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Coach, Inc. v. Di Da Import and Export, Inc.

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

February 25, 2015

COACH, INC. and COACH SERVICES, INC., Plaintiffs,
v.
DI DA IMPORT AND EXPORT, INC. (D/B/A DI DA NEW YORK), Defendant.

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge.

This matter is before the court on Plaintiff Coach, Inc.'s and Plaintiff Coach Services, Inc.'s (collectively referred to as "Coach") motion for a temporary restraining order. For the reasons stated below, the motion is granted.

BACKGROUND

Coach contends that it has expended substantial time, money, and other resources in developing, advertising and otherwise promoting certain marks (Coach Marks), and that such marks are widely recognized and exclusively associated with Coach. Defendant Di Da Import and Export Inc. D/B/A Di Da New York (DDI) allegedly is attempting to sell on its website products such as wallets, duffel bags, and accessories which are not Coach products, but bear logos and source-identifying indicia and design elements that are studied imitations of the Coach Marks. Coach brought the instant action and includes in its complaint a trademark counterfeiting claim brought under 15 U.S.C. § 1114 of the Lanham Act (Section 1114) (Count I), a trademark infringement claim brought under Section 1114 (Count II), a false designation of origin and false advertising claim brought under 15 U.S.C. § 1125(a) of the Lanham Act (Count III), a common law trademark infringement claim (Count III), an unfair competition claim brought under the Illinois Consumer Fraud and Deceptive Business Practices Act (Fraud Act), 815 ILCS 505/1 et seq. (Count IV), a common law unfair competition claim (Count V), and an unjust enrichment claim (Count VII). Coach now moves for a temporary restraining order pursuant to Federal Rule of Civil Procedure 65 (Rule 65).

DISCUSSION

I. Personal Jurisdiction

In response to the instant motion, DDI asserts that the court cannot enter an injunction against DDI because this court lacks personal jurisdiction over DDI. Coach contends that DDI waived any such defense by its active participation in this action since October 2013. DDI states in its answer to the instant motion that it will now "cross-move to dismiss on this ground...." (Ans. 2). While a party is allowed to "appear and litigate both a personal jurisdiction defense and the merits of a case without waiving the personal jurisdiction defense, " the party may waive or forfeit a personal jurisdiction defense, if the party "give[s] a plaintiff a reasonable expectation that it will defend the suit on the merits or... cause[s] the court to go to some effort that would be wasted if personal jurisdiction is later found lacking." H-D Michigan, LLC v. Hellenic Duty Free Shops S.A., 694 F.3d 827, 848 (7th Cir. 2012); see also Blockowicz v. Williams, 630 F.3d 563, 566 (7th Cir. 2010)(stating that "even when a valid personal jurisdiction defense exists, the defense is waived if the objecting party fails to timely raise it, ... or if the objecting party proceeds to litigate the case on its merits"); Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1297 (7th Cir. 1993)(explaining that "the privileged defenses referred to in Rule 12(h)(1) may be waived by formal submission in a cause, or by submission through conduct" and finding that participation in "lengthy discovery" and "various motions" indicated "an intent to submit to the court's jurisdiction")(internal quotations omitted)(quoting Trustees of Central Laborers' Welfare Fund v. Lowery, 924 F.2d 731, 732 (7th Cir. 1991)).

The record reflects that DDI was served with the complaint in October 2013. (DE 7). In November 2013, DDI filed a motion for an extension of time to answer and then filed an answer to the complaint with affirmative defenses, including the personal jurisdiction defense. (DE 10). Counsel for DDI then appeared at a hearing on December 12, 2013, at which the court gave the parties over five months to conduct discovery in this case. The record reflects that the parties conducted discovery and that in May 2014, DDI joined in a motion for an extension of the discovery dates. After an additional two months of discovery, DDI joined in another motion for an extension of discovery. The court then granted the parties an additional three months of discovery. Finally, on December 9, 2014, at a hearing on Coach's motion for leave to file an amended complaint, counsel for DDI appeared and requested a briefing date to file an opposition to the motion. On January 5, 2015, DDI suddenly asserted in opposition to the instant motion that it is seeking to have this case dismissed based upon a lack of personal jurisdiction over DDI. Coach agrees that DDI raised the personal jurisdiction issue in an affirmative defense in its answer in November 2013, but argues that since that time DDI has participated in extensive discovery and motion briefing, and has never indicated that it was objecting to the exercise of personal jurisdiction over DDI. Thus, DDI's delay in presenting the personal jurisdiction issue in a motion to dismiss has caused extensive costs to Coach in discovery. DDI has also participated in court hearings at which discovery issues and deadlines were addressed thus causing the expenditure of judicial resources. DDI's assertion of the personal jurisdiction defense is thus untimely and would cause prejudice to Coach and would not promote judicial economy.

DDI also claims that it "was required to defer moving to dismiss on this ground because plaintiffs were entitled to an opportunity to discover information about the Illinois contacts of Defendant...." (Ans. 2). However, DDI never filed any motion to dismiss and the court never made any ruling requiring DDI to delay the filing of such a motion. Coach also points out that DDI never sought to limit discovery to the personal jurisdiction issue to expedite a motion to dismiss. (Reply 6). This court repeatedly granted DDI's request to extend the discovery dates for all discovery, and DDI never made any request to limit discovery to the issue of personal jurisdiction so that DDI could file a motion to dismiss. DDI was free to seek a dismissal based on personal jurisdiction and chose not to do so.

The court notes that even if DDI had not waived the personal jurisdiction defense, Coach has shown that DDI is subject to personal jurisdiction in Illinois. See Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014)(stating that the "case involve[d] claims under both federal law (the Lanham Act) and state law, and so the district court's jurisdiction rested on a federal question, 28 U.S.C. § 1331, and supplemental jurisdiction, 28 U.S.C. § 1367" and that "[b]ecause the Lanham Act does not have a special federal rule for personal jurisdiction, however, [the Court] look[s] to the law of the forum for the governing rule"); Northern Grain Marketing, LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014)(explaining minimum contacts requirement); be 2 LLC v. Ivanov, 642 F.3d 555, 558 (7th Cir. 2011)(stating that the plaintiff "assert[ed] claims arising under the Lanham Act, federal common law, and Illinois law, " and that "[t]he Lanham Act does not authorize nationwide service of process... so a federal court sitting in Illinois may exercise jurisdiction over [the plaintiff] in this case only if authorized both by Illinois law and by the United States Constitution"); Kinslow v. Pullara, 538 F.3d 687, 690 (7th Cir. 2008)(explaining resolution of personal jurisdiction issue). The record reflects that DDI solicited business from Illinois customers on its website, that DDI had repeated communications with such Illinois customers, that DDI shipped such products to Illinois, and that the amount of sales to Illinois customers by DDI was not insignificant. Coach has shown that DDI is subject to personal jurisdiction in Illinois.

II. Merits of Motion

To obtain preliminary injunctive relief, the plaintiff must first: (1) show "some likelihood of success on the merits, " and (2) show that the plaintiff "has no adequate remedy at law and will suffer irreparable harm if" the requested injunctive relief is denied. Stuller, Inc. v. Steak N Shake Enterprises, Inc., 695 F.3d 676, 678 (7th Cir. 2012)(internal quotations omitted)(quoting Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001); see also Wisconsin Right To Life, Inc. v. Barland, 751 F.3d 804, 830 (7th Cir. 2014)(explaining that "[o]n the merits questions, the burdens at the preliminary injunction stage track the burdens at trial")(internal quotations omitted)(quoting Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006)).

If the plaintiff satisfies such threshold requirements, in the secondary phase the court must then: (1) "consider the irreparable 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, " and (2) "the public interest in granting or denying an injunction." Stuller, 695 F.3d at 678. When balancing the harms, the court should use a sliding scale approach, under which "the greater the likelihood of success on the merits, the less heavily the balance of harms must tip in the moving party's favor." Korte v. Sebelius, 735 F.3d 654, 665 (7th Cir. 2013); see also Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of America, Inc., 549 F.3d 1079, 1086 (7th Cir. 2008)(explaining that the court "must somehow balance the nature and degree of the plaintiff's injury, the likelihood of prevailing at ...


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