Vans, Inc. v. MSCHF Prod. Studio, Inc.

• Decision Date: 29 April 2022
• Docket Number: 22-CV-2156 (WFK) (RML)
• Citation: 602 F.Supp.3d 358
• Parties: VANS, INC. and VF Outdoor, LLC, Plaintiffs, v. MSCHF PRODUCT STUDIO, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

602 F.Supp.3d 358

VANS, INC. and VF Outdoor, LLC, Plaintiffs,

v.MSCHF PRODUCT STUDIO, INC., Defendant.

22-CV-2156 (WFK) (RML)

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

Signed April 29, 2022

Lucy Jewett Wheatley, Pro Hac Vice, McGuireWoods LLP, Richmond, VA, Matthew William Cornelia, Pro Hac Vice, McGuireWoods LLP, Dallas, TX, Michael L. Simes, Philip A. Goldstein, McGuireWoods LLP, New York, NY, Tanya Greene, Pro Hac Vice, Los Angeles, CA, for Plaintiffs.

David H. Bernstein, Megan K. Bannigan, Marissa P. MacAneney, Timothy Joseph Cuffman, Debevoise & Plimpton LLP, New York, NY, John Belcaster, Pro Hac Vice, Oak Park, IL, Nicole O'Toole, Pro Hac Vice, William Patterson, Pro Hac Vice, Swanson, Martin & Bell LLP, Chicago, IL, for Defendants.

Rebecca Tushnet, Pro Hac Vice, Harvard University, Cambridge, MA, for Amicus Rebecca L. Tushnet.

DECISION & ORDER

WILLIAM F. KUNTZ, II, United States District Judge:

Before the Court is a motion by Vans, Inc. and VF Outdoor, LLC (collectively, "Plaintiffs" or "Vans") seeking a temporary restraining order and preliminary injunction against MSCHF Product Studio, Inc. ("Defendant") related to its sale of the "Wavy Baby" shoes, which Plaintiffs assert, inter alia , infringe their trademarks and trade dress in violation of the Lanham Act. For the following reasons, the Court GRANTS Plaintiffs’ motion for a temporary restraining order and a preliminary injunction.

BACKGROUND

This action arises out of a collaboration between Defendant and Michael Stevenson, who uses the stage name "Tyga," to design, to develop, and to sell the "Wavy Baby" shoes. Plaintiffs assert those activities violate their intellectual property rights by incorporating Plaintiffs’ trademarks and trade dress. See Compl. ¶ 7, ECF No. 1. The Defendant released four thousand three hundred and six (4,306) Wavy Baby shoes for sale on Monday, April 18, 2022, at 12:00 Noon. Rosendahl Decl. ¶ 11, ECF No. 27-3.

On April 14, 2022, Plaintiffs filed a Complaint against Defendant asserting six claims for: (1) Federal Trademark Infringement in violation of 15 U.S.C. § 1114 ; (2) Federal Unfair Competition and False Designation of Origin in violation of 15 U.S.C. § 1125(a) ; (3) Federal Trademark Dilution in violation of 15 U.S.C. § 1125(c) ; (4) Unfair Trade Practices in violation of New York General Business Law § 349 ; (5) Trademark Dilution in violation of New York General Business Law § 360-1; and (6) Common Law Trademark Infringement and Unfair Competition. See Compl. Plaintiffs assert the Wavy Baby shoes and associated advertising infringe Plaintiffs’ "jazz stripe" trademark (the "Side Stripe Mark"), "Flying-V" mark, "OFF THE WALL" mark, waffle sole mark, and Vans footbed logo (collectively, the "Marks") and the Plaintiffs’ Old Skool shoes trade dress, Off the Wall trade dress, and shoe box trade dress (collectively, the "Trade Dress"). Pls. Mem. at 3, 14, ECF No. 12-1.

On April 15, 2022, Plaintiffs moved for a temporary restraining order ("TRO") and preliminary injunction to enjoin Defendant from: (1) releasing for sale to the public any of the Wavy Baby shoes or any colorful imitations or reconstructions thereof (collectively, the "Wavy Baby shoes"); (2) fulfilling orders for any of the Wavy Baby shoes; (3) using Vans’ Old Skool Trade Dress or Side Stripe Mark, or any mark that is confusingly similar to Vans’ marks and trade dress or that is a derivation or colorable imitation or recreation thereof, regardless of whether used alone or with other terms or elements; (4) referring to or using any of the Marks, Trade Dress, or derivations and colorable imitations or recreations thereof in any advertising, marketing, or promotion; and, (5) instructing, assisting, aiding, or abetting any other person or business entity in engaging in or performing any of the activities referred to above, or taking any action that contributes to any of the activities referred to above. Pls. Mot. at 4, ECF No. 12. Plaintiffs requested the Court to order Defendant to place in escrow any funds received from all orders taken to date for the Wavy Baby shoes so that, if Plaintiffs prevail in this action, Defendant is able to return those funds to customers who ordered the Wavy Baby shoes under the mistaken belief Vans was the source of the shoes or otherwise approved or sponsored the shoes. Finally, Plaintiffs sought permission to file with the Court within thirty (30) days after entry of the injunction a report in writing under oath detailing the manner and form in which Defendant has complied with the injunction. Pls. Mot. at 5.

In assessing Plaintiffs’ motion for injunctive relief, this Court has reviewed the submissions of Plaintiffs and Defendant, including their memoranda, declarations, and exhibits, as well as the amicus curiae brief submitted by Harvard Law Professor Rebecca Tushnet. The Court also considered carefully the oral arguments made by counsel at the hearing held on April 27, 2022.

DISCUSSION

"[A] preliminary injunction is ‘an extraordinary remedy never awarded as of right.’ " Benisek v. Lamone , 585 U.S. ––––, 138 S.Ct. 1942, 1943, 201 L.Ed.2d 398 (2018) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ). "To obtain a preliminary injunction, a plaintiff must establish: ‘(1) the likelihood of irreparable injury in the absence of such an injunction, and (2) either (a) likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation plus a balance of hardships tipping decidedly’ in its favor.’ " Louis Vuitton Malletier v. Burlington Coat Factory Warehouse Corp. , 426 F.3d 532, 537 (2d Cir. 2005).

"The Second Circuit has not definitively ruled on whether a Court should consider the [balance of the hardships and the public interest as] set forth in eBay Inc. v. MercExchange, L .L .C ., 547 U.S. 388, 393, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006), and Winter v. Natural Res. Defense Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008), in evaluating preliminary injunctions in the trademark infringement context." Barefoot Contessa Pantry, LLC v. Aqua Star (USA) Co. , No. 15-CV-1092, 2015 WL 845711, at *2 (S.D.N.Y. Feb. 26, 2015) (Furman, J). However, " ‘eBay strongly indicates that the traditional principles of equity it employed are the presumptive standard for injunctions in any context,’ and some district courts have applied the additional two factors in the trademark and trade dress infringement context as well." Id. (quoting Salinger v. Colting , 607 F.3d 68, 78 (2d Cir. 2010) ). Accordingly, the Court also considers those factors here.

I. Likelihood of Success on the Merits or Serious Questions Going to the Merits

"The principle underlying trademark protection is that distinctive marks—words, names, symbols, and the like—can help distinguish a particular artisan's goods from those of others." B&B Hardware, Inc. v. Hargis Indus., Inc. , 575 U.S. 138, 142, 135 S.Ct. 1293, 191 L.Ed.2d 222 (2015). "In order to establish a valid Lanham Act claim based on trademark or trade dress infringement, a party must show, first, that the trademark or trade dress is valid and entitled to protection, and second, that defendant's use of the trademark or trade dress is likely to cause consumer confusion as to the origin, affiliation or association, or endorsement of defendant's goods or services." Barefoot Contessa Pantry, LLC, 2015 WL 845711, at *3 (citing Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings , 696 F.3d 206, 216–17 & n.9 (2d Cir. 2012) ).

"The ‘serious questions’ standard permits a district court to grant a preliminary injunction in situations where it cannot determine with certainty that the moving party is more likely than not to prevail on the merits of the underlying claims, but where the costs outweigh the benefits of not granting the injunction." Citigroup Glob. Markets, Inc. v. VCG Special Opportunities Master Fund Ltd. , 598 F.3d 30, 35 (2d Cir. 2010). However, "[b]ecause the moving party must not only show that there are ‘serious questions’ going to the merits, but must additionally establish that ‘the balance of hardships tips decidedly ’ in its favor, ... its overall burden is no lighter than the one it bears under the ‘likelihood of success’ standard." Id. (citing F. & M. Schaefer Corp. v. C. Schmidt & Sons, Inc. , 597 F.2d 814, 815–19 (2d Cir. 1979) ; Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc. , 596 F.2d 70, 72 (2d Cir. 1979) ) (emphasis in original).

A. Plaintiffs’ Marks Merit Protection

Courts analyzing trademark infringement claims first "look to see whether plaintiff's mark merits protection. In order for a trademark to be protectable, the mark must be ‘distinctive’ and not ‘generic’ A mark is said to be ‘inherently’ distinctive if [its] intrinsic nature serves to identify a particular source." Christian Louboutin S.A. , 696 F.3d at 216 (quoting Louis Vuitton Malletier v. Dooney & Bourke, Inc. , 454 F.3d 108, 115 (2d Cir. 2006) ; Genesee Brewing Co. v. Stroh Brewing Co. , 124 F.3d 137, 143 (2d Cir. 1997) ) (alteration in original). A mark inherently not distinctive may instead " ‘acquire’ distinctiveness by developing ‘secondary meaning’ "—that is, "in the minds of the public, the primary significance of a product feature ... is to identify the source of the product rather than the product itself." Id. (quoting Inwood Labs., Inc. v. Ives Labs., Inc. , 456 U.S. 844, 851 n.11, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) ). Federal registration of a trademark is "prima facie evidence of the validity of the registered mark and of the registration of the mark, of the owner's ownership of the mark, and of the owner's exclusive right to use the registered mark." Matal v. Tam , ––– U.S. ––––, 137 S. Ct. 1744, 1753, 198 L.Ed.2d 366 (2017) ; 15 U.S.C. § 1057(b).

"Trade dress" is a "category that originally included only the packaging, or ‘dressing’ of a product, but ... has been expanded ... to...