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Ball Dynamics International, LLC v. Saunders

United States District Court, D. Colorado

December 1, 2016

BALL DYNAMICS INTERNATIONAL, LLC, a Colorado limited liability company, Plaintiff,
DEBORAH G. SAUNDERS, d/b/a WIZARD OF PAWS, aka DEBORAH SAUNDERS aka DR. DEBBIE GROSS aka DR. DEBBIE GROSS SAUNDERS, an Individual, MARTHA MCCORMICK, an Individual, and TOTO FIT, LLC, a Connecticut limited liability company, Defendants.


          Nina Y. Wang United States Magistrate Judge.

         This matter is before the court on Plaintiff Ball Dynamics International, LLC's (“BDI” or “Plaintiff”) Motion for a Temporary Restraining Order (“Motion for TRO”). [#41, filed October 17, 2016]. The undersigned Magistrate Judge disposes of the Motion for TRO pursuant to her authority under 28 U.S.C. § 636(c), Fed.R.Civ.P. 73, and D.C.COLO.LCivR 72.2. See [#15]. The court has considered the Motion for TRO and associated briefing, the applicable case law, and the comments offered by counsel during the October 21, 2016 Motion Hearing. For the following reasons, the Motion for TRO is GRANTED IN PART and DENIED IN PART.


         BDI initiated this civil action on February 26, 2016, to assert six common law claims for breach of contract, bad faith and unfair dealing, unjust enrichment, unfair competition/misappropriation of trade secrets, intentional interference with existing and prospective business relations, and civil conspiracy. [#1 at 16-22]. The action arises out of an ultimately unsuccessful business relationship between BDI and Defendant Deborah G. Saunders for services related to BDI's FitPAWS brand. See [#1; #22]. On April 18, 2016, Defendants Deborah G. Saunders, d/b/a Wizard of Paws, a/k/a Deborah Saunders, a/k/a Dr. Debbie Gross, a/k/a Dr. Debbie Saunders (“Dr. Gross”), Martha McCormick, and Toto Fit, LLC (collectively, “Defendants”) filed an Answer and the following counterclaims: intentional misrepresentation; negligent misrepresentation; tortious interference with prospective business relations; and breach of the covenant of good faith and fair dealing. [#16]. BDI filed an Answer to Defendants' counterclaims on May 2, 2016. [#20].

         On May 3, 2016, the court held a Scheduling Conference at which it set certain pre-trial dates and deadlines, including a discovery deadline of November 4, 2016 and a dispositive motions deadline of December 16, 2016. [#21; #22]. On August 17, 2016, Dr. Gross filed a Motion for Partial Judgment on the Pleadings. [#29]. BDI and Dr. Gross finished briefing the Motion for Partial Judgment on the Pleadings on September 26, 2016. See [#39; #40].

         BDI filed the Motion for TRO on October 17, 2016. [#41]. In the ensuing twenty-four hours, Defendants filed a Response [#43] and BDI filed a Reply [#44], followed by an unopposed First Amended Complaint. See [#46]. The First Amended Complaint (“FAC”) adds the following claims: violation of the Colorado Consumer Protection Act (“CCPA”), C.R.S. § 6-1-101, et seq.; violation of the Anti-Cybersquatting Consumer Protection Act, (“ACPA”), 15 U.S.C. § 1125(d); violation of the Lanham Act, 15 U.S.C. 1125(a); and trademark infringement in violation of 15 U.S.C. § 1114. The court held argument on the Motion for TRO on October 21, 2016, at which time Defendants tendered the Declaration of Jonathan Hochman. See [#48 at 48-2]. The court took the Motion under advisement and instructed Plaintiff to respond to the Hochman Declaration on or before October 28, 2016. Plaintiff filed a timely Response on October 27, 2016. See [#51]


         The following facts are derived from the Complaint, the Motion for TRO, and the Response thereto. BDI launched the FitPAWS brand in 2009. The brand is specifically designed as “canine conditioning and rehabilitation products.” [#41 at 5]. On June 1, 2010, BDI registered the trademark “FitPAWS” with the United States Patent and Trademark Office (“USPTO”) for a variety of classes of goods and services. BDI lists its marks as follows:

June 1, 2010, Reg. No. 3, 797, 098: Physical rehabilitation and physical therapy equipment for animals, namely, physical rehabilitation and physical therapy balls, balance apparatus, agility training equipment, strength training equipment, and training harnesses all used for physical rehabilitation and physical therapy animals.
June 1, 2010, Reg. No. 3, 797, 098: Exercise and conditioning equipment for animals, namely, exercise and conditioning balls, balance apparatus, agility training equipment, strength training equipment, and training harnesses, all used for exercise and physical conditioning of animals.[1]
August 28, 2012, Reg. No. 4, 199, 563: Printed instructional, educational and teaching materials in the fields of physical therapy, rehabilitation, exercise, conditioning and training for animals.
August 28, 2012, Reg. No. 4, 199, 564: Educational services, namely, conducting live classes, seminars, conferences and workshops in the fields of physical therapy, rehabilitation, exercise, conditioning and training for animals and distribution of printed materials in connection therewith in hard copy or electronic format on the same topics.
December 9, 2014, Reg. No. 4, 653, 151: Digital media, namely, digital video discs, digital versatile discs, downloadable audio and video recordings, DVDs, and high definition digital discs featuring physical therapy, rehabilitation, exercise, conditioning and training programs for animals.

[#41 at 5 (citing #41-1)]. BDI asserts that mark Reg. No. 3, 797, 098 has achieved “incontestable” status and thus cannot be challenged in litigation. [Id. at 6].[2]

         BDI has maintained and operated the website from November 2009 to present. From October 2009 through November 2015, “Wizard of Paws, ” a limited liability company controlled by Dr. Gross, was a dealer of FitPAWS products in the United States. On or about March 1, 2011, Dr. Gross entered into an Independent Contractor Consulting Agreement with BDI to provide consulting services (the “Agreement”). [#1 at ¶ 20; #1-1]. Pursuant to the Agreement, Dr. Gross served as a paid independent contractor and acted as a spokesperson for BDI and the FitPAWS brand. [#41 at 6].

         On October 13, 2015, Dr. Gross and Ms. McCormick organized Defendant Toto Fit, LLC (“TotoFit”). [#1 at ¶ 43]. On or around November 19, 2015, Dr. Gross ended her relationship with BDI. [Id. (citing #41-3)]. The termination and duration of Dr. Gross and BDI's Agreement are in dispute in this action. [#41 at 6]; see also [#1 at ¶¶ 70-76]. On or about November 19, 2015, TotoFit filed a federal trademark application for TotoFit for goods BDI contends are identical to FitPAWS's products; the application specifies September 17, 2015 as the date the goods were first used in commerce. [#1 at ¶ 48]. Following a round of correspondence with Dr. Gross and Ms. McCormick about the Parties' obligations under the Agreement, BDI commenced an effort to enforce its legal rights under the Agreement. See [#41 at 6]; see also [#1 at ¶¶ 49-55].

         By January 1, 2016, Ms. McCormick and TotoFit had purchased the following domain names:;;;;;;; and (collectively, “FitPAWS URLs”). [#41 at 6-7 (citing #41-2)]. At the October 20, 2016 Motion Hearing, the Parties informed the court that a total of eleven URLs had been disclosed. BDI asserts that it did not authorize or otherwise approve Defendants' use of its trademark for the FitPAWS URLs.


         Federal Rule of Civil Procedure 65 authorizes the court to enter preliminary injunctions and issue temporary restraining orders. Fed.R.Civ.P. 65(a), (b). “When the opposing party actually receives notice of the application for a restraining order, the procedure that is followed does not differ functionally from that on an application for a preliminary injunction and the proceeding is not subject to any special requirements.” 11A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure: Civil § 2951 (3d ed.) Because Defendants have notice of the Motion for TRO, and, indeed, filed a Response, the court treats the Motion for TRO as a motion for preliminary injunction.

         A preliminary injunction is considered an extraordinary remedy. See, e.g., Winter v. Nat'l Res. Defense Council, Inc., 555 U.S. 7, 24 (2008) (citation omitted). Thus, the right to such relief must be “clear and unequivocal.” Petrella v. Brownback, 787 F.3d 1242, 1256 (10th Cir. 2015) (quoting Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC, 562 F.3d 1067, 1070 (10th Cir. 2009)). A party seeking preliminary injunctive relief must satisfy four factors: a likelihood of success on the merits; a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; that the balance of equities tips in the movant's favor; and that the injunction is in the public interest. Id. at 1257.

         The primary goal of a preliminary injunction is to preserve the pre-trial status quo. “Status quo” is defined to be the last uncontested status between the parties that preceded the controversy until the outcome of the final hearing. See Schrier v. University of Colorado, 427 F.3d 1253, 1260 (10th Cir. 2005). Therefore, courts view the following types of injunctions with caution: (1) preliminary injunctions that alter the status quo; (2) preliminary injunctions that require the nonmoving party to take affirmative action (“mandatory preliminary injunctions”); and (3) preliminary injunctions that give the movant all the relief it would be entitled to if it prevailed in a full trial. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (per curiam), affirmed, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006)). Movants who seek a disfavored injunction must demonstrate a substantial likelihood of success on the merits, as well as a heightened showing of the other three elements. Id. (citing O Centro, 389 F.3d at 980).[3] See also Fundamentalist Church of Jesus Christ of Latter-Day Saints v. Horne, 698 F.3d 1295, 1301 (10th Cir. 2012) (the movant must show that the factors “weigh heavily and compellingly” in his or her favor). The court may grant a disfavored injunction only if the moving party demonstrates that the “exigencies of the case require extraordinary interim relief, ” and satisfies the heightened burden. RoDa Drilling, 552 F.3d at 1209 (citing O Centro, 389 F.3d at 978). “The determination of whether an injunction is mandatory as opposed to prohibitory can be vexing, ” but the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”) has explained that a mandatory injunction affirmatively requires the non-moving party to act in a particular way. Schrier, 427 F.3d at 1261. Whether to issue a preliminary injunction lies in the sound discretion of the trial court. See Id. at 1208 (citations omitted).


         BDI asserts that Defendants “must be restrained to preserve the status quo and protect against further irreparable injury.” As discussed above, the status quo is “the last uncontested status between the parties which preceded the controversy until the outcome of the final hearing.” Dominion Video Satellite, Inc. v. EchoStar Satellite Corp., 269 F.3d 1149, 1155 (10th Cir. 2001) (quoting SCFC ILC, Inc. v. Visa, USA Inc., 936 F.2d 1096, 1100, n.8 (10th Cir. 1991)). In determining the status quo for preliminary injunctions, the court “looks to the reality of the existing status and relationship between the parties and not solely to the parties' legal rights.” Id.

         BDI asserts that the “last uncontested status between that parties [sic] which preceded the controversy would be prior to the ‘launch' of the website and its Facebook page.” [#41 at 9]. Defendants frame the Parties' status quo as “Plaintiff is operating its business and Defendants are operating their business.” [#43 at 5]. The court is not fully persuaded by either Party's assertion, and finds, rather, that the status quo dates to on or around November 19, 2015, when Dr. Gross terminated the Agreement. Based on the Complaint, Dr. Gross and Ms. McCormick had organized TotoFit and launched the associated Facebook page by November 19, 2015. See [#1 at ¶¶ 42, 43]. Were the court to date the status quo to “prior to the ‘launch'” of TotoFit, it would effectively rule on the merits of the bulk, if not the entirety, of BDI's claims. A preliminary injunction is not intended to produce such an outcome or disposition.

         The court now turns to the factors identified above, and begins by noting that BDI seeks a mandatory injunction because it would have the court compel Defendants to take certain action. BDI also seeks a prohibitory injunction because it would have the court prohibit Defendants from taking certain actions. Therefore, with respect to requests such as, and for example, compelling Defendants to publish a communication in the trade press informing the public that they directed FitPAWS internet traffic to themselves, BDI must ...

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