venture's "positive cash flows" would be distributed to Mertens and Tan, it lacks any similar language addressing how the parties would handle any trademarks and trade dress arising out of the joint venture partnership, let alone any language stating the Mertens alone would own all the trademarks and trade dress.
Notably, Plaintiffs cite no authority, Oregon partnership law or otherwise, establishing that they solely own the purported marks or trade dress. Although Plaintiffs cite a number of Oregon cases for the proposition that all partnership property used in a joint venture remain with the individual partners, none of those cases involved language similar to that used in the Joint Venture Agreement.
Because Plaintiffs fail to establish that they alone own the purported trademarks and trade dress, they are not likely to succeed on their trademark claim against Tan and Mirabel.
Plaintiffs assert they own the purported trademarks because they were the first to use them in commerce. Plaintiffs assert that Idylwilde was the first fly company to sell flies using the signature fly names of tyers "as evidenced by longstanding contracts with the signature tyers who exclusively designed the flies for Idylwilde[,]" that "Idylwilde was the first fly company to sell flies that use the names of Idylwilde's custom flies as evidenced by pro shops exclusively engaging Idylwilde to manufacture them[,]" and that "Idylwilde was the first fly company to sell flies that use the name `Idyl'...." Pls.' Mem., p. 14. Plaintiffs' arguments are unavailing.
"It is axiomatic in trademark law that the standard test of ownership is priority of use.... [I]t is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services."
The evidence on which Plaintiffs rely simply shows that Mertens "coined the term `signature tyers'", Plaintiffs "began contracting with a limited number of . . . fly designers [in 2003] to create unique fly patterns for Idylwilde's exclusive production[,]" and "[Mertens] affixed the name `Idyl' to Idylwilde's proprietary designs...." Mertens Decl., ¶¶ 21, 23. Such evidence does not establish that Plaintiffs were the first to use the name Idylwilde or the name of and item codes for each signature, custom, and Idyl fly in the sale of goods or services. To the contrary, the evidence shows that the Joint Venture, through the concerted efforts of both Mertens and Tan, manufactured, marketed, and sold Idylwilde flies. Under the Joint Venture Agreement, Tan and Mertens together agreed to "form[] a joint venture. . . to produce top quality fishing flies in the Philippines and market them worldwide." Mertens Decl., Ex. C, p. 1. To achieve this endeavor, Mertens agreed to be responsible for "market[ing] the product to wholesalers" and for "seek[ing] independent sales reps to market the product directly to retailers[,]" while Tan agreed to manufacture the products. Mertens Decl., Ex. C, pp. 1-3. Notably absent from the record is any evidence showing that Plaintiffs alone were the first to use the name Idylwilde in commerce or the first to use the names of or item codes for signature, custom, and Idyl flies apart from the Joint Venture. In fact, Plaintiffs readily concede that "[a]ll of the contracts between Idylwilde and the signature tyers . . . were entered into after April 24, 1998[,]" the date the Joint Venture was consummated between Tan and Mertens. Reply, p. 5.
In sum, Plaintiffs fail to present evidence showing that they alone were the first to use the alleged trademarks in commerce.
I also deny Plaintiffs' motion for a preliminary injunction against Mirabel and Tan because Plaintiffs do not specifically point to any evidence showing that Mirabel or Tan are actually using the Idylwilde or Idyl names. Plaintiffs also fail to argue or present any evidence showing that Mirabel and Tan are using the names of and item codes for any of the signature, custom, or Idyl flies.
In sum, Plaintiffs fail to establish a likelihood of success on the merits of their trademark claim against Mirabel and Tan.
Plaintiffs also fail to show a likelihood of success on their trademark claim against Umpqua.
Plaintiffs trademark claim against Umpqua is unlikely to succeed on the merits because they present no evidence showing that Umpqua is using the Idylwilde or Idyl names. Here, Plaintiffs rely heavily on Umpqua's "Thrilla from Manila Program" order form, which is a Microsoft Excel spreadsheet entitled "Umpqua Idyl'14.xls" Plaintiffs claim Umpqua sent to prospective customers. The record, however, shows that someone other than Umpqua named the spreadsheet "Umpqua Idyl'14.xls."
Plaintiffs trademark claim against Umpqua is also unlikely to succeed on the merits because Plaintiffs do not establish that they have a protectable trademark in the names of and item codes in Umpqua's "Thrilla from Manila Program" order form. "To claim trademark infringement, a plaintiff must have a valid, protectable trademark."
"Marks are often classified in categories of generally increasing distinctiveness[:] . . . (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful."
Plaintiffs fail to present sufficient evidence showing that they have a protectable trademark in any of the fly names in the "Thrilla from Manila Program" order form. Other than Plaintiffs' general reference to the entire "Thrilla from Manila Program" order form, Plaintiffs present no specific evidence showing which names used in the "Thrilla from Manila Program" order form are distinctive or have secondary meaning. As stated above, Plaintiffs do not show that the fly names in the "Thrilla from Manila Program" order form even include a signature tyer name. In short, Plaintiffs fail to show that they have a protectable trademark in any of the fly names in the "Thrilla from Manila Program" order form.
Plaintiffs assert that each of the item codes for the signature, custom, and Idyl flies are valid trademarks because they are "symbols signifying Idylwilde as the source of those products" and "are internally generated by and unique to Idylwilde and are arbitrary." Pls.' Mem., p. 13. Like the above, Plaintiffs fail to point to specific evidence supporting their proposition. Here, the item codes begin with three capitalized letters followed by four digits. "For example, `Idyl's Miracle Midge Black 16' has the item code MDF0020. The item code for custom fly Gray Drake Quill Body 12 is CUS0110. The item code for `Hogan's Chubby Cousin Peacock 12' is SIG1072." Pls.' Mem., p. 13 (citations omitted). The evidence shows that shows that there are over 950 flies that Plaintiffs identify in their Complaint and that of the approximately 3,000 product item codes, at least 1,600 include the prefix "SIG" and at least 1,200 include the prefix "CUS." None of the evidence on which Plaintiffs specifically cite, however, demonstrates that the item codes amount to anything more than descriptive terms. Notably, Plaintiffs point to no evidence showing that the public uses any of the signature, custom, or Idyl item codes to identify Plaintiffs as the source of the products or that the item codes alone have a secondary meaning.
None of the cases Plaintiffs cite demonstrates otherwise. Plaintiffs cite
Finally, Plaintiffs cite
In short, Plaintiffs fail to demonstrate they have a protectable interest in the names and item codes in the "Thrilla from Manila Program" order form.
Plaintiffs assert they are likely to succeed on their trademark claim because a reasonably prudent consumer in the marketplace is likely to be confused as to the origin of Umpqua's flies. Having concluded that Plaintiffs fail demonstrate in the first instance that Umpqua is using the Idylwilde or Idyl name, or that Umpqua is using a valid, protectable trademark, I decline to address whether there is a likelihood of confusion.
In sum, Plaintiffs fail to establish they are likely to succeed on their trademark infringement claim against Defendants. Accordingly, Plaintiffs' motion for a preliminary injunction based on their trademark infringement claim is denied.
Plaintiffs assert trade dress in (1) the overall appearance of each of the signature, custom, and Idyl flies; and (2) the "overall appearance of its packaging and the words `Made in the Philippines' on its packaging." Pls.' Mem., p. 22. "Trade dress refers generally to the total image, design, and appearance of a product and may include features such as size, shape, color, color combinations, texture or graphics."
As discussed above, Plaintiffs fail to establish that they solely own the purported trade dress arising out of their concerted efforts with Mirabel and Tan during the Joint Venture. Accordingly, Plaintiffs fail to establish a likelihood of success on their trade dress claim against Tan and Mirabel.
Plaintiffs also fail to establish a likelihood of success on their trade dress claim as to all Defendants because they do not show that the overall appearance of the signature, custom, and Idyl flies and their packaging are nonfunctional.
Plaintiffs assert that the signature, custom, and Idyl flies are nonfunctional. Plaintiffs maintain that "there are hundreds of designs readily available for purchase by several different manufacturers, including Umpqua, Montana Fly, and Idylwilde" and the "look and feel, the overall visual impression, is what distinguishes one fly from another." Pls.' Mem., p. 23. Plaintiffs also contend that "[t]his situation is no different than pool halls or restaurants where ... courts have concluded the overall look and feel of those establishments is not functional even though the component parts are."
Courts typically consider four factors when determining whether a product feature is functional: "(1) whether the design yields a utilitarian advantage, (2) whether alternative designs are available, (3) whether advertising touts the utilitarian advantages of the design, (4) and whether the particular design results from a comparatively simple or inexpensive method of manufacture."
Plaintiffs do not address whether the signature, custom, and Idyl flies yield a utilitarian advantage. More important, the evidence before me establishes that the signature, custom, and Idyl flies yield a utilitarian advantage, namely their designs allow the flies to perform well in the water and help users to catch fish. Eric Ishiwata, a signature tyer, stated that he is "very good at coming up with flies designed to address specific fishing circumstances" and "greatly appreciated Idylwilde's obvious dedication to choosing innovative flies that really worked for the fishermen." Ishiwata Decl., ¶¶ 8-9. Ishiwata also stated that his signature fly, "`Ish's Kool Herc,' . . . is designed less for looks and more for action" and that "when the the [sic] fly is pulled against the river's hydraulics it not only assumes the correct shape, but is also able to mimic the movements of . . . bait fish."
Based on the evidence above, I conclude that Plaintiffs fail to demonstrate that the features of the signature, custom, and Idyl flies are nonfunctional.
Having found that features of the signature, custom, and Idyl flies are functional, I need not consider this factor.
Plaintiffs do not address whether advertising touts the utilitarian advantages of the signature, custom, or Idyl fly designs. Accordingly, this factor weighs in Defendants' favor.
As to the fourth and final
A weighing of the four
Plaintiffs' argument concerning packaging is vague and unsupported by any evidence. Plaintiffs merely argue that they are likely to succeed on their packaging trade dress claim because "[t]he same is true for Idylwilde's packaging" as it is for the signature, custom, and Idyl flies and because "Umpqua . . . is using Idylwilde's [packaging.]" Pls.' Mem., p. 23. Plaintiffs' arguments fail because the functionality of flies is different from the functionality of the packaging in which they come. Plaintiffs' arguments also fail because Plaintiffs do not proffer any evidence showing that their packaging is nonfunctional. Rather, the evidence shows that Plaintiffs' product packaging comprising a rectangular white cardboard box, a description of the box's contents, and the country of origin designation stating, "Made in the Philippines," all serve functional purposes.
I am also not persuaded by Plaintiffs' argument that the "Made in the Philippines" designation on its packaging alone amounts to protected trade dress. The Tariff Act of 1930, 19 U.S.C. § 1304(a), requires "every article of foreign origin . . . or its container . . . imported into the United States [to] . . . be marked in a conspicuous place . . . as the nature of the article . . . in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article." Plaintiffs do not argue or present any evidence showing that the country of origin designation "Made in the Philippines" on the white boxes shipped to customers serves a nonfunctional purpose. Rather, the record demonstrates that the "Made in the Philippines" designation serves the function of meeting the requirements of 19 U.S.C. § 1304(a). Indeed, Plaintiffs point to no evidence showing that without this country of origin designation, the packaging would even meet the requirements of the Tariff Act.
In sum, Plaintiffs fail to demonstrate that the purported trade dress is nonfunctional and in turn, fail to establish that they are likely to succeed on their trade dress claim.
"In order to prove a violation of the Federal Trademark Dilution Act ("FTDA"), a plaintiff must show that (1) the mark is famous; (2) the defendant is making a commercial use of the mark in commerce; (3) the defendant's use began after the mark became famous; and (4) the defendant's use of the mark dilutes the quality of the mark by diminishing the capacity of the mark to identify and distinguish goods and services."
The parties disagree, as a threshold matter, as to which market must be considered when analyzing Plaintiffs' dilution claim. I agree with Defendants that the proper market to consider is the general public, not just purchasers of fishing flies.
Turning next to whether the evidence proffered by Plaintiffs shows that the purported marks are famous, I conclude it does not. Here, Plaintiffs rely on emails from select customers who referred to the names of flies along with the specific item codes associated with those flies. Mertens Decl., ¶¶ 24, 29;
Plaintiffs conceded at oral argument on December 3, 2013, that their common law unfair competition claim based on Defendants' alleged used of their purported trade secrets was preempted by the Oregon Trade Secrets Act ("OTSA"), ORS 646.461-646.475. I agree.
Plaintiffs contend Defendants misappropriated their trade secrets in violation of ORS 646.463. Plaintiffs assert Defendants misappropriated "Idylwilde's signature, custom, and Idyl flies, packaging and trademarks, . . . pricing, business and marketing plans, customer lists, sales history, purchase orders, fly recipes, specialized equipment, supplier and vendor lists, detailed written processes and procedures for constructing flies of high quality, detailed written training processes and procedures, and the highly skilled trained workforce." Pls.' Mem., pp. 30-31. Plaintiffs' assertions lack merit.
The OTSA defines a trade secret as:
ORS 646.461(4).
Misappropriation may occur when a person acquires a trade secret but "knows or has reason to know" that the acquisition was acquired by "improper means." ORS 646.461(2)(a). Misappropriation may also occur when a person discloses or uses a trade secret without express or implied consent. ORS 646.461(2)(b)-(d).
Even if the information Plaintiffs allege as trade secrets were in fact trade secrets under the OTSA, I would still conclude that Plaintiffs' claim is unlikely to succeed on the merits. Plaintiffs proffer no evidence showing that their alleged trade secrets were the subject of reasonable efforts to maintain their secrecy as required under ORS 646.461(4)(b). Although Plaintiffs assert that "Idylwilde took . . . steps to protect its trade secrets[,]" the evidence on which they rely do not support their bald assertion. Pls.' Mem., p. 31; Mertens Decl., ¶¶ 10, 21;
Plaintiffs' motion for a preliminary injunction is also denied because they proffer insufficient evidence showing a likelihood of irreparable harm. Here, Plaintiffs baldly assert they will be irreparably harmed because of the "evidence of loss of sales, loss of investment capital, loss of signature tyers and sales representatives, customers, goodwill and brand reputation." Pls.' Mem., p. 33. Plaintiffs, however, do not point to specific evidence supporting this bald statement, let alone any evidence showing irreparable harm. Plaintiffs' failure to proffer sufficient evidence showing a likelihood of irreparable harm alone provides a sufficient basis on which to deny their motion for a preliminary injunction.
Plaintiffs argue that the balance of equities weighs in their favor because without a TRO, Idylwilde will be driven out of business, "Idylwilde had to suspend taking orders for the 2014 season because it could not compete against its own flies, an interested investor walked away, and the emotional distress to . . . Mertens has been extreme." Pls.' Mem., pp. 33-34. Plaintiffs further contend that a preliminary injunction serves the public interest by preventing consumer confusion resulting from Defendants' use of Plaintiffs' purported trademarks and trade dress.
Plaintiffs do not present sufficient evidence showing that the balance of equities and public interest tip in their favor. Indeed, Plaintiffs present no evidence whatsoever that they will be driven out of business were I to deny their motion for a preliminary injunction. In addition, and as discussed above, Plaintiffs fail to show that they are likely to succeed on their trademark, trade dress, dilution, and misappropriation of trade secrets claims. Thus, contrary to Plaintiffs' assertions, the balance of equities and public interest do not tip in their favor.
For the foregoing reasons, Plaintiffs' motion for a preliminary injunction [11] is DENIED. Umpua's motion to dissolve Plaintiffs' temporary restraining order or, alternatively, to increase the bond amount [45] is DENIED as moot.
IT IS SO ORDERED.
