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Saeilo Enterprises, Inc. v. Alphonse Capone Enterprises, Inc.

United States District Court, N.D. Illinois, Eastern Division

December 5, 2014



ROBERT M. DOW, Jr., District Judge.

Plaintiff Saeilo Enterprises, Inc. filed this action against Defendant Alphonse Capone Enterprises, Inc. on March 27, 2013, alleging federal trademark infringement, trademark dilution, false designation of origin or sponsorship, and trade dress infringement under the Lanham Act as well as trademark infringement and unfair competition under Illinois law. The complaint additionally petitioned for cancellation of Defendant's federal trademark registrations under 15 U.S.C. ยง 1064. This matter is before this Court in its capacity as Emergency Judge, sitting in place of Judge Aspen, the assigned judge. Plaintiff moves for a temporary restraining order prohibiting Defendant from selling Tommy Guns alcohol [49]. For the reasons set forth below, the Court grants Plaintiff's motion.

I. Background

Plaintiff's primary line of business is firearms. It manufactures the Tommy Gun, a gun that has existed in commerce since about 1920. It also sells promotional items, including hats, t-shirts, knives, flasks, lighters, pins, and other collectibles. Plaintiff owns three Tommy Gun trademarks, two of which are registered with the USPTO and one of which is registered with the State of Illinois. Defendant sells liquor-related products.

Around 2003, Defendant obtained substantially similar trademarks from the USPTO and began to sell alcohol in Tommy Gun-shaped bottles. Plaintiff, which plans to expand into the alcohol industry, filed its complaint alleging that Defendant has abandoned its own marks and infringed Plaintiff's marks. Particularly relevant here, the complaint alleges that (1) Defendant abandoned its marks by failing to use them for at least two years starting around 2011, and (2) any sales by Defendant post-abandonment would infringe Plaintiff's marks.

During discovery, the owner and manager of Defendant, William Brooks, testified that he last ordered Tommy Gun-shaped bottles three years earlier, Dkt. # 38-4, Brooks Dep., 84:22-24; that he last received a shipment two years earlier, id., 56:1-4; that he had no pending orders, id., 56:10-14; that he had not updated Defendant's website in at least three years, id., 88:1-4; and that neither Defendant nor ACD had bank accounts, employees, or assets other than the employees, id., 10:12-13, 34:8-9, 207:9-19. Based largely on these concessions, Plaintiff moved for partial summary judgment on its claim of abandonment.

According to Plaintiff, Defendant took steps to reintroduce Tommy Guns alcohol into the stream of commerce after discovery closed in April 2014. First, it caused one of its distributors, Marsalle, to purchase $444, 412.38 worth of Tommy Guns vodka in July 2014. The Purchase Order, attached to Plaintiff's motion, requested a wire payment to Defendant's second distributor, Rockwood & Hines Ltd. Second, Brooks granted both distributors the right to use Defendant's marks in a Distribution Agreement dated August 18. Third, Defendant assigned its marks to Roaring 20s Marketing, Inc., another company owned by Brooks, on October 7. Finally, on December 1, Plaintiff's private investigator discovered that Marsalle had shipped Tommy Guns alcohol to retailers in Illinois, Tennessee, and Georgia. See Dkt. # 53-1, Aff. of Benjamin A. Ford. That same day, Plaintiff moved for a temporary restraining order prohibiting Defendant from selling Tommy Guns alcohol.

In its brief opposing the TRO motion, Defendant makes various general assertions about its recent efforts, both in China and in the United States, to bring its alcohol to market. Apart from the Purchase Order, however, Defendant has presented nothing concrete, by way of affidavit or any other recognized manner of presenting evidence, in regard to the present location of the product - i.e., how many bottles have been filled, shipped, and distributed and how many are on a shelf, ready for sale. In both its opening and reply briefs, Plaintiff has attached affidavits of its investigator which indicate that, as of yesterday, at least some small portion of the full Purchase Order had reached the shelves of small Illinois retail stores.

II. Analysis

A party seeking a temporary restraining order must demonstrate as a threshold matter that (1) its case has some likelihood of succeeding on the merits; (2) no adequate remedy at law exists; and (3) it will suffer irreparable harm if preliminary relief is denied. Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). If the moving party meets this burden, then the court must consider the harm that the nonmoving party will suffer if preliminary relief is granted, balancing such harm against the irreparable harm the moving party will suffer if relief is denied. Storck USA, L.P. v. Farley Candy Co., 14 F.3d 311, 314 (7th Cir.1994). Finally, the court considers the public interest served by granting or denying the relief, including the effects of the relief on non-parties. Id. The court then weighs all of these factors, "sitting as would a chancellor in equity, " Abbott, 971 F.2d at 12, and applies a "sliding scale" approach, under which "the more likely plaintiff will succeed on the merits, the less the balance of irreparable harms need favor plaintiff's position." Ty, Inc. v. The Jones Group, 237 F.3d 891, 895 (7th Cir. 2001). Because neither party argues that a temporary restraining order would affect the public interest, and the Court cannot discern any reason why that factor would materially affect its analysis, the Court decides this motion on the basis of the first three prongs.

A. Likelihood of Success on the Merits

Under the sliding scale approach, a party seeking a TRO or a preliminary injunction must demonstrate "that it has a better than negligible' chance of success on the merits of at least one of its claims." Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S.A., 549 F.3d 1079, 1096 (7th Cir. 2008). In its motion for partial summary judgment, Plaintiff argues that Defendant abandoned its marks as a matter of law. It further argues that if Defendant sold Tommy Guns alcohol post-abandonment, its sales would infringe Plaintiff's marks because they are substantially similar.

At the hearing on Plaintiff's motion, counsel for Defendant conceded that the marks are substantially similar, that Defendant created its product to replicate the Tommy Gun firearm, and that the bottle does, in fact, look similar to the firearm. The name of Defendant's business- Alphonse Capone Enterprises-plainly evokes the Prohibition era during which time Plaintiff's firearm became famous. It its response brief, Defendant resists the notion that confusion or dilution is likely because the parties operate in entirely different lines of business. If Plaintiff solely manufactured and marketed guns, and Defendant was solely in the alcohol business, Defendant's argument might carry greater weight. But the affidavit tendered with Plaintiff's motion avers that Plaintiff also sells a variety of promotional items and toys, all trading on the Tommy Gun marks. Although Plaintiff's contention that Defendant's alcohol product is "closely ...

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