Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 1 of 28 PageID:
JUUL AND
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of Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 3 of 28 PageID:
infringe
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§ Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 4 of 28 PageID:
discovery, Grishayev that (DE sent
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or Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 5 of 28 PageID:
(DE 111-1 at 10). In a separate series of messages with a supplier in China, Mr. Grishayev voiced similar sentiments: Mr. Liu: worst case you stop this project and working on others Mr. Liu: even if you lose the lawsuit Mr. Grishayev: nah lawsuit i dont care Mr. Grishayev: just care for FDA Mr. Liu: you move your money away and apply for bankrupt [sic] Mr. Grishayev: yeah Mr. Liu: then start of a new company Mr. Grishayev: im not worried Mr. Grishayev: you can even still have same company lol Mr. Grishayev: even with bankrupt[cy here in the usa
(DE 111—1at 15). Juul was understandably alarmed by these messages. Compounding that alarm were internal communications showing Mr. Tolmach and Mr. Grishayev communicating with each other to make a number of money transfers from their Eonsmoke business checking account—a Chase checking account with account number ending in 3070—to a Chase brokerage account, account number ending in 5906. This brokerage account is co-owned by Mr. Grishayev and Mr. Tolmach, and is nicknamed the “family office account” or the “family account.” (DE 111 at 14—15). The messages concerning these accounts suggest that defendants were— unusually—treating both the Chase checking account and the Chase brokerage account as Eonsmoke’s business accounts: Mr. Tolmach: gotta have like 5-10 mil on the books for Eonsmoke Mr. Tolmach: if you wanna be in mclane etc Mr. Tolmach: but then again checking account pays 0, it’s stupid to carry 800k in the checking Mr. Tolmach: guess we will just treat family office like the Eon checking acct for next few years
5 Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 6 of 28 PageID:
presentation
between (DE
April from
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not Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 8 of 28 PageID:
from of packaging Nor 4X complaint—Juul in $500,000.
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197
have
U.S.
a
in
2011 Related
9
Kos
burden under
preliminary
but merits,
interest.
and
his F.3d
(3d
the
relief,
of
harm
and
7, v.
its
been
Phanns.,
WL2937360
the
establishing
favor,
Cir. use
Freedom
disgorgement
asset
20
at
damages, of
ability
must the
See
Servs.,
the
of
I
first
what
484;
in met.
(2008)
of
consider
1990)
establishing
Copyright
Sweet
and
likelihood
freeze
the
a
establish
injunction
two
to
Inc.
prejudgment
accord Inc.
the
Forge
absence
(placing
enjoy
(line
has
are
People
both
v. at*(D.N.J. in
equities
a
whether
of
Andrx
case
Sidamon also
Corp.,
breaks
and
essential:
Hoxworth
of
those
profits.
a
these
ordered
of success
Apparel,
particular
likelihood
Trademark
sought
seeking
Corp.,
seem
asset
204
the
and
July
(Cplt.
A
v.
by
F.3d
on to
369
of Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 10 of 28 PageID:
the district court where either or both of these prerequisites are absent.” (quoting In re Arthur Treacher’s Franchisee Litig., 689 F.2d 1137, 1143 (3d Cir.
1982)); Morton v. Beyer, 822 F.2d 364, 367 (3d Cir. 1987); Freixenet, S.A. v. Admiral Wine & Liquor Cc., 731 F.2d 148, 151 (3d Cir. 1984); Am. Ex., 669 F.3d at 366, 374. Preliminary injunctive relief is ‘ian extraordinary remedy” and should be granted only in limited circumstances. Am. Tele. & Tele. Co. v. Win back and
Conserve Program, Inc., 42 F.3d 1421, 1426—27 (3d Cir. 1994). I point out, however, that this is not the ordinary motion, e.g., to restrain a defendant from selling infringing products; rather, it is one to prevent the dissipation of assets that might be used to satisfy a judgment. B. Likelihood of Success Because this is an action involving trademark and trade dress infringement, my analysis necessarily turns on whether Juul has established a likelihood of success on the merits of a violation of the Lanham Act. The parties previously executed a consent preliminary injunction in which defendants agreed to cease selling, marketing, or distributing products containing the allegedly infringing packaging. (DE 29). Defendants’ willingness to agree to that injunction, says Juul, is significant. (DE 111 at 17). It points to the October 31, 2018 Show Cause Order that states “JLI has demonstrated that it is likely to succeed in showing that Defendants are selling products that infringe JLI’s trademarks and trade dress (the ‘Infringing Products’).” (DE 4 at
1—2).By agreeing to the subsequent Consent Preliminary Injunction Order (DE 29), suggests Juul, defendants tacitly accept that Juul will succeed on its claims. (DE 111 at 17). Defendants demur, claiming that their agreement to the consent preliminary injunction (DE 29) does not constitute a concession that Juul was likely to succeed on its claims. Rather, it was limited to the infringing packaging, and reflected only the fact that they had discontinued that packaging and had no plans to use it in the future. (DE 130 at 2).
10 Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 11 of 28 PageID:
the Injunction subsection trademark
certain “false
15
15
U.S.C.
U.S.C.
newly-asserted
I
Under
(1) 1. description.”
(1)
will
forms
Any
Any word, description which— thereof, services,
§
§
does
infringement
B.
accept
Trademark 4X
11 (a)
Shall
1
(a)
the
1,
person 125(a)(lflA).
person of
14(l)(a).
use colorable with
or of
such
is
commercial such deceive that sponsorship,
shall
term,
Pod
I not
unfair
Lanham
analyze
any or
likely
be to
arguendo
or
claims
in
15
obviate
he
the
Packaging
any
deceive
use
person
be liable who of
who, any
name,
commerce
goods
U.S.C.
Furthermore,
competition,
or as
fact,
to
liable
sale,
Infringement of
false
imitation
is
the
Act
container
shall,
she
to
cause
that
on the
in
likely
the activities
the
with or
symbol,
or
the
or
likelihood
offering
Section
§
a
or
designation
in
is
4X
Eon’s
services
false
civil need
1125(a).
approval
without
position
or
in
a
affiliation,
confusion,
any
to
another
Pod
civil
of
connection is
for
cause
action
described
or
the
or for
a
reproduction, website by
32, for
likely
packaging.
registered
and
action goods,
misleading
device,
of
on
The
another a
the
Lanham
that
sale,
of
15
person,
likelihood success of
11
confusion,
or
by
connection, to his
Trade
or
consent
U.S.C. origin, statute
infringes
the
in
by the
uses be distribution,
as
to
with
or
or
connection
person
any
damaged
cause
Act mark
“false
Consent
any
registrant.... In her
or
Dress
as
representation
counterfeit, in
Section false
any
provides
of
subsection
as of
person
Section
or
to
goods,
commerce combination
the
success
the
in
designation
mistake, to
or
goods trade to
or
Infringement—the
connection
the
Preliminary
association
Juul
cause by
registrant—
or
misleading
with
1114(1):
who
services,
that: 43(a)
such
dress
advertising
origin,
or
analysis.
copy,
Wordmark.
B.2,
which
or any
mistake,
believes
of
proscribes
act.
to
of
and
fact,
I
or
origin” or analyze
of
In
or Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 12 of 28 PageID:
unfair
Lanham protectable to
2000) federal
(D.N.J. trademark Sportswear, See standard.”) must these design consumers the LLC, established, of to claims,
from certificate registration trademark.
identify
likelihood
the
defendant’s
also
511
the
To
prove
elements.
“To
(‘We I Juul
competition/false
4X
unfair is
Aug.
address
I
Act,
Chanel,
state
will
Trademark
inherently
F.3d
packaging. establish
goods
of
infringement
measure
mark;
has
are
(citing
that
It
Inc.
number
Juul
13,
of
a
registration
discuss
competition,
has
a
350,
plaintiff
likely confusion
a
the product.”
claim
v. 2015)
(1)
or Inc.
good
must (2)
A&H
reproduced
Victoria’s
services
trade
the
prerequisites
357
distinctive
federal
and
Status
v.
it
to (sections
it
a.
for
(“courts
likelihood
owns
Matos, must
in
allegedly
demonstrate
confuse Sportswear).
and (3d
designation
Trademark
was
the dress
trademark
overlaps
McNeil
consolidated
15
trademark
causes
Document cir.
Secret
for
the show
date
issued
u.s.c.
the
civ.
II.B.a.l
or
infringement
in
false the
2007).
infringing mark;
Nut
of
of
has
Juul
of
the
as
three
No.
Stores,
a
success a
source
ritionals, registration.
infringement, of
A
and
consumer
§
likelihood
designation
to valid Claims:
Third
acquired
plaintiff
infringement, &
14-3509, Retrieval origin, 1
fashion.
and Pod
Juul’s
125(a)(fl(A),
elements:
2, that
12
Inc.,
trademark design
of
Logo
infra). (3)
on circuit
under
LLC
the
the
15
Valid
trademark the
237
bears
the
confusion. secondary
of
(section
database
2015
trademark
u.s.c.
(See
of
plaintiffs
Pod
confusion.”
a
is
Once
“(1) defendant’s
15
element
the
F.3d
consider
origin
Pod
Heartland
non-functional;
by
15
the
U.s.c.
cplt.
or WL
Logo
it
Lanham
identical
those u.s.c.
§ Mark
II.B.a.3,
has
trade 198,
burden
and 4773072, confirms meaning;
1 under
Because
trademark product
125(a)(1),
¶ that
and
claims
§
a
210 A
Ow elements
trade
dress 22—23).
1114(1),
valid use
Sweeteners,
§
&
Act,
it
provided
an
standards”); of
1114,
infra).
ned
H
(3d
owns
of
that the
proving
for
with
and
identical
and at
dress
a
(2)
in
tinder
the
by
cir.
plaintiff
is
An
*10
and
analysis relation
and
are
the
a
a
(3)
Juul
legally
that
mark
the
valid
entry
n.6
the
of Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 13 of 28 PageID:
registered. (See DE 1—2, 1—5).A “certificate of registration issued by the United States Patent and Trademark Office constitutes prima facie evidence of the validity and ownership of a disputed mark.” Coach. Inc. u. Cosmetic House, Civ. No. 10-2794, 2011 WL 1211390, 2 (D.N.J. Mar. 29, 2011) (certificate of registration by U.S. Patent and Trademark Office is sufficient to establish the first and second elements of trademark infringement and unfair competition claims).
I am satisfied that there is a likelihood of success as to the first two elements of trademark infringement with respect to Juul’s Pod Logo trademark. b. Trade Dress Claim: Package Design is non-functional and is distinct or has acquired secondwy meaning
Turning to Juul’s trade dress claim regarding its packaging, I also find a likelihood of success on the issue of ownership of a valid trade dress. First, the trade dress design is valid in that it is non-functional. “[T]he primary test for determining whether a product feature is functional is whether the feature is essential to the use or purpose of the product or whether it affects the cost or quality of the product.” Shire US Inc. v. Barr Labs., Inc., 329 F.3d 348, 354 (3d Cir. 2003) (citing Eppendorf-Netheler-Hinz GMBH v. Ritter
GMBH, 289 F.3d 351, 356 (5th Cir. 2002)). I find that Juul’s product packaging does not affect the cost or quality of the product.
Second, I find that Juul’s packaging comprises specific elements that together make up its distinct dress. The overall appearance creates a sophisticated and visually simplistic dress for consumers. Fair Wind Sailing,
Inc. tO’. Dempster, 764 F.3d 303, 309 (3d Cir. 2014) (“[TJhe alleged trade dress must create some visual impression on consumers.”). That is, the packaging features a monochromatic box, the Juul Pod Trademark Logo stacked vertically on the right side of the box, and a distinctive font with minimal text aligned on the upper left side.
13 Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 14 of 28 PageID:
whether or would when with
Inc., this
Third Coach,
decision.” Freedom mechanically would is (quoting
conflating
mark
Circuit
930
the
The
A
assessing
alleged whether attention of efforts adopting the the length (1) or media; Circuit of factors prior “The
probably
likely
2011
“likelihood
similarity.” actual there
consumers
source
that Interpace
the F.2d
Card,
price
same
critical
A
single
owner
these
&
conclude
WL the
of degree are
(8) he infringing
has suggesting
tallied,
is
277,
H
the
Inc.
confusion
the of time
expected
channels assume of
whether
a
the is
4X
the
1211390, Sportswear,
disputed
most factors “repeatedly the
a
to
likelihood
goods,
Corp.
likely
of
mark;
292
u.
Id.
package
of different because
extent the
same;
manufacture
c.
but
confusion”
JPMorgan
goods
that
similarity
Marks
important
mark; (3d
Both
that
defendant
Confusion
v.
that two
to
of
include,
rather
of
though
arising;
(6)
Lapp,
at issue
[the
(9)
to
expand
consumers
Cir.
trade
and
of
of the the marks and
product
ha,
*3
the insisted
which
Trademark
are
the
(2)
customer
the
two
Chase
that
1991)).
(quoting
other
between
exists product evidence for
Inc.,
the consuming not
the
and
but confusingly
(5) factor
237 relationship
a
has
similarity
into
products]
are
Juul’s
product
the
they
the Juul
competing,
strength
or
721
are
that
advertised
factors
F.3d
&
where
when used
Courts
likely
that
in
targets service
intent
confusion, Ford or
Co.,
the
not
are of
14
F.2d
package.
and the
trademark
determining
at
service
actual
the
market. in
public
making
of owner’s
432 to limited “consumers tools
indicative
share
similar
Motor of
216.
Lapp
of
consider
460,
the
of
function; Trade
identified
of
cause
mark
the
are
through
the
the
F.3d
the
to
defendant’s
confusion; it
might
a
factors
i.e.,
463
Co.
owner’s marketed
goods
a
to
represents
mark
if
guide defendant
common
and
parties’
without
consumer
Dress:
purchase;
463,
“ordinary
likelihood
of a
u. purchasers’
(3d
(10)
by
the
variety
viewing
expect
trade
the Summit
and in
are
a
471
a
Cir.
mark;
qualitative
same
other
Likelihood
the
sales
care
(7)
similar
evidence
through
source,
market,
not
the
dress
in
is
(3d
confusion.
1983)).
of
consumers the
(4)
minds
of
the
Motor
associated
and
to
(3)
factors
confusion
Cir. confusing
the
be
mark
mark.”
claims
The
of
Prods.,
2005)
In
is Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 15 of 28 PageID:
Juul ultimately affiliation, appearance
that rectangle rectangles maroon packaging rectangle coloring hexagon rectangle rectangle. Defendants’ Vigoro enough, portion fact depiction, of coloring Cir. flavors, Rather, separately.”
marks
finder
they 1994).
contends
With
Reviewing
That
JuuI’s
hidus.,
is
rather
the
or
of
were
by
by
is
have
with is shape
black
connection, when favor
infringes
varies;
would green
the
respect Without there
itself, “whether Third
contrast
most of
Fisons rectangle
trade
Inc.,
noticed,
defendants’
a
top that similar than
Juul.
while with
those
viewed
shape
to
are
find often
to
the
Circuit
and
30
dress
to
Horticulture,
defendants’
signify
on
finally
different
compel
often
noticeable
a
thefy]
factor
top
F.3d
a that
has
architectural
factors
the
or
hexagon
bottom (though their colored
separately, contrasting
packaging
sponsorship.”
has
portion
distinction
rounded “pod” appears
the
deciding the
466,
create
one
a
trademark.
sources
stated
in
conclusion
overall flavor
portions
with
a
use
differences
in
Inc. 477
(degree
image relation
diamond,
above
the
the
to
could
corners.
claim
of the
color features
a
u.
that
(3d
of
of
could be
dark impression
same
a
center.
Vigoro
is
the
matter, Id.
of
the
of the
similar Vietving
Cir.
grey.
to
the
that is
similar
be
is
15
the
similarity),
(quoting
pods. between color
the not
hexagon,
used
easily goods.
overall
a
Defendants
similar.
and
1994)).
test
Indus.,
closer
The
rectangle
they Defendants’
4X
a
I
“pod”
the such
to here The
design. hexagon)
in
for
made
be
background
packaging,
are
impression
the
Fisons
the
these
call.
two
Even determining
Inc.,
chalked
for
bottom
like
I
find
as
not
find
Juul
bottom by
such
have
example, “pods”
Juul’s
black.
30
image
two
if
a
pod
these
in Horticulture,
confusingly
that
differences
likelihood
Pod
F.3d
portion
that the
up
also
“pods” I
when
coloring is
half
find
The comprises
together,
the
on
pods
to
trademark.
middle.
likewise
the
466,
the
may
flipped
different
their
of
that
interior
overall
viewed
of
is
similarity
top
the
that
similar.
477 be
not of
the
Inc.
in
they
I
the
a
the
a
see
a
(3d
v. Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 16 of 28 PageID:
prominently
arranged text the warning. design designation font, PODS of features, tend Labs, These, name background. confusion displayed.”). exercise they with right similarity consumable
cause distinguished
origin.”)
number
on
are
to
and
similar
side
On
Inc., On
Cutting
on
packaging
greater
that
as
the
distinguish
little
depicted
The
the and
Juul’s
to
the Eon’s
in noted of
or
467
(emphasis
cover
was
span
appears
of
on
the
coloring layout
products
palming product
Most
text
phrase
particularly
care
confusion
against
from
pods
F.2d
the
packaging,
meant
packaging,
above,
packaging.
of
appears
the
is
in
in
notably,
upper
the
the
and a
in
in
304,
the
in
“Juul
schemes, right
selection.
side-by-side
[stereo supplied);
off
any
that
the
a
to
lieu packaging box
are
design
same
different when
when
309
distinguish
more
left-hand
the
box.
finding
side
are
compatible”
there similar
defendants’ of states
the
I
speaker
am
prominent
JUUL. (2d
distinctive
viewed
often
the
“pod”
of
Thus
Images of
cluttered distinctive
Id.
are
mindful,
the size.
Cir. the
from of the comparison
to name
at
corner
marketed
distinctness,
distinguishing
The
the
shapes, Juul’s
cabinets] Juul’s
packaging,
box.
1972)
310 flavor,
separately
The
of
Juul’s.
appears
packaging
designation
overall of
than manner—i.e.,
4X
the
16 too,
Juul
The
(“[T]here
in
4X
the
(“The
Pod
product
PODS
the
Juul
a
fonts,
Juul’s PODS
in that
to
box
Cf goes
distinctive
manufacturer
wordmark
on appearance
Logo
strength
by as
a
younger
presence
however,
Bose
highlights
Pod
judge’s
overall
these
designation
is the
features.
well
and
the
far
from
box
of
packaging.
hardly
trademark.
trademark
in
package.
to
brand
likely
Corp.
design
as
includes
are
a of
buyers
others. eliminate
font.
displays
chambers).
appears
of
the
is vertical
the
of
likelihood
inexpensive, The
a
[the v. buyers
is
the
name
these
series
use
aesthetics The
is
Linear
nicotine,
clearly
These
Overall,
who
4X
Moreover,
overall
in
source’s] are
a
a clearly
of
stack
remaining
confusion
nicotine
a (4X
products
PODS
simplistic
(as
of
a
vertically
may
different
Design
of
white
pods.
PODS),
the
and
on
may
and
the
4X Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 17 of 28 PageID:
Juul Juul respect
Juul’s and this approximately commercial share likelihood (OpIt. care pack product, relatively assume Where relatively confusion Fisons confusion in evidence However, one F.3d
189,
the
trade
factor of
in
Pod has 204
350,
of
With Overall,
As
The of
case
Pod
defendants’
“products
Horticulture,
their
to
gum;
17).
that
the
to the
widespread
of Logo
inexpensive low (3d
“it
dress
overall
of
366
by
factor.” fourth
points
Logo
respect
of
the confusion.
viability.
I market
takes consumer
selection more
individuals
Cir.
neither, defendants’
accept
standard
such
I
trademark
$15.
(3d
find
third
are
trademark
were
and trade
in
1995)
McNeil
care very Cir.
suppliers to
products,
well
Inc. (DE
that for
favor
that
factor
commercial
factor
sixth price
however,
than
ones
For
2007)
dress,
confusion. of
e-cigarettes.
little that
(“Inexpensive
v.
30-9
known.
in
this
Juul’s
Nutritionals,
use
claim. of care
Vigoro
example,
and
factors the tag
expensive (purchasers’
consumers
two
Juul.
must
evidence
was
first
(citation
at
confusion
of but
and
for market
is
packaging
Pod (commercial the Juul
10).
Indus.,
confused; success.
it
factor strongly
be The
the
Versa
(confusion)
would
a
Pod Thus
Juul
Though
Logo
exercised
refrigerator
is
goods
to ones.
LLC omitted).
pods
price
to
spend
the
as
weighs
care establish Logo
Inc.,
Prod.
purchase
points
trademark therefore
consumers
17
Juul
trade in a
to
the
The
tends
market
of
require
a
Headland
strength),
Juul’s
and
30
their
mark
little
a weigh Co.
consumable
in
supplier
Here, alleges
somewhat
more
four-pod
dress
F.3d
to
its
or
sophistication),
to
the
v.
origin
Skvpe
be
time
such
leader,
and
consumers
favor
an
Bifold
support
selection.”).
and
slightly
would
there 466,
important existence
more with
plausibly
there
automobile.
Sweeteners,
trade
took
and
products
may trade
with
package
messages
in
476
Co.
enjoying
Juul’s
is, item,
susceptible
easily
in care
an
is Juul’s
the
dress.
pass
at
respect
(‘Mfg.),
dress
(3d
little favor
to
of
increased
the
Accordingly,
that
best,
it
reference
in I
exercise products. the
is
exercise associate
Cir.
find is
unnoticed.”
The
favor where
a
LLC,
use
selecting;
dispute.
of
have
50
not
its
72%
actual
minimal to
Juul.
1994). that
to
of
F.3d
marks
its
a
with
511
even
less
a
to
a
I Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 18 of 28 PageID:
Juul on the packaging to mean that defendants had Juul’s permission to use the name. (DE 111-1 at 14). Juul also refers to another message sent by Mr. Qrishayev relating that U.S. Customs and Border Protection officers briefly detained some 4X pods because they thought the devices looked like Juul products. (DE 137-1 at 11—12). While this is by no means conclusive evidence, it favors a finding that Juul may be able to establish consumer confusion with respect to the trade dress claim and the Juul Pod Trademark claim. The fifth factor, defendants’ intent, points in favor of Juul. Juul asserts that defendants had actual knowledge of Juul’s trademark and trade dress and intentionally designed their pod logo and packaging to mirror Juul’s. (Cplt. ¶
44). I find it likely that defendants intentionally used Juul’s name, the Juul Pod Logo, and packaging design in designing their own package. At oral argument, Juul presented additional skype messages between defendants and a vendor/supplier on the subject of how to design the packaging. In this message, the supplier has inserted JuuI’s Pod Logo and packaging trade dress into a template to use as a base from which to design defendants’ product packaging. Moreover, Mr. Grishayev and Mr. Tolmach in their deposition admitted to using Juul’s trademarks to promote their products. (See, e.g., DE 137-1 at 38). The seventh, eighth, and ninth factors address the “nature of the services provided, the customers targeted, and the methods used to reach those customers.” Primepoint, L.L.C. v. PrimePay, Inc., 545 F. Supp. 2d 426, 444 (D.N.J. 2008) (addressing these factors together). These factors weigh in Juul’s favor. The “greater the similarity in advertising and marketing campaigns, the greater the likelihood of confusion.” Checkpoint Sys., Inc., 269 F.3d at 288-89. “When the parties target their sales efforts to the same group of consumers, there is a greater likelihood of confusion between two marks.” Sabinsa Coip. v. Creative Compounds, LLC, 609 F.3d 175, 188 (3d Cir. 2010). The parties operate in the same industries, offer very similar products, and target the same audiences. Overall, these factors do lead me to believe that defendants’ use of
18 Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 19 of 28 PageID:
confusion. the nature expect in consumers Kos of packaging might suggest
voluntarily sales that infringement success (“The Checkpoint, that products Consent identify a
the
108)
trademark
the
the
Pod
Juul
Phann.,
plaintiff ...
to
contexts,
closer
Finally,
Thus
close
As 2. relevant
find
the
of
the
add
Logo
that
the
with
Preliminanr
packaging, noted
the
using
prior
of
Trademark
it
products
might agreed
relationship
I
269
source claims
the
Inc.
defendants
natural
mark
it the has
find
products
respect in
in
fields,
has
the
above,
this
relation relationship owner
assessing F.3d v.
products,
proven
that
reasonably
Anthx
to
and
greater
of
of
held
package.
at
it
for
Injunction,
cease to
or
infringement at
its
almost
Juul
does to
or
Infringement
issue
packaging
Juul’s
any
one 290
between since to
are
a
goods.
manufacture
Coip.,
the
likelihood factor
the
the
consumers
all
recently
not
owned
other
company
between
(“Evaluating
are
expect relevant
(DE
all
September
development,
likelihood
trademark
4X
369
appear
(DE
it
of
so
ten
the
29).
packaging.
trade
circumstances
should
of
the by
closely
F.3d both
filed
109-1).
products of (other
the
the —
market,
to”
Juul.
may
both
Lapp
on
the success
dress
of
a products,
“JUUL” 700,
products 22,
this sell
and
19
come
the
related
motion
confusion.”). factors
perceive
“JUUL”
products),
While
This
production,
factors
2015.
Although
both.);
factor, could
trade
4X
and the
724
on
as
factor
wordmark
that
packaging.
practices
the
that
to
suggesting
the
the (3d no to
and
Juul
dress
Wordmark
cause
support
these
Lapp,
courts
amend
have
bear
wordmark
surprise
“courts Cir. similarities
merits
the I
thus
the
and
do
uses
claims.
similarities
consumer
721 the
2004).
consuming
on
not more
of
look
(Reg.
a
the favors
sales
Juul
of
the
this
other whether
likelihood
may
same
that
F.2d
rely
its
complaint
to
appears
similar
No.
I
public
Here,
in alleges,
wordmark of
conclude
Juul.
evidence claims
look
defendants
on
companies
at
source.”
all the
4818664),
to
public
462
the
in
at
of
might
their
See
on
of
light
the
(DE
to Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 20 of 28 PageID:
website however, remains developed. argument,
JUUL protectable to
Trademark proposed registration Sportswear, word registered. also of wordmark example, confusion. 1114(1), “#juulcentral” products
defendants
registration
identify
attaches
“Juul”
The
As
Juul
Again,
Juul
is
and
pending.
a
a
noted
that
Amended instances
on
issues
valid
goods plaintiff
so Indeed,
in
(Id.
has
has
mark;
Status
marketed
number
in
Inc.,
in
the
the
their
I
to
Eonsmoke
was “#juulgang”
social will
at
its
above,
a
pointed
and
the
internet.
or
crucial with
237
strong
47)
Still,
(2)
social a.
Document the must online
briefly issued
b.
services
Complaint
where
Amended
protectable
and
media
These it
Trademark F.3d
their respect
to
Trademark
motion
Juul
owns
to
issue likelihood
media
show
infringed
state
date
and
discuss
(DE
and
defendants instances
at
and
pods
matters
content.
causes
discussed
the
210.
Retrieval
to
of
Complaint
social is
to
a
111 three
cites that
“juulpods” and
mark
claim
the registration.
element
online
amend
mark;
the
Claim:
its
at
of
Claim:
the
a
online
the
do JUUL
elements:
media
where
success 6,
likelihood
wordmark
JUUL
and
have
for
these
database JUUL not
as
and
JUUL
11—12).
the
(3), a
trademark
20
Valid
without
“JUUL that
wordmark advertising
Likelihood
copy
marketing. appear
defendants
used
(3) complaint
wordmark
claims
whether
(See
wordmark
on
wordmark,
“(1)
it
the
Mark
of
Juul
of
in
elements that
the
owns
PODS
DE
confusion.”
it
qualification
to an
defendant’s other
in
has
hashtags infringement,
also
be
are
Owned
of confirms defendant’s
entry
109-1
creates
their
Juul
to
have
that
infringement
WITH
Confusion
in
trademark
a
ways,
incompletely
add
and
highlights
(1)
valid
dispute.
from trademark.
briefing
points
used
¶
by
and
these
a
provides A
MORE
“#juul”
that
use
chiefly
26—27).
to
likelihood
and Juul
&
the
the
use
(2)—that
promote
H
to,
15
of
is
issues
a
and
that legally claim.
BUZZ”.
JUUL
certificate
the
of
U.S.C. for
on
the
Juul
Juul’s
the
at
its
mark
of
oral their
§ Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 21 of 28 PageID:
(DE 110-2 at 2). While the use of the JUUL wordmark without any
qualifications gives me some concerns, I am unable to fully engage in a proper Lapp factor analysis at this time without more context to understand the nature and extent of defendants’ social media and online marketing.
With respect to factor one (degree of similarity), I find that the few social media examples provided by Juul are inconclusive. Now obviously “Juul” and “Juul” are similar. Still, “[tjhe mere appearance of Plaintiff’s name or image as part of the search results displayed in response to a user-generated query does not mean that the relevant company used Plaintiff’s name for advertising or trade purposes.” Ohado v. Magedson, No. 13 Civ. 2382, 2014 WL 3778261, at *7 (D.N.J. July 31, 2014), aff’d, 612 F. App’x 90 (3d Cir. 2015). Nevetheless, with respect to the use of hashtags in social media, there is case law support for the proposition that the use of Juul’s wordmark beneath an image of an EON product could create a mental association between the two, and promote consumer confusion regarding these products. Museum of Modern Ad u. MOIVMCHAIPLLC, 339 F. Supp. 3d 361, 377 (S.D.N.Y. 2018). Still, without more evidence as to how the wordmark is used in defendants’ social media,
this factor remains less than conclusive. I do not fault the plaintiffs for this; the claim is in its infancy. The analysis as to factors two (commercial strength) and three (purchasers’ care and sophistication), is the same as the analysis with respect to Juul’s Pod Logo trademark and packaging trade dress claims. Concerning factor two, there is little dispute that Juul has widespread commercial success and that its mark is well known. As to the third factor, the relatively inexpensive price tag for Juul and EON products tends to support an increased likelihood of consumer confusion. Versa Prod. Co., 50 P.3d at 204. These factors favor Juul. The fourth and sixth factors (confusion) are inconclusive on this undeveloped record. Juul presents little evidence of consumer confusion with respect to their social media advertising. Are consumers looking for a Juul pod,
21 Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 22 of 28 PageID:
but a lacking consumer
confused accompanying that such circumstances, and that social imitation, also provided, media, advertising. confusion. noted whether products customers,” consumers expect context
therefore
lower-cost
being
popularity
defendants inclined are
as
The In
Finally, media
above,
the
and
at
for
“4Xpod”,
merely
regard
the
simply
and
inconclusive.
misdirected
the
this
viewing
see
seventh,
prior
how
to I
These Juul-compatible
Prirnepoint,
use
post
must
to
the
customers
target
Section
assume in
point.
that
of
compatible but agree
to
the products
owner
because
of
assessing
parties
“Eonsmoke
Juul.
and
a
the
similarities view
the eighth,
post.
it
Juul
social
the
Thus,
that is
to
u.S. fifth conclude
that
Juul
to
They
that
also
545
same
an
operate
targeted,
It
wordmark
defendants
are
manufacture
defendants
media
ic,
factor,
and
factor
is with
defendants
it
EON
wordmark
use
F.
plausible
repeatedly
product
Pods”,
remains
perhaps synonymous
audiences,
therefore
supra.
Supp.
ninth
that
Juul’s.
in
in
product?
post
ten
defendants’
and
the
the
is
or
defendants’
use
(other
factors—the
from
2d
by
intended
to This
plausible
used
that
the
“eonjuulcompatiblepod”
are
same
context in both
used
increase
be
at
defendants
the
often
22 defendants’
methods Are
with
owned
another
a factor
444—weigh
seen
by factors
products),
JUUL
industries, consumer
the
intent
they
defendants,
of through
to
JuuI
that
products
whether
the
Juul
leans
other
by
benefit
“nature
wordmark suggesting
manufacturer?
intentionally
used
in
a under
likelihood Juul.
under
social
consumer name
using again
evidence would in
in
social
offer
to
from
a
Juul’s
are
of
Juul’s
This
it
account
reasonable
reach
these
media
in
the
without is
very the
distinct
view in media
the
the
of
would
their
hard
factor
services
of
a searching
favor.
would
mark, favor.
consumer
those
similar
public
hashtag reputation
Evidence
may
conscious
the
names
social
and
to
more
be
products is
same
As
assess
believe
I
cause
am
might
online
for
is Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 23 of 28 PageID:
consumer
for
related judgment purposes without burden McGraw—Hill, entitled irreparable
*7 Inc., those disgorge Disc.
“freeze the damages.”). profits.” satisfy assets. 1990), brokerage the
(D.N.J.
the
fact
“family
42
Co.
The
C.
“Establishing Having
funds.”
Turning
first
holding
any and
Defendants’
of
Specifically,
F.3d
to
the
and
(DE
based
v.
of
record
proving
confusion—is in
Nov.
Irreparable
the
account
time
harm
Premiere potential office”
Wordmark
preliminan’
seeking
extent JLI’s
111
1421 considered
Inc.,
Honuorth
encumbered
then modified
on
5,
in
is
at requires
2007)
favor,” a account.
809
the
(3d
a
undeveloped
in
of
a assets
to
29—30). ‘clear
they a
Foods, judgment
proposed
risk
an
the
preliminary
claims
the
Cir.
F.2d
claims, Harm:
by
v.
injunction,
suggested,
(“[T]he
the
are injury
including
name
showing
of
Blinder, “a
substance
to
Am.
1994).
Juul funds
Inc.,
223,
Juul
irreparable
likelihood
transferring showing
preserve
asserted
Asset
Amended I
because
burden
Tel.
and
of
turn
in
No.
points
225
believes
upon
Juul
injunction
Mr.
Robinson
of
relation one
but
&
plaintiffs
to
CIV. Freeze
to
immediate of
(3d
that
Tel.
their
in
Grishayev
show
of
has of
for
final not the to
the
they
harm
Complaint.
its
Cir.l987)
the
success 04-4049WHW,
proof
that
23
Co.
evidence
plaintiffs
“disgorgement
to
firmly the element
harm, ability
complaint.
& judgment
the
are
to will
company’s
v.
the
is
defendants
Co.,
burden
is
freeze
Winback
irreparable
amount
not
purposely
and
probably
upon
Wordmark
as established.
Juul
to
903
(citation
that
are of
The
enough.
to
pay
Mr.
assets,
irreparable
and
what
both
At
F.2d seeks
the
likely
defendants
money
critical
and 2007
& any
Tolmach, of
will
be
dissipating
a
plaintiff
Credit
Conserve
injury.”’
Defendants’
omitted).
the
profits
186,
claim,
A
showing
value
potential
demonstrating unable
to to
be
WL
plaintiff
to
third
have
become
packaging-
unable
197
harm.
Consumer
a
3256733,
of
known
asserted
it
have ...
personal
ECRI
Program,
to
this For factor— his
seeks that
(3d
to
their
has
recover
to
show
been
or
Cir. Court
v.
as
the
to
her
at Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 24 of 28 PageID:
office unusual making personal dissipate interest
and Juul “4X are which account:
from 3 next combined accounts—and 2018. accounting Chase using products. products. at consent least
offending
(Eonsmoke
issue.
admittedly
PODS
undeniably
few
sales then
June
brokerage
I
Juul
There
it
(Id.).
it
checking
am
regular
or
in
would preliminary
that years.”
brokerage
“guess JuuI
these
products
(See sales (See,
states
and
no-interest
of
commerce not
2018”
has
Juul
of
is
4X
defendants
sales
and
asserts
a using persuaded
DE Eonsmoke
assets seek
not transfers the
e.g.,
of account.
sweeping
and
we
(DE
disconnect
Pods
therefore
that
that
4X
disgorgement
111
by
relief adequately account,
and
zulu
the
Cplt.
injunction
brokerage
this
111-1
on
defendants
PODS
products
or
product
that account
defendants
at
just
required
equitable
March spirit
requested
are from
(Id.
nominally
funds
¶
that
10).
branded
asks
it
at
6,
between
treat
branded
it
transferring
at registered
6
On the Prayer
from there
them is
accounted to
accounts.
this for
order
28,
14—15).
(emphasis
not
of
family
them
not
earned
a
remedy December
began
business
the
profits
products”
more
in
2016 January
personal court
needed
abroad.
is
the
as
products
for
that
the
past irreparable to
its
if
office
remedy
marketing Relief).
$30
profitable
surrender the
(Cplt.
Verified (DE defendants for 24
to of
from
barred
Pod
added)).
checking
5
for
disgorgement.
freeze
6, They
1, the account assets
million
earned
years
like
111
and
Logo
operating 2018,
the 2014
¶
With
Juul
scope
22).
defendants
the
Complaint are,
harm
at
all
brokerage
offending other
their
(Id.
for
of in
in
$5.2
31).
to
account
respect
have I
Eon
But as assets
seeks—all
however,
their
October
signed
destruction
at of
net
October
here.
a
allegedly
EON
expenses
the
28; million checking
it
defacto
taken
Juul
revenue
business
was
in
4X
(DE
from
to
“profits” account.
see to
the While
products
defendants’
10,
the
concededly
25,
claims
assets that
PODS
not
steps
in
1)—an
parties’
also
infringing
selling
business
from
2017,
acc/ounJt
all
time
from
2019)). revenue
it
until
family
to
as offending
is DE
They
to
in
that
in
a
a
period
the
to
first
the
“at these
low-
111-
two
for
the Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 25 of 28 PageID:
disgorgement
merchandise. provide issue figures that $400,000 remedy. established during request
freeze on arguments tailored defendants potentially FDA irreparable involvement preserving conducted
“corporate 3 is apparently correct,
Options
under
Eonsmoke,
the
has
from
B.
Regarding The
Defendants would
the
for
they an
for
to
Comp., profits
In
no
put
to
miscreant”
public all are
an June
Balance accounting
relevant viable
any
[illegallyj”), ill-gotten an
are
harm
out what in
would duty
$500,000
put
them
EON
of
(DE
amount
acting the
order
560
they
not
event, from
of
profits
2018
the
them
interest
spend the
‘to
assets
because
ENDS
business.
29).
equally
products.
out persuasive.
F.2d
time
say, of
without
freezing
protect
unconcerned balance
profits.3 the
profits
Juul
through
commensurate
Thus, of
Equities
range.
out
of
cert. is
significant
industry.
outweighs
2020
sale
135,
period.
the
June
apply business,
in
the
of
has
FDA denied,
illegitimate
Any
preventing were
tens
relevant
of
At
the
of
business.
See,
143
(January
will
plaintiffs
December
An
to
2018
hardships,
allegedly
not
oral
and
approval,
The
regulatory
relevant
with
defendants, portions
for
of
(2d
e.g.,
be
asset
an
carried
they
438
millions
argument,
Public
Court
the through
a
profits
the Cir.
with
individual’s
cFTC challenging
6,
Because
further
have profits
freeze,
U.S.
cannot
allegedly
infringing
public’s
to
time
2018,
of
25
2020
1977)
places
defendants
ill-gotten
its
woes
Interest boot.
their
for
who
of
put
a
905,
December
burden
period
or
violations dollars
British especially
the
transcript
Juul
the
simultaneously
the
(holding
no brief health
them
are are
advance
infringing
98
interest
year
products parties
weight
specific
FDA
profits,
in
self-inflicted.
instead
for
painting S.Ct.
here
American
argue
would
out
the
based
for
2018.
purposes
that
is
of
one
at
business
on
same
seemingly
in of
3123, as
the
particularly
4X
the
would
4X
was
50).
that
provides
business. these be
on
protecting
Juul
appropriately
a
it
Rather
PODS company.
“court law
PODS
industry
claim has their
far
Commodity
Thus,
in
any
57
Indeed,
of
as
arguments.
not
too
which and
the
not
L.Ed.2d
extensive
a agreed
profits
asset
than
revenue products
of
put
broad
Juul’s
focused
and
equity
These
is
if
the
at
If
a Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 26 of 28 PageID:
III. virtually
copyright
the claims modest—somewhere appears that 1147 without argument, Complaint. from true, if surprising; these not The walking impression
cavalier appropriate suggest
it
public
identify can
sense
amount.
the
have
(1978)
A.
The CONCLUSION
I
The
admitted
Accordingly,
B. Defendants
is
have
be
infringement.
a
to attitude discovery.
axiomatic
Asset
sale
Financial strong
protections
motive
showing
interest showing
admitted is
counsel
be
made,
the The
that
any
reaction (citation
weighed
not
of
no
claim Freeze
profits
showing Juul-compatible
in
such
the
toward that
great
for
must
should
to
relation that
The
I
as
as
suggested
Reporting
to
Court will
that
in
omitted);
to
the allow
appears
defendants
products,
to
to
The
to
profit
danger
piecemeal
the
the its
await
deny the the
the of
);
relevant
infringement
strategy.
not
is evidentiaiy
orders
PNY
defendants
to
likely
neighborhood public
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is Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 27 of 28 PageID:
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is Case 2:18-cv-15444-KM-MAH Document 160 Filed 02/13/20 Page 28 of 28 PageID:
any deposits, withdrawals, or other movements of funds. Defendants are forewarned that any movements of funds outside the ordinary course of business, or with the evident intention of secreting assets, will be dealt with severely. For the foregoing reasons, Juul’s motion for a temporary restraining order or preliminary injunction is DENIED as presented. A requirement of quarterly reporting is imposed in according with the above Opinion. A separate order will issue. Dated: February 13, 2020
Hon. Kevin McNuity United States District Judge
28