The Conkle Firm Wins Injunction Prohibiting Trade Dress Infringement by Zotos

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In September 2016, Conkle, Kremer & Engel attorneys filed a case on behalf of Moroccanoil against Zotos International, Inc. for trademark infringement by its “Majestic Oil” products. By January 2017, CK&E had obtained a Preliminary Injunction against Zotos’ competing products, and within days the case was over.

A Preliminary Injunction is a powerful litigation tool that can immediately stop a defendant from selling products during the litigation. Securing a Preliminary Injunction at the beginning of the case often brings a prompt settlement, as the defendant must decide whether to settle or to fight over the product packaging that it cannot sell.

Getting a Preliminary Injunction can be challenging because the plaintiff must show that it is likely to win the case, and that it will be irreparably harmed if the defendant’s products are allowed in the market while the case proceeds to trial. Recently, courts have made Preliminary Injunctions tougher to get by raising the standards for showing irreparable harm.

In Moroccanoil’s case, the Preliminary Injunction prohibited Zotos from selling its Majestic Oil products in packaging that was confusingly similar to Moroccanoil’s distinctive trade dress. Zotos is a subsidiary of Shiseido America.  Drawing on its knowledge of the beauty industry, CK&E’s presentation of irreparable harm to Moroccanoil’s reputation proved effective – the Court found that continued sales of Majestic Oil products would erode Moroccanoil’s premium position in the hair care market as a professional brand. The Court’s Order granting Moroccanoil’s Motion for Preliminary Injunction is available here, and is published at Moroccanoil, Inc. v. Zotos Int’l, Inc., No. CV167004DMGAGRX, ___ F. Supp. 3d ___, 2017 WL 319309 (USDC CD Cal. Jan. 19, 2017).

On the heels of the Preliminary Injunction, the parties settled the case with Zotos agreeing to pay a substantial portion of Moroccanoil’s attorneys’ fees and to drop the confusingly similar trade dress of the Majestic Oil products. In total, the case was fully resolved within 6 months of filing, and the only litigation activity was CK&E’s Motion for the Preliminary Injunction.

To learn more about the case, contact the CK&E attorneys who lead the team for Moroccanoil, Mark Kremer, Evan Pitchford and Zachary Page.

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The Conkle Firm Visits ISSE

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Attorneys from Conkle, Kremer & Engel were on hand as the Professional Beauty Association (PBA) hosted the International Salon and Spa Expo (ISSE) on January 28th-30th, 2017 at the Long Beach Convention and Entertainment Center.  Tens of thousands of industry professionals attended this year’s ISSE show, which featured booths and displays from hundreds of manufacturers and distributors.  CK&E attorneys were pleased to be able to assist clients and meet with professionals in the beauty industry.  CK&E attorneys particularly focus on helping beauty industry participants develop and grow their businesses, such as by expanding into overseas markets or negotiating with distributors. CK&E attorneys are proud members of the PBA, which advances the professional beauty industry by providing members with education, charitable outreach, government advocacy, events and more.

CK&E Attorneys Zachary Page, Heather Laird, Desiree Ho and Mark Riedel at ISSE

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The Conkle Firm Advises BIMA Participants on IP and Regulatory Issues

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Once again, Conkle, Kremer & Engel attorneys Mark Kremer and Kim Sim have been honored to participate in and contribute to the revolutionary Beauty Industry Market Access (BIMA) program, led by beauty industry guru Patty Schmucker of American Made Beauty.  BIMA is a multi-day intensive domestic and international trade and business education program taught by leading health and beauty industry experts. BIMA participants focus on key principles essential to expand their personal care products businesses both in the U.S. and overseas.

Mark contributes to the BIMA educational program by teaching modules on domestic and foreign intellectual property protection and international distribution agreements.   Participants are particularly advised about cost-effective methods of protecting their intellectual property internationally, such as international trademark registrations through the Madrid System, which can offer a centralized application process for trademark registration in over 90 countries based on a brand owner’s domestic application or registration.  Kim adds her expertise in domestic regulatory compliance, including Prop 65, California Organic Products Act (COPA), Safe Cosmetics Act, California Air Resources Board (CARB) regulations and survey requirements, and federal and state Made in the USA regulations.

BIMA is sponsored by Universal Companies, which has been in the beauty industry for over 18 years and is an important distributor of more than 300 brands in the spa, salon, esthetics and massage market, as well as their own proprietary brands.

In partnership with the California Trade Alliance (CTA), access to international trade shows are available to companies that participate in the BIMA programs. BIMA participants can exhibit in the popular California Pavilion regularly sponsored by CTA at Cosmoprof Bologna and Cosmoprof Hong Kong, among the world’s largest and most important beauty industry trade shows.

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The Conkle Firm Attends INTA Annual Meeting in Orlando

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Conkle, Kremer & Engel attorneys Mark Kremer and Zachary Page attended the Annual Meeting of the International Trademark Association (INTA) in Orlando, Florida this week. The Annual Meeting is INTA’s largest event of the year in which intellectual property attorneys, brand owners and administrative officials gather to discuss developments and trends in trademark law in the United States and across the globe. This year’s Annual Meeting included discussions about rule changes for proceedings in the Trademark Trial and Appeal Board, the impact of TTAB decisions on later litigation, anti-counterfeiting strategies, enforcement strategies in online marketplaces and social media, and changes to international trademark prosecution systems.

CK&E regularly works with clients to identify and protect their intellectual property both in the United States and abroad, and participates in industry conferences like INTA’s Annual Meeting and others to stay abreast of the developing issues affecting the firm’s clients.

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Making a Federal Case of Trade Secret Misappropriation

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On April 27, 2016, the Defend Trade Secrets Act (DTSA) passed the House of Representatives and went to President Obama’s desk, where it is expected to be signed.  With that, trade secret misappropriation claims will exist under federal law and can be pursued in federal courts.

The DTSA will provide businesses with more effective new tools to protect their sensitive information from misappropriation.  In the context of trade secrets, misappropriation is generally considered the acquisition of hidden information through some improper means .  The broadly structured language of the DTSA extends its protection to “all forms and types of financial, business, scientific, technical, economic, or engineering information” so long as (1) the owner has taken reasonable steps to keep the information secret and (2) the information derives its value from that secrecy.  The DTSA largely tracks the concepts of trade secrets that have long existed in most states.  But under the DTSA, plaintiffs will be able to bring claims for misappropriation of trade secrets in federal court.

Previously, trade secrets have been an outlier in the world of intellectual property.  Unlike copyright, patent and trademark claims, which receive the wider benefit and protection of federal court jurisdiction, trade secret claims have mostly been litigated in state court.  The problem with this has been that, given the diffuse and global nature of business and commerce, state courts are often not the best venue for intellectual property claims.   If a misappropriation occurs across state or national borders, a federal court is better suited to address such jurisdictional conflicts.

To gain access to the DTSA, and federal court jurisdiction, all that is required is that the “trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”  This is generally a very low threshold, as most products and services these days are used or intended for use in at least interstate commerce – only the most localized of businesses would not be able to meet this minimal requirement.

The DTSA will confer on trade secret holders a greater ability to pursue misappropriation beyond the borders of the United States, and can even pursue remedies before the International Trade Commission.  In addition, a secondary benefit gained from access to the federal court system is a potential for more uniform decisions and precedent than the more disparate and varied state courts decisions.

Another interesting development that the DTSA will usher in relates to injunction and damages.  Injunctions are often sought in trade secret cases to prevent the information at issue from being disclosed.  Previously,  under the Uniform Trade Secrets Act (UTSA), which almost all states have adopted in some form or another, the injunction would end when the trade secret ceased to exist or after an amount of time necessary to stop any potential commercial advantage being gained from a misappropriation.  The DTSA however contains no such limitation, which presumably will give courts more discretion in applying an extended injunction.  Also, where the UTSA allows for double damages in cases of “willful and malicious misappropriation”, the language of the DTSA has upped this to treble damages.

Perhaps the biggest tool in the DTSA tool belt is the ability to seek ex parte civil seizures.  What this means is that a plaintiff can, without giving a defendant notice, seek the seizure of property if the plaintiff can demonstrate that the defendant, or someone working in concert with the defendant, is likely to “destroy, move, hide, or otherwise make such matter inaccessible to the court”.  This type of ex parte seizure is a powerful new tool that will likely allow trade secret holders to better combat harm associated with a misappropriation.  And being a powerful tool, it may be subject to misuse among competitors.

Conkle, Kremer & Engel attorneys stay current on developments that may be important to their clients concerned about commercial and intellectual property issues.  If you have questions about the DTSA or other aspects of trade secret or intellectual property protection, we would be glad to hear from you.

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California Pavilion Exhibitors Achieve Goals at Cosmoprof Bologna

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Positive Global Sales

Cosmoprof Bologna came to a successful close on March 21.  The overall show statistics are not available yet, but participants in the California Pavilion experienced brisk business.  The California Pavilion this year expanded to two islands with 18 exhibitors, and booths were often crowded with interested buyers.  The CK&E lounge at the center of the California Pavilion buzzed with deal negotiations, and CK&E attorneys Mark Kremer and Eric Engel were glad to be able to lend their assistance to help participants expand their global reach.

Mark Kremer and Eric Engel at Cosmoprof Bologna 2016

Mark Kremer and Eric Engel at the CK&E Lounge in the California Pavilion

Organizer Cesar Arellanes of California Trade Alliance commented that California Pavilion participants reported meeting or exceeding their goals for the show, expanding and strengthening their international business.

CK&E attorneys advise clients to prepare for major trade shows, particularly foreign shows, by verifying that they have taken all appropriate steps to protect their trademarks, trade dress and other valuable intellectual property, before problems arise.  To help one well-prepared client, Mark Kremer successfully initiated an immediate takedown of counterfeit products being sold in another hall.  CK&E attorneys attend major beauty industry trade shows to help protect clients’ brands, to keep current on trends, and to assist clients with the full range of legal skills needed to grow their businesses internationally.

David Lester at Cosmoprof Bologna 2016

COOLA at California Pavilion

 

 

 

 

CK&E Lounge at the center of California Pavilion

CK&E Lounge at the center of California Pavilion

 

 

 

Daily Concepts and Afterspa in California Pavilion at Cosmoprof Bologna 2016

Daily Concepts and Afterspa in California Pavilion

 

 

 

 

Infinite Aloe booth at California Pavilion

Infinite Aloe at California Pavilion

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California Pavilion at Cosmoprof Bologna Opens

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Bologna FiereThe huge convention center in Italy known as Bologna Fiere sprang to life today with the opening of Cosmoprof Bologna, featuring the California Pavilion organized by California Trade Alliance.  Conkle, Kremer & Engel sent attorneys Mark Kremer and Eric Engel to help clients and other beauty industry participants groCK&E Lounge at California Pavilionw their businesses by expanding internationally.  Once again this year, CK&E is proud to sponsor the Exhibitor Lounge in the California Pavilion, which enables participants to work, meet and discuss international business deals.

Thirty-five California Pavilion participants began the event with a dinner to share ideas and stories.  The group was glad to be able to use the occasion to celebrate the special birthday of Emilio Smeke, of Daily Concepts and AfterSpa.  The California Pavilion has the unique position of being the only State Pavilion in the Hall of Country Pavilions, with a choice position adjacent to the USA Pavilion.  The prominence of the California Pavilion is a fitting tribute to the strength and growth potential of the California cosmetics business and the leadership of Cesar Arellanes and Jake Rubenstein of California Trade Alliance.California at Hall of National Pavilions in Cosmoprof Bologna 2016

Emilio Smeke Celebrates Birthday at Cosmoprof Bologna 2016Mark Kremer at California Pavilion Dinner

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CK&E to Present on Emerging Legal Issues at PCPC Emerging Issues Conference

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Conkle, Kremer & Engel attorneys John Conkle and Kim Sim will once address current legal trends and developments in the cosmetic and personal care products industry at the Personal Care Products Council (PCPC)’s Emerging Issues Conference on November 18, 2015 at the Ritz Carlton Hotel in Marina Del Rey, California.

John and Kim will present on “Emerging Legal Issues in the Cosmetic and Personal Care Products Industry.”  The topics to be discussed include recent developments involving enforcement of prohibitions on container slack fill, trends in lawsuits and agency action concerning advertising, an update on the California Air Resources Board’s ongoing Consumer and Commercial Products Survey, as well as a discussion about protecting companies from counterfeiting and cybersquatting in the digital age.

CK&E’s presentation from last year’s Emerging Issues Conference can be found here.

The annual event by the PCPC – the leading national trade association for the cosmetic and personal care products industry – is a must-attend for beauty companies across the country, with its unique focus on the many challenges that are on the horizon for the beauty industry.

This year’s agenda will also include updates from the PCPC on key issues for the industry and from the California Department of Toxic Substances Control on the California Safer Consumer Products and Workplaces regulations, as well as presentations on emerging issues in the Americas, safety standards for cosmetics, current and future challenges for Proposition 65.  In addition, Deputy Attorney General Robert Sumner is slated to speak at the conference.

CK&E is pleased to once again participate in this annual event and to offer its experience and insight into legal issues affecting the industry to the PCPC and its members.

 

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The Conkle Firm Secures Summary Judgment in Published Trademark Decision

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A motion for summary judgment can be a cost-effective mechanism to efficiently resolve issues in a case by asking a judge to adjudicate certain claims or defenses before going to trial. Success on a motion for summary judgment can also reduce costs and improve outcomes by pushing the other side to settle on favorable terms and avoid the uncertainty and expense of trial.

Moroccanoil, Inc. and Marc Anthony Cosmetics, Inc., ended a legal fight over their trademarks and packaging after attorneys from Conkle, Kremer & Engel prevailed on behalf of Moroccanoil in a battle of competing summary judgment motions.

Marc Anthony’s attorneys filed several motions asking for summary judgment against Moroccanoil’s trademark and trade dress infringement claims while Conkle, Kremer & Engel brought motions for summary judgment on behalf of Moroccanoil to eliminate Marc Anthony’s defenses. While the court denied all of Marc Anthony’s motions, Conkle, Kremer & Engel’s motions successfully defeated almost all of Marc Anthony’s defenses before trial.

Marc Anthony Product Line

Marc Anthony Product Line

Marc Anthony argued that there was no likelihood of consumer confusion between the trademarks and product packaging, and attempted to strike at the heart of Moroccanoil’s brand by attacking the validity of the trademark in the Moroccanoil name and signature blue and copper orange colors. Marc Anthony claimed that Moroccanoil had improperly obtained registration for a name that was a “generic” name for argan oil, and that Moroccanoil had no ownership rights in common colors used for its packaging.

 

Moroccanoil Product Line

Moroccanoil Product Line

In a ruling recently published in the Federal case law reporter, Judge Dolly Gee of the Central District of California denied all of Marc Anthony’s motions, and issued significant rulings rejecting Marc Anthony’s attacks. Judge Gee specifically upheld Moroccanoil’s registration of its name and found that Moroccanoil’s trade dress is distinctive and protectable. Judge Gee also found that the majority of factors concerning the likelihood of confusion between the brands pointed toward trademark infringement. The case settled after Judge Gee’s opinion, without trial.

Judge Gee’s opinion, also published and available on Westlaw and Lexis: Moroccanoil, Inc. v. Marc Anthony Cosmetics, Inc., 57 F. Supp. 3d 1203 (C.D. Cal. 2014).

 

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What Businesses Can Learn from Motorcycle Gangs

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The Mongols motorcycle gang has a distinctive registered trademark, which the U.S. government very badly wants to own.  Claiming use that dates back to 1969, the Mongols’ design trademark is an image of a man with sunglasses, mustache, and queue, wearing a black vest, holding a sword, and riding a chopper motorcycle, and includes the words “MONGOLS M.C.”  (USPTO Registration No. 4730806)  The MONGOLS design mark is used extensively by the group, including on jackets and motorcycle accessories, to signify affiliation with the association.  The MONGOLS design mark is owned by the corporation formed by the group, Mongols Nation Motorcycle Club, and it is classed as a Collective Membership Mark “indicating membership in an association dedicated to motorcycle riding appreciation.”

Since 2008, the U.S. has been prosecuting individual members of the Mongols for a wide variety of criminal acts, including extortion, drug dealing and assault.  The government’s stated purpose is to “break the back” of the gang and put it out of business.  What better way to achieve that goal than to seize ownership and control of the MONGOLS design trademark that signifies membership in the gang?  The government’s view is that the trademark is an asset – arguably the single biggest asset – of the motorcycle gang and it can be seized when its members are found guilty of crimes requiring penalties and restitution to be paid to the government.  In focusing on the trademark, the U.S. government recognizes that the organization would become essentially non-functional if its members were stripped of the ability to readily identify themselves as being members of the association.

The first attack by the government in 2008 was an attempt to seize the MONGOLS word mark (USPTO Registration No. 2916965).  The government obtained a preliminary injunction restraining the transfer of the mark during the pendency of the action.  But the action stalled when the U.S. District Court found that the government was trying to seize the trademark from the wrong person.  In 2008, the government was prosecuting individual members of the gang for alleged criminal acts, but was trying to seize a trademark owned by the corporate entity that constitutes the Mongols association itself.  This governmental drive skidded off the road because it violated one of the basic tenets of trademark law:  The trademark is controlled by its owner, not by those who have non-exclusive licenses to use the mark such as members who are allowed to wear the mark on their jackets.

Not to be stymied, the U.S. Attorney returned to court beginning in 2013, this time with an indictment against the Mongols organization itself as an unincorporated association that is alleged to be racketeering enterprise.  With this new approach, the registered owner of both the MONGOLS word and design marks is considered part of the indictment and the government seeks forfeiture of its assets, including its trademarks, which can be seized if the court allows that remedy.

One thing more conventional businesses can learn from the Mongols is to pay close attention to who owns the business’ marks, which are often its most valuable assets and usually vital to its survival and growth.  Should the marks be owned by the business entity itself?  By a sister entity that licenses it under strictures?  Or perhaps by the individual founder, who can license the mark to the entity and create a revenue stream for herself?

Even for businesses that are not motorcycle gangs, all structures for trademark ownership options have advantages and disadvantages, and business owners would do well to consult counsel familiar with the issues involved.  Conkle, Kremer & Engel attorneys advise clients about the most suitable trademark ownership and licensing structures for their circumstances and business plans.

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