Does the COVID Crisis Warrant Ex Parte Relief to Address Price Gouging under Trademark Theories?

Yes, with some reluctance.

3M, the well-known manufacturer of n95 masks, has filed a number of lawsuits throughout the country asserting trademark claims against defendants who are offering to sell to the government and others "3M" masks at extremely elevated prices.  3M asserts claims for trademark infringement, false advertising, dilution, among others.  Part of the harm 3M argues is that, aside from the defendants not being authorized to sell 3M products, 3M does not want to be associated with allegations of price gouging during this crisis.

To that end, 3M sought a temporary restraining order against such a seller in the Middle District.  After noting that hundreds of millions of dollars that 3M has invested in advertising its products under the 3M brand, the Court granted the ex parte relief:

Based on the evidence discussed above, Plaintiff has established a likelihood of success on the merits. Also based on those filings, it is clear that irreparable injury will be suffered if Plaintiff’s goodwill is injured due to Defendant’s price gouging and sale of either fraudulent PPE that is either below industry quality standards or that does not exist. Further, the Court places specific importance on the fact that if these fraudulent masks are sold, the public––likely healthcare workers––may be given PPE that is faulty, and therefore, expose them to COVID-19 and put their lives at risk. That potential harm obviously constitutes irreparable harm to 3M’s goodwill, but especially to the public. And, keeping that possibility from occurring, at least until the Court has the opportunity to further address these issues, outweighs any potential harm to Defendant and is certainly serving the public interest. 

The Court did note some hesitation with handling this ex parte:

The Court notes that it does have certain misgivings about whether Plaintiff met its burden regarding the propriety of ex parte relief here. The TRO’s argument regarding ex parte relief constitutes only one paragraph and contains no explanation as to why notice and a hearing would be impractical. M.D. Fla. R. 4.05(b)(2) (noting that to obtain such emergency, ex parte relief, Plaintiff must explain why notice and a hearing would be “impractical if not impossible.”). However, in light of the COVID-19 global pandemic and the harm that could occur should fraudulent masks be introduced by Defendant into the public, the Court finds that a TRO is necessary here. Accordingly, while the Court concludes that a TRO in this case is permissible, the Court will set an expedited schedule regarding service and the preliminary injunction hearing to ensure sufficient ability for Defendant to be heard on the matter. 

The Court then immediately enjoined the defendant's accused activities, required a $10,000 bond, and set an evidentiary hearing for tomorrow, May 7, 2020.

Defendant has appeared and asked that the hearing be delayed a week, and asked that it be conducted by Zoom.  The Court agreed to delay the hearing, but given that it will be an evidentiary hearing, is requiring in person attendance.

3M Company v. Geftico, LLC, Case No. 6:20-CV-648-ORl-41GJK (M.D. Fla. April 30, 2020) (J. Mendoza)

Are Rule 11 Sanctions Warranted If Plaintiff Names the Wrong Defendants?

Yes.

RooR International Bv and Sream, Inc (collectively "RooR") have filed dozens (more? - a recent search suggests over 100 such cases) of suits throughout Florida asserting trademark rights for purported counterfeit sales of its water pipes. 

Recently, RooR asserted such claims against Nipa Enterprise, Inc. and and Ashmaul Hosna for such alleged counterfeit sales at their store in 2016.  But Nipa and Hosna did not own the store in 2016.  Indeed, Nipa Enterprise, Inc. was not formed until 2017.  Defendants filed their Rule 11 motion after waiting for the Rule 11 safe harbor period to elapse.

RooR responded by seeking leave to file an Amended Complaint.  That Amended Complaint named different defendants, and no longer named Nipa and Hosna.  The Court then took up Nipa and Hosna's Rule 11 motion.

Nipa and Hosna claim there is no factual basis for the Complaint because they did not own the store when the counterfeit sale happened. (Doc. 34 at 2-3). Rather than deny or disputing this claim, Roor and Sream filed an Amended Complaint identical to the original Complaint, except it replaces Nipa and Hosna with new defendants. (Doc. 38). So Roor and Sream implicitly admit that the new defendants owned the store at the time of the sale—not Nipa and Hosna. On that basis, the Court concludes that the original Complaint was objectively baseless. See Busse v. Lee Cty., Fla., No. 2:07-cv-228-FtM29SPC, 2007 WL 4350863, at *2-3 (M.D. Fla. Dec. 11, 2007) (finding plaintiff’s claim, that defense counsel perpetuated fraud before she was born, objectively baseless)

RooR likely did not help itself by failing to respond to the sanctions motion:

Roor and Sream also should have known that Nipa and Hosna were the wrong parties. See Attwood v. Singletary, 105 F.3d 610, 613 (11th Cir.1997) (per curiam) (“Rule 11 requires [litigants] to make reasonable inquiries into the veracity of information filed before the court[.]”). A simple public record search could have easily fixed the error. Instead, Nipa and Hosna were named defendants for three months. RooR and Sream wasted three months of Nipa’s, Hosna’s, and the Court’s time and resources. And RooR and Sream have failed to respond as to why they did so when given the chance. The Court thus finds sanctions warranted and will award Nipa and Hosna reasonable costs and attorney’s fees. See Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir. 1987) (Rule 11 sanctions can be “viewed as a form of cost-shifting, compensating opposing parties injured by the vexatious or frivolous litigation” or “as a form of punishment imposed on those who violate the rule[.]”).

The Court then imposed liability on plaintiffs' counsel to pay defendants' reasonable costs and attorney fees.

Motion for sanctions, granted.
RooR International Bv v. Ullah Business, Inc., Case No. 2:19-cv-222-FtM-38MRM (M.D. Fla. July 31, 2019) (J. Chappell)

Do You Need To Threaten Litigation To Trigger Declaratory Judgment Subject Matter Jurisdiction?

No.

Erbaviva, LLC, a California LLC, sent a demand letter to Era Organics, a Florida company.  The letter identified a number of Erbaviva federal trademark registrations, and "request[ed]" Era Organics:

1. Request the USPTO expressly abandon certain Era Organics trademark registrations;
2. Permanently refrain from using ERA ORGANICS, or any similar mark, in connection with certain goods;
3. Provide written assurances Era Organics will comply with these "requests"

The letter then concluded:

Provided we receive Era Organics' full and prompt cooperation, as well as confirmation that the above action has been performed, our client is prepared to give Era Organics a reasonable amount of time to transition to a new company name/trademark and sell through its remaining inventory.

The letter demanded compliance within 11 days.

Instead of changing the name it had been using for at least 4 years, Era Organics filed suit, seeking a declaratory judgment that there was no trademark infringement.  Erbabviva sought dismissal, arguing there was no jurisdiction to hear the dispute, as there was no "actual controversy."  Erbabviva argued its letter did not create any such dispute:

Nowhere in the letter did Defendant threaten litigation or suggest that it intended to take any formal action.  To the contrary, Defendant indicated that it was concerned about confusion in the marketplace and expressed a willingness to work with Plaintiff on resolving the dispute informally and amicably.  Plaintiff never responded to Defendant's letter but instead rushed to Court to file the present action.  In doing so, Plaintiff effectively jumped the gun.

The Court was not persuaded:

Defendant's letter described the likelihood of confusion between its products as "substantial" and "perhaps inevitable," and requested that Plaintiff cancel its federal trademarks and "permanently refrain" from using its own mark, among other things.  Dkt. 1, p. 14.  An actual controversy exists.

Motion To Dismiss for Lack of Jurisdiction, Denied
Era Organics, Inc. v. Erbaviva, LLC, Case No. 8:18-CV-2219-T-30SPF (M.D. Fla. Jan 4, 2019) (J. Moody)

Can The Manager of a Florida LLC Represent the Corporation in Litigation?

If she or he is not a lawyer, no.

David Boggs, LLC and Mac Mar, LLC sued Matthew Soltis and his company My Affordable Roof, LLC for trademark infringement concerning the mark "MY AFFORDABLE ROOF."  Soltis appears to have opted to defend himself.  He has submitted a number of filings to the Court captioned as requests for extension of time, motions to dismiss for lack of subject matter jurisdiction, and answers.  He has submitted these filings both on behalf of himself, and on behalf of his corporation.

On plaintiffs' motion, the Court struck the first such filing on behalf of the corporation:

Soltis is not an attorney so cannot represent this entity under Local Rule 2.03(e). (Doc. 16, pp. 1–3.) See Local Rule 2.03(e) (“A corporation may appear and be heard only through counsel admitted to practice in this Court pursuant to Rule 2.01 or Rule 2.02.”); see also Energy Lighting Mgmt., LLC v. Kinder, 363 F. Supp. 2d 1331, 1332 (M.D. Fla. 2005) (applying Local Rule 2.03(e) to limited liability companies).

Undeterred, Soltis tried again, moving for an extension of time on behalf of himself and his corporation to respond to the complaint.  The Court again reminded Soltis that a corporation must be represented by counsel:

Defendant Soltis has again filed a Motion on behalf of My Affordable Roof, LLC in violation of the local rules. The Motion filed on behalf of Defendant, My Affordable Roof, LLC is unauthorized. 

Soltis then filed a motion to dismiss the complaint as to him, and tried filing an answer on behalf of the Corporation.  The Court struck the corporation's answer, and denied Soltis' motion:

On review, the Court finds the Motion is due to be denied. First, the Motion is untimely. Indeed, Soltis’ approach to this case reveals a pattern of disregarding court orders, despite repeated extensions and opportunities for compliance. This latest Motion appears to be another delay tactic, as the Court flatly denied Soltis leave to file it. (See Doc. 22.) Moreover, Soltis’ argument that the Court lacks subject matter jurisdiction here is meritless. Plaintiffs’ Complaint alleges violations of the Lanham Act based, in part, on Defendants’ engagement in interstate commerce. (E.g., Doc. 1, ¶ 20.) Accepting these allegations as true, subject matter jurisdiction exists here. See Stalley ex rel. U.S. v. Orlando Reg’l Healthcare Sys. Inc., 524 F.3d 1229, 1232–33 (11th Cir. 2008) (announcing standard of review for facial subject matter jurisdiction attacks where the defendant does not use material extrinsic to the pleadings). 

Motion to dismiss, granted.  Motion to strike corporation's answer, granted.  Amended motion for default as to corporation, granted as well.

[Practice pointer -- a corporation may not represent itself in the Middle District of Florida; it must engage counsel.]

David Boggs, LLC v. Soltis, Case No. 6:18-CV-687-ORL-37GJK (M.D. Fla. Oct. 1, 2018) (J. Dalton, Jr.)

Does The Labor Day Holiday's Mattress Sale Weekend Warrant a Temporary Restraining Order?

No.

The owner of the TEMPUR-PEDIC bedding brand ("Plaintiff") has sued a number of defendants, including a former retailer as well as the owner of the THERAPEDIC bedding brand.  Through that lawsuit, Plaintiff seeks to enjoin sales of the THERAPEDIC bedding.

To that end, on August 28, 2018, the Tuesday before the labor day holiday, Plaintiff filed suit.   Along with its complaint, Plaintiff also filed a motion for a temporary restraining order, as well as a motion for a preliminary injunction.  The next day, the Court denied the motion for TRO for failure to comply with Fed. R. Civ. P. 65(b)(1)(B)'s obligation that the filing lawyer certify what efforts she has made to give notice to the defending party, and why notice should not be required.  Notably, the Court also referred the motion for preliminary injunction the magistrate judge to conduct an evidentiary hearing and issue a report and recommendation.

After its motion was denied, Plaintiff's general counsel emailed the retailer defendant's general counsel demanding defendant cease sales, and provided a copy of the motion for TRO as well as the Court's order denying it.  Plaintiff's letter gave defendant one day to comply.  Defendant did not respond.

Plaintiff next renewed its motion for TRO on the evening of August 30, 2018 (the Thursday before the labor day holiday).  Plaintiff included a copy of its letter to the defendant in an attempt to satisfy Fed. R. Civ. P. 65(b)(1)(B).  The next day, Friday, around 11:50am Defendant's counsel contacted the Court and indicated that it wanted to oppose Plaintiff's motion for TRO.  The Court gave defendant until 3pm that day to file its response, which defendant did.

Plaintiff's argument for a TRO was based, in part, on the labor day sales weekend being "one of the bedding industry's biggest sales weekends."  Permitting defendant to sell the allegedly infringing products through this weekend would result in "significant irreparable harm to [Plaintiff's] brand and goodwill."  In response, defendant explained that its limited sales in a single test market, as well as its long standing trademark rights -- predating Plaintiff's trademark rights -- cautioned against the extraordinary remedy of an ex parte temporary restraining order.   The Court agreed with defendant:

The Court is mindful that “[a]n ex parte temporary restraining order is an extreme remedy to be used only with the utmost caution.” Levine v. Comcoa Ltd., 70 F.3d 1191, 1194 (11th Cir. 1995). Given the contested nature of the allegations underpinning Plaintiffs’ argument for a temporary restraining order, as well as Mattress Firm’s request that it be given an opportunity to respond fully before any injunctive relief is granted, the Court denies the Renewed Motion for Temporary Restraining Order. The Court finds that Plaintiffs have not carried their burden for the issuance of a temporary restraining order pursuant to Federal Rule of Civil Procedure 65 and Local Rule 4.05.

While absent from the Court's order, defendant also explained another interesting angle in its responsive brief.  Apparently, the parties have been engaged in separate litigations in Texas state and federal court, where the Texas state litigation is due to begin trial later this month.  According to defendant, Plaintiff has filed a number of motions seeking preliminary injunctions against defendant.  And defendant notes that the Texas state court denied a request for a temporary restraining order against defendant more than a year ago. 

Renewed motion for temporary restraining order, denied.

Tempur-Pedic North America, LLC v. Mattress Firm, Inc., Case No. 8:18-CV-2147-VMC-SPF (M.D. Fla. Aug. 31, 2018) (J. Covington)

Are "Nationwide" Sales on Amazon Sufficient to Show Injury in M.D.Fla. for Venue Purposes?

Yes.

Thursday, LLC and Klhip, Inc. are both retailers that use Amazon to sell nail clippers online.  Klhip filed a number of claims with Amazon about Thursday.  In response, Amazon would take Thursday down and investigate.  Each time, Klhip's allegations have been found baseless (and Thursday's Amazon presence has been restored). 

Thursday, a Florida corporation located in Clearwater, sued Klhip for unfair competition, tortious interference, and violations of Florida's Deceptive and Unfair Trade Practices Act (FDUPTA) (among other claims).  Klhip, whose CEO lives in Idaho, sought to transfer the case there pursuant to either 28 U.S.C. 1391(b) (arguing that venue in M.D. Fla. was entirely improper) or 28 U.S.C. 1404(b) (arguing that it would be more convenient to litigate in Idaho).

Concerning the propriety of venue (28 U.S.C. 1391(b)), the Court quickly disposed of Klhip's challenge.  Thursday notes that it sells thousands of its nail clippers in this district, and Klhip's statements about Thursday (to Amazon) have hurt Thursday in this district, thus supporting jurisdiction  The Court agreed.

Concerning transfer for convenience of the parties, the Court rejected Klhip's argument that Idaho would be more convenient.  The analysis followed the typical analysis in a 1404 decision, but notably noticed the importance of the FDUPTA claim, explaining that: "[a] district judge in Florida indisputably has the advantage in an action based on Florida law and is most adept at applying Florida law.  As a result [familiarity with the governing law] distinctly disfavors transfer."

Motion to transfer, denied.
Thursday, LLC v. Klhip, Inc., Case No. 8:17-cv-1587-T-36AEP (M.D. Fla. July 11, 2018) (J. Honeywell)

Is it a good idea to ignore the Court's orders?

No.

Taser International, Inc. sued Phazzer Electronics, Inc. for patent infringement.  The discovery history appears tortured.  Taser pursued a number of motions to compel discovery responses.  Phazzer produced some documents (and apparently no emails), but the documents conflicted with representations Phazzer had made about its corporate structure and relationships with third parties. 

Then came the attempts to schedule depositions of "the handful of critical witnesses associated with Phazzer."  Apparently these critical witnesses for this closely-held company "are represented to be on vacation, out of the country, in surgery, or convalescing."  Taser had been attempting to schedule these depositions for 5 months.

With a Technology Tutorial scheduled in court, the Court ordered the parties and their counsel to attend in person, and cautioned that failure to do so could result in sanctions (including default judgment).  The day the Court entered that order, Phazzer's counsel filed a motion to withdraw.  That same day, the Court denied the motion to withdraw, and specifically ordered counsel to continue to represent Phazzer, notwithstanding counsel's representation of "irreconcilable differences."   The next day, Phazzer's counsel filed a "Notice of Termination of Legal Representation."   The Court struck that notice the same day because "because it is not a motion or a filing that is otherwise authorized by the Federal Rules of Civil Procedure or this Court’s Local Rules."

Phazzer's corporate representative did not attend the Technology Tutorial, failed to attend the corporate deposition of Phazzer, and a number of other Phazzer witnesses did not attend their court ordered depositions. 

The court then set a hearing on Phazzer's counsel's renewed motion to withdraw, specifically ordering a representative of Phazzer to attend.  No corporate representative attended.  Denying Phazzer's motion to stay the case, the Magistrate Judge observed: "it appears that Phazzer, with the assistance of its counsel, is attempting in bad faith to further delay this litigation."

In light of this abusive practice, the Court granted Taser's request for sanctions, and imposed the following relief:

• Striking of Phazzer's motion to dismiss;
• default entered in favor of Taser and against Phazzer on all claims;
• compensatory damages;
• treble damages for "Defendant's willful infringement" and "willful false advertisement";
• attorneys' fees and costs; and
• a permanent injunction.

Notably, while the Court could not name the third-party manufacturers in the injunction (for due process concerns), the Court did note: "it is clear that nonparties who assist the enjoined party in violating the injunction may be held in contempt by this Court."

The injunction should be helpful with ceasing importation of these infringing devices (electroshock cartridges).  Whether Taser will ever see any money from this judgment is another question entirely.  Moral of the story, Court orders are not something to be ignored.

Motion for Sanctions, granted.
Taser International, Inc. v. Phazzer Electronics, Inc., Case No. 6:16-cv-366-Orl-40KRS (M.D. Fla. July 21, 2018) (J. Byron)
 

Request for 2 Day Extension To Oppose Summary Judgment Motion?

Denied.  Ouch.

Commodores Entertainment Corporation has sued Thomas McClary, a former Commodores band member, for various trademark claims.  Commodores sought summary judgment.  Procedurally, McClary's attorney requested a first extension of 8 days for McClary to respond to the dispositive summary judgment motion.  The Commodores did not oppose the request and the Court granted it.

During that 8-day period, McClary's counsel attended a hearing in California state court in San Diego.  During that hearing, the California state court set a case for jury trial where McClary's counsel is lead trial.  That jury trial was set to begin on July 6 - the day after McClary's summary judgment response was due.

On the day of the summary judgment response deadline (July 5), McClary's counsel sought a 2-day extension of time to respond to the summary judgment motion.   Again, the Commodores did not oppose the request.    The next day (after the deadline has passed), the Court denied the motion with the following docket entry:

ENDORSED ORDER denying 415 Motion. Counsel has not demonstrated good cause for the requested second extension. Defendants have other counsel of record who could have assisted. Signed by Judge Roy B. Dalton, Jr. on 7/6/2018. (ZRR) (Entered: 07/06/2018)

Ouch.  Later that day, McClary submitted its summary judgment response brief.  And a few days later, McClary filed an unopposed motion requesting the brief be accepted as timely.  The Court has not yet ruled on that request.

As a practice pointer, it is difficult for the Courts to rule on requested extensions on the day of a particular deadline, and I have not studied the history of this case to see how well it has progressed.  But I presume the merits of the case will get resolved.

*** Update 7/10/2018 ***
The Court resolved McClary's request to accept the summary judgment

ENDORSED ORDER granting in part and denying in part 418 Motion Relief From Order, And To Accept Opposition To Motion For Summary Judgment As Timely Filed. The Response in Opposition will be considered as timely filed. In all other respects the motion is denied. Signed by Judge Roy B. Dalton, Jr. on 7/10/2018. (Dalton, Jr., Roy) (Entered: 07/10/2018)

Commodores Entertainment Corporation v McClary, Case No. 6:14-cv-01335-RBD-GJK (M.D. Fla. July 6, 2018) (J. Dalton, Jr.)