Mechling v. The Operator of Website Muaythaifactory.com

NICHOLAS MECHLING and CHRISTOPHER MECHLING, Plaintiffs, v. THE OPERATOR OF WEBSITE MUAYTHAIFACTORY.COM, Defendant.

No. 21-cv-01538

United States District Court, N.D. Illinois, Eastern Division

September 1, 2021

MEMORANDUM OPINION AND ORDER

Franklin U. Valderrama, United States District Judge.

Plaintiffs Nicholas Mechling and Christopher Mechling (collectively Plaintiffs) filed suit against Defendant The Operator of Website Muaythaifactory.com (Defendant), asserting claims stemming from Defendant's trademark counterfeiting of Plaintiffs' boxing equipment. Plaintiffs bring one claim for trademark infringement and counterfeiting under 15 U.S.C § 1114 and another claim for false designation of origin under 15 U.S.C. § 1125(a). R. 2, Am Compl.^[1][2] The crux of the parties' dispute is whether Defendant can sell products with the trademarks at issue in the United States.

Before the Court is Plaintiffs' Motion for Entry of a Preliminary Injunction (PI Motion). R. 25, Mot. Pre. Inj. For the reasons that follow, the Court grants Plaintiffs' PI Motion.

Procedural History and Evidence

Less than one week after filing their amended complaint, Plaintiffs filed an ex parte motion for entry of a temporary restraining order (TRO), including requests for a temporary injunction, a temporary asset restraint, and expedited discovery. R. 13. The Court granted the motion and entered a TRO, which included the requested relief. R. 24. Before the TRO expired, Plaintiffs filed the pending PI Motion. Mot. Pre. Inj. Defendant then answered the amended complaint (R. 33) and responded to Plaintiffs' PI Motion (R. 39, Resp.).

Plaintiffs attach to their PI Motion a declaration from one of their attorneys, Justin Gaudio. R. 26-1. In their PI Motion, Plaintiffs refer to the arguments made in their memorandum in support of their motion for a TRO and the evidence attached to it. Because the standards are the same for both types of injunctive relief, the Court considers these arguments and evidence for the purposes of resolving the PI Motion. Attached to Plaintiffs' motion for TRO is another declaration from Mr. Gaudio (R. 15) and a declaration from Christopher Mechling, one of the Plaintiffs (R. 16, Mechling Decl.). Defendant attaches to its response a declaration from one of its attorneys, Joshua Schaul. R. 39-1, Schaul Decl. And attached to each of the declarations are various documents which the parties purport to use as evidence to support their arguments.

The Court considers the evidence before it in ruling on the PI Motion. A preliminary injunction “is customarily granted on the basis of procedures that are less formal and evidence that is less complete than in a trial on the merits, ” and a district court can consider hearsay at the preliminary injunction stage. Fed. Trade Comm'n v. Lifewatch Inc., 176 F.Supp.3d 757, 761-62 (N.D. Ill. 2016) (internal citations and quotations omitted). However, documents still must be properly authenticated, and any affidavits still must be based on personal knowledge. See Dunnet Bay Constr. Co. v. Hannig, 2010 WL 1326560, at *4, n.1 (C.D. Ill. Mar. 26, 2010). Additionally, the Court notes that Federal Rule of Civil Procedure 65(a) does not require an evidentiary hearing, and a hearing is generally not required if a defendant's response to a motion for preliminary injunction fails to create a genuine issue of material fact. In re Aimster Copyright Litig., 334 F.3d 643, 653-54 (7th Cir. 2003).

Background

On June 22, 2010, Twins Special Co. Ltd. of Thailand (Twins Special Thailand), Paveenvat Wongprasertkarn (P. Wongprasertkarn), and Plaintiffs established an entity known as Twins Special LLC (TSLLC). Schaul Decl., Exh. D at CM/ECF 14 (TSLLC Letter); R. 47, Reply at 1-2. At that time, Twins Special Thailand owned 50% of TSLLC, P. Wongprasertkarn owned 10% of TSLLC, and Plaintiffs owned 40% of TSLLC. TSLLC Letter. At the same time, Twins Special Thailand assigned:

all rights, title and interest in and to all trademarks relating to Twins Special and King Professional and all common law rights therein in all countries except existing Thai trademarks, relating to the names Twins Special and King Professional (as those names are use for products made or distributed by the undersigned parties), together with all the good will associated therewith to [TSLLC].

TSLLC Letter; Reply at 2. On February 5, 2013, the owners of TSLLC assigned 100% ownership of TSLLC to Plaintiffs and agreed that they would no longer be “responsible for expenses incurred by [TSLLC] in its business activities, including the cost of registration, maintenance and protection of trademarks.” Schaul Decl., Exh. D at CM/ECF 15 (Transfer Letter); Reply at 2. Twins Special Thailand continued to hold its Thai trademarks. Id.

TSLLC has granted Plaintiffs a full and exclusive license to “use, enforce[, ] and sublicense the intellectual property of [TSLLC], including, but not limited to, the ‘Twins Special' and ‘King Professional' brands.” Mechling Decl. ¶ 2. Pursuant to an agreement between Plaintiffs and TSLLC, Plaintiffs police and enforce the Twin Specials trademarks in the United States. Id. In their briefing, Plaintiffs refer to themselves and TSLLC together as Twins Special, but for clarity in this Opinion, the Court refers to Plaintiffs and TSLLC collectively as Twins Special US.

Twins Special U.S. is a manufacturer of boxing gloves and mixed martial arts equipment under, among other brands, the Twins Special and Kings Professional brands. Mechling Decl. ¶ 3. In addition to boxing gloves, it manufactures, sells, and distributes shin guards, training gear, head gear, fight wear, and fighting accessories. Id. According to Twins Special US, due to its superior design and craftmanship, along with its reputation, Twins Special U.S. has achieved widespread recognition and fame, making it one of the most well-known manufacturers of fighting equipment. Id. ¶ 4. Its products are distributed and sold to customers through its website, twinsfightgear.com, and through authorized retailers, many of which are in this District. Id. ¶¶ 5, 10. Twins Special U.S. also authorizes other websites to sell its products. Id. ¶ 5.

Twins Special U.S. owns three trademarks, which are registered with the United States Patent and Trademark Office (USPTO) with the following Registration Numbers: 4, 848, 713, 4, 848, 712, and 4, 848, 711 (collectively, the Twins Trademarks). Mechling Decl. ¶ 6. Twins Special US' products usually include at least one of these trademarks, and single products often include more than one trademark. Id. Twins Special U.S. also uses its trademarks to market its products. Id. Twins Special U.S. has used the Twins Trademarks exclusively and continuously in the United States and has never abandoned them. Id. ¶ 7. According to Twins Special US, the Twins Trademarks are “valid, subsisting, in full force and effect, and one is incontestable pursuant to 15 U.S.C. § 1065.” Id.

According to Defendant, Twins Special U.S. is part of a worldwide distribution network for Twins Special branded products, all of which come from Twins Special Thailand. Resp. at 1. Defendant claims that it has also been authorized by Twins Special Thailand to distribute such products. Id. However, the two documents Defendant attempts to use to support these contentions, a certificate of dealership and a letter, both signed by Narong Wongprasertkan, the CEO of Twins Special Thailand (Schaul Decl., Exhs. B, C), ^[3] have not been properly authenticated and are not admissible as evidence.^[4] See Dunnet Bay Constr. Co., 2010 WL 1326560, at *4, n.1.

Standard of Review

A party seeking a preliminary injunction is required to demonstrate (1) a likelihood of success on the merits, (2) that it has no adequate remedy at law, and (3) that it will suffer irreparable harm if the relief is not granted. Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 811 (7th Cir. 2002), as amended (Oct. 18, 2002). The Seventh Circuit recently clarified how likely success on the merits must be in order to satisfy the standard. Ill. Republican Party v. Pritzker, 973 F.3d 760, 762 (7th Cir. 2020). The Court explained that a “possibility of success is not enough” and “[n]either is a better than negligible chance.” Id. (internal citations and quotations omitted). But, the moving party “need not show that it definitely will win the case.” Id. at 763. “A strong showing” of a likelihood of success on the merits thus “normally includes a demonstration of how the applicant proposes to prove the key elements of its case.” Id. (internal citations and quotations omitted).

If the moving party meets this three-element threshold showing, the court “must weigh the harm that the plaintiff will suffer absent an injunction against the harm to the defendant from an injunction.” GEFT Outdoors, LLC v. City of Westfield, 922 F.3d 357, 364 (7th Cir. 2019) (internal quotation and citation omitted). “Specifically, the court weighs the irreparable harm that the moving party would endure without the protection of the preliminary injunction against any irreparable harm the nonmoving party would suffer if the court were to grant the requested relief.” Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the U.S.A., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008) (citing Abbott Labs. v Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir. 1992)). The Seventh Circuit has described this balancing test as a “sliding scale”: “if a plaintiff is more likely to win the balance of harms can weigh less heavily in its favor, but the less likely a plaintiff is to win[, ] the more that balance would need to weigh in its favor.” GEFT Outdoors, 992 F.3d at 364 (internal quotation and citation omitted). Finally, the court must consider the interests of non-part...