Nike, Inc. v. Fujian Jialaimeng Shoes Co., Ltd. et al

MOTION for Temporary Restraining Order

D. Neb.February 22, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i Michael J. McCue Nevada Bar No. 6055 Jonathan W. Fountain Nevada Bar No. 10351 Lewis Roca Rothgerber Christie LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, Nevada 89169 Telephone: (702) 949-8224 E-mail: mmccue@lrrc.com E-mail: jfountain@lrrc.com Christopher J. Renk Will comply with LR IA 11-2 within 45 days Erik S. Maurer Will comply with LR IA 11-2 within 45 days Michael J. Harris Will comply with LR IA 11-2 within 45 days Banner & Witcoff, Ltd. 10 South Wacker Drive, Suite 3000 Chicago, Illinois 60606 Telephone: (312) 463-5000 E-mail: crenk@bannerwitcoff.com E-mail: emaurer@bannerwitcoff.com E-mail: mharris@bannerwitcoff.com Attorneys for Plaintiff, NIKE, Inc. UNITED STATES DISTRICT COURT DISTRICT OF NEVADA NIKE, INC., Plaintiff, v. FUJIAN JIALAIMENG SHOES CO., LTD. and DAEAST-ASIA (FUJIAN) SPORTS PRODUCTION CO., LTD., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:17-cv-00516 NIKE’S EMERGENCY EX PARTE MOTION AND SUPPORTING MEMORANDUM FOR ENTRY OF A TEMPORARY RESTRAINING ORDER, SEIZURE ORDER, AND PRELIMINARY INJUNCTION (Special Expedited Review Requsted) Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 1 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Pursuant to Rule 65 of the Federal Rules of Civil Procedure, Lanham Act Section 34 (15 U.S.C. § 1116), the Patent Act, 35 U.S.C. § 283, and Local Rule 7-4, Plaintiff NIKE, Inc. (“NIKE”) respectfully moves the Court for an emergency, ex parte, temporary restraining order, a seizure order, and a preliminary injunction against Fujian Jialaimeng Shoes Co., Ltd. and Daeast-Asia (Fujian) Sports Production Co., Ltd. (collectively, “Defendants” or “Jialaimeng”). I. INTRODUCTION NIKE is seeking relief on an ex parte and emergency basis because, right now, at the biannual WSA@MAGIC (“WSA”) trade show in Las Vegas, Jialaimeng is offering to sell shoes that infringe NIKE’s design patents and its famous, registered “Swoosh Design” trademarks. NIKE notified Jialaimeng that it was infringing NIKE design patents and trademarks at the last WSA show in October 2016. However, Jialaimeng ignored NIKE’s cease and desist letter and has returned to WSA with newly infringing goods. The evidence, described below, establishes that NIKE is being immediately and irreparably harmed. Jialaimeng has developed a system for flaunting United States intellectual property laws by limiting its presence in the United States to the WSA shows. Jialaimeng’s recent promotions through the Alibaba online marketplace evidence Jialaimeng’s intent and capacity to sell a wide variety of infringing shoes, including designs it is offering at WSA. Because WSA runs for only two more days, a TRO and seizure order now may be the only meaningful opportunity to disrupt Jialaimeng’s systematic infringements before Jialaimeng leaves the country with infringing products, promotional materials, orders, and sales evidence. Because Jialaimeng has proven itself to be a recidivist infringer that willfully ignores NIKE’s rights, good cause exists for not providing Jialaimeng notice of this motion. If provided notice, Jialaimeng would likely conceal evidence of its infringements and return to China to exploit infringing sales from WSA. Further, if Jialaimeng is notified of – but evades – NIKE’s enforcement efforts now, Jialaimeng will likely change its identity before returning to the United States, making it impossible for NIKE to enforce its rights. Moreover, although NIKE is seeking relief on an ex parte basis, NIKE will promptly provide Jialaimeng with notice through multiple means, once service is effected at WSA, including by emailing Jialaimeng representatives in Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 2 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 China. In addition, NIKE will not oppose a hearing on this motion in less than the two-day notice required for seeking to dissolve a temporary restraining order under Rule 65 of the Federal Rules of Civil Procedure. Further, pursuant to Local Rule 7-4, NIKE is seeking this TRO on an emergency basis because Jialaimeng will be at the WSA show only until Thursday, February 23, 2017. Once the WSA show ends, Jialaimeng will return to China with its infringing products, promotional materials, and sales orders, which are evidence in this case. As a practical matter, NIKE has no effective or efficient means of serving Jialaimeng with process in China. Pursuant to the Court’s inherent authority, NIKE further asks the Court to authorize the United States Marshal for the District of Nevada or his authorized assistants, deputies, or appointees (or any other federal, state, or local law enforcement officer to whom this Order is presented, including, without limitation, any Constable of the County of Clark, Nevada, or Plaintiff’s counsel, Michael J. McCue and/or Jonathan W. Fountain if no such law enforcement officer is available) (the “Enforcing Agents”) to seize Jialaimeng’s infringing goods and documents/things used in support of Jialaimeng’s infringements. If this evidence is not collected now, it will be difficult or impossible to collect later and NIKE will have no way to track and stop Jialaimeng’s infringements. Because Jialaimeng is likely to default and not participate in discovery, NIKE will have no effective means of enforcing its intellectual property rights if this evidence is not seized now. The relief NIKE requests is necessary and appropriate, and has been granted by this Court under similar circumstances. To that end, this case is similar to the cases of NIKE, Inc. v. Fujian Bestwinn (China) Industry Co., No. 16-00311, 166 F. Supp. 3d 1177 (D. Nev. 2016); NIKE, Inc. v. QiLoo Int’l Ltd., No. 12–00191, 2012 WL 9491724 (D. Nev. Feb. 7, 2012), and NIKE, Inc. v. Meitac Int’l Enter. Co., No. 06-00934, 2006 WL 3883278 (D. Nev. Oct. 11, 2006). In each of those cases, this Court issued a TRO, authorized seizure of infringing shoes and sales records, and, in due course, entered a preliminary injunction. Id. Here, as there, NIKE respectfully requests that this Court act now to stop Jialaimeng’s willful infringements. Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 3 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 II. STATEMENT OF FACTS A. NIKE’S ASSERTED DESIGN PATENTS NIKE is one of the world’s largest athletic footwear companies. (Declaration of Erik S. Maurer (“Maurer Decl.”) ¶ 3). To that end, NIKE spends substantial time and resources creating ornamental footwear designs. NIKE has also spent substantial time and resources protecting its innovative footwear designs with United States design patents. (Id. ¶ 8.) NIKE’s Complaint in this matter asserts eighteen U.S. design patents covering a variety of innovative NIKE shoe designs. NIKE’s motion for TRO, however, relates to a subset of the patents asserted in the Complaint and focuses only on eight patents implicated by Jialaimeng’s infringements identified at the current WSA show. Relevant to this TRO motion, NIKE owns all right, title, and interest in the United States design patents in Table 1 below (“NIKE TRO Design Patents”). Each patent is presumed valid. A copy of each patent is attached to the Maurer Decl. as indicated in Table 1. TABLE 1: NIKE TRO DESIGN PATENTS United States Design Patent No. Issue Date of Patent Maurer Decl. Exhibit D659,967 May 22, 2012 D D666,404 Sep. 4, 2012 E D666,405 Sep. 4, 2012 F D666,406 Sep. 4, 2012 G D683,119 May 28, 2013 H D711,081 Aug. 19, 2014 I D723,772 Mar. 10, 2015 J D725,356 Mar. 31, 2015 K B. NIKE’S ASSERTED SWOOSH DESIGN TRADEMARK As a result of substantial, continuous, and long-standing use, the (“Swoosh Design”) has become a famous trademark that is among NIKE’s most valuable assets. (Declaration of Jaime M. Lemons (“Lemons Decl.”) ¶¶ 25-27). The Swoosh Design mark is the Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 4 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 figurative equivalent of the word mark NIKE and easily eclipses the factors courts consider when determining that a trademark is strong and entitled to broad protection. (Id. ¶ 15). Indeed, the 9th Circuit Court of Appeals referenced the NIKE and Swoosh Design marks as examples of “famous trademarks [that] have assumed an exalted status...Consumers sometimes buy products bearing marks such as the Nike Swoosh…for the appeal of the mark itself, without regard to whether it signifies the origin or sponsorship of the product.” Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1067 (9th Cir. 2006). NIKE has continuously promoted and sold shoes and apparel bearing the Swoosh Design mark since 1971. (Lemons Decl. ¶ 6). NIKE uses the Swoosh Design mark on almost all of its footwear products and in connection with its retail sales of those products. (Id. ¶¶ 5-6, 15). The Swoosh Design mark has been used in connection with dozens of iconic shoe designs and innovative footwear technologies over the years. (Id. ¶ 17). Since 1979, NIKE has sold more than $375 billion worth of products bearing the Swoosh Design mark worldwide. (Lemons Decl. ¶ 18). While NIKE’s global sales have steadily increased over the past decades, its domestic sales accounted for approximately 45% of its total, worldwide revenue in 2016. (Id.). Even conservatively assuming that only approximately half of NIKE’s $375 billion in revenue was attributable to U.S. sales, NIKE has sold billions of products bearing the Swoosh Design mark in the United States. Between 1979-2016, NIKE spent over $41 billion advertising and promoting Swoosh Design branded products worldwide. (Lemons Decl. ¶ 19). Conservatively assuming that approximately half of these expenditures supported domestic sales described above, NIKE has spent tens of billions of dollars promoting Swoosh Design branded products in the United States. NIKE advertises and promotes products bearing the Swoosh Design mark through a wide variety of traditional and non-traditional means, including print advertising, event sponsorship, and athlete and team endorsements, to name a few. (Lemons Decl. ¶¶ 20-21, 24). NIKE also provides the official uniforms of the National Football League, which prominently bear the Swoosh Design mark. (Id. ¶ 22). As a result of NIKE’s efforts, the NIKE and Swoosh Design marks are widely regarded Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 5 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 as some of the most valuable, impactful marks in the world, and they receive unsolicited publicity and praise among consumers and in the media. (Lemons Decl. ¶¶ 9-14). Because they are valuable assets, NIKE has enforced its rights in the NIKE and Swoosh Design marks over the years. To that end, the NIKE and Swoosh Design marks have received judicial and administrative recognition as being well-known and/or famous trademarks. (Id. ¶¶ 26-27). Together these facts evidence the great strength of the Swoosh Design mark. To that end, the United States Patent and Trademark Office has examined and allowed numerous applications to register the NIKE and Swoosh Design marks on the Principal Register in connection with a wide array of goods and services over the years. (Lemons Decl. ¶ 16). Relevant to this TRO motion, NIKE owns all right, title, and interest in the United States Trademark Registrations for the Swoosh Design mark identified in Table 2 below (“NIKE TRO Trademarks”). Each of these trademark registrations is presumed valid and is incontestable. A copy of each trademark is attached to the Maurer Decl. as indicated in Table 2. TABLE 2: NIKE TRO TRADEMARKS United States Trademark Reg. No. Registration Date Maurer Decl. Exhibit 977,190 January 22, 1974 L 1,323,342 March 5, 1985 M 1,323,343 March 5, 1985 N C. JIALAIMENG AND ITS INFRINGING ACTIVITIES Jialaimeng is a manufacturer of footwear products in Fujian Province, China. (Maurer Decl. ¶ 4.) Jialaimeng claims that its factory runs 9 production lines, creating around 6 million pairs of shoes per year, with more than 1,000 employees and “a large sales network.” (Id. ¶ 5). Jialaimeng claims revenues between $50-100 million U.S., that it exports 91-100% of its products from China, and that sales to North America are responsible for 50% of its revenue. (Id.). With the exception of its temporary presence in Las Vegas during the WSA trade show, Jialaimeng does not have any known business operations or assets in the U.S. (Id. ¶ 6). According to WSA’s website, the trade show is held in February and August each year Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 6 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 and “offer[s] the largest selection of fast fashion footwear anywhere in the world” with “a global base of product and buyers from over 100 countries.” (Maurer Decl. ¶ 11). Manufacturing exhibitors at WSA, like Jialaimeng, meet with and offer to sell their products to retailers (“buyers”) during the show. (Id. ¶ 12). Buyers place orders with the manufacturing exhibitors for thousands or tens of thousands of pairs of shoes that will be sold at retail over the next six or more months. (Id.). The current WSA trade show began on Tuesday, February 21, 2017, and runs through Thursday, February 23, 2017, at the Las Vegas Convention Center. (Id. ¶¶ 11, 13). Yesterday, NIKE representatives visited Jialaimeng’s booths at WSA. (Maurer Decl. ¶ 13). Jialaimeng is exhibiting shoes at booth numbers 92409 and 92509 in the South Hall of the Las Vegas Convention Center. (Id.). NIKE representatives observed numerous footwear products bearing designs that are substantially the same as, if not identical copies of, the designs covered by the NIKE TRO Design Patents (hereafter, “Jialaimeng’s Design Infringements”) (Maurer Decl. ¶ 15), as well as footwear products bearing simulations of the NIKE Swoosh Design trademark (hereafter, “Jialaimeng’s Trademark Infringements”) (Id.). This is not the first time Jialaimeng has offered to sell shoes violating NIKE’s patent and trademark rights. Following the last WSA trade show, NIKE sent Jialaimeng a cease and desist relating to NIKE design patents and trademarks. (Maurer Decl. ¶ 16). NIKE’s letter was delivered to Jialaimeng on November 7, 2016. (Id.). Jialaimeng never responded. (Id. ¶ 17). III. ARGUMENT A. OPERATIVE LEGAL STANDARDS The Court is authorized to issue injunctive relief in this case under the Lanham Act, 15 U.S.C. § 1116, and under the Patent Act, 35 U.S.C. § 283. The Court must make two determinations before issuing a TRO: (1) that NIKE is being “immediately and irreparably” harmed by Jialaimeng’s infringements (Rule 65(b), Fed. R. Civ. P.), and (2) that the four factors required to issue a preliminary injunction are satisfied, at least preliminarily – i.e., (A) a reasonable likelihood of success on the merits; (B) irreparable harm if an injunction is not granted; (C) a balance of hardships tipping in NIKE’s favor; and (D) the injunction’s favorable impact on the public interest. AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1049 (Fed. Cir. Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 7 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 2010).1 Here, NIKE satisfies all of the requirements for a TRO and preliminary injunction. B. NIKE WILL BE IMMEDIATELY AND IRREPARABLY HARMED ABSENT A TRO Jialaimeng is causing NIKE immediate and irreparable harm in at least three distinct ways. First, Jialaimeng has made it impossible for Plaintiffs to secure relief unless a TRO issues and it is stopped while physically present in Las Vegas now. Jialaimeng has been observed operating under at least 12 different names. (Maurer Decl. ¶ 4). Jialaimeng has no known domestic presence and is unlikely to preserve any evidence of its current identity or of its infringements now that suit has been filed. (Id. ¶ 6). Moreover, Jialaimeng is taking infringing orders that it will only fulfill after it leaves the country, when NIKE has no effective recourse, let alone ability to monitor or disrupt infringements that began here. (Id. ¶ 12). In sum, Jialaimeng has developed a system for flaunting United States intellectual property laws and flooding world markets with knock-off designs that can only be stopped through an ex parte TRO. (Id.). Second, Jialaimeng is eroding and devaluing Plaintiff’s intellectual property rights by undermining NIKE’s control over products bearing NIKE’s proprietary designs and trademarks. Loss of control over proprietary intellectual property rights constitutes a well-recognized form of irreparable harm and supports issuance of a TRO and preliminary injunction. See Life Alert Emergency Response, Inc. v. LifeWatch, Inc., 601 F. App’x 469, 474 (9th Cir. 2015) (a threat to “reputation and goodwill” is the “type of harm [that] constitutes irreparable harm, as it is not readily compensable”); Stuhlbarg, 240 F.3d at 841 (“[T]hreatened loss of prospective customers or goodwill certainly supports a finding of the possibility of irreparable harm.”); Gallagher Benefit Servs., Inc. v. De La Torre, 283 F. App’x 543, 546 (9th Cir. 2008) (potential loss of goodwill and customers causes irreparable injury); M2 Software, Inc. v. Madacy Entm’t, 421 F.3d 1073, 1088 (9th Cir. 2005) (“Use of similar marks by third-party companies in the relevant industry weakens the mark at issue.”); Otter Prods., LLC v. Anke Grp. Indus. Ltd., No. 13-00029, 1 In patent cases, temporary restraining orders and preliminary injunctions are governed by the law of the Federal Circuit. Revision Military, Inc. v. Balboa Mfg. Co., 700 F.3d 524, 525 (Fed. Cir. 2012). Likewise, in trademark cases, temporary restraining order standards mirror those for a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001) (“Because our analysis is substantially identical for the injunction and the TRO, we do not address the TRO separately.”) overruled on other grounds, Winter v. NRDC, 555 U.S. 7 (2008). Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 8 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 2013 WL 5910882, at *2 (D. Nev. Jan. 8, 2013) (loss of control over intellectual property rights, loss of consumer goodwill, and inability to exploit design patents support a finding of likely irreparable harm sufficient for TRO and preliminary injunction); Farmer Bros. Co. v. Albrecht, No. 11-01371, 2011 WL 4736858, *3 (D. Nev. October 6, 2011) (“Loss of customers or goodwill constitutes irreparable harm . . .”); Tile Outlet Always In Stock, Inc. v. Big Leaps, Inc., No. 10-0618, 2010 WL 5239229, at *2 (D. Nev. Dec. 16, 2010) (irreparable injury exists when continuing infringement will result in loss in plaintiff’s reputation and goodwill). Finally, because Jialaimeng has no domestic presence and no identifiable domestic assets (Maurer Decl. ¶ 6), it will be difficult or impossible for Plaintiffs to recover a money judgment. Thus, NIKE’s harm is irreparable because monetary remedies are inadequate. Robert Bosch, LLC v. Pylon Mfg. Corp, 659 F.3d 1142, 1156 (Fed. Cir. 2011) (citing O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., No. 04-32, 2007 WL 869576, at *2 (E.D. Tex. Mar. 21, 2007), vacated and remanded on other grounds, 521 F.3d 1351 (Fed. Cir. 2008) (finding irreparable harm where “all three defendants are foreign corporations and that there is little assurance that [plaintiff] could collect monetary damages”)); Bushnell, Inc. v. Brunton Co., 673 F. Supp. 2d 1241, 1263 (D. Kan. 2009) (granting preliminary injunction where “the prospect of collecting money damages from a foreign defendant with few to no assets in the United States tips in favor of a finding of irreparable harm”); Canon Inc. v. GCC Int’l Ltd., 450 F. Supp. 2d 243, 256 (S.D.N.Y. 2006) (granting preliminary injunction where defendant was largely based abroad). Thus, NIKE is likely to suffer irreparable injury and satisfies the first requirement for a TRO. Winter v. NRDC, 555 U.S. at 20 (the questions are “likely to succeed on the merits [and] likely to suffer irreparable harm in the absence of preliminary relief”) (emphases added). C. NIKE SATISFIES THE REQUIREMENTS FOR A PRELIMINARY INJUNCTION 1) NIKE IS LIKELY TO SUCCEED ON THE MERITS i. NIKE WILL LIKELY PREVAIL ON ITS PATENT INFRINGEMENT CLAIMS To demonstrate a likelihood of success on the merits, NIKE must show that, in light of the presumptions and burdens that will apply at trial on the merits, (1) Jialaimeng likely infringes the NIKE Design Patents, and (2) the claims of the NIKE Design Patents will likely withstand Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 9 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 any challenges Jialaimeng raises to validity. Equalia, LLC v. Kushgo LLC, No. 16-02851, 2017 WL 277495, at *2 (D. Nev. Jan. 20, 2017); AstraZeneca, 633 F.3d at 1050. First, at this stage, NIKE must merely establish a reasonable likelihood that it will prove at trial, by a preponderance of the evidence, that Jialaimeng infringes the NIKE TRO Design Patents. See Revision Military, Inc. v. Balboa Mfg. Co., 700 F.3d 524, 526 (Fed. Cir. 2012) (“[T]he estimated likelihood of success in establishing infringement is governed by . . . the Federal Circuit’s standard of whether success is more likely than not.”); Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1326-27 (Fed. Cir. 2008) (patentee has the burden of persuasion by a preponderance of the evidence). Infringement of a design patent occurs when the accused design is substantially the same as the design patent’s claim under the ordinary observer test. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 683 (Fed. Cir. 2008). The ordinary observer test provides that “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same … the first one patented is infringed by the other.” Catalina Lighting, Inc. v. Home Depot USA, Inc., 295 F.3d 1277, 1286 (Fed. Cir. 2002) (quoting Gorham Co. v. White, 81 U.S. 511, 528 (1872)). The NIKE TRO Design Patents cover the overall visual impression of what is shown in solid lines in the patents’ figures. Crocs, Inc. v. ITC, 598 F.3d 1294, 1302 (Fed. Cir. 2010) (design patent claim construction is “adapted to a pictorial setting” because design patents are “typically claimed as shown in the drawings”). Jialaimeng’s Design Infringements satisfy the ordinary observer test because these shoes appear to be virtually identical copies of NIKE’s patented footwear designs. (Maurer Decl., ¶ 15); L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1125-26 (Fed. Cir. 1993). Representative examples of Jialaimeng’s Design Infringements are shown below. Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 10 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 Table 3: EXAMPLE DESIGN INFRINGEMENTS NIKE’s TRO Design Patents Jialaimeng’s Design Infringements D659,967 See Maurer Decl. Ex. D Model Nos. 605244; 605272 D666,404 See Maurer Decl. Ex. E Model No. 605126 D666,405 See Maurer Decl. Ex. F Model No. 605184 D666,406 See Maurer Decl. Ex. G Model No. 605184 Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 11 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 Table 3: EXAMPLE DESIGN INFRINGEMENTS NIKE’s TRO Design Patents Jialaimeng’s Design Infringements D683,119 See Maurer Decl. Ex. H Model No. 60592 D711,081 See Maurer Decl. Ex. I Model No. 60592 D723,772 See Maurer Decl. Ex. J Model Nos. 605244; 605272 D725,356 See Maurer Decl. Ex. K Model Nos. 605244; 605272 Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 12 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 The strong similarities between NIKE’s TRO Design Patents and Jialaimeng’s Design Infringements demonstrate not only NIKE’s substantial likelihood of success on the merits, but also that Jialaimeng willfully copied NIKE’s designs. L.A. Gear, Inc., 988 F.2d at 1127 (copying is strong evidence of willful infringement). Thus, NIKE has a strong likelihood of proving Jialaimeng infringed its Design Patents. Second, NIKE’s TRO Design Patents are presumed valid. See Equalia, 2017 WL 277495, at *3; Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998). This presumption exists at every stage of the litigation. Canon, 134 F.3d at 1088. Because Jialaimeng has never challenged the validity of the NIKE Design Patents – indeed, Jialaimeng never responded to NIKE’s cease and desist letter – the presumptive validity of NIKE’s TRO Design Patents establishes a likelihood of success on the merits at this stage of the case. Id. (if “the [alleged infringer] fails to identify any persuasive evidence of invalidity, the very existence of the patent satisfies the patentee’s burden on the validity issue.”). ii. NIKE WILL LIKELY PREVAIL ON ITS TRADEMARK INFRINGEMENT CLAIMS To succeed on the merits, NIKE must show (1) that the NIKE TRO Trademarks are valid and (2) that Jialaimeng’s use of the NIKE TRO Trademarks creates a likelihood of consumer confusion. See Grocery Outlet, Inc. v. Albertson’s, Inc., 497 F.3d 949, 951 (9th Cir. 2007) (citing Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1046 (9th Cir. 1999)). NIKE is likely to succeed on its trademark infringement claims under the Lanham Act. 1. THE NIKE TRO TRADEMARKS ARE VALID AND ENFORCEABLE NIKE’s certificates of trademark registration (Maurer Decl. Exs. L-N) are prima facie evidence of the validity, ownership, and exclusive right by NIKE to use the registered Swoosh Design trademark. 15 U.S.C. § 1057. NIKE’s rights in the asserted mark are incontestable. 15 U.S.C. § 1065. But, this Court need not rest on NIKE’s registrations. The Swoosh Design mark is one of the most well-known, famous trademarks ever. As evidenced in Section II.B. above, NIKE owns strong rights in the Swoosh Design mark as a result of continuous and long-standing promotion and sales of footwear and other goods and services under the mark. Of particular note: Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 13 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 • NIKE has continuously promoted and sold shoes bearing the Swoosh Design mark for almost 50 years (Lemons Decl., ¶¶ 5, 6, 15); • NIKE has sold more than $375 billion worth of products bearing the Swoosh Design mark throughout the world (Id., ¶ 18); • NIKE has invested more than $40 billion advertising and promoting the Swoosh Design mark throughout the world, and the mark routinely appears in connection with famous shoe designs, athletes, teams, and sporting events (Id., ¶¶ 17, 19-24); and • The Swoosh Design mark is a famous designator associated with NIKE and one of NIKE’s most valuable assets (Id., ¶¶ 7-14, 25-27). All of these facts evidence NIKE’s ownership of valid and enforceable trademark rights in the NIKE TRO Trademarks. See e.g., Power Balance LLC v. Power Force LLC, No. 10-1726, 2010 WL 5174957, *3 (C.D. Cal. Dec. 14, 2010) (“Secondary meaning can be established in many ways, including (but not limited to) … exclusivity, manner, and length of use of a mark; amount and manner of advertising; amount of sales and number of customers.”) (quoting Filipino Yellow Pages, Inc. v. Asian Journal Publs., Inc., 198 F.3d 1143, 1151 (9th Cir. 1999)); see also 2 McCarthy on Trademarks and Unfair Competition § 15:30 (4th ed.) (listing factors courts consider when determining whether a mark has acquired secondary meaning). 2. JIALAIMENG IS LIKELY TO CAUSE CONSUMER CONFUSION Jialaimeng’s use of marks that are substantially the same as the NIKE TRO Trademarks on products made to have the same overall look as NIKE shoes creates a likelihood of confusion. Under Ninth Circuit law, likelihood of confusion is determined using the following eight factors: “(1) strength of the mark; (2) proximity or relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines.” AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979), abrograted in part on other grounds, Mattel, Inc. v. Walking Mountain Prod., 353 F.3d 792 (9th Cir. 2003). Although eight factors are enumerated, the “test is ‘pliant,’ illustrative rather than exhaustive and is best understood as simply providing helpful guide Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 14 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 posts.” Id. (citation omitted). As a preliminary matter, other courts have already found NIKE’s marks to be famous. Nike Inc. v. Variety Wholesalers, Inc., 274 F. Supp. 2d 1352, 1356 (S.D. Ga. 2003) (“The Nike trademarks are famous as trademarks for apparel and sporting goods in the United States.”), aff'd, 107 F. App'x 183 (11th Cir. 2004); see also Leviton Mfg. Co. v. Universal Sec. Instruments, Inc., 409 F. Supp. 2d 643, 652 n.12 (D. Md. 2006) (“[I]t is clear that the Nike ‘swoosh’ . . . indeed, is famous.”). Nevertheless, NIKE reviews the Sleekcraft factors below. a. Strength of the Mark Evidence establishing the validity of the Swoosh Design mark leaves no doubt that it is one of the strongest marks ever. See Mattel, Inc. v. MGA Entm’t, Inc., 782 F. Supp. 2d 911, 1008 (C.D. Cal. 2011) (strength of a mark rests on its distinctiveness, which is “related to the questions of secondary meaning”). The commercial successes embodied in the Swoosh Design mark – exceeding hundreds of billions in sales revenue and tens of billions in brand valuation – far exceed levels for other marks that courts have held to be famous. See, e.g., Teletech Customer Care Mgmt. (California), Inc. v. Tele-Tech Co., 977 F. Supp. 1407, 1413 (C.D. Cal. 1997) (crediting “hundreds of millions of dollars worth of services under the TELETECH® Service Mark”); BOSE Corp. v. OSC Audio Products, Inc., 293 F.3d 1367, 1371-73 (Fed. Cir. 2002) (“The [WAVE] product has enjoyed vast commercial success, with current annual sales of $100 million … and sales since inception of $250 million.”). b. Proximity or Relatedness of the Goods Jialaimeng is using a replica of the Swoosh Design mark on shoes intended to mimic NIKE shoes. Moreover, at WSA, Jialaimeng promotes its Trademark Infringements to the world’s single largest gathering of shoe buyers/retailers, many of whom are the same types of businesses that distribute genuine NIKE shoes. (Maurer Decl. ¶ 11). Consequently, Jialaimeng’s Trademark Infringements are in close proximity to NIKE’s business. See Sleekcraft, 599 F.3d at 350, n.10 (related goods are “those products which would be reasonably thought by the buying public to come from the same source if sold under the same mark”). /// Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 15 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 c. Similarity of the Marks Jialaimeng is using a close copy of the Swoosh Design mark at the heel of infringing shoes. Notably, NIKE has used its Swoosh Design mark on athletic shoes in various orientations and locations on the shoes over the years. The Table below compares the NIKE TRO Trademarks with the Jialaimeng Trademark Infringement. Table 4: EXAMPLE TRADEMARK INFRINGEMENTS TM Reg. Nos. 977,190; 1,323,342; 1,323,343; See Maurer Decl. Exs. L-N Model No. 605397 Because the overall shape and appearance of the Jialaimeng mark is substantially similar to the Swoosh Design mark, and because the famous Swoosh Design mark is entitled to a broad scope of protection, this factor favors NIKE. d. Evidence of Actual Confusion Because Jialaimeng is only in the United States for a few days every year and fulfills its infringing sales in Asia, NIKE has not been able to track Jialaimeng’s infringements to evidence of actual confusion. Because evidence of actual confusion is often difficult to prove, courts may discount this factor. Sleekcraft, 559 F.2d at 352. Moreover, even though evidence of actual confusion can be important when present, its absence is inconsequential at this preliminary stage. Hand & Nail Harmony, Inc. v. Guangzhou Cocome Cosmetics Co., No. 14-01106, 2014 WL 4809928, at *6 (D. Nev. Sept. 26, 2014) (citing Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011)). Nevertheless, it is precisely because NIKE Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 16 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 cannot track Jialaimeng’s continuing infringements that a TRO is necessary and appropriate. e. Marketing Channels For the same reasons that the Infringing Shoes are in close proximity/related to the NIKE TRO Trademarks, the fourth Sleekcraft factor also favors NIKE. By promoting, selling, and offering to sell Trademark Infringements to buyers who could also retail NIKE products, it is highly likely that Jialaimeng is injecting its infringing products into channels of trade that are similar to NIKE’s channels of trade. See Sleekcraft, 599 F.2d at 353 (“Convergent marketing channels increase the likelihood of confusion.”); Hand & Nail, 2014 WL 4809928, at *5 (addressing proximity and marketing factors together). f. Types of Goods & Degree of Care Likely to be Exercised The average athletic footwear buyer is unlikely to exercise a heightened degree of care when making purchases of relatively inexpensive footwear. adidas-Am., Inc. v. Payless Shoesource, Inc., 546 F. Supp. 2d 1029, 1060 (D. Or. 2008) (citations omitted) (“Courts have found that purchasers of ‘relatively inexpensive athletic and sportswear’ are ‘not likely to exercise a great deal of care in distinguishing between trademarks when purchasing the goods.’”); K-Swiss, Inc. v. USA AISIQI Shoes, Inc., 291 F. Supp. 2d 1116, 1125 (C.D. Cal. 2003) (finding consumers unlikely to exercise high degree of care when purchasing athletic shoes). Although institutional buyers attending WSA may be considered sophisticated, they are but one category of buyer attending the show. To that end, Jialaimeng is promoting its Trademark Infringements to all manner of retail buyers at WSA – from mom-and-pop storefronts to national chain retailers – and the ultimate consumer is not sophisticated in a trademark sense. Id. As a result, this factor favors NIKE. g. Jailaimeng’s Intent in Selecting its Mark The strong similarities between Jialaimeng’s Trademark Infringements and the NIKE Swoosh Design mark, in addition to Jialaimeng’s use of this mark on shoes that mimic genuine NIKE shoes, provides compelling evidence that Jialaimeng intends to trade on NIKE’s goodwill. Moreover, as set forth in NIKE’s Complaint in this action, NIKE previously notified Jialaimeng that it was infringing the “NIKE” and “NIKE FREE” trademarks on shoes that infringe NIKE Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 17 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 design patents. The context here confirms that “[w]hen the alleged infringer knowingly adopts a mark similar to another’s, reviewing courts [should] presume that the defendant can accomplish his purpose: that is, that the public will be deceived.” Sleekcraft, 599 F.2d at 354. Further, Jialaimeng could not credibly claim that it wasn’t aware of its encroachments onto NIKE trademarks. (Maurer Decl. ¶ 18). This factor favors NIKE. Brookfield, 174 F.3d at 1059 (“This factor favors the plaintiff where the alleged infringer adopted his mark with knowledge, actual or constructive, that it was another’s trademark.”). h. Likelihood of Expansion This factor favors NIKE, because each and every one of Jialaimeng’s sales of Trademark Infringements is a potentially lost sale of genuine NIKE products. See Sleekcraft, 599 F.2d at 354 (“When goods are closely related, any expansion is likely to result in direct competition.”). In sum, seven of the eight Sleekcraft factors favor NIKE, while one factor (actual confusion) is immaterial at this stage because Jialaimeng has thwarted NIKE’s collection of evidence. Thus, NIKE is likely to succeed on the merits of its trademark infringement claims. 2) NIKE WILL BE IRREPARABLY INJURED ABSENT IMMEDIATE RELIEF For the reasons discussed in Section III.B, NIKE will suffer immediate and irreparable harm if Jialaimeng’s willful patent and trademark infringements are not enjoined now. Additionally, if Jialaimeng is allowed to promote and sell the infringing products at the current WSA show, then return to Asia to fulfill these sales and perhaps build additional business, there is no way to know the extent of NIKE’s long-term loss and concomitant erosion of exclusive patent and trademark rights. Courts in similar situations have granted preliminary relief because these injuries cannot be readily quantified. Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 975-76 (Fed. Cir. 1996) (“Years after infringement has begun, it may be impossible to restore a patentee’s … exclusive position”); Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 1345 (Fed. Cir. 2013) (“[M]ere damages will not compensate for a competitor’s increasing share of the market, a market which [the patentee] competes in, and a market that [the patentee] has in part created with its investment in patented technology.”); see also Otter Prods., 2013 WL 5910882, at *2 (explaining that absent the requested TRO, plaintiff was likely to Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 18 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 suffer “irreparable injury . . . in the form of (a) loss of control over its intellectual property rights; (b) loss of consumer goodwill; and (c) interference with [plaintiff’s] ability to exploit the OTTERBOX trademarks and design patents”). Thus, irreparable harm to NIKE warrants preliminary relief. 3) THE BALANCE OF HARDSHIPS WEIGHS IN NIKE’S FAVOR The balance of hardships tips in NIKE’s favor for at least three reasons. First, NIKE will suffer the irreparable harm described above absent a TRO and injunction. Meitac, 2006 WL 3883278, at *3 (absent relief, “Nike will be severely handicapped in its ability to prevent further importation of infringing products, thereby destroying any potential of preserving the status quo pending a resolution of this case on its merits.”); QiLoo, 2012 WL 9491724, at *1-2. Second, NIKE’s reputation will be harmed if Jialaimeng is allowed to continue to manufacture and sell infringements because NIKE cannot effectively police the market and enforce its intellectual property rights. See California Med. Prods., Inc. v. Emergency Med. Prods., Inc., 796 F. Supp. 640, 647 (D.R.I. 1992) (denial of preliminary relief can damage patentee’s reputation). It is difficult to earn respect in the marketplace among competitors if intellectual property rights are not enforced by the courts. Otter Prods., 2013 WL 5910882, at *2 (absent TRO, plaintiff was likely to suffer “loss of control over its intellectual property rights . . . [and] interference with [plaintiff’s] ability to exploit [its] trademarks and design patents”). This is particularly true here, where Jialaimeng’s contacts with the United States are premised upon its infringing conduct, including promotions, sales, and offers to sell infringements at the WSA show made over a period of a few days twice yearly. If NIKE cannot enforce its patent and trademark rights against Jialaimeng while it is present in the United States attending the WSA show, its patents and trademarks will be of little value in the marketplace. Third, in similar circumstances, courts have concluded that the existence of a non- infringing alternative that the defendant can sell in place of the infringing product tips the balance of hardships strongly in the plaintiff’s favor. See, e.g., Henkel Corp. v. Coral, Inc., 754 F. Supp. 1280, 1309, 1323 (N.D. Ill. 1990), aff'd, 945 F.2d 416 (Fed. Cir. 1991) (injunction granted where defendant can switch to selling a non-infringing product even though it is required Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 19 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 to raise its prices, or reduce its profit); MGM Well Servs., Inc. v. Mega Lift Sys., LLC, 505 F. Supp. 2d 359, 379 (S.D. Tex. 2007) (holding that injunction against selling infringing products should not impose an unreasonable hardship where defendant already sold a non-infringing alternative). Because the NIKE TRO Design Patents and Trademarks protect only ornamental and source identifying features, Jialaimeng has a virtually unlimited field of non-infringing alternatives to choose from – i.e., any designs that do not have the same appearance or trademark indicia as NIKE’s shoes. Importantly, any harm to Jialaimeng that could possibly result from a preliminary injunction is self-inflicted. Jialaimeng took a calculated risk when it copied NIKE’s designs, and returned to the United States to promote, sell, and offer to sell infringements – particularly after NIKE previously served a cease and desist letter. Under such circumstances, courts refuse to weigh any “harm” to the infringer. See Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 931 (Fed. Cir. 2012) (“[T]he preliminary record suggests that [defendant’s] losses were the result of its own calculated risk in selling a product with knowledge of [plaintiff’s] patent.”); Smith Int’l, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1581 (Fed. Cir. 1983) (reversing denial of preliminary injunction where infringer was aware of patents and “took a calculated risk that it might infringe those patents”), abrogated in part on other grounds, Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011). Accordingly, the balance of hardships strongly favors NIKE. 4) THE PUBLIC INTEREST FAVORS PRELIMINARY RELIEF The public interest favors NIKE for at least two reasons. First, public policy favors protection of the rights secured by valid patents, including the right to prevent infringement through preliminary relief. Smith Int’l, 718 F.2d at 1581 (“Without the right to obtain an injunction, the right to exclude granted to the patentee [by the Constitution and Congress] would have only a fraction of the value it was intended to have”); Meitac, 2006 WL 3883278, *3 (“[T]he public interest is clearly served by seeing that patents are enforced.”). Likewise, in the trademark context, courts often define the public interest as the right of the public not to be deceived or confused from competing uses of a trademark. See Tile Outlet, Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 20 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 2010 WL 5239229, at *3. Here, an injunction not only protects NIKE’s interest in maintaining control over its trademarks and avoiding injury to its reputation and goodwill, but it also protects the public from consumer confusion. See Brookfield, 174 F.3d at 1066 (“preliminary injunctive relief is appropriate … to promote the public interest in protecting trademarks generally.”). Second, enjoining Jialaimeng’s infringing activities will not harm the public. There are many other shoes on the market, including Jialaimeng’s shoes that are not covered by the NIKE Design Patents or the NIKE Trademarks. The public will still be able to purchase those other non-infringing shoes, despite an injunction against Jialaimeng. MGM Well Servs., 505 F. Supp. 2d at 379-80 (granting injunction on products for which alternatives were available in the market); Nat’l Presto Indus., Inc. v. Dazey Corp., No. 90-06614, 1990 WL 291494, at *12 (N.D. Ill. Dec. 17, 1990), aff'd, 949 F.2d 402 (Fed. Cir. 1991) (“If an injunction makes the Dazey cooker unavailable, the public has plenty of substitutes, including [plaintiff’s products].”). Thus, the public interest favors an injunction. D. THE TEMPORARY RESTRAINING ORDER SHOULD INCLUDE A SEIZURE ORDER Because all of the relevant factors heavily favor NIKE, this Court should grant NIKE’s request for a TRO and, in due course, a preliminary injunction. As part of the TRO, the Court should include a seizure order to ensure compliance with the TRO, to preserve evidence, and to prevent further infringements and injury to NIKE. First, the Court is empowered to grant a seizure pursuant to the Court’s inherent power and Rule 64, Fed. R. Civ. P. QiLoo, 2012 WL 9491724; Meitac, 2006 WL 3883278; see also Reebok Int’l v. Marnatech Enter. Inc., 970 F.2d 552, 559 (9th Cir. 1992) (district courts have inherent power to issue provisional remedies ancillary to providing final equitable relief, issuing injunction and freezing assets in trademark case). Seizure orders such as the one proposed here are common in intellectual property cases because the design patents and trademarks in this case confer exclusive rights to use or exclude others from unauthorized use. Therefore, Courts issue “not just temporary restraining orders, which are frequently ignored-but seizure orders providing for the seizure of the counterfeit merchandise.” Vuitton v. White, 945 F.2d 569, 571-72 (3d Cir. 1991); Reebok Int’l, 970 F.2d at Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 21 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 563 (affirming seizure order, as part of injunction against willful trademark infringer). Lastly, pursuant to Fed. R. Civ. P. Rule 65(c), NIKE proposes making a cash deposit in the amount of Twenty-Five Thousand dollars ($25,000.00) with the Clerk of the Court as security for the requested temporary restraining and seizure order. To the extent Jialaimeng believes that additional security is necessary, it shall file an application to the Court and provide proper notice to counsel for NIKE. IV. CONCLUSION For the reasons set forth above, NIKE respectfully request entry of an ex parte order temporarily restraining Jialaimeng from infringing the NIKE TRO Design Patents and Trademarks for the duration of the WSA Show, February 21-23, 2017. The Court’s order should authorize Enforcing Agents to seize Jialaimeng’s infringing goods and documents/things used in support of Jialaimeng’s infringements at the WSA show over the next two days until February 23, 2017. Furthermore, NIKE requests that the Court set a hearing for NIKE’s motion for a preliminary injunction. Dated: February 22, 2017 Respectfully submitted, /s/ Jonathan W. Fountain Michael J. McCue (Nevada Bar #6055) MMcCue@LRLaw.com Jonathan W. Fountain (Nevada Bar #10351) JFountain@LRLaw.com Lewis Roca Rothgerber Christie LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, Nevada 89169 Telephone: (702) 949-8224 Facsimile: (702) 949-8363 Christopher J. Renk Erik S. Maurer Michael J. Harris Banner & Witcoff, Ltd. 10 South Wacker Drive Suite 3000 Chicago, Illinois 60606 Telephone: (312) 463-5000 Facsimile: (312) 463-5001 Attorneys for Plaintiff, NIKE, Inc. Case 2:17-cv-00516-GMN-GWF Document 3 Filed 02/22/17 Page 22 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Michael J. McCue Nevada Bar No. 6055 Jonathan W. Fountain Nevada Bar No. 10351 Lewis Roca Rothgerber Christie LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, Nevada 89169 Telephone: (702) 949-8224 E-mail: mmccue@lrrc.com E-mail: jfountain@lrrc.com Christopher J. Renk Will comply with LR IA 11-2 within 45 days Erik S. Maurer Will comply with LR IA 11-2 within 45 days Michael J. Harris Will comply with LR IA 11-2 within 45 days Banner & Witcoff, Ltd. 10 South Wacker Drive, Suite 3000 Chicago, Illinois 60606 Telephone: (312) 463-5000 E-mail: crenk@bannerwitcoff.com E-mail: emaurer@bannerwitcoff.com E-mail: mharris@bannerwitcoff.com Attorneys for Plaintiff, NIKE, Inc. UNITED STATES DISTRICT COURT DISTRICT OF NEVADA NIKE, INC., Plaintiff, v. FUJIAN JIALAIMENG SHOES CO., LTD. and DAEAST-ASIA (FUJIAN) SPORTS PRODUCTION CO., LTD., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:17-cv-00516 EMERGENCY EX PARTE TEMPORARY RESTRAINING ORDER AND SEIZURE ORDER Plaintiff, NIKE, Inc. (“NIKE”) has moved ex parte for a Temporary Restraining Order, Seizure Order, and an Order for Preliminary Injunction, pursuant to Rule 65 of the Federal Rules of Civil Procedure, Lanham Act Section 34 (15 U.S.C. § 1116), the Patent Act, 35 U.S.C. § 283, and Local Rule 7-4. NIKE alleges that Defendants Fujian Jialaimeng Shoes Co., Ltd. and Daeast- Case 2:17-cv-00516-GMN-GWF Document 3-1 Filed 02/22/17 Page 1 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Asia (Fujian) Sports Production Co., Ltd. (collectively hereafter, “Jialaimeng”) have made, imported into the United States, sold, offered to sell, distributed, promoted, and/or advertised at the World Shoe Association (“WSA”) trade show in Las Vegas, Nevada, numerous shoes that infringe NIKE Design Patents and NIKE Trademarks. The Court having duly considered Plaintiff’s Complaint, Emergency Motion and Supporting Memorandum for Entry of an Ex Parte Temporary Restraining Order, Seizure Order, and Preliminary Injunction, declarations and exhibits submitted therewith, makes the following findings and conclusions: 1. NIKE is likely to succeed in showing that the NIKE Design Patents and NIKE Trademarks that are appended to the Complaint as Exhibits B through E, H, M, P, Q, S, U, and V are owned by NIKE, are valid, and are enforceable, and that Jialaimeng has imported into the United States, sold, offered to sell, distributed, promoted, and/or advertised shoes bearing designs that infringe the NIKE Design Patents and NIKE Trademarks (“Infringing Shoes”). Specifically, NIKE is likely to succeed on its claim against Jialaimeng’s product numbers 605244, 605272, 605126, 605184, 60592, and 605397 and any other models bearing the patented designs, simulations of NIKE Trademarks, or colorable imitations thereof. 2. It appears to the Court that Jialaimeng is a China-based manufacturer of footwear products that, with the exception of its temporary presence in Las Vegas during the biannual WSA show, does not have a regular place of business or assets in the United States. Further, over the past two years, Jialaimeng has established a pattern of selling, offering to sell, distributing, promoting, and/or advertising infringing shoe designs at the WSA show, and then promptly leaving the United States. 3. Absent an ex parte temporary restraining order and seizure order, Jialaimeng’s importation, sale, offers to sell, distribution, promotion, and/or advertisement of Infringing Shoes will result in immediate and irreparable injury to NIKE in the form of loss of control over its valuable intellectual property rights, loss of consumer goodwill, and interference with NIKE’s ability to exploit the NIKE Design Patents and NIKE Trademarks. Further, because Jialaimeng has no presence in the United States, it may be difficult or impossible for NIKE to recover a money judgment against Jialaimeng. Case 2:17-cv-00516-GMN-GWF Document 3-1 Filed 02/22/17 Page 2 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 4. It appears to the Court based on NIKE’s representations that they have not publicized their application for an ex parte temporary restraining order and seizure order. 5. The harm to NIKE in denying the requested temporary restraining order and seizure order outweighs the harm to the legitimate interests of Jialaimeng from granting such relief. 6. The public interest weighs in favor of granting NIKE the requested temporary restraining order and seizure order. 7. Jialaimeng’s Infringing Shoes and materials evidencing Jialaimeng’s infringements alleged in the Complaint are in Jialaimeng’s possession at the WSA show currently taking place in Las Vegas, Nevada, but these materials would likely be destroyed, moved, hidden, or otherwise made inaccessible to the Court if NIKE were to proceed on notice to Jialaimeng. TEMPORARY RESTRAINING ORDER IT IS THEREFORE ORDERED that pending a decision by the Court on NIKE’s application for a preliminary injunction, Jialaimeng and its officers, agents, servants, employees, and attorneys; and all other persons acting in active concert or participation with any of them, are hereby immediately, temporarily restrained from infringing NIKE’s Design Patents and NIKE’s Trademarks at the WSA show in Las Vegas, Nevada from February 21-23, 2017. Specifically, Jialaimeng is hereby temporarily restrained from making, using, selling, offering to sell, and importing into the United States footwear designs covered by U.S. Patent Nos. D659,967; D666,404; D666,405; D666,406; D683,119; D711,081; D723,772; D725,356, and colorable imitations thereof. In addition, Jialaimeng is hereby temporarily restrained from using in commerce any reproduction, copy, or colorable imitation of the NIKE Trademarks reflected in U.S. Trademark Registration Nos. 977,190, 1,323,342; and 1,323,343, including selling, offering for sale, distributing, promoting, or advertising goods or services in connection with those trademarks or colorable imitations thereof; and transferring, moving, returning, destroying, or otherwise disposing of any Infringing Shoes except pursuant to the below Seizure Order. SEIZURE ORDER IT IS FURTHER ORDERED that Jialaimeng’s infringing shoe products, records (including computers and electronic evidence) of Jialaimeng’s sales and offers to sell infringing Case 2:17-cv-00516-GMN-GWF Document 3-1 Filed 02/22/17 Page 3 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 products, and Jialaimeng’s promotional display(s), sales equipment, and materials used to facilitate Jialaimeng’s infringements (collectively, “Materials”) shall be seized by the United States Marshal for the District of Nevada or his authorized assistants, deputies, or appointees (or any other federal, state, or local law enforcement officer to whom this Order is presented including, without limitation, any Constable of the County of Clark, Nevada, or Plaintiff’s counsel, Michael J. McCue and/or Jonathan W. Fountain if no such law enforcement officer is available) (the “Enforcing Agents”) at the booth rented or occupied by Jialaimeng at the WSA trade show in Las Vegas, Nevada, during the period of February 21 through 23, 2017. The shoe products that the Enforcing Agents shall seize are Jialaimeng product numbers: 605244, 605272, 605126, 605184, 60592, and 605397. If NIKE identifies more infringing products, they can petition the Court to amend this Order. The Enforcing Agents may use all reasonable force in conducting the seizure and may open doors, locks, boxes, brief cases, and containers of any type or nature to locate and identify Materials to be seized. Attorneys and other representatives of NIKE shall accompany the Enforcing Agents during the seizure to identify the Materials to be seized. NIKE’s counsel shall itemize and take possession of the seized Materials, provide a copy of the inventory to the Enforcing Agents, and file the inventory with the Court. In addition, NIKE’s counsel may record the contents of Jialaimeng’s booth and Materials by photographic and/or videographic means during the seizure action. The United States Marshals Service shall not retain custody of seized Materials. NIKE agrees to indemnify the United States Marshals Service and hold it harmless from any suit, claim, cause of action, damage, loss, or injury arising from the execution of the seizure described in this Order. IT IS FURTHER ORDERED that this Order and the Summons and Complaint must be served upon Jialaimeng, if found, at the time of the seizure, and by other means reasonably calculated to give Jialaimeng notice of this action. IT IS FURTHER ORDERED that, NIKE shall post a bond of $25,000. To the extent Jialaimeng believes that a higher bond is necessary pursuant to Rule 65(c), Fed. R. Civ. P., Jialaimeng shall file an application to the Court and provide notice to counsel for Plaintiff on or Case 2:17-cv-00516-GMN-GWF Document 3-1 Filed 02/22/17 Page 4 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 before , 2017. IT IS FURTHER ORDERED that a preliminary injunction hearing is set for _______ , 2017, at a.m./p.m., in Courtroom , before . Jialaimeng shall file and serve any opposition to NIKE’s motion for a preliminary injunction on or before February , 2017. NIKE shall file and serve any reply in support of their motion for a preliminary injunction on or before , 2017. SIGNED AND ENTERED this day of February, 2017. UNITED STATES DISTRICT JUDGE Case 2:17-cv-00516-GMN-GWF Document 3-1 Filed 02/22/17 Page 5 of 5