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Champion-Cain v. MacDonald

United States District Court, S.D. California

July 15, 2015

GINA CHAMPION-CAIN, an individual; LUV SURF, LP, a California limited partnership; ANI COMMERCIAL CA I, LLC, a California limited liability company; and ANI COMMERCIAL CA II, LP, a California limited partnership, Plaintiffs,
v.
BRIAN MacDONALD, an individual; LOVESURF, INC., a Delaware corporation; and DOES 1-10, inclusive, Defendants. AND RELATED COUNTERCLAIM

ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION [ECF No. 18]

GONZALO P. CURIEL, District Judge.

Before the Court is Plaintiffs Gina Champion-Cain, Luv Surf, LP, ANI Commercial CA I, LLC, and ANI Commercial CA II, LP's ("Plaintiffs" or "Luv Surf") motion for a preliminary injunction against Defendants Brian MacDonald and LoveSurf, Inc. ("Defendants" or "LoveSurf"). (ECF No. 18.) The parties have fully briefed the motion. (ECF Nos. 23, 32.)

A hearing was held on June 18, 2015. Following careful consideration of the parties' oral arguments and legal briefing, as well as the applicable law, and for the reasons set forth below, the Court DENIES Plaintiffs' motion for a preliminary injunction.

PROCEDURAL HISTORY

On October 23, 2014, Plaintiffs filed this action alleging claims of: (1) trademark infringement (Lanham Act, 15 U.S.C. § 1125(a)); (2) slander; (3) defamation; and (4) interference with a business advantage. (ECF No. 1.) On December 5, 2014, Defendants answered and filed counterclaims for: (1) trademark infringement (Lanham Act, 15 U.S.C. § 1125(a)); and (2) misappropriation of trade secrets (Uniform Trade Secrets Act, Cal. Civ. Code § 3426). (ECF No. 9.)

On January 23, 2015, Plaintiffs filed the instant motion for a preliminary injunction, seeking to enjoin Defendants from making defamatory and disparaging statements, and from using the allegedly infringing trademarks. (ECF No. 18.) Defendants opposed on February 20, 2015. (ECF No. 23.) After receiving two extensions of time in order to allow their forensic expert to conduct a forensic analysis of the computer equipment from which Defendant MacDonald produced the documents attached to his declaration in opposition to the preliminary injunction motion (ECF No. 23-1), Plaintiffs filed a reply on April 20, 2015 (ECF No. 32). In conjunction with their reply brief, Plaintiffs filed the Declaration of Peter Garza ("Garza Declaration"), wherein their forensic expert Peter Garza ("Garza") described the analysis that lead him to conclude that Defendant MacDonald manufactured the evidence he used to support his claim of first use of the mark. (ECF No. 32-2.) On May 8, 2015, Defendants filed objections to the Garza Declaration (ECF No. 33) as well as a motion for sanctions before the magistrate judge (ECF No. 46).

Plaintiffs subsequently filed three ex parte applications relating to the pending preliminary injunction motion. On May 22, 2015, Plaintiffs filed an Ex Parte Application for Leave to Submit New Evidence in Support of Motion for Preliminary Injunction. (ECF No. 37.) Defendants filed a response on June 2, 2015. (ECF No. 42.) On May 27, 2015, Plaintiffs filed an Ex Parte Motion for Order Permitting Oral Argument and Limited Witness Testimony on Plaintiffs' Motion for Preliminary Injunction. (ECF No. 38.) Defendants filed a response on June 3, 2015. (ECF No. 43.) Finally, on June 2, 2015, Plaintiffs filed an Ex Parte Application for Leave to Submit Additional Evidence in Support of Motion for Preliminary Injunction. (ECF No. 41.) Defendants filed their opposition on June 3, 2015. (ECF No. 45.) On June 11, 2015, Plaintiffs filed a reply. (ECF No. 48.)

FACTUAL BACKGROUND

As will be discussed below, the parties vehemently dispute which company first used the trademark at issue. Without making any finding at this stage as to the truth of the allegations, the Court details the parties' claimed first uses below.

A. Plaintiffs' Claimed Use of their Mark

Plaintiffs allege that they began using the brand "LUV SURF" in connection with a vacation rental business in San Diego in August 2011, and had a logo designed for "LUV San Diego SURF." (Champion-Cain Decl., ECF No. 18-2 ¶ 2; Ex. I, ECF No. 19-11 at 22[1].) In October 2011, Plaintiffs received a vacation rental Transient Occupancy Registration Certificate for a business named "LUV SAN DIEGO SURF." (Champion-Cain Decl., ECF No. 18-2 ¶ 2; Ex. K, ECF No. 19-11 at 27). In December 2011, Plaintiffs ordered tote bags with their logo, and indicated on Facebook that guests would receive a tote bag. (Champion-Cain Decl., ECF No. 18-2 ¶ 4; Ex. O, ECF No. 19-11 at 37-38.)[2]

In February 2012, Plaintiffs ordered other merchandise (clothing, hats, towels) with their logo. (Champion-Cain Decl., ECF No. 18-2 ¶ 4; Exhs. N, P, ECF No. 19-11 at 34-35, 40.) Also in February 2012, Plaintiffs filed an application for a seller's permit to sell clothing online and in a retail store, which they received in March 2012. (Champion-Cain Decl., ECF No. 18-2 ¶ 7; Exhs. L-M, ECF No. 19-11 at 29-30, 32.)

On April 12, 2012, Plaintiffs' online store became available. (Champion-Cain Decl., ECF No. 18-2 ¶ 8.) On July 4, 2012, Plaintiffs opened their retail store. ( Id. )

Plaintiff Gina Champion-Cain has multiple federal trademark registrations and applications. ( Id. ¶ 9.)

• On August 27, 2013 (corrected December 9, 2014), she registered the "LUV San Diego SURF" mark for beachwear, hooded sweatshirts, t-shirts, and tank tops (Registration No. 4, 390, 537).[3] (Champion-Cain Decl., ECF No. 18-2 ¶ 9; Ex. A, ECF No. 19-11 at 2.) The registration states: "First Use: 2-9-2012; In Commerce 2-9-2012.") (Ex. A, ECF No. 19-11 at 2.)

• On August 5, 2014 (corrected December 9, 2014), she registered the "HEART SURF" mark for bathing suits and hats (Registration No. 4, 578, 750).[4] (Champion-Cain Decl., ECF No. 18-2 ¶ 9; Ex. A, ECF No. 19-11 at 3.) The registration states: "First Use 7-4-2012; In Commerce 7-4-2012." (Ex. A, ECF No. 19-11 at 3.)

• On October 21, 2014, she applied to register the "LUV San Diego SURF" mark for various goods and services, including clothing, pet accessories, surfboard accessories, and rental of vacation homes (Application Serial No. 86430225). (Champion-Cain Decl., ECF No. 18-2 ¶ 9; Ex. R, ECF No. 18-12 at 2-4.)

• On October 21, 2014, she applied to register the "HEART SURF" mark for various goods and services. (Application Serial Nos. 86430191 and 86430195) (Champion-Cain Decl., ECF No. 18-2 ¶ 9; Ex. R, ECF No. 18-12 at 5-8.)

• On October 21, 2014, she applied to register the terms "LUV SURF" for various goods and services. (Application Serial No. 86430220.) (Champion-Cain Decl., ECF No. 18-2 ¶ 9; Ex. R, ECF No. 18-12 at 9-10.)

Plaintiffs currently manufacture and sell various products (clothing, hats, towels, pet accessories with the "LUV SURF" and "HEART SURF" logos. (Champion-Cain Decl., ECF No. 18-2 ¶¶ 3-4.) They market the apparel and accessories to individuals with a surfer-type style, and attend and sell their merchandise at surfing competitions and similar events throughout Southern California. ( Id. ¶ 3.)

Plaintiffs argue they have "made a significant financial investment to develop the LUV SURF Brand with its marketing materials, a website, an online presence, a retail store, and in placing the LUV SURF products in local stores." ( Id. ¶ 15.) Plaintiffs declare that industry sales representatives are confused between the two companies, and that a surfing magazine would not run an article from Luv Surf because of the possible confusion for readers with LoveSurf.[5] (Kramer Decl., ECF No. 18-3 ¶¶ 9, 11; Villatyua Decl., ECF No. 18-4 ¶ 5; Diefenbach Decl., ECF No. 18-5 ¶¶ 3-5; Ex. AA, ECF No. 18-12 at 69-70.)

B. Defendants' Claimed Use of their Mark

Defendants allege that they started making hats and t-shirts labeled with a tag displaying "LOVESURF" in 2010. (MacDonald Decl., ECF No. 23-1 ¶ 2.) Also in 2010, Defendants sponsored several beach clean-ups, and passed out its hats and t-shirts at those events. ( Id . ¶ 3; Ex. 20, Dkt No. 23-21 at 2.[6])

By July 12, 2011, Defendants added other clothing lines using the "LOVESURF" brand, and by August 15, 2011, Defendants were selling clothing under the "LOVESURF" brand.[7] (MacDonald Decl., ECF No. 23-1 ¶ 4.) Defendants listed the clothing for sale on several websites, and the first sale of "LOVESURF" clothing was a t-shirt on August 23, 2011. ( Id. ¶¶4-5; Ex. 14, ECF No. 23-15 at 2.)

In December 2011, Defendants created the "HEART WAVE" logo.[8] (MacDonald Decl., ECF No. 23-1 ¶ 6; Exhs. 10-11, ECF Nos. 23-11, 23-12.) By December 28, 2011, Defendants used the "HEART WAVE" logo above the word "LoveSurf" on tags of clothing for sale on the internet.[9] (MacDonald Decl., ECF No. 23-1 ¶ 7; Exhs. 12-13, ECF Nos. 23-13, 23-14.) The first sale of clothing displaying the "HEART WAVE" logo above the word "LoveSurf" occurred within a few weeks.[10] (MacDonald Decl., ECF No. 23-1 ¶ 8.)

On May 27, 2014, Defendants applied for a trademark registration for a mark consisting of the "HEART WAVE" logo to the left of the word "LoveSurf" (Application Serial No. 86292235). ( Id. ¶ 9; Ex. Q, ECF No. 19-1 at 42-58.) The application states that the first use was by March 4, 2012, and the first use in commerce was by July 5, 2013. (MacDonald Decl., ECF No. 23-1 ¶ 9; Ex. Q, ECF No. 19-1 at 46.) Defendants state that those first use dates refer to the first use of the combined configuration of the "HEART WAVE" logo together with a stylized version of the "LoveSurf" wordmark. (MacDonald Decl., ECF No. 23-1 ¶ 9; Ex. Q, ECF No. 19-1 at 42.)

Defendants currently use another version of the same logo with a pink "HEART WAVE" logo and the word "LOVESURF" in all capitals.[11] (MacDonald Decl., ECF No. 23-1 ¶ 9.) Plaintiffs declare that Defendants changed the color of their logo to match Plaintiffs' "HEART SURF" logo. (Kramer Decl., ECF No. 18-3 ¶ 12.)

C. Defendants' Alleged Defamation of Plaintiffs

Plaintiffs contend that Defendants made slanderous and defamatory statements about Luv Surf on the internet, on social media, and in email correspondence with those working for ...


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