By Robert Margolis, J.D.
Failure to find likelihood of success on trade dress infringement claim not a bar to enjoining sale of products allegedly infringing trademark and copyright.
Finding a likelihood of success that allegedly counterfeit dental surgical tools sold by defendants Ul Amin Industries and Hammad Ashiq infringed Versah, LLC’s trademark and copyrighted materials, a federal district court in Detroit has granted Versah’s motion for a preliminary injunction, though it denied injunctive relief based on claimed trade dress infringement. The court also granted Versah an asset restraining order preventing the defendants from accessing assets in a PayPal account associated with their sales of allegedly infringing products, as well as expedited discovery from PayPal of other potential accounts (Versah, LLC v. Ul Amin Industries, December 9, 2020, Berg, T.).
"Densah" mark. Versah has a license to the exclusive use of the registered "Densah" trademark. Since November 2014, Versah has used the Densah mark in connection with Densah Bur Kits, which are sets of medical tools used by dentists in oral surgery.
Alleged counterfeiters. Versah alleges that Ul Amin sells "copycat and counterfeit products" in the United States through online websites such as eBay. It further alleges that Ul Amin sells tools that infringe on the Densah trademark, publishing on its website identical or nearly identical information and images to those in Versah’s copyrighted "Instructions for Use." Versah alleges that these counterfeit bur kits may cause confusion as to the origin of the products that Ul Amin is selling, and also pose a threat to public health and safety.
Injunction request. Versah brought claims for (1) copyright infringement; (2) trademark infringement, unfair competition, false designation of origin, and counterfeiting under the Lanham Act; (3) trade dress infringement, also under the Lanham Act; and (4) Michigan state law unfair competition.
Versah first moved ex parte for a TRO, which the court denied. After Ul Amin was served and given the opportunity to appear at a hearing, the court addressed Versah’s request to preliminarily enjoin Ul Amin from: (1) using Versah’s Densah trademark and copyrighted materials in the sale or promotion of dental burs and bur kits; and (2) selling dental burs and bur kits with similar trade dress to the Densah Bur Kits. Versah also sought an asset restraining order of a PayPal account associated with individual defendant Hammad Ashiq, and discovery from PayPal to determine if there are other accounts associated with the defendants. Ul Amin did not appear or file a response to the injunction motion.
Copyright claim. The court found a likelihood that Versah would succeed on its copyright infringement claim. Versah owns two copyrights: (1) Registration No. VA 2-203-676 for work titled "BUR SILHOUETTE WITH DEPTH MARKINGS"; and (2) Registration No. TX-8- 896-578 for work titled "Densah Bur & Versah Guided Surgery System Instructions For Use" (the "IFU"). Versah alleges that Ul Amin’s kit includes on its cover a diagram that is "strikingly similar" to the art from the "BUR SILHOUETTE" copyrighted work, and that Ul Amin’s website includes a product description and explanation that is virtually a verbatim reproduction of the copyrighted IFU. The court examined the parties’ materials and found that Ul Amin’s bur diagram "has the exact same measurements marked along in the same units," with a diagram that is identical in all respects to Versah’s except for the font.
Lanham Act. To establish a likelihood of confusion to support its Lanham Act claims, Versah submitted evidence that Ul Amin uses the Densah trademark on its website offering the sale of allegedly counterfeit bur kits, and evidence of an email from a consumer asking if Ul Amin’s allegedly counterfeit kits are made by Versah. Based on this evidence, the court found that Versah showed a likelihood of success on these claims.
Trade dress. The court did not find a likelihood of success for Densah on its trade dress infringement claim. Such a claim requires that a plaintiff identify with particularity discrete elements making up the trade dress and Versah failed to do so, the court held. Versah’s motion identifies only "similar color relationships, similar shapes, and similar text positioning and color," which the court found to be insufficiently specific. In addition, Versah did not offer any evidence as to why its packaging is distinctive, primarily nonfunctional, or that Ul Amin’s trade dress is confusingly similar. But the court further noted that the failure to establish grounds to enjoin Ul Amin from selling or offering bur kits with a trade dress bearing certain characteristics, does not prevent it from enjoining Ul Amin based on the likelihood of success of Versah’s other claims.
Irreparable injury. Under Sixth Circuit law, when there is a "strong showing" of likelihood of confusion, "irreparable harm follows as a matter of course." Ford Motor Co. v. Lloyd Design Corp., 22 F. App’x 464, 469 (6th Cir. 2001). Here, not only did Versah show confusion, but it provided evidence that Ul Amin’s bur kits were of inferior quality, such that the use of trademark and copyrighted-protected material could continue to cause confusion and diminish consumers’ goodwill toward Versah, in light of health and safety concerns. This met Versah’s burden for this injunction factor, the court held. On the other hand, enjoining Ul Amin from using Versah’s trademarks and copyrighted works does not prevent Ul Amin from selling products other than bur kits, so the harm to it is "finite" in comparison to the irreparable harm to Versah’s brand in the absence of an injunction, the court reasoned.
Asset restraint. The court granted Versah an "asset restraining order." It cited evidence that the individual defendant Ashiq had informed Versah that he had resigned from Ul Amin, his PayPal account was no longer linked with Ul Amin’s websites, and that Ul Amin’s websites have been restructured to no longer accept online payments. These changes raise the risk that the defendants will seek to transfer or hide assets derived from its counterfeiting activity, the court held.
Expedited discovery. Given the infringement claims and the limited scope of expedited discovery sought—requests to PayPal to determine if the defendants have any other accounts used to conduct the allegedly counterfeit activity—the court granted Versah’s request for expedited discovery from PayPal.
This case is No. 2:20-cv-12657-TGB-RSW
Attorneys: Steven C. Susser (Carlson, Gaskey & Olds, PC) for Versah, LLC.
Companies: Versah, LLC; Huwais IP Holding, LLC; Ul Amin Industries
MainStory: TopStory Copyright Trademark MichiganNews GCNNews
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