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PAYCARGO, LLC, Plaintiff, v. CARGOSPRINT LLC, and JOSHUA WOLF, an individual, Defendants.
May 14, 2020, Entered on Docket
May 14, 2020, Decided
For Paycargo, Llc, Plaintiff: Alissa Del Riego, Peter Prieto, LEAD ATTORNEYS, Podhurst Orseck P.A., Miami, FL USA; Ann G. Fort, PRO HAC VICE, Eversheds Sutherland (US) LLP, Atlanta, GA USA; Cameron Christopher Murphy, Eversheds Sutherland (US) LLP, Atlanta, GA USA; Jason Harold Weber, PayCargo, LLC, Coral Gables, FL USA; Wayne Robert Atkins, Miami, FL USA.
For Cargosprint Llc, Joshua Wolf an individual, Defendants: Giulia Christine Farrior, Noah Hamilton Rashkind, Ury Fischer, LEAD ATTORNEYS, Lott and Fischer PL, Coral Gables, FL USA.
LAUREN F. LOUIS, UNITED STATES MAGISTRATE JUDGE.
LAUREN F. LOUIS
ORDER ON PLAINTIFF PAYCARGO, LLC'S MOTION FOR PRELIMINARY INJUNCTION
This cause comes before the Court on Plaintiff PayCargo, LLC's Motion for Preliminary Injunction (ECF No. 18) and Motion for Relief Pursuant to Preliminary Injunction (ECF No. 79). The Parties have consented to the jurisdiction of the undersigned United States Magistrate Judge to conduct all proceedings in this case, including the entry of final judgment (ECF No. 46, 50). The Court held an evidentiary hearing on the Motion for Preliminary Injunction on March 27, 2020. Following presentation of evidence, the hearing adjourned at the Parties' request for opportunity to confer regarding scope of relief requested by Plaintiff. Plaintiff has since moved for five specific categories of relief (ECF No. 79), two of which Defendants oppose (ECF No. 80). The Court heard argument again on May 5, 2020. Having considered the evidence, all briefing, and with the benefit of oral argument on the both Motions, Plaintiff's Motion for Preliminary Injunction (ECF No. 18) and Motion for Relief Pursuant to Preliminary Injunction (ECF No. 79) are granted, in part and denied, in part.
I. FACTUAL BACKGROUND
Plaintiff PayCargo, LLC ("PayCargo") was founded in 2008. The company provides an internet-based payment platform for the shipping and freight business, which permits its clients to instantaneously pay cargo carriers, warehouses, and other vendors. Plaintiff's platform permits payors, those who hold title in the cargo goods, to create an account and submit a payment to vendors, those who transmitted the goods into the United States; once the vendors receive notice of a payment made through Plaintiff, they release the cargo goods within 24 hours from the date the payment was made through the online portal. Plaintiff's customers also include vendors, as many vendors require that payment be made through Plaintiff. In 2007, 2008, and in 2010, Plaintiff obtained three trademarks arising from the name PayCargo: Numbers 3,347,315; 3,519,112; and 3,900,069, respectively, which currently hold incontestable status.1
In 2012, Defendant Joshua Wolf founded PayAirCargo, LLC (now "CargoSprint"), which also provides an online forum that allows payors to pay vendors or cargo carriers. Payments are generally sent by paper checks within 15 to [*2] 30 days from the payor's payment on the platform. Plaintiff adduced evidence that as early as 2011, Defendant Wolf had created an account on Plaintiff's website for a corporation called "Dey Cargo," thereby gaining access to its proprietary platform as a client (ECF No. 67-1 ¶ 14).
Due to the similarity in name and services provided, Plaintiff sent PayAirCargo a cease and desist letter on August 19, 2016, informing PayAirCargo that it was infringing on Plaintiff's trademarks and demanding that it immediately stop using the marks. On December 2, 2016, the Parties entered into a settlement agreement,2 in which Defendants agreed to cease use of the name PayAirCargo by June 2017. In the settlement agreement, the Parties also agreed that Defendants would operate under the name CargoSprint (Defendant herein).
In 2018, Plaintiff discovered that Defendants were still using the name PayAirCargo in their business activities, such as the use of the PayAirCargo name in invoices on the Dock enRoll system3 and by sending emails from @payaircargo.com email address. Plaintiff again sent a cease and desist letter in July 2018, demanding that Defendants stop using the name PayAirCargo on its invoices, and received assurances from Defendants that the invoices were modified as a result. On July 18, 20109, Plaintiff filed a Complaint (ECF No. 1), which it amended on January 21, 2020 (ECF No. 35). In the Amended Complaint, Plaintiff brings the following claims: (1) misappropriation of trade secrets in violation of 18 U.S.C. § 1836(b) ; (2) violation of Florida's Computer Abuse and Data Recovery Act ("CADRA"), Fla. Stat. § 668.801-805 ; (3) conversion; (4) infringement of Plaintiff's three registered trademarks, in violation of 15 U.S.C. § 1114 ; (5) breach of contract (settlement agreement and service agreement); (6) federal unfair competition in violation of 15 U.S.C. § 1125(a) ; and (7) common law unfair competition (ECF No. 35). As relevant to this Motion, the Amended Complaint claims that Defendants have infringed on Plaintiff's trademarks by using the name PAYAIRCARGO in its business activities.
Plaintiff's Motion for Preliminary Injunction sought to enjoin Defendants from any further use of the name PAYAIRCARGO; to freeze Defendants' accounts through which any profits flowed from Defendants' use of the infringing name;4 to order an accounting; to transfer the @payaircargo.com domain name to Plaintiff; and to require Defendants to preserve all records related to accounts referencing PayAirCargo (ECF No. 18 at 18).
The Court held an evidentiary hearing on the Motion on March 27, 2020. Plaintiff presented substantial evidence establishing the validity of the mark as well as evidence of actual consumer confusion resulting from Defendants' use of the name (ECF No. 62). The Court found that Plaintiff had met its burden of establishing the likelihood of success on the merits of its trademark claims (ECF No. 69). However, the question of the relief sought by Plaintiff remained at issue at the end of the hearing. Counsel expressed a preference to confer and attempt to reach agreement as to the scope and content of an order granting the motion. The Court [*3] granted the Parties leave to confer on the issue of relief (ECF No. 69). After meaningful conferral, the Parties agreed to most but not all aspects of the relief sought by Plaintiff: primarily, the Parties disagreed as to whether the Court should order an accounting and/or forensic inspection of Defendant CargoSprint. The Parties briefed the issue (ECF Nos. 79, 80, 81) and the Court heard arguments on May 5, 2020. For the reasons discussed below, Plaintiff's Motion for Preliminary Injunction is GRANTED, in part and DENIED in part.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 65 permits courts to enter preliminary injunctions. Fed. R. Civ. P. 65 . To prevail on a motion for a preliminary injunction, a plaintiff must establish that: (1) there is a substantial likelihood of success on the merits of the plaintiff's claims; (2) it will suffer irreparable harm in the absence of injunctive relief; (3) the threatened injury to the plaintiff outweighs any potential harm to the defendant if injunctive relief is granted; and (4) granting the injunction would not be adverse to the public interest. It's A 10 v. Beauty Elite Group, Inc., 932 F. Supp. 2d 1325 , 1330 (S.D. Fla. 2013). The issuance of a preliminary injunction is an extraordinary remedy which should not be granted absent a clear showing that the movant has met its burden of proof. Café 207 v. St. Johns Cty., 989 F.2d 1136 , 1137 (11th Cir. 1993).
1. Substantial Likelihood of Success on the Merits
To succeed on its trademark infringement claim, Plaintiff must prove that: (1) it was the first to use the trademark in the same market; (2) that the mark is valid; and (3) that the Defendants' use of the contested mark, PayAirCargo, is likely to confuse consumers. It's A 10, 932 F. Supp. 2d at 1330 ; see also Popular Bank of Florida v. Banco Popular de Puerto Rico, 9 F. Supp. 2d 1347 , 1353 (S.D. Fla. 1998) (citing Dieter v. B & H Indus. of S.W. Fla., Inc., 880 F.2d 322 , 326 (11th Cir. 1989)). The Parties agree that Plaintiff had priority of its valid trademarks, and thus, the only issue with respect to substantial likelihood of success is whether Defendants' use of the contested mark is likely to confuse consumers.
In determining whether a likelihood of confusion exists, the Court considers: (1) the strength of Plaintiff's mark; (2) the degree of similarity between Plaintiff's mark and the infringing mark; (3) the similarity of the products that the marks represents; (4) the similarity of the Parties' market and customers; (5) the similarity of the Parties' advertising; (6) Defendants' intent in using the contested mark; and (7) evidence of actual confusion. It's A 10, 932 F. Supp. 2d at 1331 . Of the seven factors courts consider, the type of mark and the evidence of actual confusion are the most important factors. Tancogne v. Tomjai Enter. Corp., 408 F. Supp. 2d 1237 , 1244 (S.D. Fla. 2005). Plaintiff need not prevail on every factor, rather, the Court must look to the overall balance of the factors to determine whether it is likely that use of the contested mark would likely lead to consumer confusion. It's a 10, 932 F. Supp. 2d at 1331 .
a. Strength of Plaintiff's Mark
The first factor assesses the strength of Plaintiff's mark. It's a 10, 932 F. Supp. 2d at 1331 . The stronger the mark, the more protection it is afforded Id. The Eleventh Circuit has described this factor as the second most important factor. Caliber Auto. Liquidators, [*4] Inc. v. Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931 , 938 (11th Cir. 2010). Plaintiff argues that its mark is strong because it is incontestable, therefore presumptively strong; and that the mark is distinctive and not in common usage by third parties (ECF No. 18 at 8-9). Defendants do not dispute that Plaintiff's mark is incontestable, rather they contend that they can overcome that presumption by showing that Plaintiff's mark is descriptive of the service it provides (ECF No. 29 at 5) ("Defendants have rebutted the presumption that comes with a mark's incontestable status by showing Plaintiff's PAYCARGO mark exactly describes a service that assists customers in 'paying for cargo,' and therefore, are weak marks.").
In determining the strength of a mark, the Court considers: (1) the distinctiveness of the mark; (2) whether the mark is incontestable; and (3) the degree that third parties use the mark. See PlayNation Play Systems, Inc. v. Velex Corp., 924 F.3d 1159 , 1165-66 (11th Cir. 2019). The four categories of distinctiveness in order of weakest to strongest are: generic, descriptive, suggestive, and arbitrary. Id. at 1165 . These categories are based on the relationship between the mark (name of the business) and the service it provides. Frehling Enters., Inc. v. Int'l Select Group., Inc., 192 F.3d 1330 , 1335 (11th Cir. 1999). The strength of a mark is enhanced if the mark is incontestable because such marks are presumed to be at least descriptive with second meaning and thus, relatively strong marks. See Dieter, 880 F.2d at 328 . The presumption of strength may be rebutted by evidence of third party use of the mark. See Estefan Enter., 994 F. Supp. 1454 , 1459 (S.D. Fla. 1998) (finding that the defendants could overcome the presumption of a strong mark because defendants submitted evidence that the mark's common usage rendered it weak).
It is undisputed that Plaintiff's mark is incontestable and therefore carries with it a presumption that it is a strong mark. Defendants aver that they can rebut such presumption because Plaintiff's mark is descriptive of the service Plaintiff provides, thus should be afforded less protection. Defendants' argument is not persuasive as the presumption will not be rebutted by merely challenging the mark on grounds that it is descriptive. See Sovereign Military, 809 F.3d at 1183-85 (affirming the district court's determination that the incontestable marks at issue were presumptively strong and rejection of defendants' argument that the marks were weak because they were descriptive). Moreover, the lack of evidence showing extensive third-party use also enhances the strength of Plaintiff's mark. Defendants did not advance any evidence that the mark was in common usage by third parties and have not overcome the presumption. See PlayNation, 924 F.3d at 1166 (affirming district court's finding that mark was strong because the mark was incontestable, and the defendant did not advance evidence of third party use of the mark in the particular market plaintiff was in). This factor weighs in favor of a finding of likelihood of confusion.
b. Similarity of the Marks, Services, Market, and Advertising Used
In determining the similarity of the marks at issue, PayCargo and [*5] PayAirCargo, the Court considers "overall impression created by the marks, including their appearance, sound, and meaning, as well as the manner in which they are used." It's a 10, 932 F. Supp. 2d at 1331-32 ; see also Popular Bank, 9 F. Supp. 2d at 1359 .
Plaintiff argues that Defendants marks are strikingly similar in the language used and the meaning afforded to the words "pay" and "cargo." (ECF No. 18 at 10). Plaintiff further asserts that the marks are so similar that Defendants' own Dock enRoll username is "PayCargo2016." ( id.).
In their Response, Defendants challenge the marks' similarities on two grounds: first, they contend that the relevant inquiry is whether the marks PayCargo and "CargoSprint" are sufficiently similar so as to show a likelihood of confusion and justify injunctive relief. Defendants conclude the two are obviously not by relying on the Parties' agreement that Defendant should adopt CargoSprint pursuant to terms of their prior settlement agreement. Of course, Plaintiff does not challenge Defendants' use of CargoSprint but rather PayAirCargo, and the relevant inquiry is whether that name is similar enough to Plaintiff's mark as to weigh in favor of a finding of likelihood of confusion arising from Defendants' use of the contested name. Defendants offer no basis to distinguish the two marks on the basis of the terms used or the meaning afforded to those terms.
Next, Defendants argue that the contested marks are not used in the same manner or market as Plaintiff's mark. Defendants claim that any use of PayAirCargo was inadvertent or was initiated by third parties outside of Defendants' control and certainly not to Defendants' benefit (ECF No. 29 at 6-7). Defendants argue, for example, that the instances in which the names PayAirCargo and PayCargo2016 were used on the Dock enRoll pick-up orders were inadvertent, and more importantly, not visible to any of Plaintiff's customers; rather they were only available to Defendants' employees.
Defendants' arguments do not directly speak to similarity of the marks or the market in which they are used; instead they speak to Defendants' intent and lack of actual customer confusion as evidenced by the fact that the exact same arguments upon the same set of facts are advanced in a later section of the Defendants' argument discussed below. The evidence before me reveals that the Parties operate in the same freight industry, and Plaintiff and Defendants offer a similar service that facilitates payments from payors to vendors. The Parties also market their services to the freight industry through advertisements at trade shows, as well as online and print advertising. These facts were not refuted in Defendants' Response nor was it challenged at the hearing when Defendants acknowledged, through counsel, that both parties attend at least one trade show together. Moreover, even if Defendants' Dock enRoll username, PayCargo2016 was only available to Defendants' employees, as I will discuss in the forthcoming sections, Plaintiff has introduced ample evidence of use of the contested mark in the Parties' shared industry. [*6] For these reasons, I find that factors two through five weigh in Plaintiff's favor.
c. Defendants' Intent
In assessing the likelihood of confusion, the Court may also consider whether Defendants had the subjective intent to infringe on Plaintiff's mark. See John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966 , 977 (11th Cir. 1983) ("Indeed, the former Fifth Circuit once stated that if a plaintiff can show that a defendant adopted a mark with the intent of deriving benefit from the reputation of the plaintiff, that fact alone may be sufficient to justify the inference that there is confusing similarity.") (internal quotations omitted). To determine whether Defendants used the contested mark, PayAirCargo, in bad faith, the Court must examine whether they adopted the mark with the intention of capitalizing on Plaintiff's reputation and goodwill and any confusion resulting therefrom. Tancogne, 408 F. Supp. 2d at 1249 .
In this instance, there is circumstantial evidence tending to show Defendants' intent to derive benefit from the use of Plaintiff's mark. Plaintiff argues that Defendants registered as a client on Plaintiff's website, gaining access to Plaintiff's proprietary system, and have used information from that access to compete unfairly with Plaintiff. It also shows that Defendants were aware of PayCargo's platform and success before adopting the name PayAirCargo. See Tancogne, 408 F. Supp. 2d at 1249 (finding that the defendant had intent to infringe based on evidence that defendant had sold the plaintiff's products and thus, had significant knowledge about the products at issue). Plaintiff further relies on evidence that Defendants continued to use the mark PayAirCargo after the Parties entered into the Settlement Agreement, in which Defendants agreed to cease any use of the domain @payaircargo.com, yet Defendant Wolf continued to monitor the firstname.lastname@example.org email address for customer communication. See Pl's Ex. 70.
By contrast, Defendants argue that the uses of PayAirCargo were inadvertent and not intended to benefit Defendants. Counsel argued that Defendants have endeavored to distinguish and market the mark CargoSprint and have no desire to be associated with Plaintiffs, as evidenced by Defendants' agreement to be bound by an injunction prohibiting their use of the name PayAirCargo.
At this stage of the proceedings and based on the facts before me, I find that the evidence as to intent does not point conclusively to a finding of either good or bad faith on Defendants' part. Moreover, a finding or absence of intent is not critical to a finding of likelihood of confusion. See Popular Bank, 9 F. Supp. 2d at 1362 .
d. Actual Customer Confusion
Evidence of actual confusion between trademarks is not a prerequisite to a finding of likelihood of confusion. There is no doubt, however, that such evidence is highly persuasive. See E. Remy Martin & Co., S.A., 756 F.2d 1525 , 1529-30 (11th Cir. 1985); Tancogne, 408 F. Supp. 2d at 1250 . Instances of actual confusion include consumer inquiries regarding affiliation between the parties or attempts to use the services offered by the other party. Popular Bank, 9 F. Supp. 2d at 1360 .
Plaintiff advanced the deposition [*7] testimony of Timothy Walton, the Vice President of Plaintiff PayCargo, who testified that he is aware of several instances of consumer confusion, including one instant as recently as March 2020. Walton testified that Plaintiff's clients asked Walton if PayCargo was the same company as PayAirCargo. See Dep. Walton (Pl's Ex. 98, 25:19-27:1-19). In his Declaration, Walton stated that due to the similarity of the marks, multiple confused customers contacted Plaintiff in connection to payments submitted through CargoSprint, some of which sought refunds of duplicative payments made through both Parties' websites See Walton Dec. (Pl's Ex. 96). Walton testified that he was personally aware of at least 42 instances of consumer confusion.
At the evidentiary hearing Plaintiff introduced examples of actual consumer confusion in the form of misdirected email communications-emails sent to Plaintiff at email@example.com that relate to payments made through Defendant CargoSprint. As recently as May 2019, Plaintiff received an email at its support email address from a payor regarding an issue with duplicative payments made through CargoSprint (Pl's Ex. 16). The customer's email includes a receipt from Defendant CargoSprint, which bears a support email address: firstname.lastname@example.org. Another example of customer confusion is an email chain received by Plaintiff from a payor complaining about a delay in the processing of a payment made through CargoSprint (Pl's Ex. 67).
Plaintiff also introduced evidence that Defendants' managing of the Dock enRoll account is likely to cause customer confusion because the system generated invoice-like documents that had email@example.com (Pl's Ex. 96). Defendants challenge Plaintiff's reliance on the invoices produced by the Dock enRoll system because those invoices are never seen by payors, rather they are seen by their employees and cargo carriers or vendors. However, as Plaintiff notes, Plaintiff's customers include both payors and vendors such that vendors regularly require that payors use PayCargo to submit payments. Additionally, even if payors were Plaintiff's only intended customers, Plaintiff has shown evidence that there was some actual confusion among entities and persons responsible for the release of cargo, a crucial aspect of both Plaintiff and Defendants' business model. See John H. Harland., 711 F.2d at 978-79 (affirming jury finding of actual consumer confusion where plaintiff presented evidence of confusion among persons responsible for marketing and processing the orders for checks at issue although they were not the plaintiff's ultimate customers).
Defendants advanced as evidence Josh Wolf's deposition testimony. Wolf explained that CargoSprint uses the Sales Force platform to store consumer transaction data and electronically send proof of payment to payors. See Wolf Dep. (Pl's Ex. 13, 166:5-24, 168:22-168:1-18). Wolf acknowledged that the invoices produced through Sales Force bear the firstname.lastname@example.org email address, and he acknowledged at least one [*8] instance where that caused customer confusion. He also agreed that CargoSprint could update its account to reflect a different support email address (id. at 172:20-173:1-5).
Considering all the evidence advanced by the Parties, I find that the balance of factors weighs in favor of finding a likelihood of confusion resulting from Defendants' use of the name PayAirCargo, including its use of the domain name @payaircargo.com, and that Plaintiff has met its burden to show a likelihood of success on the merits of its trademark infringement claim.
2. Irreparable Harm
Plaintiff contends that if the injunction is not granted, customer confusion resulting from Defendants' use of PayAirCargo will continue and result in loss of good will. The Eleventh Circuit has recognized that "a sufficiently strong showing of likelihood of confusion caused by trademark infringement may by itself constitute a showing of a substantial threat of irreparable harm." McDonald's Corp. v. Robertson, 147 F.3d 1301 , 1310 (11th Cir. 1998) (affirming entry of preliminary injunction on Trademark infringement claims); see Popular Bank, 9 F. Supp. 2d at 1363-64 ("For purposes of determining whether a preliminary injunction should be entered, if the plaintiff presents a sufficiently strong showing of likelihood of confusion, the Court may presume irreparable harm."). Plaintiff's evidence of consumer confusion here is sufficient to show a substantial threat of irreparable harm.
Defendants respond that there is no imminent threat to Plaintiff because it has been aware of Defendants' inadvertent use of PayAirCargo since as early as November 2017 but did not initiate this action until July 2019, nor file this Motion until October 2019. See e.g. Menudo Int'l, LLC v. Miami Production, LLC, No. 17-21559-CIV, [2017 BL 389643], 2017 WL 4919222 , at *4 (S.D. Fla. Oct. 31, 2017) (denying motion for preliminary injunction because plaintiff waited over a year from learning of the infringing conduct to file the motion for preliminary injunction); see also Wreal, LLC v. Amazon.com, Inc., 840 F.3d 1244 , 1248-49 (affirming denial of preliminary motion because plaintiff waited 5 months from filing the complaint to moving for a preliminary injunction without any explanation).
However, the cases cited by Defendant are distinguishable in that the evidence adduced by Plaintiff demonstrates diligent efforts to safeguard its mark and to stop Defendants' contested use through settlement efforts in lieu of litigation, and Plaintiff instituted the complaint in close proximity to its discovery that Defendants had breached the settlement agreement. Unlike the plaintiffs in Menudo and Wreal, I find no delay by Plaintiff here undermining my finding of irreparable harm unless injunctive relief is ordered.
3. Balance of Harms
The third factor to consider in determining whether to grant Plaintiff's Motion is whether the threatened injury to Plaintiff outweighs the potential harm to the Defendants. At the hearing, Defendants, through counsel, conceded that they would not be harmed by granting of injunctive relief in the form of ordering Defendants to cease using the name PayAirCargo. [*9] Counsel noted that Defendants wish to untether themselves from any connection to PayCargo. Defendants only objected to Plaintiff's request to freeze Defendants' accounts and for an accounting and/or inspection. Plaintiff withdrew its requests for an order freezing Defendants' accounts but persists in its demand for either an inspection or accounting, conceding that in this case, the requested inspection would functionally satisfy its request for accounting. Subject to the relief granted herein, the Court finds that Defendants would not be harmed by the entry of an injunction order, described below.
4. Public Interest
The final factor to consider when evaluating whether to order injunctive relief is the public interest. Plaintiff has shown that Defendants' use of PayAirCargo has caused consumer confusion. Public policy concerns weigh in favor of granting injunctive relief. See Popular Bank, 9 F. Supp. 2d at 1364 ; Sundor Brands, Inc. v. Borden, Inc., 653 F. Supp 86 , 93 (M.D. Fla. 1986) (recognizing that when a trademark is shown to have been infringed, the public's right to be free of confusion between two marks is infringed too).
Following conferral, Defendants have agreed to the entry of injunction that enjoins their use of the contested mark and transfers Defendants' @payaircargo.com domain name to Plaintiff. Defendants further agree to preserve documents and evidence for use in this litigation, and Plaintiff has agreed to entry of an order that makes this a reciprocal obligation. The two points of contention remain Plaintiff's request for inspection and accounting of Defendants' business.
Plaintiff insists that an inspection of Defendants' system is necessary to identify all possible instances that could allow for Defendants' improper use of PayAirCargo. Plaintiff seeks an order appointing a third-party inspector with read-only access to Defendants' "SalesForce platform, email distribution platforms, email server, credit card merchant accounts, banking accounts, ACH transactions, customer and vendor statements and invoices, and third-party accounts," to search for usage of PayAirCargo and produce the results of that search to counsel for both Defendants and Plaintiff (ECF No. 82 at 7). Plaintiff contends this inspection should review accounts from the inception of CargoSprint in 2012 through the present. Plaintiff argues that such inspection is justified because Defendants have repeatedly been unable to prevent what they characterize as inadvertent usage of the contested name on their own, thus without a forensic inspection they cannot be trusted to comply with the injunction. Of course, the inspection would also serve the purpose of identifying all historical uses of the contested name, "for the purpose of determining the number of transactions and business dealings CargoSprint performed with third parties" using the contested name.
Defendants challenge Plaintiff's request as vague, incredibly broad, competitively harmful and most pointedly, without precedent in case law (ECF No. 80 at 8). [*10] Defendants distinguish the case on which Plaintiff chiefly relies to support its request for inspection as part of the relief to be ordered on this preliminary injunction ( id. at 8-9). This Court agrees that the circumstances presented in Spinowitz v. Herrity, 672 F. Supp 670 (E.D.N.Y. 1987) may not be fairly analogized to this trademark infringement action and does not provide support for the inspection here sought.
Defendants have articulated a specific and cognizable harm attendant to ordering the inspection Plaintiff seeks. Plaintiff's proposed inspection would, Defendants aver, reveal every level of its business functions to a competitor (ECF No. 80 at 8). Defendants advanced that other, less intrusive and burdensome steps are available to provide assurance of compliance with the injunction without providing Plaintiff limitless access to its entire business system. At the hearing Defendants represented that they were in the process of retaining a third party to perform a forensic inspection to ensure that they comply with this Court's Order.
The points on which the Parties disagree are whether the Court or the Defendants should set the parameters for the third-party inspection; and whether the results should be produced to Plaintiff. On this record, I find that the relief sought exceeds that which is necessary to protect Plaintiff from irreparable harm. While inspection or certification may be a condition of any permanent injunction ultimately entered in this case, Plaintiff's proposal is supported with too little information about Defendants' platform and systems to permit an efficient inspection. The absence of meaningful evidence regarding use and procedures implemented by Defendant CargoSprint would inevitably require an overly intrusive inspection of Defendants' business and result in increased costs to the Parties outside the costs associated with conducting discovery. If discovery reveals the necessity of a court-ordered inspection and disclosure of findings, or Defendants violate this Order, the Court may revisit Plaintiff's request.
Lastly, Plaintiff seeks an injunction requiring Defendants to be subject to an accounting of all transactions Defendants conducted using PayAirCargo (ECF No. 79 at 10). Plaintiff may pursue this information through discovery, It's a 10, 932 F. Supp. 2d at 1335 (denying motion for preliminary injunction to the extent plaintiff sought an accounting of defendant's books and records because injunctive relief is not intended to circumvent discovery"), and has not demonstrated circumstances that would warrant circumvention of the discovery process. While courts have authority to order an accounting, Plaintiff has not demonstrated that this level of intrusion and disruption to Defendants' business is warranted. See, e.g., Consumer Elec., Ass'n v. Compras and Buys Magazine, Inc., No. 08-21085-CIV, 2008 WL 11333083 , at *2 (S.D. Fla. Nov. 12, 2008) (ordering accounting of the defendant's records only after the court found the defendant violated the court's order on a motion for preliminary injunction).[*11]
c. Posting Security of Bond
Having found that a preliminary injunction is warranted, the Court will now establish the proper level of security that Plaintiffs must provide for that injunction. Federal Rule of Civil Procedure 65(c) provides that "the court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." The Court has the discretion to issue a preliminary injunction without requiring Plaintiff to give a security bond. TracFone Wireless, Inc. v. Washington, 978 F. Supp. 2d 1225 , 1234 (M.D. Fla. 2013) (citing BellSouth Telecomms., Inc. v. MCIMetro Access Transmission Servs., LLC, 425 F.3d 964 , 971 (11th Cir. 2005)).
Considering the scope of injunction here ordered, agreement thereto, and Defendants' acknowledgement that they will not be harmed if they are enjoined from using PayAirCargo, I find that a security bond is not necessary.
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that Plaintiff's Motion for Preliminary Injunction (ECF No. 18) is hereby GRANTED in part and DENIED in part; and Plaintiff's Motion for Relief Pursuant to Preliminary Injunction Order (ECF No. 79) is GRANTED in part and DENIED in part as follows:
1. Defendants CargoSprint LLC and Joshua Wolf, as well as Defendants' officers, agents, servants, employees, attorneys, and other persons who are in active concert or participation with Defendants or Defendants' officers, agents, servants, employees, and attorneys are hereby enjoined from using in commerce (as that term is defined under 15 U.S.C. § 1127 ) the name PayAirCargo. This injunction shall expressly cover activities including, but not limited to, applying for and/or maintaining credit accounts with any third party bearing the name PayAirCargo; sending payment notifications that bear the name PayAirCargo; processing or allowing the processing of credit card or ACH transactions in the name of or bearing the name of PayAirCargo; sending any emails from or receiving any emails to any @payaircargo.com domain name; maintaining any accounts with any third party, including payment providers, in the name of or bearing the name of PayAirCargo; issuing customer statements bearing the name PayAirCargo; and maintaining any accounting system(s) that bear the name PayAirCargo. In order to aid compliance with this injunction, Plaintiff shall, within five (5) days of the entry of this Order, disclose to Defendants' counsel any instances they believe to constitute ongoing use in commerce of the PayAirCargo name by Defendants unless such instances have already been disclosed by Plaintiff in its Motion for Preliminary Injunction, any exhibits or declarations attached thereto, or any exhibits or testimony introduced at the hearing on Plaintiff's Motion for Preliminary Injunction.
2. Within five (5) days of the entry of this Order, the Defendants shall cause the @payaircargo.com domain name to be transferred to Plaintiff, who may arrange for an autoreply message to any e-mails [*12] received at that domain name after entry of this Order. The autoreply message shall state, in its entirety, the following: "This e-mail domain is no longer active. PayAirCargo LLC is no longer an active company. PayAirCargo LLC is in no way affiliated and has never been affiliated with PayCargo, LLC." Other than to provide for the auto-reply message, Plaintiff shall make no use of the @payaircargo.com domain name and shall not maintain any web site or web pages at that domain name.
3. The Parties, their principals, officers, directors, agents, servants, employees, as well as any of their successors or assigns and all those acting in privity, concert, or participation with the Parties, their principals, officers, directors, agents, servants, employees, and any of their successors or assigns are ordered to preserve all paper and ESI relevant to this case, including without limitation, documents that reflect Defendants' actual use or intended use of any of Plaintiff's marks and Defendants' sales, revenues, and profits related thereto. DONE and ORDERED in Chambers at Miami, Florida this 14th day of May, 2020.
/s/ Lauren F. Louis
LAUREN F. LOUIS
UNITED STATES MAGISTRATE JUDGE
"A mark becomes incontestable when the owner uses it in commerce for five consecutive years and files an affidavit with the Patent and Trademark Office attesting that the mark is not generic, not subject to a prior adverse judgment, and not currently subject to litigation." Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, The Ecumenical Order, 809 F.3d 1171 , 1183 (11th Cir. 2015) (citing 15 U.S.C. § 1065 ).
In the record as Exhibit A to Declaration of Juan C. Dieppa (ECF No. 67-1).
"Dock enRoll" is the software platform Defendant CARGOSPRINT uses to generate invoices reflecting payments made for the release of cargo.
Plaintiff withdrew its request to freeze Defendants' accounts through which it received any funds using the name "PAYAIRCARGO."