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Deckers v. Does, 11-Cv-7970 (N.D. Ill. Dec. 14, 2011) (R&R)

Deckers v. Does, 11-Cv-7970 (N.D. Ill. Dec. 14, 2011) (R&R)

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Published by: Venkat Balasubramani on Jan 13, 2012
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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOISEASTERN DIVISIONDECKERS OUTDOOR CORP.
,))Plaintiff,)Case No. 11 C 7970)v.)Judge Ronald A. Guzman)
LIYANGHUA,
 
et al
., )Magistrate Judge) Martin C. AshmanDefendants.) 
REPORT AND RECOMMENDATION
Plaintiff Deckers Outdoor Corp. ("Deckers") filed this action against DefendantLiyanghua and approximately 100 other named defendants, as well as Does 102-500(collectively "Defendants"), as listed on Schedule A of the First Amended Complaint. Deckersalleges that the Defendants are individuals and business entities residing in the People's Republicof China or other foreign jurisdictions that have targeted Illinois residents for the sale of counterfeited products that purport to be Deckers' UGG brand of premium sheepskin footwear.Deckers alleges that Defendants' actions constitute a trademark infringement and a falsedesignation of origin, 15 U.S.C. §§ 1114 &1125(a), violate the Anticybersquatting ConsumerProtection Act, 15 U.S.C. § 1125(d), and contravene the Illinois Uniform Deceptive TradePractices Act, 815 ILCS 510
et seq
. On November 15, 2011, District Judge Ronald Guzmanentered a sealed temporary restraining order ("TRO") and required Deckers to post a $150,000bond as security. Judge Guzman also referred Deckers' request for a preliminary injunction tothis Court for a Report and Recommendation. The Court subsequently extended the TRO toDecember 15 and held a hearing on the request for preliminary injunction on December 13,
Case: 1:11-cv-07970 Document #: 37 Filed: 12/14/11 Page 1 of 61 PageID #:669
 
2011. For the reasons stated below, the Court issues this Report and Recommendation to theDistrict Judge recommending that Deckers' motion for preliminary injunction (Dckt. #28) begranted in part and denied in part. 
I.Discussion
In order to demonstrate that a preliminary injunction is warranted, the party seeking theinjunction must show that: (1) it has a reasonable likelihood of success on the merits of its claim;(2) no adequate remedy at law exists; (3) it will suffer irreparable harm if the injunction is notgranted; (4) such harm is greater than the harm that the opposing party will suffer if theinjunction is not issued; and, (5) the injunction does not adversely affect the public interest.
Kielv. City of Kenosha
, 236 F.3d 814, 815-16 (7th Cir. 2000). Courts should be mindful that thepurpose of an injunction is "to minimize the hardship to the parties pending the ultimateresolution of the lawsuit."
Platinum Home Mortg. Corp. v. Platinum Financial Group, Inc
., 149F.3d 722, 726 (7th Cir. 1998) (quoting
Faheem-El v. Klincar 
, 841 F.2d 712, 717 (7th Cir. 1988)).In order to obtain an injunction, a party need only demonstrate that it has a "better thannegligible chance of succeeding" in proving the merits of its cause of action.
 Boucher v. School Bd. of School Dist. of Greenfield 
, 134 F.3d 821, 824 (7th Cir. 1998) (citations omitted);
Cooper v. Salazar 
, 196 F.3d 809, 813 (7th Cir. 1999).Under the Lanham Act, a party is liable for trademark infringement and counterfeiting if "without the consent of the registrant, [it] uses in commerce, any reproduction, copy, orcolorable imitations of a registered mark in connection with the sale, offering for sale,distribution, or advertising of any goods . . . . which such use is likely to cause confusion, or to- 2 -
Case: 1:11-cv-07970 Document #: 37 Filed: 12/14/11 Page 2 of 61 PageID #:670
 
cause mistake or to deceive." 15 U.S.C. § 1114(1). A
 prima facie
case of infringement is shownwhen a party's (1) mark is distinctive and worth protecting, (2) the opposing party was notauthorized to use it, and (3) unauthorized use of the trademark is likely to cause confusion as tothe origin or sponsorship of the products in question.
 Bliss Salon Day Spa v. Bill World LLC 
,268 F.3d 494, 496-97 (7th Cir. 2001);
 Neopost Industrie B.V. v. PFE Int'l, Inc
., 403 F. Supp.2d669, 684 (N.D. Ill. 2005).Based on the briefs and extensive exhibits submitted, the Court finds that Deckers meetsthe standard for a preliminary injunction. The first two elements of a
 prima facie
infringementcase are clearly shown: Deckers' UGG trademark is registered as U.S. Trademark RegistrationNo. 3,050,925, and the company has never licensed it to any of the Defendants for use.Declaration of Leah Evert-Burks at ¶ 3; Declaration of Justin Gaudio at ¶ 9. The third factorrequires a more complex analysis involving seven factors: (1) the similarity between the marksin appearance and suggestion; (2) the similarity of the products; (3) the area and manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5) the strength of thecomplaint's mark; (6) actual confusion;
1
and, (7) the infringing party's intent to palm off aproduct as that of another.
 Eli Lilly & Co. v. Natural Answers, Inc
., 233 F.3d 456, 461 (7th Cir.2000) (citation omitted). No one factor is determinative, but special consideration should begiven to the potential for confusion and the defendant's intent.
G. Heileman Brewing Co., Inc. v. Anheuser-Busch, Inc
., 873 F.2d 985, 999 (7th Cir. 1989). Confusion is also the central issue
1
Although
 Lilly
refers to evidence of actual confusion,
 Eli Lilly
, 233 F.3d at 462, courtsfrequently analyze this factor in terms of the likelihood for confusion.
See
,
e.g.
,
Facebook, Inc.v. Teachbook.com LLC 
, — F. Supp.2d —, No. 11 C 3052, 2011 WL 4449686, at *7 (N.D. Ill.Sept. 26, 2011);
 Lorillard Tobacco Co. v. Amoco & Food Shop 5, Inc
., 360 F. Supp.2d 882, 886(N.D. Ill. 2005).- 3 -
Case: 1:11-cv-07970 Document #: 37 Filed: 12/14/11 Page 3 of 61 PageID #:671

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