Stensrud Incorporated v. Unknown Parties

District Court, D. Arizona·Decided March 1, 2024·No. 2:24-cv-00334·Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Stensrud Incorporated, et al., No. CV-24-00334-PHX-DJH

10 Plaintiffs, PRELIMINARY INJUNCTION ORDER 11 v.

12 Unknown Parties,

13 Defendant. 14 15 On February 22, 2024, the Court issued an ex parte Temporary Restraining Order 16 (“TRO”) (Doc. 13) 1 in favor of Plaintiff Stensrud, Inc. (“Plaintiff Stensrud”) and Plaintiff 17 Benito Antonio Martinez Ocasio a/k/a Bad Bunny (“Plaintiff Bad Bunny”) 18 (collectively, “Plaintiffs”) against Defendants, various John Does, Jane Does and ABC 19 Companies (collectively, the “Unauthorized Merchandisers”). As required by Federal Rule 20 of Civil Procedure 65(a)(1) and (b)(3), the Court held a hearing on February 29, 2024, 21 (the “Hearing”) to determine whether the TRO should convert to a Preliminary Injunction 22 (“PI”). In advance of the Hearing, Plaintiff filed declarations showing service was 23 effectuated on at least eight Unauthorized Merchandisers. (Doc. 17-1). Despite this, none 24 of the Unauthorized Merchandisers appeared at the Hearing, and the Court found cause to 25 convert the TRO to a PI that applied to all other concerts associated with Plaintiff Bad 26 Bunny’s 2024 tour (the “2024 Concert Tour”). The following is an Order formalizing the 27 Court’s oral ruling issuing the Preliminary Injunction.

28 1 The ex parte Temporary Restraining Order was limited to Plaintiff Bad Bunny’s concerts that took place at the Footprint Center in Phoenix, Arizona on February 27 and 28, 2024. 1 I. Background2 2 The TRO was based on Plaintiffs’ claim under the Lanham Act, 3 15 U.S.C. § 1125(a), against the Unauthorized Merchandisers’ infringing use of the 4 BAD BUNNY trademark. (Doc. 1 at ¶¶ 15–26). Plaintiff Bad Bunny has used the BAD 5 BUNNY trademark, Registration No. 77245510, to identify his services as a musical 6 performer since 2016. (Id. at ¶ 5, 10). To date, 50 million dollars worth of licensed BAD 7 BUNNY merchandise has been sold. (Id. at ¶ 9). Plaintiff Bad Bunny granted Plaintiff 8 Stensrud the exclusive rights to sell or license the sale of BAD BUNNY merchandise 9 during the 2024 Concert Tour. (Id. at ¶ 9). The 2024 Concert Tour will take place at 10 various locations throughout the United States from February–May 2024. (Id. at 9–10); 11 see also Exhibit A attached to this Order. Plaintiffs claim the Unauthorized Merchandisers 12 are travelling from state to state to follow Plaintiff Bad Bunny’s concerts and sell 13 unlicensed and infringing merchandise that bear the BAD BUNNY trademark, likeness, 14 and logos. Plaintiffs sought nationwide injunctive relief to preclude them from doing so. 15 The Court issued a TRO that restrained the Unauthorized Merchandisers from 16 selling unlicensed and infringing merchandise that bear the BAD BUNNY trademark, 17 likeness, and logos at Plaintiff Bad Bunny’s concerts at the Footprint Center in Phoenix, 18 Arizona on February 27 and 28, 2024 (the “Footprint Center Concerts”). (See generally 19 Doc. 13). The TRO was limited in geographical scope because the Court did not have 20 sufficient information to confirm whether the Unauthorized Merchandisers in this case are 21 indeed the same travelling individuals or affiliated therewith. (Id. at 4). However, the 22 Court indicated it would revisit Plaintiffs’ request for nationwide injunctive relief at the 23 Hearing. (Id.) 24 At the Hearing, Plaintiffs submitted evidence showing unauthorized merchandise 25 that was sold outside of Plaintiff Bad Bunny’s concerts in Las Vegas on February 24 and 26 25, 2024 (the “Las Vegas Concerts), are identical to merchandise seized at the Footprint 27 2 The Court’s TRO contains extensive background information. (See Doc. 13 at 2). The 28 Court presumes the parties’ familiarity with the TRO, and as such, provides only an abbreviated version of the background facts here. 1 Center Concerts (Compare Doc. 17-2 (unauthorized Las Vegas merchandise) with Doc. 2 17-3 (unauthorized Arizona merchandise)). Plaintiffs also submitted evidence showing 3 that at least three individuals who were photographed selling unlicensed merchandise at 4 the Las Vegas Concerts and at Plaintiff Bad Bunny’s concert in Salt Lake City, Utah on 5 February 21, 2024 (the “Utah Concert”) were the same Unauthorized Merchandisers served 6 at the Footprint Center Concerts. (Docs. 17-4; 17-5; 17-6). 7 II. Legal Standard 8 Preliminary injunctive relief is an “extraordinary remedy never awarded as of right.” 9 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To obtain a preliminary 10 injunction, a plaintiff must show: (1) a likelihood of success on the merits, (2) a likelihood 11 of irreparable harm if injunctive relief were denied, (3) that the equities weigh in the 12 plaintiff’s favor, and (4) that the public interest favors injunctive relief. Id. at 20. The 13 movant carries the burden of proof on each element of the test. See Los Angeles Memorial 14 Coliseum Comm’n v. National Football League, 634 F.2d 1197, 1203 (9th Cir. 1980). 15 The Ninth Circuit also employs a “sliding scale” approach to preliminary 16 injunctions, under which “the elements of the preliminary injunction test are balanced, so 17 that a stronger showing of one element may offset a weaker showing of another.” All. for 18 the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). The issuance of a 19 preliminary injunction may be appropriate when there are “‘serious questions going to the 20 merits’ and a balance of hardships that tips sharply towards the plaintiff . . . so long as the 21 plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is 22 in the public interest.” Id. at 1135. “[C]ourts ‘must balance the competing claims of injury 23 and must consider the effect on each party of the granting or withholding of the requested 24 relief,’” and should be particularly mindful, in exercising their sound discretion, of the 25 “public consequences in employing the extraordinary remedy of injunction.” Id. at 24 26 (citations omitted). 27 / / / 28 / / / 1 III. Discussion 2 The Court will convert the prior TRO against the Unauthorized Merchandisers into 3 a PI because consideration of the Winter factors presently weigh in the Plaintiffs’ favor. 4 1. Likelihood of Success on the Merits 5 First, the Unauthorized Merchandisers’ acts likely constitute trademark 6 infringement under the Lanham Act, 15 U.S.C. § 1125(a). The Act “creates a federal civil 7 cause of action for unauthorized use of a registered trademark.” Slep-Tone Entm’t Corp. 8 v. Wired for Sound Karaoke & DJ Servs., LLC, 845 F.3d 1246, 1248 (9th Cir. 2017). To 9 establish a prima facie case for trademark infringement, Plaintiffs must show: (1) 10 ownership in a valid, protectable trademark; and (2) the defendant’s unauthorized use of 11 the mark in commerce is likely to cause confusion. See Brookfield Commc’ns, Inc. v. W. 12 Coast Ent. Corp., 174 F.3d 1036, 1046 (9th Cir. 1999); see also 15 U.S.C. § 1114(1). 13 Plaintiffs have established proof of ownership because Plaintiff Bad Bunny 14 registered the BAD BUNNY trademark in the federal Principal Register at No. 77245510 15 (Doc.

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