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Halo Optical Products, Inc. v. Liberty Sports, Inc.

United States District Court, N.D. New York

March 5, 2015

HALO OPTICAL PRODUCTS, INC. and HALO SPORTS AND SAFETY, INC., Plaintiffs/Counter Defendants,
v.
LIBERTY SPORTS, INC., LIBERTY OPTICAL MANUFACTURING COMPANY, INC., Defendant/Counter claimant.

G. KIMBALL WILLIAMS, ESQ., McNAMEE, LOCHNER, TITUS & WILLIAMS, P.C., Albany, New York, Attorneys for Plaintiffs/Counter Defendants.

CAROLYN J. FAIRLESS, ESQ., GWEN J. YOUNG, ESQ., WHEELER, TRIGG LAW FIRM, Denver, Colorado, Attorneys for Defendant/Counter Claimant.

JEFFREY J. SHERRIN, ESQ., O'CONNELL & ARONOWITZ, P.C., Albany, New York, Attorneys for Defendant/Counter Claimant.

MEMORANDUM-DECISION AND ORDER

MAE A. D'AGOSTINO, District Judge.

I. INTRODUCTION

Plaintiffs Halo Optical Products, Inc. and Halo Sports and Safety, Inc. (collectively "Halo") commenced this action on March 13, 2014, alleging trademark infringement and breach of contract by Defendant Liberty Sports, Inc. ("Liberty"). See Dkt. No. 1. In a Memorandum-Decision and Order dated June 24, 2014 (the "June 24 Order"), this Court granted Halo's motion for a preliminary injunction, enjoining Liberty during the pendency of this action from "(1) ordering, purchasing, marketing or selling REC SPECS eyewear, or sports protective eyewear that competes with REC SPECS eyewear, or (2) if Liberty does order, purchase, market or sell REC SPECS eyewear, or sports protective eyewear that competes with REC SPECS eyewear, that it do so in accordance with the parites' agreements, and the custom and practice implementing them as discussed herein...." Dkt. No. 34 at 31 (emphasis omitted). On July 23, 2014, this Court denied Liberty's motion for modification of the preliminary injunction to require security from Halo. See Dkt. No. 45.

Currently before the Court is Liberty's motion for reconsideration of the preliminary injunction order pursuant to Fed.R.Civ.P. 59(e), which Halo opposes. See Dkt. Nos. 38, 48. On August 18, 2014, Liberty submitted a letter motion which the Court accepted as a reply brief in support of its motion for reconsideration. See Dkt. No. 51.

II. BACKGROUND

A. The June 24 Order

The Court assumes the parties' familiarity with the background of this case, as detailed in the June 24 Order. See Dkt. No. 34.

B. Liberty's motion for reconsideration

Liberty argues that this Court made a number of mistakes of law and fact, and that in light of these mistakes the Court's June 24 Order is in error. See Dkt. No. 38-1.

First, Liberty argues that this Court's preliminary injunction operates to "prevent Liberty from terminating the 1993 trademark license agreement and selling sports protective eyewear that does not carry the REC SPECS mark." Dkt. No. 38-1 at 6. Liberty contends that, "at a minimum, this Court's preliminary injunction order should be modified to reflect Liberty's right to cease its marketing and promotion of REC SPECS branded goods in favor of selling only non-REC SPECS branded eyewear." Id. at 7. Consequently, Liberty requests that this Court modify the preliminary injunction to reflect its right to "cease ordering, purchasing, marketing or selling REC SPECS eyewear altogether...." Id.

Second, Liberty claims that "[t]his Court's determination regarding likelihood of success on the merits of Halo's trademark infringement claims... was based on a regrettable misunderstanding." Id. at 8. According to Liberty, "it is beyond dispute that the SPORT SPECS' and F8' designs were always fit to be labeled as REC SPECS products, " because "the SPORT SPECS' designs have simultaneously been sold under the REC SPECS mark from the very start, and the F8' models have always been considered a closely related, but superior, product to the models sold under the REC SPECS brand." Id. at 9. Due to Liberty's clarification, they request "that the Court revise its opinion to reflect that Halo has failed to carry its burden on preliminary injunction...." Id. Liberty also contends that this mistake of fact led to the Court's finding that "labeling a product with the REC SPECS mark that was its competitor days before, and developed for sale at Wal-Mart, without permitting Halo the opportunity to ensure that they meet its quality standards, creates a significant risk of irreparable harm to the reputation of the company.'" Id. Consequently, Liberty requests that the Court's determination "that adding the REC SPECS mark to the SPORT SPECS' and F8' models posed a risk to Halo's reputation[, ]" be removed from the record. Id. at 11. Liberty also claims that "when [this] flawed premise is removed, there is no longer sufficient grounds for finding irreparable harm, and therefore, ... this Court should withdraw its order of preliminary injunction altogether." Id.

Third, Liberty argues that "irreparable harm also cannot properly be predicated on the contention that Halo is being denied a sufficient' opportunity to inspect the products in question." Id. at 13. Liberty points to its statement that they "will comply with any reasonable request from Halo to inspect the REC SPECS eyewear Liberty obtains directly from its manufacturer so that Halo may police its mark.'" Id. at 11.

Fourth, Liberty addresses Halo's likelihood of success on the breach of contract claim, because Liberty "was deprived of an opportunity to address [Halo's] breach of contract theory." Id. at 15. As to this point, Liberty makes the following arguments: (1) "other good and valuable consideration' cannot logically be construed by referencing a course of conduct that began twelve years after execution and which took place pursuant to subsequent agreements[;]" (2)"on the law, there is insufficient justification to find other good and valuable consideration' to be ...


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