Opinion
Case No. 2:13-cv-02042
11-06-2013
SATA GmbH & Co. KG, a German corporation, Plaintiff, v. Wenzhou T&E Industrial Co., Ltd., a foreign business organization, CMI Continental Marketing International Co., Ltd., a foreign business organization, and Kuani Gear Co. Ltd., a foreign business organization, Defendants.
MICHAEL J. McCUE (NV Bar No. 6055) JONATHAN W. FOUNTAIN (NV Bar No. 10351) MENG ZHONG (NV Bar No. 12145) LEWIS ROCA ROTHGERBER LLP Attorneys for Plaintiff SATA GmbH & Co. KG
MICHAEL J. McCUE (NV Bar No. 6055)
JONATHAN W. FOUNTAIN (NV Bar No. 10351)
MENG ZHONG (NV Bar No. 12145)
LEWIS ROCA ROTHGERBER LLP
Attorneys for Plaintiff
SATA GmbH & Co. KG
ORDER GRANTING PLAINTIFF'S
EMERGENCY EX PARTE MOTION
FOR TEMPORARY RESTRAINING
AND SEIZURE ORDER
Plaintiff SATA GmbH & Co. KG ("SATA") has moved the Court ex parte for an Emergency Temporary Restraining Order, Seizure Order, and Preliminary Injunction, pursuant to Rule 65 of the Federal Rules of Civil Procedure, the Lanham Act (15 U.S.C. § 1116), the Patent Act (35 U.S.C. § 283), and Local Rule 7-5. SATA alleges that Defendants Wenzhou T&E Industrial Co., Ltd. ("Wenzhou"), CMI Continental Marketing International Co., Ltd. ("CMI"), and Kuani Gear Co. Ltd. ("Kuani"), are advertising, displaying and offering to sell products that violate SATA's U.S. trademarks and U.S. design patents. SATA further alleges that it discovered the infringing activity on November 5, 2013, when SATA representatives attended the Automobile Aftermarket Products Expo (the "AAPEX") trade show in Las Vegas, Nevada, which is scheduled to end on November 7, 2013. SATA representatives allegedly visited Defendants' booths and observed infringing products on display, advertised and being offered for sale.
SATA seeks a temporary restraining order to enjoin the display, advertisement and offer of sale of those products, as well as an order permitting SATA to seize infringing products as well as related evidence of such infringing activity, including records of infringing product sales.
FINDINGS AND CONCLUSIONS
The Court, having duly considered SATA's First Amended Complaint, emergency motion, and the declarations and exhibits submitted therewith, hereby makes the following findings and conclusions:
1. An order other than an ex parte seizure order would not be adequate to achieve the purposes of Section 32 of the Lanham Act (15 U.S.C. § 1114), because: (a) Wenzhou is a China-based manufacturer of spray paint guns; (b) with the exception of its temporary presence in Las Vegas, Nevada, during the annual AAPEX tradeshow from November 5 - 7, 2013, Wenzhou does not have any known regular place of business or assets in the United States; and (c) there is a significant risk that Wenzhou will remove from the any evidence of its counterfeiting (including documents in paper and electronic form) if an ex parte seizure order is not granted. Similarly, (a) CMI is a foreign-based manufacturer of spray paint guns in Taiwan; (b) with the exception of its temporary presence in Las Vegas, Nevada, during the annual AAPEX tradeshow from November 5 - 7, 2013, CMI does not have any known regular place of business or assets in the United States; and (c) there is a significant risk that CMI will remove from the any evidence of its counterfeiting (including documents in paper and electronic form) if an ex parte seizure order is not granted. Further, (a) Kuani is a foreign-based manufacturer of spray paint guns in Taiwan; (b) with the exception of its temporary presence in Las Vegas, Nevada, during the annual AAPEX tradeshow from November 5 - 7, 2013, Kuani does not have any known regular place of business or assets in the United States; and (c) there is a significant risk that Kuani will remove from the any evidence of its counterfeiting (including documents in paper and electronic form) if an ex parte seizure order is not granted.
2. SATA has not publicized its application for an ex parte temporary restraining and seizure order. SATA only learned of the infringing products and infringing activity on the first day of the A APEX show.
3. SATA is likely to succeed on the merits of its trademark counterfeiting claim under 15 U.S.C. §§ 1114 and 1116. SATA owns valid federal trademark registrations at U.S. Trademark Registration No. 3,072,417, U.S. Trademark Registration No. 2,770,801, U.S. Trademark Registration No. 2,774,593, and U.S. Trademark Registration No. 2,793,583 (the "SATA Marks").
Wenzhou is using counterfeits of the SATA Marks on counterfeit SATA products. Wenzhou is using the SATA Marks in commerce, including in connection with displaying and offering such products for sale in or to the United States, at least through the AAPEX trade show.
CMI is using counterfeits of the SATA Marks on counterfeit SATA products. CM1 is using the SATA Marks in commerce, including in connection with displaying and offering such products for sale in or to the United States, at least through the AAPEX trade show.
Furthermore, Kuani is using counterfeits of the SATA Marks on counterfeit SATA products. Kuani is using the SATA Marks in commerce, including in connection with displaying and offering such products for sale in or to the United States, at least through the AAPEX trade show.
4. SATA is also likely to succeed on the merits of its patent infringement claim. SATA owns design patents USD 459,432 SI and USD 459,433 S1 (the "SATA Patents"). Wenzhou is offering products for sale at the AAPEX trade show that infringe SATA's design patents based on the ordinary observer test. Additionally, CMI is offering products for sale at the AAPEX trade show that infringe SATA's design patents based on the ordinary observer test. Further, Kuani is offering products for sale at the AAPEX trade show that infringe SATA's design patents based on the ordinary observer test.
5. Absent an ex parte temporary restraining order and a seizure order, Defendants' promotion, offers for sale, and/or sale of its counterfeit and infringing products will result in immediate and irreparable injury to SATA in the form of loss of control over its valuable intellectual property rights, loss of consumer goodwill, and interference with SATA's ability to exploit its U.S. trademarks and design patents. Further, because each Defendant has no presence in the United States, it may be difficult or impossible for SATA to enforce a money judgment against any of the Defendants.
6. The evidence of Defendants' unlawful conduct are or may be in Defendants' possession at the AAPEX show and would likely be destroyed, moved, hidden, taken outside of the United States, or otherwise made inaccessible to SATA if Defendants were to receive notice of SATA's application for a seizure order or temporary restraining order in advance of service of this Order.
7. The harm to SATA in denying the requested temporary restraining order and seizure order outweighs the harm to the legitimate interests of Defendants from granting SATA such relief.
8. The public interest weighs in favor of granting SATA the requested temporary restraining order and seizure order.
9. SATA is prepared to deposit money with the Clerk of the Court as security for payment of any damages Defendants may be entitled to recover as a result of a wrongful seizure or a wrongful attempted seizure.
TEMPORARY RESTRAINING ORDER
IT IS HEREBY ORDERED that, pending a decision by the Court on SATA's application for a preliminary injunction, Wenzhou, CMI, and Kuani, as well as their respective officers, agents, servants, employees, confederates, attorneys, ("Restrained Parties") are hereby temporarily enjoined and restrained from:
a. Using any reproduction, counterfeit, copy, or colorable imitation of the SATA Marks in commerce including, without limitation: (i) by selling, offering for sale, distributing, promoting, or advertising any good or service in connection with such reproduction, counterfeit, copy, or colorable imitation of the SATA Marks; or (ii) by displaying any reproduction, counterfeit, copy, or colorable imitation of the SATA Marks at the AAPEX trade show in Las Vegas, Nevada;
b. Manufacturing, using, selling, offering to sell, or importing into the United States, paint spray guns embodying designs that are the same as or substantially similar to the designs claimed in U.S. Patent Nos. D459,432 SI and D459,433 SI, including, without limitation, by offering to sell or selling such products at the AAPEX trade show in Las Vegas, Nevada; and
c. Transferring, moving, destroying, or otherwise disposing of: (i) any of the accused products identified or encompassed in Paragraphs a. and b. above; or (ii) any evidence of Defendants' illegal activities, including, without limitation, any documents in any form or format and any portable media or device (such as CDs, DVDs, Flash Drives, cell phones, PDAs, hard disk drives, laptop computers, memory cards, etc.), relating to any use or infringement of the SATA Marks or any use or infringement of the SATA Design Patents, except pursuant to the below Seizure Order (collectively, "Evidence").
IT IS HEREBY FURTHER ORDERED, that upon two (2) business days' written notice to the Court and SATA's counsel, or as otherwise permitted by leave of Court, any Defendant may, upon proper showing, appear and move for the dissolution or modification of the provisions of this Order.
SEIZURE ORDER
IT IS HEREBY ORDERED that Evidence (as defined above but for clarity including laptops and media that electronically stores documents and any products bearing the SATA marks) shall be seized by the United States Marshals Service assisted by one or more attorneys or representatives of SATA, at the respective booths rented or occupied by Wenzhou, CMI and Kuani at the AAPEX trade show as soon as practicable during the period of November 6 through 7, 2013. The United States Marshals Service may use all reasonable force in conducting the seizure and may open doors, locks, boxes, brief cases, and containers of any type or nature to locate and identify Evidence to be seized. Attorneys and other representatives of SATA shall accompany the United States Marshals Service during the seizure to identify the Evidence to be seized. SATA's counsel shall itemize and take possession of the seized Evidence, provide a copy of the inventory to the United States Marshals Service assisting with the seizure, and file the inventory with the Court. In addition, SATA's counsel may record the contents of Wenzhou, CMI and Kuani's respective booths and Evidence by photographic, audio, and/or videographic means during the seizure action. The United States Marshals Service shall not retain custody of seized Evidence but shall ensure that they are placed in the custody of SATA's counsel. SATA agrees to indemnify the United States Marshals Service who may assist with the seizure and hold it/them harmless from any suit, claim, cause of action, damage, loss, or injury arising from the execution of the seizure described in this Order.
IT IS HEREBY FURTHER ORDERED that Wenzhou, CMI and Kuani shall provide any passwords necessary to access any electronically stored documents or electronic devices;
IT IS HEREBY FURTHER ORDERED, that the Summons, First Amended Complaint, Plaintiffs Emergency Ex Parte Motion for Temporary Restraining and Seizure Order and for Preliminary Injunction, the Declaration of Dr. Ewald Schmon, and this Order must be served upon Wenzhou, CMI and Kuani, if found, at the time of the seizure, and by other means reasonably calculated to give Wenzhou, CMI and Kuani reasonable notice of this action, which shall include via email and Federal Express to the email and physical addresses provided by Defendants on their respective business cards, attached as Exs. C, J and L to the Declaration of Dr. Ewald Schmon.
IT IS HEREBY FURTHER ORDERED, that SATA shall deposit with the Clerk of the Court the amount of $ 15,000.00 to serve as sufficient security for the payment of any damages Wenzhou, CMI and Kuani may be entitled to recover as a result of a wrongful seizure or a wrongful attempted seizure. To the extent Wenzhou, CMI or Kuani believes that additional security is necessary pursuant to Rule 65(c) of the Federal Rules of Civil Procedure, Wenzhou, CMI or Kuani shall so move the Court and shall provide notice to SATA's counsel of such motion on or before November __, 2013.
IT IS HEREBY FURTHER ORDERED, that a preliminary injunction hearing is set for November 20 2013, at 8:30 a.m./p.m., in Courtroom ________, before ______________________.
Wenzhou, CMI and Kuani shall file and serve any opposition to SATA's motion for a preliminary injunction on or before November 15, 2013.
SATA shall file and serve any reply in support of their motion for a preliminary injunction on or before November 19, 2013.
______________________
UNITED STATES DISTRICT JUDGE