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Starbuzz Tobacco, Inc. v. Namou

United States District Court, Ninth Circuit

July 2, 2013

STARBUZZ TOBACCO, INC., a California corporation, Plaintiff,
v.
WISAM NAMOU, et al., Defendants.

ORDER: DENYING APPLICATION TO FILE THE ACTION UNDER SEAL; DENYING PLAINTIFF'S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER; DENYING APPLICATION FOR A SEIZURE ORDER; DENYING APPLICATION FOR SUBSTITUTE CUSTODIAN ORDER; GRANTING APPLICATION FOR AN ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE

MICHAEL M. ANELLO, District Judge.

On July 2, 2012, Starbuzz Tobacco, Inc. ("Plaintiff" or "Starbuzz") brought the instant copyright and trademark infringement action against Defendants Wisam Namou and Sukrat Namou ("Defendants"). Currently pending before the Court is Plaintiff's application to file the action under seal, along with a separate ex parte motion for a temporary restraining order ("TRO"), an order to show cause ("OSC") why a preliminary injunction should not issue, a seizure order, an order prohibiting destruction of evidence, a substitute custodian order, and an expedited discovery order. For the reasons set forth below, the Court DENIES Plaintiff's application to file the action under seal; DENIES Plaintiff's ex parte motion for a TRO and related requests; and GRANTS Plaintiff's application for an OSC why a preliminary injunction should not issue.

BACKGROUND

Plaintiff Starbuzz is a leading hookah tobacco manufacturer and distributor in the United States, with over ninety trademarks in the United States and trademark registrations in over thirty-three countries. Since its formation, Plaintiff has expanded its product line to include hookah accessories, cigars, charcoal, candles, air fresheners, energy drinks, and electronic cigarettes. On January 21, 2013, Plaintiff applied with the Copyright Office to register the design appearing on page 2 of Plaintiff's complaint (the "Copyrighted Design"). Plaintiff also uses the following trademarks that are registered for tobacco and related products and services: STARBUZZ (Reg. No. 3, 113, 110), STARBUZZ TOBACCO SINCE 2005 (Reg. No. 3, 783, 438), BLUE MIST (Reg. No. 3, 619, 407), CITRUS MIST (Reg. No. 3, 695, 500), CODE 69 (Reg. No. 3, 695, 438), DOUBLE APPLE (Reg. No. 4, 020, 760), PINK (Reg. No. 3, 672, 967), SAFARI MELON DEW (Reg. No. 3, 619, 357), and SEX ON THE BEACH (Reg. No. 3, 838, 818). Plaintiff has also applied to register various trademarks for electronic cigarettes including the marks STARBUZZ (Ser. No. 85/909, 961) and BLUE MIST (Ser. No. 85/812, 403) (collectively, the Registered Marks and Applications for Marks are referred to as the "Starbuzz Marks").

In June 2013, Plaintiff was informed by one of its distributors that Defendants were selling e-liquid products bearing labels with a design substantially similar to the Copyrighted Design and some of the Starbuzz Marks. Plaintiff, however, does not produce e-liquid products. Upon receiving this information, the distributor proceeded to purchase three bottles of e-liquid products from Defendants' store, Pure Smoke Shop, located in Lakeside, California. Plaintiff later authorized an investigator to assess Defendants' activities and acquire additional evidence. The investigator purchased additional e-liquid products from Pure Smoke Shop and from Defendants' second store, Aztec Smoke Shop.

According to Plaintiff, the outside of the e-liquid products purchased from Defendants mimics the appearance of Starbuzz products. The products use Plaintiff's house mark "STARBUZZ, " and prominently display a design substantially similar to the Copyrighted Design. Further, the e-liquid flavors are nearly identical to Starbuzz's trademarks for its popular flavored hookah tobacco.

Additionally, Defendants' products contain the following warning label:

WARNINGS: Potentially fatal if ingested. Seek medical attention if ingestion or contact with skin/eyes occurs. Wash skin and/or flush eyes immediately if contact occurs."
This product should not be used by persons under the age of 18 years of age. Store away from children, light, pets & heat with a container closed tightly. Consult a physician before use.

[Elhalwani Decl. ΒΆ 15.]

Plaintiff alleges that since it does not know the exact ingredients of the e-liquid products, it can only assume, based on the warnings, that the e-liquid products are indeed potentially fatal and harmful to consumers. Accordingly, Plaintiff insists that sales of the e-liquid products must be stopped immediately to avoid further potential death or injury. Moreover, Plaintiff alleges, any harm arising from the use of the e-liquid products will be unfairly and mistakenly attributed to Plaintiff, negatively impacting Plaintiff's reputation.

DISCUSSION

A. Ex Parte TRO

The standard for a TRO is the same as for a preliminary injunction. See Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). To obtain preliminary injunctive relief, the moving party must show: (1) a likelihood of success on the merits; (2) a likelihood of irreparable harm to the moving party in the absence of preliminary relief; (3) that the balance of equities tips in the moving party's favor; and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The court may apply a sliding scale test, under which "the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another." Alliance for the Wild Rockies v. Cottrell, 632 ...


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