Airwair Int'l v. ITX U.S. LLC

• Decision Date: 15 November 2021
• Docket Number: 19-cv-07641-SI
• Court: U.S. District Court — Northern District of California
• Parties: AIRWAIR INTERNATIONAL LTD., Plaintiff, v. ITX USA LLC, Defendant.

AIRWAIR INTERNATIONAL LTD., Plaintiff, v. ITX USA LLC, Defendant.

No. 19-cv-07641-SI

United States District Court, N.D. California

November 15, 2021

ORDER GRANTING PLAINTIFF'S MOTION FOR PERMANENT INJUNCTION

Dkt. No. 189

SUSAN ILLSTON, United States District Judge

Before the Court is a motion for a permanent injunction filed by plaintiff AirWair International Ltd. (“plaintiff” or “AirWair”) against defendant ITX USA, LLC (“ITX” or “defendant”). Dkt. No. 189 (Plaintiff's Motion). On November 12, 2021, the Court held a hearing and heard argument. Having considered the parties' papers and the arguments made during the hearing, the Court hereby GRANTS plaintiff's motion as discussed below.

BACKGROUND

Plaintiff owns the following trade dress, referred to collectively as “Dr. Martens Trade Dress”: Registration No 2437751 is directed to “a combination of yellow stitching in the welt area, and a two-tone grooved sole edge”; Registration No. 5067689 is directed to “a sole edge including longitudinal ribbing, and a dark color band over a light color”; Registration No. 5067692 is directed to “longitudinal ribbing and a dark color band over a light color on the outer sole edge, welt stitching and a tab located at the top back heel of footwear” and Overall visual impression of welt stitching, a grooved sole edge, an angled heel, a platform sole, the “Quad” cleat pattern, and a heel loop corresponds to the “Jadon Design.” See e.g., Dkt. No. 189 at 2 (Motion for PI); see, e.g., Dkt. No. 189-1, Exhibit D and E (below).

Dkt. No. 189-1, Exhibit D (Specimen)

(Image Omitted)

Dkt. No. 189-1, Exhibit E (“Jadon”)

(Image Omitted)

In 2019, defendant sold four styles of shoes that a jury found infringed plaintiff's protected trade dress. Dkt. No. 189 at 5; see Dkt. No. 189-1 Exhibits F-I. Specifically, on August 9, 2021, the jury returned the following verdict in plaintiff's favor:

(1) Regarding plaintiff's first claim (Infringement under 15 U.S.C. § 1114(1)): that plaintiff's ‘751, '689, and ‘692 registrations are valid and protectable, that plaintiff owns the marks, and that defendant infringed these registered marks. Id. at p. 2-3.

(2) Regarding plaintiff's second and third claims (Unfair competition under 15 U.S.C. § 1125 and California common law): that defendant used trade dress similar to the overall visual impression of the Jadon Design without the plaintiff's consent in a manner that is likely to cause confusion among ordinary consumers and the general public as to the source, sponsorship, affiliation, or approval of the defendant's goods. Id. at p. 4-5.

(3) Regarding plaintiff's fourth and fifth claims (Trademark Dilution under 15 U.S.C. §1125(c) and California Business & Professions Code § 14247): that the ‘689 trade dress, ‘692 trade dress, and ‘751 trade dress, and Jadon Design are famous, and defendant diluted the ‘689 trade dress, ‘692 trade dress, and ‘751 trade dress, and Jadon Design. Id. at p. 5-6.

Dkt. No. 183 at p. 2-3 (Jury Verdict Form).

Plaintiff requests the following language for a permanent injunction:

the court permanently enjoin ITX and its officers, directors, servants, employees, attorneys, agents, representatives, partners, joint venturers, corporate affiliates, successors, assigns, and all persons in active concert or participation with it, from:

A. designing, manufacturing, importing, shipping, delivering, selling, marketing, displaying, advertising, or promoting footwear in the United States that use any of the following trade dress1 (“Dr. Martens Trade Dress”), alone or in combination:

1. Registration No. 2, 437, 751 (a combination of yellow stitching in the welt area, and a two-tone grooved sole edge);

2. Registration No. 5, 067, 689 (a sole edge including longitudinal ribbing, and a dark color band over a light color);

3. Registration No. 5, 067, 692 (longitudinal ribbing and a dark color band over a light color on the outer sole edge, welt stitching, and a tab located at the top back heel of footwear);

4. The overall visual impression of welt stitching, a grooved sole edge, an angled heel, a platform sole, the “Quad” cleat pattern, and a heel loop (the “Jadon Design”); and/or

B. designing, manufacturing, importing, shipping, delivering, selling, marketing, displaying, advertising, or promoting footwear in the United States that use the elements of the trade dress in a manner that is a colorable imitation of or confusingly similar to the Dr. Martens Trade Dress, alone or in combination; and/or

C. representing or implying, directly or indirectly, to retailers, customers, distributors, licensees, or any other customers or potential customers of the products of ITX or to any corporate affiliate of ITX (collectively, “ITX Products”) that ITX Products originate with, are sponsored, endorsed, or licensed by, or are otherwise associated or affiliated with AirWair or Dr. Martens.

(Dkt. No. 189 at 2-3).

LEGAL STANDARD

Federal Rule of Civil Procedure 65 governs the issuance of injunctions. To obtain a permanent injunction, a plaintiff must satisfy four factors: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (citations omitted).

The Lanham Act (15 U.S.C. §§ 1116(a), 1125(c)(1)) provides for injunctive relief for claims of trademark infringement, unfair competition, and trademark dilution. California statute (Cal. Bus. & Prof. Code § 14247(b)) provides for injunctive relief for claims of trademark dilution. More particularly, “[i]injunctive relief is the remedy of choice for trademark and unfair competition cases, since there is no adequate remedy at law for the injury caused by a defendant's continuing infringement.” Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988).

DISCUSSION

I. Irreparable Harm

Under the Lanham Act, plaintiff is “entitled to a rebuttable presumption of irreparable harm upon a finding of a violation” of “any right of the registrant” of a registered mark or under 15 U.S.C. 1125. 15. U.S.C. § 1116 (West).^[1] Regarding voluntary cessation, defendant “bears the formidable burden” of demonstrating voluntary compliance by showing ‘it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur.'” Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013) (internal citations omitted); see Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132, 1135 (9th Cir. 1986) (internal citations omitted) (“any doubt in respect to the extent [of relief] thereof must be resolved in its [plaintiff's] favor and against” the defendant).

“Evidence of threatened loss of prospective customers or goodwill certainly supports a finding of the possibility of irreparable harm.” Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 841 (9th Cir. 2001); see also OTR Wheel Eng'g, Inc. v. W. Worldwide Servs., Inc., 602 Fed.Appx. 669, 672 (9th Cir. 2015). Further, evidence of “extensive and targeted advertising and unsolicited media” can demonstrate plaintiff has “built a specific reputation” with “intangible benefits, ” and “evidence of loss of control over business reputation and damage to goodwill [can] constitute irreparable harm” adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 756 (9th Cir. 2018) (internal citations omitted).

Plaintiff argues irreparable harm here is both presumed and evidenced. Dkt. No. 189 at 7. Plaintiff refers to evidence at trial including, for example:

- Damien Wilson testimony: “I've had -- personally had an experience of seeing somebody walking in a -- you know, for want of a better word, a "knockoff" pair of Doc Martens across the street, with the sole hanging off because it was glued on and not made of great materials. And I think if people mistake that as a pair of Dr. Martens, that's not a great thing.” (Trial Transcript 260:3-10));

- Leslie Lane testimony: “[I]t's a very hard thing for me to talk about because that would be incredibly damaging to the brand. Tremendously damaging, yeah. Yeah, a couple of years of mass sales … and the brand would be nowhere” (Trial Transcript 498:23-499:2));

- News article stating “Dr. Martens are a style icon that has endured for over 50 years. They've been worn by everyone from Kanye West, to Cardi B. to the Dalai Lama, and even Pope John Paul, II, when the Vatican placed an order for the famous eight-eyelet boot in black, white, and navy leather” (Trial Transcript 246:25-246:5));

- Leslie Lane testimony that plaintiff spends around $8.5million per year on marketing (Dkt. No. 172 at page 135 lines 15-17 of 192 (Trial Transcript 306:15-17).

See generally, Dkt. No. 189 at 8-10.

Defendant counters that plaintiff has not established irreparable harm because (i) defendant has ceased selling the products in question and sales are not likely to recur and (ii) plaintiff was not awarded monetary damages and has only evidenced speculative harm. Dkt. No. 193 at 7-9.

Plaintiff refers to Gianni Versace, wherein the defendant was found to have harmed plaintiff's brand by causing customer confusion and negative reviews, and BMW of N Am. , wherein the defendant intended to continue selling counterfeit goods, as instances in which injunctions were granted. Dkt. No. 189 at 3;, citing Gianni Versace, S.p.A., v. Versace 19.69 Abbigliamento Sportivo SRL, 328 F.Supp.3d 1007, 1023, 1032 (N.D. Cal. 2018), and citing BMW of N. Am., LLC v. Rocco, 2020 WL 7047318, at *12 (C.D. Cal. Nov. 18, 2020). While defendant's conduct...