Sports Design and Development, Inc. v. Schoneboom

• Decision Date: 06 January 1995
• Docket Number: No. C95-4001.,C95-4001.
• Citation: 871 F. Supp. 1158
• Parties: SPORTS DESIGN AND DEVELOPMENT, INC., d/b/a Bill Lewis Lures, Plaintiff, v. Larry SCHONEBOOM, d/b/a Stream-Lines International Sporting Goods Products, Defendant.
• Court: U.S. District Court — Northern District of West Virginia

871 F. Supp. 1158

SPORTS DESIGN AND DEVELOPMENT, INC., d/b/a Bill Lewis Lures, Plaintiff, v. Larry SCHONEBOOM, d/b/a Stream-Lines International Sporting Goods Products, Defendant.

No. C95-4001.

United States District Court, N.D. Iowa, Western Division.

January 6, 1995.

COPYRIGHT MATERIAL OMITTED

John C. Gray, Eidsmoe, Heidman, Redmond, Fredregill, Patterson & Schatz, Sioux City, IA, and John Wesley Daughdrill, Jr., Young Scanlon & Sessums, P.A., Jackson, MS, for plaintiff.

No appearance, for defendant.

ORDER GRANTING TEMPORARY RESTRAINING ORDER PURSUANT TO F.R.CIV.P. 65(b)

BENNETT, District Judge.

I. INTRODUCTION AND BACKGROUND

This matter comes before the court pursuant to Plaintiff Sports Design and Development, Inc.'s d/b/a Bill Lewis Lures ("Bill Lewis Lures") Application for Temporary Restraining Order Pursuant to F.R.C.P. 65(b) and Civil Seizure Order (# 2) filed January 3, 1995 and motion to seal case, for expedited discovery, for order setting bond, for order to show cause, and for hearing on preliminary injunction (# 3) filed on January 3, 1995.¹ Bill Lewis Lures seeks a temporary restraining order enjoining Defendant Larry Schoneboom d/b/a Stream-Lines International Sporting Good Products ("Schoneboom") from any further infringement of Bill Lewis Lures' RAT-L-TRAP trademark or trade dress.² Bill Lewis Lures further requests that the court order the seizure of any products or materials bearing Bill Lewis Lures' RAT-L-TRAP mark.

On January 3, 1995, Bill Lewis Lures, a manufacturer of fishing lures under the registered mark RAT-L-TRAP, brought this action for trademark infringement of its RAT-L-TRAP mark against Schoneboom. In its three-count complaint Bill Lewis Lures asserts claims against Schoneboom for violation of the Trademark Act of 1946 ("The Lanham Trademark Act"), 15 U.S.C. § 1051 et seq., the Trade Mark Counterfeiting Act of 1984, 15 U.S.C. § 1116 et seq., (Count I), and section 43(a) of the Lanham Trademark Act, 15 U.S.C. § 1125(a), (Count III). Bill Lewis Lures further claims relief based on pendent common law claims of unfair competition and trademark infringement (Count II).

The federal district courts have always been courts of limited jurisdiction. See U.S. CONST., Art. III, § 1. "Federal courts are not courts of general jurisdiction and have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto." Marine Equip. Management Co. v. United States, 4 F.3d 643, 646 (8th Cir.1993) (citing Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89 L.Ed.2d 501, reh'g denied, 476 U.S. 1132, 106 S.Ct. 2003, 90 L.Ed.2d 682 (1986), citing in turn Marbury v. Madison, 5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803)); see also Neighborhood Transp. Network, Inc. v. Pena, 42 F.3d 1169 (8th Cir.1994) (federal court jurisdiction limited by Article III of the Constitution). A federal court therefore has a duty to assure itself that the threshold requirement of subject matter jurisdiction has been met in every case. Bradley v. American Postal Workers Union, AFL-CIO, 962 F.2d 800, 802 n. 3 (8th Cir.1992); Thomas v. Basham, 931 F.2d 521, 523 (8th Cir.1991); Jader v. Principal Mut. Life Ins. Co., 925 F.2d 1075, 1077 (8th Cir.1991); Barclay Square Properties v. Midwest Fed. Sav. & Loan Ass'n, 893 F.2d 968, 969 (8th Cir.1990); Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir.1987). The federal courts have a duty to examine the substantiality of the federal claim throughout the litigation, and must dismiss all claims if the federal claim proves patently meritless even after the trial begins. Pioneer Hi-Bred Int'l v. Holden Found. Seeds, Inc., 35 F.3d 1226, 1242 (8th Cir.1994). Here jurisdiction is grounded on alleged violations of the Lanham Trademark Act. See 28 U.S.C. § 1338.

A hearing on Bill Lewis Lures' request for a temporary restraining order, civil seizure order and expedited discovery was held on January 6, 1994. Bill Lewis Lures appeared through its counsel John C. Gray, Eidsmoe, Heidman, Redmond, Fredregill, Patterson & Schatz, Sioux City, Iowa, and John Wesley Daughdrill, Jr., Young, Scanlon, & Sessums, P.A., Jackson, Mississippi. Defendant Schoneboom did not appear at the hearing. At the hearing, Mr. Gray informed the court that the Sac County Sheriff's Office had served Schoneboom with notice of the hearing on January 5, 1995.

II. FINDINGS OF FACT

Plaintiff Bill Lewis Lures is a corporation incorporated under the laws of the State of Louisiana, and its principal place of business is located in Alexandria, Louisiana. Compl. at ¶ 5. Defendant Schoneboom operates a business in Wall Lake, Iowa and Early, Iowa. Id. at ¶ 6. Bill Lewis Lures is the owner of the registered trademark "RAT-L-TRAP", registration number 1,432,081. Id. at ¶ 9. For a number of years Bill Lewis Lures has offered fishing lures under the RAT-L-TRAP mark. Id. at ¶ 8. These lures are sold in distinctive packaging. Id. at ¶ 7. The lures are sold in clear plastic boxes with plastic hooks on one end of the box which permits it to be displayed in a retail setting. On the wall behind the lure is a white insert which has imprinted on it in large red letters "Rat-L-Trap." The symbol for registered trademark appears just to the upper right of the phrase. Immediately below the red letters is the word "Rattletrap" surrounded by parenthesis and again followed by the symbol for registered trademark. Below the two phrases appears the following text:

For best results, retrieve the lure fast. Rattlers set up vibration and chatter that can best be heard in 20 feet of water. Excellent School bass lure. Also very effective with yo-yo retrieve. Produces most violent strikes of any lure we have ever fished.

Right of the text quoted above appears a sketch of a fisherman drawn in red ink. Immediately below the text the words "Bill Lewis Lures" appear in red.³ Bill Lewis Lures has engaged in extensive advertising and sale of RAT-L-TRAP lures. Id. at ¶ 8.

On September 2, 1994, the Lee Company, a sporting goods distributorship located in Lewisville, Texas, purchased approximately 1400 to 1500 RAT-L-TRAP fishing lures from Schoneboom. Aff. of John Kenneth Wilson ("Wilson Aff.") at ¶ 2.⁴ On September 7, 1994, the Lee Company sold one of the fishing lures purchased from Schoneboom, a Chrome Black RAT-L-TRAP fishing lure, to Jimmy Franklin Smith of Smitty's Sporting Goods in Dallas, Texas. Wilson Aff. at ¶ 3; Aff. of Jimmy Franklin Smith ("Smith Aff.") at ¶ 2. Smith, aware of the existence of counterfeit RAT-L-TRAP lures, contacted Preston Hartt of Bill Lewis Lures prior to ordering the lure. Smith Aff. at 3; Aff. of Preston Hartt ("Hartt Aff.") at 3. Hartt works in the sales department of Bill Lewis Lures and has done business with Jimmy Franklin Smith of Smitty's Sporting Goods for many years. Hartt Aff. at ¶ 1. Upon receipt of the lure on September 20, 1994, Smith sent it to Hartt. Smith Aff. at ¶ 4; Hartt Aff. at ¶ 3. On September 21, 1994, Hartt sent the lure to Eldora Plastics in Eldora, Iowa for testing to determine whether the lure was in fact counterfeit. Hartt Aff. at ¶ 4. After testing was done at Eldora Plastics, the lure was eventually sent on October 4, 1994, to Triad Fastener Limited Partnership in Alda, Nebraska. Aff. of Jerry Jenson ("Jensen Aff.") at ¶¶ 5-10; Aff. of John Wesley Daughdrill, Jr. ("Daughdrill Aff.") at ¶ 3; Aff. of Herb Worthington ("Worthington Aff.") at ¶¶ 3-7. Triad and Eldora Plastics are the only two companies that produce plastic lure bodies for Bill Lewis Lures' RAT-L-TRAP fishing lures. Worthington Aff. at ¶ 2; Jensen Aff. at ¶ 2. Testing at Triad and Eldora Plastics revealed that the lure purchased from Schoneboom could not have been produced by any mold ever used at either facility to make RAT-L-TRAP lures. Worthington Aff. at ¶¶ 3-6; Jensen Aff. at ¶¶ 6-10.

The RAT-L-TRAP lure sold by Schoneboom differs from the RAT-L-TRAP lures sold and marketed by Bill Lewis Lures in the following ways: (1) that the Schoneboom lure differs in length from Bill Lewis Lures' RAT-L-TRAP lures; (2) that the eyes on the Schoneboom lure are out of location when compared with a Bill Lewis Lures' RAT-L-TRAP lure; (3) that the eyes on the Schoneboom lure protrude from the body more than those found on Bill Lewis Lures' RAT-L-TRAP lures; (4) that the eyes on the Schoneboom lure are smaller in diameter; and (5) the fin on the Schoneboom lure is taller than that found on a Bill Lewis Lures' RAT-L-TRAP lure, and the Bill Lewis Lures' lure has a flat on the fin after the radius. Aff. of Everett Gill at ¶ 4.

The packaging of Schoneboom's lures is identical to that of Bill Lewis Lures. The only perceivable differences are the red ink on the insert found in Schoneboom's plastic case is slightly faded, and the text is in a slightly bolder type face.

Bill Lewis Lures' counsel hired John P. Dolan, Jr., a private investigator from Des Moines, Iowa, to conduct investigative work concerning trademark infringement and counterfeiting. Aff. of John P. Dolan, Jr. ("Dolan Aff.") at ¶¶ 1-2. Dolan found fishing lure production facilities in a building in Early, Iowa, in which Schoneboom had previously operated his sporting equipment and fish lure business. Id. at ¶ 3.

III. CONCLUSIONS OF LAW

A. Standards for Granting a Temporary Restraining Order

Courts in this circuit apply the well-established standards set out in Data-phase Sys., Inc. v. CL Sys., Inc., 640 F.2d 109, 114 (8th Cir.1981) (en banc), for consideration of a preliminary injunction in also determining the propriety of issuing a temporary restraining order under Federal Rule of Civil Procedure 65.⁵See S.B. McLaughlin & Co. v. Tudor Oaks Condominium Project, 877 F.2d 707, 708 (8th Cir.1989) (approving district court's application of Dataphase test in considering temporary restraining order); Jackson v. National Football League, 802 F.Supp. 226, 229 (D.Minn.1992); see generally Wright &...