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H-D U.S.A., LLC v. Sunfrog, LLC

United States District Court, E.D. Wisconsin

July 31, 2017

H-D U.S.A., LLC and HARLEY-DAVIDSON MOTOR COMPANY GROUP, LLC, Plaintiffs,
v.
SUNFROG, LLC d/b/a SUNFROG SHIRTS and JOHN DOES, Defendants.

          ORDER

          J. P. Stadtmueller U.S. District Judge.

         This is a trademark infringement case brought by Plaintiffs, collectively referred to as “Harley-Davidson, ” against Defendants, collectively referred to as “SunFrog.” SunFrog runs a website where third-party sellers can upload designs and logos onto clothing, hats, mugs, or other items and sell them. SunFrog handles printing the goods and selling them, and it takes the majority of the profits from the sales. Harley-Davidson noticed that SunFrog sold many items bearing its trademarks, including both word-marks and logos, and it filed this lawsuit as a result. Before the Court is Harley-Davidson's motion for preliminary injunction. For the reasons stated below, it will largely be granted.

         To obtain a preliminary injunction, a plaintiff must show that (1) it will suffer irreparable harm in the period before final resolution of its claims; (2) traditional legal remedies are inadequate; and (3) the claim has some likelihood of success on the merits. Jones v. Markiewicz-Qualkinbush, 842 F.3d 1053, 1058 (7th Cir. 2016); Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008). If the court determines that the plaintiff has failed to demonstrate any one of these three threshold requirements, it must deny the injunction. Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992).

         If the plaintiff makes these preliminary showings, the court then assesses the balance of harms and where the public interest lies. Jones, 842 F.3d at 1058; ACLU of Ill. v. Alvarez, 679 F.3d 583, 589 (7th Cir. 2012). In so doing, the court employs a sliding scale approach: “[t]he more likely the plaintiff is to win, the less heavily need the balance of harms weigh in his favor; the less likely he is to win, the more need it weigh in his favor.” Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 387 (7th Cir. 1984); Abbott Labs., 971 F.2d at 12. Overarching this entire analysis, the court must be mindful that “[a] preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008).

         SunFrog does not meaningfully challenge Harley-Davidson's prima facie showing of a right to a preliminary injunction. Because SunFrog sells numerous products bearing marks identical to or materially indistinguishable from Harley-Davidson's registered (and largely incontestable) marks, Harley-Davidson has established a likelihood that consumers, viewing SunFrog's products in the marketplace, would be confused as to their source, affiliation, or sponsorship. See Ty, Inc. v. Jones Grps., Inc., 237 F.3d 891, 897 (7th Cir. 2001) (likelihood-of-confusion factors); Coach, Inc. v. Treasure Box, Inc., No. 3:11 CV 468, 2013 WL 2402922, at *4 (N.D. Ind. May 31, 2013) (collecting cases holding that in counterfeit cases, a likelihood of confusion can be presumed). Harley-Davidson thus enjoys a greater-than-negligible chance of success on its claims, which is all that is required to support the issuance of a preliminary injunction. D.U. v. Rhoades, 825 F.3d 331, 338 (7th Cir. 2016).

         Additionally, it is well-settled that courts presume irreparable harm to the plaintiff where there are violations of the Lanham Act. Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 813 (7th Cir. 2002). Likewise, injuries to a company's goodwill or reputation, such as are caused by trademark infringement, are not susceptible to precise valuation. Thus, a showing of infringement is generally sufficient to establish that remedies at law are inadequate. Meridian Mut. Ins. Co. v. Meridian Ins. Grp., Inc., 128 F.3d 1111, 1120 (7th Cir. 1997); Abbott Labs., 971 F.2d at 16.

         Finally, the balance of harms tips in Harley-Davidson's favor. Harley-Davidson presents a fairly straightforward case of counterfeiting against an online marketplace. Stopping this conduct will serve both to protect Harley-Davidson's interest in its consumer goodwill and vindicate the public's interest in avoiding deception as to the source or sponsorship of the goods they purchase. Promatek, 300 F.3d at 813-14. Thus, Harley-Davidson has demonstrated that a preliminary injunction is warranted in this case.[1]

         SunFrog's response is that Harley-Davidson's requested relief is either moot or unavailable to it. In its motion, Harley-Davidson requests an order from the Court enjoining SunFrog from:

(1) using or displaying Harley-Davidson's marks on its website, advertising materials, or products;
(2) using or displaying any uniform resource locator (“URL”) that directs to a page for an infringing product, to an image of an infringing product, or that contain a sales-tracking element related to infringing products, whether or not any of these URLs themselves contain one of Harley-Davidson's marks; The Court does not agree, and its reasoning ties into SunFrog's second argument: that it cannot be liable for monetary damages because it is an “innocent infringer” as provided in 15 U.S.C. § 1114(2)(A). (Docket #28 at 11-13). That section states:
Where an infringer or violator is engaged solely in the business of printing the mark or violating matter for others and establishes that he or she was an innocent infringer or innocent violator, the owner of the right infringed or person bringing the action under section 1125(a) of this title shall be entitled as against such infringer or violator only to an injunction against future printing.

15 U.S.C. § 1114(2)(A). As can be seen, this section expressly contemplates that injunctive relief is available to prevent future printing of infringing goods, meaning that Congress intended that an infringement action could lie directly against a printer. Indeed, because this section is a defense to monetary damages only, the inescapable conclusion is that even an innocent printer of infringing goods may be liable for infringement and can be enjoined from future infringement. Nat'l Bus. Forms & Printing, Inc. v. Ford Motor Co., 671 F.3d 526, 536 n.7 (5th Cir. 2012); Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 985 (9th Cir. 1999); Barrios v. Am. Thermal Instruments, Inc., 712 F.Supp. 611, 620 (S.D. Ohio 1988); Gianni Versace SPA v. Awada, Case No. CV 03-3254 GPS(RNBx), 2008 WL 11338774, at *1 (CD. Cal. Mar. 25, 2008). Thus, without commenting on the merits of this contention as a defense against monetary damages, the Court finds that SunFrog's arguments in its motion to dismiss do not preclude the issuance of preliminary injunctive relief.

(3) fulfilling any orders for infringing products, including after SunFrog has deactivated the page for such a product in response to a takedown request;
(4) using its marks in SunFrog's business names, domain names, URLs, or other identifiers, from suggesting that SunFrog's products or services are associated with Harley-Davidson;
(5) allowing its sellers that have previously sold infringing products from selling infringing ...

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