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Hand & Nail Harmony, Inc. v. Guangzhou Cocome Cosmetics Co. Ltd.

United States District Court, D. Nevada

July 15, 2014

HAND & NAIL HARMONY, INC. and NAIL ALLIANCE, LLC, Plaintiffs,
v.
GUANGZHOU COCOME COSMETICS CO. LTD.; GUANGZHOU BLUESKY CHEMICAL TECHNOLOGY CO., LTD.; GUANGZHOU QUANXIN HAIR DRESSING PRODUCT, CO. LTD.; DONGRI ELECTRICAL EQUIPMENT CO., LTD.; GUANGZHOU L&M COSMETICS CO., LTD., and; DOES 1-1000, inclusive, Defendants.

EX PARTE TEMPORARY RESTRAINING ORDER AND SEIZURE ORDER

RICHARD F. BOULWARE, District Judge.

Presently before the court is plaintiffs Hand & Nail Harmony, Inc's ("Harmony") and Nail Alliance, LLC's (collectively, "Plaintiffs") ex parte motion for a temporary restraining order and seizure order. Also before the court is plaintiffs' motion for a preliminary injunction. The Court considers in this Opinion and Order only the Plaintiffs' request for a temporary restraining order and seizure order.

I. PROCEDURAL BACKGROUND

On July 8, 2014, Plaintiffs filed a complaint against Guangzhou Cocome Cosmetics Co. Ltd., Guangzhou Bluesky Chemical Technology Co., Ltd., Guangzhou Quanxin Hair Dressing Product, Co. Ltd., Dongri Electrical Equipment Co., Ltd., Guangzhou L&M Cosmetics Co., Ltd. and Does 1-1000 ("Defendants") alleging, inter alia, trademark infringement under the Lanham Act, 15 U.S.C. § 1125. Simultaneously with the filing of the Complaint, and based upon its claim of trademark infringement, the Plaintiffs filed an ex parte Emergency Motion for Temporary Restraining Order ("TRO Motion") seeking a restraining order against the Defendants, a seizure order, a preliminary injunction, the substitution of custodians under the seizure, and expedited discovery. On July 11, at a hearing on the TRO Motion, the Court denied the TRO Motion on the grounds primarily that the Plaintiffs had not yet identified an infringing product upon which they could base their claim. See Transcript and Order of July 11, 2014. The Court granted the Plaintiffs leave to file a supplemental memorandum providing further information for the Court's consideration. The Court further ordered the Plaintiffs to file a $5, 000 security at the time of the filing of any supplemental memorandum or before the filing of such memorandum. On July 11, the Plaintiffs filed a $5, 000 security bond. On July 12, Plaintiffs filed a supplemental memorandum to its TRO Motion.

On July 15, 2014, the Court held another ex parte sealed hearing regarding Plaintiffs' TRO Motion. The Court heard additional sworn testimony from, Steven Malynn, a witness of the Plaintiffs. This testimony confirmed the location of the counterfeit goods.

II. FACTUAL BACKGROUND

Plaintiffs promote, distribute, and sell a line of soak-off gel polishes under the brand name "Gelish." Plaintiffs claim products in this line are patented and patent-pending, including United States Trademark Registration Numbers 4, 096, 115 (Gelish standard character mark), 3, 857, 946 (Gelish design plus words), 4, 473, 557 (design mark), 4, 473, 558 (design mark), and other common law trademark and trade dress rights. Plaintiffs further claim to spend millions of dollars promoting Gelish products in the United States and throughout the world. These Gelish products are sold in a distinctive bottle incorporating the "®" symbol. Plaintiff claims these Gelish marks are instantly recognizable by consumers and associated exclusively with Harmony.

Plaintiffs also promote, distribute, and sell nail care lamps under the "18G" mark, for curing the Gelish nail polish. This curing process facilitates the hardening of the nail gel. Plaintiffs claim the 18G lamps are distinctive and adorned with the same scroll work pattern that is registered as a design mark for the Gelish bottle. Plaintiffs claim to own the rights to United States Trademark Registration Number 4, 206, 100 for "apparatus for drying/hardening nail finishes, polishes and varnishes, including desiccate apparatus, drying apparatus, type nail dryers, drying apparatus and installations, and lamps, " and that the "18G" mark is instantly recognizable and associated exclusively with the Plaintiffs.

At Cosmoprof North America 2014, a show held in Las Vegas, Nevada between July 13, 2014, and July 15, 2014, Plaintiffs claim to have observed on July 13, 2014 various individuals operating under different company names offering for sale and distribution merchandise strikingly similar to Plaintiff's Gelish products. In their supplemental memorandum the Plaintiffs specifically claim that the occupants of booth 24042 at the Cosmoprof North America 2014 trade show are offering for sale and distribution infringing nail gel bottles using the Plaintiffs' registered bottle design and heart shaped decorative design. See Supplemental Affidavit of David S. Kahn of July 13, 2014 ("Kahn Supp. Aff.") at ¶¶ 5-15. The signs on the booth indicate the company name Jiangyin Jinbao Plastic Sprayer Company, Jiangyin Jiangsu, China with a website of http://www.jbsprayer.com but this internet site does not appear to be operational according to the Plaintiffs. Id . Moreover, the individuals actually present in the respective booth on July 13, 2014 provided different contact information. According to Plaintiffs, one of these individuals was offering a business card to show participants which had the name Guangzhou L&M Cosmetics with a second name L&M Nail Gel with an address in Guangzhou, China.

The infringing product, according to Plaintiffs, is a nail polish bottle with a heart design confusingly similar to the heart design and bottle of Plaintiffs under the design patent U.S. D651, 521 S. See Design Patent attached as Exhibit A to this Opinion and Order. A photographic image of the alleged infringing product is attached to this Opinion. See Photographs submitted by Plaintiffs attached as Exhibit B. There also appears to be visible an advertising banner or sign with the counterfeit bottle. Id . After being contacted by the Plaintiffs on July 13 and July 14 regarding the alleged infringing bottles, it appears that Defendants partially removed the imitative bottles from the display in their booth but advertising signs still appear to be present.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 65 allows a court to issue a temporary restraining order when the moving party provides specific facts showing that immediate and irreparable injury, loss, or damage will result before the adverse party's opposition to a motion for preliminary injunction can be heard. The Supreme Court has stated that courts must consider the following factors in determining whether to issue a temporary restraining order and preliminary injunction: (1) a likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. Natural Resources Defense Council, Inc. , 555 U.S. 7, 20 (2008). All elements must be satisfied by the plaintiff. Id. at 19.

Section 34 of the Lanham Act, 15 U.S.C. § 1116(d), expressly empowers a court to grant an ex parte seizure order. Such an order must set forth "(A) the findings of fact and conclusions of law required for the order; (B) a particular description of the matter to be seized, and a description of each place at which such matter is to be seized; (C) the time period, which shall end not later than seven days after the date on which such order is issued, during which the seizure is to be made; (D) the amount of security required to be provided under this subsection; and (E) a date for the hearing required under paragraph (10) of this subsection." 15 U.S.C. § 1116(d)(5).

The Lanham Act further requires for an ex parte seizure that a court find:

a.) an order other than an ex parte order would not be adequate,
b.) the party seeking the ex parte seizure application has ...

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