CJ Prods. LLC v. Snuggly Plushez LLC

• Decision Date: 22 August 2011
• Docket Number: No. 11–CV–0715 (RRM)(SMG).,11–CV–0715 (RRM)(SMG).
• Citation: 809 F.Supp.2d 127
• Parties: CJ PRODUCTS LLC and Ontel Products Corporation, Plaintiffs, v. SNUGGLY PLUSHEZ LLC and Berkant Keiskbas, Defendants.
• Court: U.S. District Court — Eastern District of New York

809 F.Supp.2d 127

CJ PRODUCTS LLC and Ontel Products Corporation, Plaintiffs,
v.
SNUGGLY PLUSHEZ LLC and Berkant Keiskbas, Defendants.

No. 11–CV–0715 (RRM)(SMG).

United States District Court, E.D. New York.

Aug. 22, 2011.

[809 F.Supp.2d 139]

Jason M. Drangel, Robert L. Epstein, Epstein Drangel Bazerman & James, P.C., New York, NY, for Plaintiffs.

Daniel C. Marotta, Gabor & Marotta, Staten Island, NY, for Defendants.

MEMORANDUM AND ORDER ROSLYNN R. MAUSKOPF, District Judge:

Plaintiffs CJ Products LLC (“CJ”) and Ontel Products Corporation (“Ontel”) (collectively, “plaintiffs”) brought this action on February 14, 2011 against defendants Snuggly Plushez, LLC (“Snuggly”) and Berkant Keiskbas (“Keiskbas”) (collectively, “defendants”) alleging copyright infringement, trademark infringement, and related claims as to one of their products. ( See Compl. (Doc. No. 1).) In May 2011, plaintiffs moved for a preliminary injunction. (Doc. Nos. 7–12.) The Court held an extensive preliminary injunction hearing on June 24, 2011. For the reasons stated below, plaintiff's request for a preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure is GRANTED. This Memorandum and Order constitutes the Court's findings of fact and conclusions of law.

BACKGROUND

CJ is a company that develops, produces, sells, and distributes toys. The subject of this motion is one of its most popular products—a plush toy in the shape of an animal that unfolds into a flat pillow known as a “Pillow Pet.” This product was introduced in 2003 and branded with several different registered trademarks, including MY PILLOW PETS®, MY PILLOW PETS® (with logo), and IT'S A PILLOW, IT'S A PET, IT'S A PET ... IT'S A PILLOW PET®. (Pl.'s Reply in Supp. of Mot. for Prelim. Inj. (Doc. No. 21) at 6.) CJ is in the midst of registering the trademark PILLOW PETS™; at the time of this action the process had passed through the United States Patent and Trademark Office (“USPTO”) registration period and stalled in the opposition period. CJ granted to Ontel the exclusive license to manufacture, market, advertise, promote, sell, offer to sell, and distribute the pillow pet line of products, and an exclusive license to all related intellectual property. (Compl. ¶¶ 23–25.)

Defendant Snuggly Plushez (“Plushez”) is also a corporation that develops, produces, sells, and distributes toys, including selling toys by website. ( Id. ¶¶ 31–33.) Plaintiffs allege that “Defendant Snuggly [Plushez] was under the de facto and sole

[809 F.Supp.2d 140]

control and served as the alter egos of Defendant Keiskbas, who is an officer, director, or board member of this entity.” ( Id. ¶ 6.) Plaintiffs learned that defendants were selling merchandise quite similar to their “Pillow Pet” product line. Likewise, when plaintiffs investigated these sales, they found that defendants were using marks resembling those they had registered, and that they purchased and used Google AdWords ¹ to direct potential customers to their sites using these marks.

Plaintiffs now seek a preliminary injunction, enjoining and restraining defendants and their agents from: (1) manufacturing, copying, distributing, or selling any plush toy substantially similar to CJ's designs for Lady Bug, VA–1–665–418; Panda, VA 1–679–223; Bumble Bee, VA 1–665–417; Penguin, VA–674–371; Bear, VA 1–715–257; Dolphin, VA 1–674–379: Frog, VA 1–674–372; Monkey, VA 1–674–374; Duck, VA 1–715–275; and Cow, VA 1–715–272, pending further order of this Court or a determination of the action; (2) using PILLOW PETS™, MY PILLOW PETS®, IT'S A PILLOW, IT'S A PET, IT'S A PILLOW PET®, pillowpets.co, “authentic pillow pets” or any confusingly similar mark, or any colorable imitations thereof, as a trademark, service mark, trade name, domain name and website, Google AdWord or otherwise on tags, labels or packaging, in connection with the wholesale, retail and/or Internet sale of plush toys; (3) using PILLOW PETS™, MY PILLOW PETS®, IT'S A PILLOW, IT'S A PET, IT'S A PILLOW PET®, or any confusingly similar mark, or any colorable imitations thereof, in any advertising, promotions, solicitations or Internet use (including, but not limited to, website, domain name, coupon, and/or social networks) for such wholesale, retail and/or Internet sale; (4) using the terms “authentic,” “original,” “official,” “As Seen On TV” or other similar confusing terms in connection with the wholesale, resale and/or Internet sale of Plushez or Napies plush toys; (5) making any other false associations with Plaintiff or plaintiffs PILLOW PETS™, MY PILLOW PETS®, IT'S A PILLOW, IT'S A PET, IT'S A PILLOW PET®, products in connection with the wholesale, resale and/or Internet sale of Plushez or Napies plush toys; (6) using third party reviews of PILLOW PETS™, MY PILLOW PETS®, IT'S A PILLOW, IT'S A PET, IT'S A PILLOW PET® products; and (7) destroying, mutilating, concealing altering, transferring, or otherwise disposing of, in any manner, any books, records, documents, emails, correspondence, brochures, manuals, or other documents of any kind relating to defendants' sale of plush toys in the possession custody or control of any of the defendants until further order of this Court.

For the reasons stated below, the motion for preliminary injunction is GRANTED in its entirety.

STANDARD

Whether to grant or deny a preliminary injunction lies within the sound discretion of the district court. S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 237 (2d Cir.2001); P & G v. Ultreo, Inc., 574 F.Supp.2d 339, 344 (S.D.N.Y.2008). A “party seeking a preliminary injunction must demonstrate (1) irreparable harm in the absence of the injunction, and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor.”

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MyWebGrocer, LLC v. Hometown Info., Inc., 375 F.3d 190, 192 (2d Cir.2004) (internal quotation marks and citation omitted).

Moreover, if a party seeks a “mandatory” preliminary injunction, which alters the status quo by requiring a positive act, or if a party seeks an injunction that will provide the moving party with “substantially all the relief sought and that relief cannot be undone even if the defendant prevails at a trial on the merits,” then the moving party “must satisfy a higher standard, by showing a clear or substantial likelihood of success.” Bose Corp. v. Silonsonnic Corp., 413 F.Supp.2d 339, 341 (S.D.N.Y.2006) (internal quotation marks and citation omitted). In all cases, a preliminary injunction is an “extraordinary remedy” that should not be routinely granted. JSG Trading Corp. v. Tray–Wrap, Inc., 917 F.2d 75, 79, 80 (2d Cir.1990). The party seeking the injunction carries the burden of persuasion to demonstrate, “by a clear showing,” that the necessary elements are satisfied. See Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997).

The Second Circuit, in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006), held that the “longstanding standard” for preliminary injunctive relief in the copyright context had been “abrogated” by the Supreme Court. Id. at 391, 126 S.Ct. 1837. The Court held that, in addition to demonstrating (1) “either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the [plaintiff]'s favor,” plaintiffs also must demonstrate (2) a likelihood of irreparable harm; (3) that “remedies available at law ... are inadequate”; (4) that the balance of hardships tip in his favor; and (5) that the “public interest would not be disserved” by issuing preliminary relief. Salinger v. Colting, 607 F.3d 68, 80 (2d Cir.2010) (quoting eBay, 547 U.S. at 391, 126 S.Ct. 1837).

The Salinger court further clarified these requirements. First, with respect to the probability of success on the merits, the Salinger court cautioned district courts of “the difficulty of predicting the merits of a copyright claim at a preliminary injunction hearing.” Id. at 80. Second, the court altered the burden of proof with respect to irreparable harm. Formerly, irreparable harm was presumed if a plaintiff successfully made out a prima facie case of infringement, due to the threat of market confusion. See Pem–America, Inc. v. Sunham Home Fashions, LLC, 83 Fed.Appx. 369, 372 (2d Cir.2003). The Salinger court warned that courts, in analyzing the irreparable harm prong,

must not adopt a “categorical” or “general” rule or presume that the plaintiff will suffer irreparable harm.... The court must actually consider the injury the plaintiff will suffer if he or she loses on the preliminary injunction but ultimately prevails on the merits, paying particular attention to whether the remedies available at law, such as monetary damages, are inadequate to compensate for that injury ....

Salinger, 607 F.3d at 80. Thus, in the wake of eBay and Salinger, “courts must not simply presume irreparable harm ... [instead, a plaintiff must show that] the failure to issue a[ ] [preliminary] injunction would actually cause irreparable harm.” Id. at 82 (citing eBay, 547 U.S. at 393, 126 S.Ct. 1837). Irreparable harm comprises “the harm that (a) occurs to the parties' legal interests and (b) cannot be remedied after a final adjudication, whether by damages or a permanent injunction.” Id. at 81. In the copyright context, the plaintiff's interest in the copyrighted work at issue must be balanced against the defendant's

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interest in his own material—to the extent that it is not superseded by plaintiff's copyright. Id. at 81. Irreparable injury must be “likely in the absence of an injunction,” not merely possible, given the fact that a preliminary injunction is an “extraordinary remedy that may only be awarded upon a clear...