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National Products, Inc. v. Arkon Resources, Inc.

United States District Court, W.D. Washington, Seattle

March 5, 2018

NATIONAL PRODUCTS, INC., Plaintiff,
v.
ARKON RESOURCES, INC., Defendant.

          ORDER DENYING NPI'S MOTION FOR PERMANENT INJUNCTION

          JAMES P. DONOHUE, UNITED STATES MAGISTRATE JUDGE.

         I. INTRODUCTION AND SUMMARY CONCLUSION

         This matter comes before the Court on plaintiff National Products, Inc.'s (“NPI”) motion for a permanent injunction against defendant Arkon Resources, Inc. (“Arkon”), following a jury verdict in NPI's favor on its trade dress infringement claim. Dkt. 219. Specifically, NPI requests an injunction that would, among other things, require Arkon to continue storing the infringing products indefinitely. Dkt. 219-1. Having reviewed the parties' submissions, the governing law, and the balance of the record, the Court DENIES NPI's motion. Dkt. 219. Arkon redesigned its products and ceased all sales of the infringing products by no later than April 30, 2016, rendering it unnecessary to permanently enjoin Arkon from future infringement. Instead, the Court ORDERS Arkon to destroy the part of the accused products that infringed NPI's trade dress. Although Arkon may salvage the product parts that do not bear the infringing trade dress, it may not dispose of the infringing products (or the double-socket mount arm bearing NPI's hourglass shaped trade dress) in any manner other than destruction.

         II. DISCUSSION

         A. Background

         The Court conducted a jury trial in this matter from December 4, 2017 to December 8, 2017, on NPI's claims against Arkon for infringement of NPI's federally registered trademark[1]in violation of the Lanham Act, 15 U.S.C. § 1114(1), as well as the Washington Consumer Protection Act (“WCPA”). NPI's trade dress is the hourglass shaped design of a mounting arm, which is used to attach a cell phone (or similar device) to a base in the interior of a vehicle. Arkon denied NPI's claims, arguing that NPI's trade dress was invalid as functional, as lacking secondary meaning, and as generic. Alternatively, if the jury found that NPI's trade dress was valid, Arkon argued that there was no infringement.

         On December 8, 2017, the jury returned a verdict in NPI's favor on its trade dress infringement claim, finding that NPI's trade dress was valid, and infringed, and that the infringement was “deliberate or willful.” However, the jury found in favor of Arkon on NPI's WCPA claim. The jury awarded NPI money damages in the amount of $193, 598. Dkt. 177 (jury verdict). The Court entered judgment on December 11, 2017. Dkt. 179.

         By Order dated February 14, 2018, the Court ruled on the parties' numerous post-trial motions. Dkt. 218. Specifically, the Court denied the parties' Rule 50(b) motions, as well as Arkon's motion for judgment as a matter of law and motion to alter or amend the judgment. Id. Finally, the Court denied Arkon's motion for a new trial as to damages, conditional upon NPI accepting a remittitur reducing the damages award in this case from $193, 598 to $167, 239.55. Id. To date, NPI has not responded to the Court's Order or otherwise indicated whether it accepts the remittitur in lieu of a new trial as to damages.

         NPI's current motion asks the Court to enter a permanent injunction prohibiting Arkon from infringing NPI's registered trade dress by selling, distributing, donating, exporting, using, transferring, or otherwise moving or disposing of the Infringing Products (or any other products which infringe upon NPI's registered hourglass shape trademark). Dkt. 219-1 at 2. Because Arkon would be prohibited from disposing of the products in any manner, NPI asks the Court to further require Arkon to “maintain records of its inventory of Infringing Products, to be made available to NPI at its request.” Id.

         B. Relevant Law

         A plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). See also Herb Reed Enters., LLC v. Fla. Entm't Mgmt., 736 F.3d 1239, 1249 (9th Cir. 2013) (holding that “the traditional four-factor test employed by courts of equity, including the requirement that the plaintiff must establish irreparable injury in seeking a permanent injunction” applies not only in the patent and copyright context, but “the same principle applies to trademark infringement under the Lanham Act.”). In addition, the Lanham Act expressly states that courts “have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark....” 15 U.S.C. § 1116(a).

         As to the first factor of the eBay test, the Ninth Circuit has held that “actual irreparable harm must be demonstrated to obtain a permanent injunction in a trademark infringement action.” Herb Reed Enterprises, LLC, 736 F.3d at 1249. Courts have recognized that in trademark cases, the irreparable harm may be shown through evidence of the loss of prospective customers, goodwill, or reputation. See e.g., Stuhlbarg Intern. Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 841 (9th Cir. 2001).

         With respect to the second eBay factor, the plaintiff must show that “remedies available at law, such as monetary damages, are inadequate to compensate for the injury.” eBay, 547 U.S. at 391. Courts have broadly accepted the general proposition that, even after the Supreme Court's decision in eBay, monetary damages alone are often inadequate to remedy trademark violations.

         As to the third eBay factor, the court must consider and balance “the hardships that might afflict the parties by the grant or denial of Plaintiffs' motion for a permanent injunction.” Metro-Goldwyn-Mayer Studios, Inc. et al. v. Grokster, Ltd.. 518 F.Supp.2d 1197, 1220 (C.D. Cal. 2007). Specifically, the court looks at the plaintiff's hardship if the infringing behavior does not stop, as well as the defendant's hardship in refraining from its infringement. See, e.g., Getty Images (US), Inc. v. Virtual Clinics, Case No. C13-626-JLR, 2014 WL 358412 (W.D. Wash. 2014); Amini Innovation Corp. v. KTY Intern. Mktg.,768 F.Supp.2d 1049, 1057 (C.D. Cal. 2011). A court may ...


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