The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge
ORDER CLARIFYING SCOPE OF INJUNCTION [Docket No. 94]
Presently before the Court is Defendants' motion to clarify the scope of the preliminary injunction. The matter came on for hearing on June 18, 2010. Lisa Martens appeared on behalf of Plaintiffs. Robert Weisbein and David Kleinfeld appeared on behalf of Defendants.
On August 17, 2009, Plaintiffs filed suit against Defendants alleging trademark infringement and other claims. Plaintiffs manufacture a bakery product known as "Sandwich Thins," a thin bread product used for sandwiches and hamburgers. Plaintiffs are the registered owners of United States Trademark No. 3,637,950 for the "Sandwich Thins" mark. (Pl. Compl. Ex. A.)
On August 21, 2009, Plaintiffs moved for a preliminary injunction to enjoin Defendants from launching a competing product under their Earthgrains brand using the name "Thins." On September 11, 2009, this Court granted Plaintiffs' motion for preliminary injunction, finding Defendants' use of the word "Thins" was likely to cause confusion with Plaintiffs' trademarked phrase "Sandwich Thins." Defendants were enjoined from:
(1) using the SANDWICH THINS and THINS marks in connection with Defendants' goods, and in connection with the marketing, offering, selling, licensing, displaying, advertising, or developing of Defendants' goods; and
(2) infringing the SANDWICH THINS mark and/or engaging in further such unlawful acts and from reaping any additional commercial advantage from the misappropriation of the rights of the Plaintiffs and all affiliated and related companies of Plaintiffs in the SANDWICH THINS mark and the registration of this mark.
(Order on Preliminary Injunction, September 11, 2009 (Docket No. 30).)
On September 14, 2009, Defendants filed a motion to stay the preliminary injunction and an ex parte application for interim stay pending decision on the motion to stay. The Court denied both the ex parte application and the motion to stay pending appeal. (Docket No. 35.) Defendants immediately filed an appeal with the Ninth Circuit. (Docket No. 36.)
On September 15, 2009, Defendants proceeded with the planned launch of their competing product. They covered the word "Thins" on the packaging with bright yellow stickers stating "New Product." Plaintiffs contended the stickers were improperly applied and violated the preliminary injunction. Accordingly, on September 16, 2009, Plaintiffs sought contempt sanctions against Defendants, as well as an order modifying the original preliminary injunction order. (Docket No. 42.) The Court held that Defendants were not in contempt of the preliminary injunction but that modification of the preliminary injunction was warranted. (September 29, 2009 Order (Docket No. 57).) The preliminary injunction order was modified as follows:
1. Defendants shall destroy, at their sole and exclusive cost, all existing packaging and other materials in their possession or under their control that bear the SANDWICH THINS or THINS marks;
2. Given the seven-day shelf-life of the SANDWICH THINS and THINS products, product recall by Defendants is not required. Defendants may sell product that is currently on the market so long as stickers are placed over the front and side panels of the product packaging, completely covering the THINS label;
3. For units that contain the THINS label and have been packaged at the time this Order is posted but not yet shipped, such units that have been stickered in accordance with this Order may be shipped; however, unstickered units or units that have not been stickered in accordance with this Order, must be destroyed; and
4. Defendants shall confirm in writing and under oath within 10 days of entry of this Order that all packaging containing the term SANDWICH THINS or THINS has been destroyed and that no ...