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Mitchell Group USA LLC v. Udeh

United States District Court, E.D. New York

October 7, 2014

MITCHELL GROUP USA LLC; and GAPARDIS HEALTH AND BEAUTY, INC., Plaintiffs, :
v.
NKEM UDEH, individually and d/b/a

ORDER FOR CONSENT PRELIMINARY INJUNCTION, EXPEDITED DISCOVERY, TO UNSEAL THE ACTION AND USE SEIZED BUSINESS RECORDS IN FURTHERANCE OF THE ACTION

DORA L. IRIZARRY, District Judge.

On October 1, 2014, the Court granted the ex parte request of Mitchell Group USA LLC and Gapardis Health and Beauty, Inc. (collectively, "Plaintiffs") for a temporary restraining order, expedited discovery to be scheduled by a magistrate judge, and an order of seizure of inventory and assorted business records, upon Plaintiffs' sworn allegations that Defendants were unlawfully infringing upon their trademark rights by selling counterfeit goods and other products bearing Plaintiffs' trademarks. The October 1 Order also directed Defendants to show cause at a hearing to be held before the Court on October 7, 2014, why a preliminary injunction should not issue and why the Court should not grant Plaintiffs the additional relief they requested.

On October 4, 2014, Plaintiffs executed the Order of Seizure of Inventory and Business Records. On October 7, 2014, Plaintiffs filed with the Court, inter alia, an inventory of the items seized pursuant to said seizure order.

On October 7, 2014, the Court held a hearing, at which Plaintiffs' counsel appeared and Defendant Nkem Udeh appeared pro se. No counsel appeared for Defendant Beauty Resource. At this hearing, Defendant Udeh consented to the entry of Plaintiffs' requested preliminary injunction.

Having duly considered the arguments and authority presented by Plaintiffs in their moving papers and all other subsequent filings pertaining to this matter, Plaintiffs' motion for a preliminary injunction, expedited discovery, use of seized business records, and to unseal this case is GRANTED.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Trademark infringement is defined as follows:

"Any Person who shall, without the consent of the registrant use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive: or reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for the remedies hereinafter provided."

15 U.S.C. §1114 (1)(a).

The test for determining whether a mark is a counterfeit is essentially the same as whether a suspect mark infringes a registered mark. See Chauvin International Ltd. v. Goldwit z, 832 F.Supp. 35 (D. Conn. 1993). The standard for determining whether a suspect mark infringes a registered mark is whether "numerous ordinary prudent purchasers are likely to be misled or confused as to the source of the product in question because of the entrance in the marketplace of defendant's mark." Playtex Prods. v. Georgia-Pacific Corp., 390 F.3d 158, 161 (2d Cir. 2004). In order to determine whether a likelihood of confusion exists, courts in the Second Circuit apply the eight factor test set forth in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961). Playtex Prods., 390 F.3d at 162. These factors include: (1) the strength of the plaintiff's mark; (2) the similarity of the parties' marks; (3) the proximity of the parties' products in the marketplace; (4) the likelihood that the plaintiff will "bridge the gap" between the products; (5) actual consumer confusion between the two marks; (6) the defendant's intent in adopting its mark; (7) the quality of the defendant's product; and (8) the sophistication of the relevant consumer group. Id. Where items are counterfeit, however, "the Court need not undertake a factor-by-factor analysis under Polaroid because counterfeits, by their very nature, cause confusion." Gucci Am., Inc. v. DutyFree Apparel, Ltd., 286 F.Supp.2d 284, 287 (S.D.N.Y. 2003). The Lanham Act defines "counterfeit" as "a spurious mark which is identical with, or substantially indistinguishable from, a registered mark." 15 U.S.C. § 1127.

To obtain a preliminary injunction in a trademark case a movant must demonstrate a likelihood of success on the merits, and that: (1) they are likely to suffer irreparable injury in the absence of an injunction; (2) remedies at law, such as monetary damages, are inadequate to compensate plaintiffs for that injury; (3) the balance of hardships tips in plaintiffs' favor; and (4) the public interest would not be disserved by the issuance of a preliminary injunction. See Salinger v. Colting, 607 F.3d 68, 80 (2d Cir. 2010) (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006)).

Plaintiffs presented sworn allegations of facts, supplemented by photographs, demonstrating that their investigator, Bradford Cole, visited Defendants' store and purchased unauthorized counterfeit products bearing the Plaintiffs' registered trademarks.

Following entry of the temporary restraining order ("TRO") on October 1, 2014, Plaintiffs, along with the U.S. Marshals Service, conducted seizures and served Defendants Nkem Udeh and Beauty Resource with the Complaint, ...


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