Advanced Tactical Ordnance Sys., LLC v. Real Action PaintBall, Inc.
| Decision Date | 16 August 2013 |
| Docket Number | 1:12-CV-296-JVB |
| Parties | ADVANCED TACTICAL ORDNANCE SYSTEMS, LLC, an Indiana limited liability company, (d/b/a PepperBall Technologies), Plaintiff, v. REAL ACTION PAINTBALL, INC., and K.T. TRAN, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Plaintiff, Advanced Tactical Ordnance Systems, LLC, ("ATO") sued Real Action Paintball, Inc. ("RAP4"), and K.T. Tran (and others who have now been dismissed) alleging trademark infringement and various state law violations.
On September 7, 2012, the Court granted Plaintiff's motion for a Temporary Restraining Order, enjoining Defendants from manufacturing, advertising, selling, or otherwise using projectiles filled with pepper powder that are generally used in military or law enforcement operations. On September 26, 2013, and again on October 3, 2012, at the request of Defendants K.T. Tran and RAP4, the Court modified the TRO to narrow its scope so as to allow Defendants to continue selling products that were clearly outside the scope of Plaintiff's trademark infringement claims. Since then, with the consent of the parties, the TRO has been extended numerous times to allow the parties to conduct discovery regarding Plaintiff's motion for preliminary injunction. The extensions were also made to accommodate the parties' schedules inpresenting their case to the Court in a series of evidentiary hearings. Now, having heard and reviewed all the evidence relating to Plaintiff's motion for preliminary injunction and having considered the applicable laws, the Court sets forth its findings of fact and conclusions of law.
At the outset the Court notes several matters regarding the procedural stature of the case, the conduct of the parties and their attorneys, and the credibility of the witnesses.
On December 14, 2012, Plaintiff amended its motion for preliminary injunction. On December 18, 2012, the Court issued an order stating that the any further amendments to the Plaintiff's motion for preliminary injunction must be made by January 18, 2013.
On June 3, 2013, the Court concluded a series of evidentiary hearings regarding Plaintiff's amended motion for preliminary injunction and set forth the briefing schedule. On the day that Plaintiff's brief in support of its motion was due, without leave of Court, Plaintiff filed the Second Amended Motion for preliminary injunction (DE 323). Defendants rightfully objected to this amendment and seek that it be stricken. However, having reviewed the memorandum accompanying the motion, the Court finds no substantive differences between the second amended motion and the first amended motion. As a matter of procedure the Court strikes Plaintiff's second amended motion (DE 323), but not the brief accompanying it, which equally applies to the first amended motion for preliminary injunction.
From the beginning, this has been an extremely contentious case. Neither the parties nor the attorneys get along with each other. There have been multiple accusations against everyone involved in this case and numerous motions for sanctions from both sides that request anythingfrom the dismissal of the case to the granting of default judgment. The Court will address these motions in separate orders.
Additionally, in less than a year, this case has garnered almost 350 docket entries, many accompanied by voluminous filings. As the Court noted before, a great number of these entries are related to petty motions by both sides, regarding matters that should be easily resolved by the attorneys without the Court's involvement. These filings have overwhelmed the Court and are neither helpful to the administration of this case nor conducive to the orderly litigation of the matters before it.
Finally, having heard the testimony of K.T. Tran and Omar Macy in person, the Court finds that these witnesses lack credibility almost entirely. It was not so in the beginning. As the evidentiary hearings began, Mr. Tran appeared sincere and perhaps overwhelmed with the scope of the lawsuit filed against him and his company. Soon, however, it became clear to the Court that his demeanor was an act and that he had no problems with twisting the truth or lying outright. The Court found his testimony regarding the meaning of the term "acquisition" that he used in the announcement of projectile sales especially troubling. His account that he thought the term "acquisition" meant a contract with Conrad Sun to sell projectiles is plainly incredible and his hiding behind the fact that English is his second language (which he appears to speak and write quite well) shameful.
Likewise, Mr. Tran's testimony as to the steps he took to comply with the Court's Temporary Restraining Order when confronted with the alleged violations entirely lacks credibility. If anything, his testimony established that Defendants were trying to appear to be complying with the letter of the law, while using every outlet possible to undermine the status quo of the case that the order meant to implement.
As to Omar Macy, an officer of Defendant RAP4, the Court found him arrogant, evasive, and too eager to twist the truth in Defendants' favor. Very little, if anything of his testimony could be taken at face value.
On the other hand, while Plaintiff's officers appear to have chosen to use this lawsuit not to merely prevent unfair competition but to also maintain their monopoly in pepper powder projectiles, their testimony agreed with other evidence in this case and the Court finds them largely credible.
With these things in mind, the Court moves on to the merits of Plaintiff's amended motion for preliminary injunction.
Plaintiff, a corporation based in Fort Wayne, Indiana, manufactures and sells PepperBall branded equipment including PepperBall projectiles. Live PepperBall projectiles are small plastic spheres that are red or half red/half black, and contain an irritant powder that functions similar to pepper spray. PepperBall projectiles are used by police and governmental agencies, militaries, and private security firms as a non-lethal force compliance tool. Plaintiff's half owner, Perfect Circle Projectiles, developed and has manufactured the majority of the projectiles sold by PepperBall Technologies since the late 1990s.
Plaintiff acquired all the tangible and intangible assets of PepperBall Technologies---including PepperBall's trademarks, goodwill, and trade secrets---when Plaintiff foreclosed on the loans it had purchased and was the successful bidder at the January 9, 2012, public sale Plaintiff conducted. No one with standing to complain about how the sale was conducted has complained. Plaintiff's owners took steps to ensure a seamless transition between owners, including keepingmost of the employees, trainers and suppliers. PepperBall Technologies was at all times reachable by phone, e-mail, and via its website. PepperBall Technologies shipped all orders to its customers on time and there was never a shortage of product during Plaintiff's ownership of PepperBall Technologies or the transition period.
Plaintiff was and is the sole manufacturer of a spherical irritant powder filled projectile in the United States. Plaintiff and its authorized distributors are the sole source for PepperBall projectiles in the United States, and dominated the domestic market for irritant powder filled projectiles.
RAP4 sells paintball guns and related items through its interactive website. Defendant Tran is its owner and chief executive officer. Customers use RAP4's website to place orders for merchandise. In placing their orders, the customers enter into a legal agreement with RAP4 where, among other things, they consent to receiving "certain communications . . . , such as service announcements, administrative messages and the RAP4 Newsletter" and acknowledge "that these communications are considered part of RAP4 membership and [they] will not be able to opt out of receiving them." RAP4 has reserved for itself the right "under certain circumstances and without prior notice, [to] immediately terminate" the customers' access to service. "Cause for such termination shall include, but not be limited to, (a) breaches or violations of the TOS [Terms of Service] or other incorporated agreements or guidelines . . . ." (Tiberius Decl. ¶ 7 and its Ex. A-8.)
RAP4 sends its customers, including those in Indiana, about one email a week.
During the second week of August 2012, Defendant RAP4 posted on its, and other, websites---and sent out blast e-mails that some Indiana residents and several of Plaintiff's employees and customers received---the following statement:
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