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Heartland Trademarks, Ltd. v. Dr Flax LLC

United States District Court, N.D. New York

August 1, 2017

HEARTLAND TRADEMARKS, LTD., Plaintiff,
v.
DR FLAX LLC, Defendant.

         APPEARANCES:

          HARRIS, BEACH LAW FIRM, Attorneys for Plaintiff.

         OF COUNSEL:

          NEAL LOUIS SLIFKIN, ESQ., TED H. WILLIAMS, ESQ., TRISTAN D. HUJER, ESQ.

          MEMORANDUM-DECISION AND ORDER

          Mae A. D'Agostino U.S. District Judge.

         I. INTRODUCTION

         On July 20, 2017, Plaintiff Heartland Trademarks, Ltd., commenced this action against Defendant Dr. Flax LLC alleging trademark infringement, unfair competition, and deceptive business practices. See Dkt. No. 1. Presently before the Court is Plaintiff's motion for a temporary restraining order, which was filed on July 24, 2017. See Dkt. No. 8. Plaintiff's motion seeks injunctive relief relating to alleged trademark infringement. See Id. at 2. For the following reasons, Plaintiff's motion is granted.

         II. BACKGROUND

         Plaintiff is the sole owner of the trademark, "FLAX, " for use in connection with dresses skirts pants, jackets, shirts, coats, and shoes ("FLAX Goods"). See Dkt. No. 1 at ¶ 2. FLAX Goods are made of linen-linen is manufactured from the flax plant, which is the source of the FLAX name. See Dkt. No. 8-4 at ¶ 6. Clothing and apparel under the FLAX name have been marketed and sold since 1992. See Id. at ¶ 5. The FLAX trademark was registered with United States Patent and Trademark Office ("PTO") on August 13, 1996, see Dkt. No. 1-1 at 2-3, and it was assigned to Plaintiff on September 17, 2001, see Dkt. No. 1-2 at 2-4.

         Plaintiff has permanent showrooms in New York, Los Angeles, Dallas, Chicago, and Atlanta, where it exhibits FLAX Goods; it also exhibits FLAX Goods at fourteen national and regional trade shows. See Dkt. No. 8-4 at ¶ 12. In total, "the workforce supporting the FLAX Mark and the FLAX Goods [includes] as many as 75 people." Id. at ¶ 13. Additionally, Plaintiff has invested approximately $3 to $4 million per year "in the goodwill of the FLAX Mark, " including more than $1 million each year in marketing costs. Id. at ¶ 14. Plaintiff's investment in the FLAX brand has paid off-sales of FLAX Goods average $20 million per year, and enthusiastic FLAX consumers created "an internet fan page and chat site devoted to discussing the FLAX Goods, " which was called "flaxista." Id. at ¶¶ 16-17.[1] FLAX Goods are sold on the FLAX website and through six online retailers, but they are primarily sold in retail stores. See id. at ¶ 20. Plaintiff has sold FLAX Goods in forty-nine states, as well as in the Caribbean, Europe, and Asia. See id.

         In 2014, Plaintiff granted an exclusive license of the FLAX mark and FLAX Goods to a third party licensee. See Id. at ¶ 18. While the licensee is currently responsible for the sale and promotion of FLAX Goods, Plaintiff still owns the FLAX mark and receives royalties on the sale of FLAX Goods. See Id. Pursuant to the licensing agreement, the licensee has the option to purchase the FLAX mark, and Plaintiff claims that the licensee "is expected to exercise its option to purchase the FLAX Mark at the end of the term." Dkt. No. 8-1 at 18.

         In late June 2017, Plaintiff was informed that Defendant was selling goods that infringed on the FLAX mark. See Dkt. No. 8-4 at ¶ 28. Specifically, Defendant sells linen clothes of a similar style to the FLAX Goods, and it sells them under varying names, including Dr Flax, Dr. Flax, Doctor Flax, DoctorFlax, dr.flax, and @dr.flax. See Id. at ¶ 23. Defendant formed a limited liability company on October 15, 2015, and began promoting its products on Instagram on January 20, 2017. See Id. at ¶¶ 27-28. Plaintiff first discovered Defendant's products on the Facebook page of a boutique clothing store that also sells FLAX Goods. See Id. at ¶ 28. On June 30, 2017, Plaintiff sent Defendant a cease and desist letter demanding that Defendant stop using the word "flax" in connection with the sale of its clothing. See Dkt. No. 1-3 at 2. On July 13, 2017, Defendant responded by refusing to comply with Plaintiff's demand. See Dkt. No. 8-4 at ¶ 30.

         Plaintiff sells the vast majority of its goods to retailers at national and regional trade shows. See Id. at ¶ 34. Many of the significant trade shows for spring and summer clothing-the type of clothing sold by both parties-take place throughout the month of August. See Id. at ¶ 35. Therefore, Plaintiff claims that its sales and its agreement with the licensee will be in jeopardy if Defendant is not prevented from participating in the August trade shows. See Id. at ¶ 33. According to Plaintiff, at least one sales director of a regional trade show has already confused the FLAX and Dr. Flax brands. See Id. at ¶ 32. The sales director for the Dallas regional trade show stated that she believed Dr. Flax was a subsidiary of the FLAX brand. See Id. at ¶ 28.

         On July 24, 2017, Plaintiff filed an emergency motion for a temporary restraining order seeking to enjoin Defendant from marketing and selling clothing under labels that infringe on the FLAX mark. See Dkt. No. 8-1 at 1. The following day, the Court issued an order asking Defendant to show cause why a temporary restraining order should not be granted. See Dkt. No. 9. Plaintiff's counsel served a copy of the motion for a temporary restraining order and the Court's order to show cause on Defendant's counsel and attempted to complete service on Defendant, but service was refused. See Dkt. Nos. 11, 11-1, 11-2.

         III. STANDARD OF REVIEW

         "Temporary restraining orders . . . and preliminary injunctions are extraordinary and drastic remedies." Lawrence v. Zee, No. 16-CV-1515, 2016 WL 1690669, *1 (E.D.N.Y. Apr. 26, 2016) (citation omitted). In order to obtain a temporary restraining order, the moving party must demonstrate: (1) a likelihood of success on the merits; (2) that absent an injunction the moving party is likely to suffer irreparable injury that cannot be remedied with monetary damages; (3) that the balance of hardships tips in favor of the moving party; and (4) that the public interest would not be disserved by the issuance of an injunction. Salinger v. Colting, 607 F.3d 68, 80 (2d Cir. 2010).

         IV. DISCUSSION

         A. Success on the Merits

         The Lanham Act provides a right of action against "[a]ny person who, on or in connection with any goods or services . . . uses in commerce any word, term, name, symbol or device" that "is likely to cause confusion . . . as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person." 15 U.S.C. § 1125(a)(1). There is a two-part test for analyzing trademark infringement claims under the Lanham Act. "The first prong looks to whether the senior user's mark is entitled to protection; the second to whether the junior user's use of its mark is likely to cause consumers ...


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