Whaleco Incorporated v. Arslan

CourtDistrict Court, D. Arizona
DecidedJanuary 30, 2024
Docket2:23-cv-02549
StatusUnknown

This text of Whaleco Incorporated v. Arslan (Whaleco Incorporated v. Arslan) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whaleco Incorporated v. Arslan, (D. Ariz. 2024).

Opinion

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

9 Whaleco Incorporated, No. CV-23-02549-PHX-DLR

10 Plaintiff, ORDER

11 v.

12 Muhammad Arslan, et al.,

13 Defendants. 14 15 16 Plaintiff Whaleco Incorporated operates an e-commerce platform called TEMU, 17 which launched in the United States in September 2022 using the TEMU name and 18 trademark, including a distinctive orange logo (“TEMU Marks”). Whaleco alleges that a 19 host of websites are infringing the TEMU Marks, and has sued the infringing websites in 20 rem, and the owners of these websites (the identities of all but one of whom are, at this 21 point, unknown), under federal and state trademark laws. At issue is Whaleco 22 Incorporated’s ex parte motion for a temporary restraining order (“TRO”) and for an order 23 authorizing alternative service. (Doc. 10.) Having considered the motion, Whaleco’s 24 supplement thereto (Doc. 16), its First Amended Verified Complaint (Doc. 8), and its 25 arguments during the telephonic ex parte hearing, the Court grants Whaleco’s motion in 26 part. 27 A TRO preserves the status quo pending a hearing on a preliminary injunction 28 motion to avoid irreparable harm in the interim. See Ariz. Recovery Housing Ass’n v. Ariz. 1 Dep’t of Health Servs., No. CV-20-00893-PHX-JAT, 2020 WL 8996590, at *1 (D. Ariz. 2 May 14, 2020). The standards for issuing a TRO are identical to those for issuing a 3 preliminary injunction. Whitman v. Hawaiian Tug & Barge Corp./Young Bros., Ltd. 4 Salaried Pension Plan, 27 F. Supp. 2d 1225, 1228 (D. Haw. 1998). A plaintiff seeking a 5 TRO must establish that it is likely to succeed on the merits, that it is likely to suffer 6 irreparable harm in the absence of immediate relief, that the balance of equities tips in its 7 favor, and that a TRO is in the public interest. See Winter v. Natural Res. Def. Council, 8 Inc., 555 U.S. 7, 20 (2008). These elements are balanced on a sliding scale, whereby a 9 stronger showing of one element may offset a weaker showing of another, although all 10 elements still must be met. See Alliance for the Wild Rockies v. Cottrell, 632 F. 3d 1127, 11 1131, 1134-35 (9th Cir. 2011). The movant bears the burden of proof on each element of 12 the test. Envtl. Council of Sacramento v. Slater, 184 F. Supp. 2d 1016, 1027 (E.D. Cal. 13 2000). 14 A party seeking an ex parte TRO also must comply with Federal Rule of Civil 15 Procedure 65(b)(1) by (1) substantiating its allegations of irreparable harm with an affidavit 16 or verified complaint and (2) certifying in writing any efforts made to give notice to the 17 non-moving parties, and why notice should not be required. Further, the Court may issue a 18 TRO only if the movant “gives security in an amount that the court considers proper to pay 19 the costs and damages sustained by any party found to have been wrongfully enjoined or 20 restrained.” Fed. R. Civ. P. 65(c). A TRO expires no later than 14 days after issuance, 21 although the Court may extend its duration for good cause. Fed. R. Civ. P. 65(b)(2). 22 Whaleco has satisfied Rule 65(b)(1) by substantiating its allegations of irreparable 23 reputational harm via its First Amended Verified Complaint (Doc. 8), and by explaining in 24 a declaration submitted by counsel the efforts it has made to identify and serve the owners 25 of the allegedly infringing websites and why, considering the failure of those efforts, notice 26 to Defendants would be impracticable or counterproductive (Doc. 10-1). 27 Whaleco is likely to succeed on the merits of its trademark infringement and unfair 28 competition claims under 15 U.S.C. §§ 1114, 1125, and Arizona common law because 1 Whaleco has demonstrated protectable rights in the TEMU Marks and that Defendants are 2 using marks and domain names likely to cause consumer confusion. 3 Whaleco is likely to succeed on the merits of its counterfeiting claim under 15 4 U.S.C. §§ 1114(1)(b), 1116(d) because it has demonstrated that Defendants have used and 5 continue to use counterfeits of the federally registered TEMU Marks in connection with 6 the advertising of goods or services and pirate websites, which is likely to cause consumer 7 confusion, mistake, or deception. 8 Whaleco is likely to succeed on the merits of its cybersquatting claim under 15 9 U.S.C. § 1125(d)(1)(A) because it has demonstrated that temucouponcode.us, 10 temugifts.com, temudiscount.co, temu.coupons, temuspot.shop, temuhot.store, and 11 temups.com (the “Cybersquatting Domain Names”) were registered and used in bad faith; 12 the TEMU Marks were distinctive and famous at the time the Cybersquatting Domain 13 Names were registered; the Cybersquatting Domain Names are identical or confusingly 14 similar to the TEMU Marks; and the Cybersquatting Domain Names are dilutive of the 15 TEMU Marks. 16 Whaleco is likely to succeed on the merits of its trademark dilution claim under 15 17 U.S.C. § 1125(c) and A.R.S. § 44-1448.01 because it has demonstrated that the TEMU 18 Marks are famous and distinctive, that Defendants began using the TEMU Marks in 19 commerce after the TEMU Marks became famous and distinctive, that Defendants acted 20 willfully with intent to trade on Whaleco’s reputation and goodwill and to cause dilution 21 of the famous TEMU Marks, and that Defendants’ use is likely to dilute the TEMU Marks. 22 Whaleo likely will suffer irreparable reputational harm in the absence of immediate 23 relief. The balance of hardships favors Whaleco because issuance of a TRO will prevent 24 Defendants from profiting off their likely infringement, while failure to issue the TRO 25 likely will cause Whaleco to suffer additional irreparable reputational injury. And the 26 public interest is served by preventing consumer confusion or deception and protecting 27 consumers. 28 1 Whaleco’s proposed TRO, however, goes too far in two respects. First, much of the 2 proposed TRO is directed toward non-party Namecheap Incorporated, the domain name 3 registrar for the websites at issue. “This Court previously has rejected the argument that 4 domain registrars necessarily act in concert or participation with a client who uses a domain 5 to commit intellectual property violations.” Boyko v. Kondratiev, No. CV-23-01186-PHX- 6 DLR, 2023 WL 5017198, at *4 (D. Ariz. July 14, 2023). See also Fornix Holdings LLC v. 7 Unknown Party, No. CV-22-00494-PHX-DLR, 2022 WL 992546, at *2 (D. Ariz. Apr. 1, 8 2022). Although a domain registrar who receives notice of the TRO cannot thereafter take 9 actions that facilitate an effort by Defendants to evade or violate the TRO, the Court 10 remains convinced that it lacks authority to order a non-party domain registrar to act before 11 it even has notice of the injunction, and before it has been asked by any defendant to 12 facilitate a potential violation of that order.

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Whitman v. HAWAIIAN TUG & BARGE CORP./YOUNG BROS., LTD.
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Environmental Council of Sacramento v. Slater
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Alliance for Wild Rockies v. Cottrell
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Whaleco Incorporated v. Arslan, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whaleco-incorporated-v-arslan-azd-2024.