Olson Kundig Inc v. 12th Avenue Iron Inc, No. 2:2022cv00825 - Document 26 (W.D. Wash. 2022)

Court Description: ORDER granting Plaintiff's 6 Motion for Preliminary Injunction. The court ORDERS the parties to submit a joint statement regarding the preliminary injunction by 9/22/2022. Signed by Judge James L. Robart. (LH)

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Olson Kundig Inc v. 12th Avenue Iron Inc Doc. 26 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 1 of 42 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 OLSON KUNDIG, INC., 10 CASE NO. C22-0825JLR ORDER Plaintiff, 11 v. 12 12TH AVENUE IRON, INC., 13 Defendant. 14 15 I. 16 INTRODUCTION Before the court is Plaintiff Olson Kundig, Inc.’s (“Olson Kundig”) motion for a 17 preliminary injunction. (Mot. (Dkt. # 6); Reply (Dkt. # 18).) Defendant 12th Avenue 18 Iron, Inc. (“12th Avenue Iron”) opposes the motion. (Resp. (Dkt. # 14).) The court has 19 // 20 // 21 // 22 // ORDER - 1 Dockets.Justia.com Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 2 of 42 1 considered the parties’ submissions, the balance of the record, and the applicable law. 2 Being fully advised, 1 the court GRANTS Olson Kundig’s motion. 3 II. 4 BACKGROUND This dispute stems from the parties’ business dealings with respect to the “Tom 5 Kundig Collection”—a hardware and home furnishings line designed by Mr. Kundig and 6 manufactured and sold by 12th Avenue Iron. (See generally Compl. (Dkt. # 1) ¶¶ 1, 7 18-28, 39-43, 46-51.) 8 A. 9 The Parties Stephen Marks is a founder and the current owner of 12th Avenue Iron, and he has 10 been managing and operating the business since it began in 2006. (Marks Decl. (Dkt. 11 # 15) ¶ 2; see also Answer (Dkt. # 12) ¶ C7 2 (stating that Mr. Marks “has decades of 12 experience in metalworking – forging, welding, fabrication, casting, machining, and 13 high-end finishing”).) 12th Avenue Iron “designs, builds, and installs custom 14 architectural metalwork, sculpture, and furniture for commercial, residential, and public 15 environments.” (Marks Decl. ¶ 2 (noting that 12th Avenue Iron sometimes “provides 16 hand sketches, detailed shop drawings, and/or sophisticated 3-dimensional CAD 17 renderings before fabrication begins in the shop”).) 18 19 20 21 22 1 Neither party has requested oral argument (see Mot. at 1; Resp. at 1), and the court has determined that oral argument would not be helpful to its disposition of the motions, see Local Rules W.D. Wash. LCR 7(b)(4). 2 Because 12th Avenue Iron separately numbers the paragraphs in the counterclaim section of its answer (see Answer at 13-23), the court uses “C” to refer to the paragraphs in the counterclaim section. ORDER - 2 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 3 of 42 1 Tom Kundig is a distinguished architect and an owner and design principal of 2 Olson Kundig, an architectural firm. (See Compl. ¶¶ 10-11 (“Mr. Kundig has received 3 some of the world’s highest design honors . . . .”).) Olson Kundig “has been a worldwide 4 leader in architectural design for several decades”; its work “encompasses museums, 5 commercial and mixed-use design, exhibit design, interior design, places of worship, and 6 residences.” (Id. ¶ 10 (“The firm has won more than 70 regional and national American 7 Institute of Architects (“AIA”) awards” and its “work has been published in the New 8 York Times, Architectural Digest, and Architectural Record.”).) 9 B. 10 The Tom Kundig Collection In or about December 2009, Olson Kundig approached 12th Avenue Iron to 11 discuss “the formation of a business relationship between the two companies.” (See 12 Compl. ¶ 12; Answer ¶ 10; see also Marks Decl. ¶ 7.) During the parties’ discussions, 13 12th Avenue Iron “expressed interest in partnering with Olson Kundig to fabricate a line 14 of Olson Kundig’s design.” (See Compl. ¶ 13; see also Marks Decl. ¶ 8 (“As 12th Ave. 15 Iron completed custom projects for some of Kundig’s customers, I had the idea of 16 creating a product line for hardware and home furnishings.”); Parwani Decl. (Dkt. # 7) 17 ¶ 13, Ex. 6 (meeting notes between 12th Avenue Iron and Olson Kundig regarding 12th 18 Avenue Iron’s business relationship proposition).) 12th Avenue Iron proposed that its 19 official website “would have a section dedicated to Olson Kundig’s product line(s) where 20 customers could order online” and that it would be responsible for all sales transactions 21 as well as delivery and shipping of the products designed by Olson Kundig. (See Compl. 22 ¶¶ 14-15; see also Answer ¶¶ 12-14; Parwani Decl. ¶ 14, Ex. 7 (meeting notes between ORDER - 3 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 4 of 42 1 12th Avenue Iron and Olson Kundig regarding 12th Avenue Iron’s website proposition).) 2 The parties “agreed that it would be a good idea for Olson Kundig to start designing 3 small products at the beginning such as coat hooks, shelf brackets, door hardware, and 4 drawer pulls.” (See Compl. ¶ 17; Answer ¶ 15.) The parties would call the line of 5 products the “Tom Kundig Collection.” (See Compl. ¶ 27; Answer ¶ C13.) 6 According to Olson Kundig, “in or about June 2010, the parties incorporated the 7 essential terms from the parties’ discussions into an official Product Development 8 Product Development [sic], Manufacturing and Marketing Agreement (the 9 ‘Agreement’).” 3 (Compl. ¶ 18; Parwani Decl. ¶¶ 15-16, Ex. 8 (“Agreement”).) The 10 Agreement defines Olson Kundig as the “Architect” and 12th Avenue Iron as the 11 “Manufacturer.” (Agreement at 1.) It states that the parties “desire to establish a 12 collaborative relationship for the design and development of various products including, 13 without limitation, doorknobs, pulls, lights and similar products (the ‘Products’), pursuant 14 to which Architect will design Products for manufacture and sale by Manufacturer to the 15 public.” (Id.) The Agreement also sets forth the parties’ rights and responsibilities with 16 respect to the Tom Kundig Collection products: 17 18 19 20 21 22 1.1. Design. Architect shall be solely responsible for performing all design work related to the Products (“Product Designs”) from which Manufacturer shall develop shop drawings of sufficient detail to enable the 3 As discussed in more detail below, see infra Section III.B.1, Mr. Marks states that he never negotiated or discussed the terms of the Agreement with Mr. Kundig. (Marks Decl. ¶¶ 35-38 (stating that he was presented with the Agreement, but never signed it).) Instead, according to Mr. Marks, the parties moved forward with the Tom Kundig Collection based on an “oral agreement [between Mr. Kundig and Mr. Marks] that the product line would be a joint partnership and both parties would fully participate in developing the products from start to finish.” (See id. ¶¶ 10, 37-41; Answer ¶ C13.) ORDER - 4 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 5 of 42 1 2 manufacture of the Products (“Shop Drawings”). . . . Architect shall have sole control over the branding of the Products, and shall have sole and final authority regarding the placement and appearance of trademarks on the Products. 3 1.2. Manufacture. 4 (a) Prototypes. Manufacturer shall build, assemble and manufacture Product prototypes (“Prototypes”) in accordance with the approved Shop Drawings for inspection and final approval by Architect. . . . Architect’s approval of a Prototype shall be required prior to the manufacturing of any Products for sale to Customers, provided, however, that the Parties shall mutually agree whether any Product Designs provided by Architect or Prototypes manufactured by Manufacturer will be manufactured as Products and made available to Customers, and Architect’s approval of a Prototype shall not obligate Manufacturer to manufacture a Product for sale to Customers. 5 6 7 8 9 10 (b) Products. Subject to Architect’s approval of a Prototype, Manufacturer shall build, assemble and manufacture the Product in accordance with the Product Design and with mutually agreed-upon quality and material requirements, or in accordance with written guidelines providing for the same. Architect shall have the right to conduct quality control audits or otherwise inspect and approve the manufacturing processes and facilities of Manufacturer and the processes and facilities of any third party contracted by Manufacturer to perform work to confirm that the Products are manufactured according to Product Design specifications and quality requirements. 11 12 13 14 15 16 (c) Manufacturing Matters: Third-Party Contractors. Manufacturer shall be solely responsible for all matters and costs relating the building, assembling and manufacturing of Prototypes and Products, subject to Architect’s quality control rights . . . . The parties agree that Manufacturer is under no obligation to build, assemble or manufacture Prototypes or Products for every Product Design provided by Architect . . . . 17 18 19 20 1.3. Sales and Marketing. (a) Distribution. Product sales shall initially be carried out through a web site owned and/or controlled by Manufacturer . . . . 21 22 ORDER - 5 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 6 of 42 1 (b) Marketing. Manufacturer shall be responsible for the performance of any and all marketing activities related to the Products . . . . 2 3 (c) Inventory. Manufacturer shall be solely responsible for managing the Product inventory . . . . Manufacturer shall be solely responsible for all costs associated with inventory management and shall bear all responsibility for order fulfillment. Manufacturer shall be solely responsible for invoicing Customers for Products sold, collecting payments and remitting a portion of the gross amounts received from sales to Architect . . . provided, however, that if Manufacturer is unwilling or unable to collect such payments, Manufacturer shall be deemed to have automatically assigned the right to collect payments to Architect. 4 5 6 7 8 *** 9 10 11 12 1.4. Pricing and Royalty. Manufacturer shall be solely responsible for determining the price point at which the Products will be sold to Customers. For and in consideration of the license granted to Manufacturer and Architect’s other obligations under this Agreement, Manufacturer shall pay Architect a royalty of seven percent (7%) of the gross amount received from the sale of products (the “Royalty”)..) *** 13 20 2.1. Ownership of Products. Architect shall own all intellectual property rights in and to the Products. For the purposes of this Agreement, Intellectual Property Rights means, any and all proprietary rights of any kind, tangible or intangible, now known or hereafter existing, including without limitation, copyrights, neighboring rights and moral rights; trade secret; trademark; patent and other industrial property rights, and all registrations, and applications thereof now or hereafter in force throughout the universe. Architect shall have the sole and exclusive right to enforce any and all Intellectual Property Rights in the Products including, without limitation, by filing or and maintaining trademark, patent and copyright protection for the Products as appropriate. Manufacturer hereby irrevocably transfers, assigns and conveys to Architect any and all rights Manufacturer may have in and to the Products. 4 21 4 14 15 16 17 18 19 22 The intellectual property at issue in the instant motion includes: (1) the D197, D352, D422, and D933 Design Patents; (2) the OLSON KUNDIG trademark; and (3) the TOM KUNDIG COLLECTION trademark. (See generally Compl. at 8-17; 19-21.) ORDER - 6 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 7 of 42 1 *** 2 3 4 2.3. License. Architect hereby grants Manufacturer under Architect’s Intellectual Property Rights, a limited, non-exclusive worldwide, royalty-bearing, non-transferrable, non-sublicensable license to manufacture, market and sell the Products in accordance with the terms hereof during the term of this Agreement. (Id. ¶ 2.3.) 5 (Id. ¶¶ 1.1-1.4, 2.1, 2.3.) 6 The Agreement provides that it shall continue until terminated by either party “for 7 any or no cause upon thirty (30) days written notice provided in accordance with” the 8 terms of the Agreement. (See id. ¶ 3.1; id. ¶ 3.2 (referencing Section 8.4 with respect to 9 written notice); see also id. ¶ 3.3 (stating that either party may also terminate the 10 Agreement “if the other [p]arty breaches any of its material obligations under [the] 11 Agreement and such breach is not cured within fifteen (15) days of receiving written 12 notice of such breach”).) Upon termination, the Agreement requires 12th Avenue Iron to 13 “take all steps to immediately cease activities related to the manufacture or marketing of 14 Products” and “immediately cease accepting orders for Products, provided, however, that 15 Manufacturer may continue to manufacture Products for the fulfillment of orders placed 16 prior to the effective date of termination.” (Id. ¶ 3.2.) The Agreement explicitly states 17 that 12th Avenue Iron’s “obligation to pay Royalties” survives any termination of the 18 Agreement. (Id.) 19 The parties did not sign the Agreement. (See Compl. ¶ 26; Parwani Decl. ¶ 16; see 20 also Marks Decl. ¶ 36 (stating that Mr. Marks received the Agreement but that “no one 21 from [Olson] Kundig ever followed up with [him] about the document or requested [his] 22 ORDER - 7 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 8 of 42 1 signature”).) Nevertheless, they began their business relationship in June 2010. (See 2 Compl. ¶ 27; Parwani Decl. ¶ 16.) Leading up to the Tom Kundig Collection’s launch in 3 2012, the parties worked together to create the Tom Kundig Collection products. (See 4 Marks Decl. ¶ 11.) Mr. Kundig designed and sketched the products and then Debbie 5 Kennedy, a senior interior designer at Olson Kundig, converted the sketch into a 6 computer drawing with rough dimensions and designs. (See Marks Decl. ¶ 11; see also 7 Compl. ¶ 31 (“Mr. Kundig invested significant time and effort into designing each piece 8 of the Tom Kundig Collection.”).) Olson Kundig provided the rough designs to 12th 9 Avenue Iron, and 12th Avenue Iron made prototypes based on the designs, determined 10 “the best way to fabricate, weld, and finish the product,” and manufactured the final 11 product. 5 (See Marks Decl. ¶ 11; see also id. ¶ 12 (discussing Mr. Marks’s contributions 12 to the Tom Kundig Collection, which include, among other things, research[ing] all the 13 suppliers, recruit[ing] the vendors, over[seeing] several rounds of shop drawings for each 14 piece, and [making] multiple rounds of prototypes to get the machinery dialed in”); id. 15 ¶ 39 (same).) 16 The Tom Kundig Collection officially launched in 2012. (Compl. ¶¶ 27, 36; 17 Marks Decl. ¶¶ 11, 39.) It initially “consisted of 25 small-scale steel pieces including 18 cabinet pulls, rollers and door handles,” but eventually “expanded to a compendium of 19 over 125 products, including furniture, lighting, and household tools.” (Compl. ¶¶ 29-30, 20 21 22 5 Mr. Marks “had veto power over proposed products for the [Tom Kundig] Collection if the product could not be made to [his] exacting quality standards, but also efficiently and economically.” (See Marks Decl. ¶ 12.) ORDER - 8 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 9 of 42 1 33.) Since the Collection’s launch in 2012, 12th Avenue Iron has been responsible for 2 selling, marketing, delivering, and shipping the Tom Kundig Collection products and the 3 entire Tom Kundig Collection “has been commercially available for customers to 4 purchase through 12th Avenue Iron’s official website.” (Id. ¶ 28; see also Marks Decl. 5 ¶¶ 13-14.) Both parties devoted substantial time, effort, and resources into the 6 development and promotion of the Tom Kundig Collection products over the last decade. 7 (See, e.g., Compl. ¶¶ 27-35, 57-60; Parwani Decl. ¶¶ 6, 34; Marks Decl. ¶¶ 12, 39, 42; 8 Answer ¶¶ C14-C16.) 9 C. 10 11 12 13 14 15 16 17 Termination of the Business Relationship Between Olson Kundig and 12th Avenue Iron and Commencement of this Lawsuit According to Olson Kundig, the parties performed their obligations in accordance with the terms of the Agreement for many years, despite not having signed the Agreement. (See, e.g., Compl. ¶¶ 36-39; Parwani Decl. ¶¶ 20-21 (including a chart showing that 12th Avenue Iron paid Olson Kundig royalties for gross sales of products in the Tom Kundig Collection every year from 2012 until the third quarter of 2020).) However, starting in the fourth quarter of 2020, 12th Avenue Iron stopped paying Olson Kundig any royalties for the sales of Tom Kundig Collection products. (See Compl. ¶ 41; Parwani Decl. ¶ 21 (noting that 12th Avenue Iron similarly failed to pay any royalties in 18 2021 and 2022).) Additionally, Olson Kundig “learned from its own clients that, despite 19 accepting money for orders of products in the Tom Kundig Collection, 12th Avenue Iron 20 stopped timely fulfilling those orders in 2020, around the same time 12th Avenue Iron 21 stopped paying royalties to Olson Kundig.” (Parwani Decl. ¶ 22; id. ¶ 37 (stating that 22 ORDER - 9 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 10 of 42 1 customers complained to Olson Kundig regarding 12th Avenue Iron’s services and 2 failure to timely produce orders and asked Olson Kundig to do something regarding the 3 issues); Compl. ¶ 40.) Mr. Marks states that the loss of 12th Avenue Iron’s long-time 4 employee, the buyout of 12th Avenue Iron’s co-founder, and Mr. Marks’s serious health 5 issues, in combination with the COVID-19 pandemic, “crippled 12th Ave[nue] Iron and 6 caused a backlog of work, missed deadlines, and the temporary inability to fulfil 7 [sic][Tom Kundig] Collection orders.” (See Marks Decl. ¶ 16.) 8 9 According to Olson Kundig, it “attempted to work with 12th Avenue Iron to find a solution to help it fulfil [sic] orders, but was unable to find a solution that would work 10 and 12th Avenue Iron continued to accept more orders and continued to not pay any 11 royalties.” (Parwani Decl. ¶ 23; see also Marks Decl. ¶¶ 18-27 (discussing 12th Avenue 12 Iron’s attempt to work with, Argent Fabrication, LLC (“Argent”), a third-party metal 13 hardware and furniture fabricating company, to fulfill its orders).) On April 28, 2022, 14 after “failing to find solutions short of termination of the Agreement,” Olson Kundig 15 notified 12th Avenue Iron that it had breached the Agreement by failing to timely pay 16 royalties and fulfill orders and that Olson Kundig intended to terminate the Agreement in 17 accordance with Paragraphs 3.2 and 3.3 of the Agreement. (See Parwani Decl. ¶¶ 24-25, 18 Ex. 10 (breach and termination notice letter); Compl. ¶¶ 42-47 (alleging that 12th Avenue 19 Iron materially breached the Agreement).) 20 12th Avenue Iron failed to take any action to remedy the alleged breaches. (See 21 Parwani Decl. ¶ 26; Compl. ¶ 48.) Thus, according to Olson Kundig, the Agreement was 22 terminated no later than May 28, 2022. (See Compl. ¶ 49; Agreement ¶ 3.2 (noting that ORDER - 10 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 11 of 42 1 the Agreement could be terminated by either party upon 30 days written notice); id. ¶ 3.3 2 (stating that a party may terminate the Agreement if the other party breaches its 3 obligations under the Agreement and fails to cure such breach within 15 days of receiving 4 written notice of the same).) 12th Avenue Iron did not, however, cease its activities 5 related to the manufacture, marketing, and sale of Tom Kundig Collection products. (See 6 Compl. ¶¶ 51-56 (alleging that 12th Avenue Iron continues to use Olson Kundig’s 7 intellectual property without a license); Resp. at 14 (admitting ongoing use of Olson 8 Kundig’s intellectual property through 12th Avenue Iron’s continued sale and 9 manufacturing of the Tom Kundig Collection products); Marks Decl. ¶¶ 46-47, Exs. F-G 10 (discussing 12th Avenue Iron’s 2022 sales of and orders for Tom Kundig Collection 11 products); Parwani Decl. ¶¶ 17-18, 28-31, Exs. 9, 11-14 (including screenshots from 12th 12 Avenue Iron’s website showing that it offered Tom Kundig Collection products for sale 13 in June 2022); see also Agreement ¶ 3.2 (describing post-termination duties).) 14 As a result, Olson Kundig commenced this case against 12th Avenue Iron on June 15 12, 2022. (See generally Compl.) Olson Kundig brings claims against 12th Avenue Iron 16 for: breach of contract; infringement of the D352, D197, D933 and D422 Design Patents 17 (the “Design Patents”) under 35 U.S.C. § 271; infringement of the OLSON KUNDIG 18 trademark under 15 U.S.C. § 1114; infringement of the TOM KUNDIG COLLECTION 19 trademark under Washington common law; violation of the Washington Personality 20 Rights Act (“WPRA”), RCW 63.60.010 et seq.; and violation of the Washington 21 Consumer Protection Act (“WCPA”), RCW 19.86.010 et seq. (See Compl. at 10-20.) On 22 ORDER - 11 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 12 of 42 1 June 30, 2022, Olson Kundig filed the instant motion for a preliminary injunction. (See 2 generally Mot.; Dkt.) 3 III. ANALYSIS 4 Olson Kundig asks the court to preliminarily “enjoin[] 12th Avenue Iron from 5 continued breach of post-termination obligations under the Agreement and continued 6 infringement of the D352, D197, D933 and D422 Design Patents, the TOM KUNDIG 7 COLLECTION mark, the OLSON KUNDIG mark, and direct[] 12th Avenue Iron to 8 remove the Tom Kundig Collection line, and all mention of Tom Kundig or association 9 with Olson Kundig, from its official website immediately.” (Mot. at 19.) The court 10 begins by setting forth the relevant legal standard before turning to Olson Kundig’s 11 motion. 12 A. 13 Legal Standard “A preliminary injunction is an extraordinary remedy never awarded as of right.” 14 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008) (citing Munaf v. Geren, 553 15 U.S. 674, 689-90 (2008)). “[T]he basic function of a preliminary injunction is to preserve 16 the status quo ante litem pending a determination of the action on the merits.” L.A. 17 Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1200 (9th Cir. 1980). 18 Under Federal Rule of Civil Procedure 65(b), a party seeking a preliminary injunction 19 must show: (1) a likelihood of success on the merits; (2) a likelihood of suffering 20 irreparable harm in the absence of preliminary relief; (3) that the balance of equities 21 // 22 // ORDER - 12 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 13 of 42 1 in its favor; and (4) that an injunction is in the public interest. 6 Winter, 555 U.S. at 20. 2 The moving party bears the burden of persuasion and must make a clear showing that it is 3 entitled to such relief. See id. “In each case, courts ‘must balance the competing claims 4 of injury and must consider the effect on each party of the granting or withholding of the 5 requested relief.’” Id. at 24 (quoting Amoco Prod. Co. v. Vill. of Gambell, AK, 480 U.S. 6 531, 542 (1987)). 7 B. 8 9 Likelihood of Success on the Merits Although the plaintiff “carr[ies] the burden of demonstrating a likelihood of success, they are not required to prove their case in full at this stage but only such 10 portions that enable them to obtain the injunctive relief they seek.” M.M.M. on Behalf of 11 J.M.A. v. Sessions, 347 F. Supp. 3d 526, 532-33 (S.D. Cal. 2018) (citing Univ. of Texas v. 12 Camenisch, 451 U.S. 390, 395 (1981)). Olson Kundig requests injunctive relief in 13 connection with its claims for: (1) infringement of the Design Patents under 35 U.S.C. 14 § 271; (2) infringement of the OLSON KUNDIG trademark under 15 U.S.C. § 1114; and 15 (3) infringement of the TOM KUNDIG COLLECTION trademark under Washington 16 common law. (See generally Compl. at 9-17, 19-21; Mot. at 7-14; Reply at 9-10.) 17 Before addressing whether Olson Kundig is likely to succeed on the merits of those 18 claims, the court considers two preliminary issues that are relevant to Olson Kundig’s 19 likelihood of success. 20 21 22 6 In the Ninth Circuit, a preliminary injunction is also proper “if there are serious questions going to the merits; there is a likelihood of irreparable injury to the plaintiff; the balance of hardships tips sharply in favor of the plaintiff; and the injunction is in the public interest.” Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012). ORDER - 13 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 14 of 42 1 1. Preliminary Issues 2 The parties dispute whether Olson Kundig and 12th Avenue Iron are partners with 3 respect to the Tom Kundig Collection or whether the Agreement governs their 4 relationship with respect to the Collection. Olson Kundig argues that the unsigned 5 Agreement is enforceable, and thus: (1) Olson Kundig owns the Design Patents and the 6 OLSON KUNDIG and TOM KUNDIG COLLECTION marks (the “Marks”); (2) 12th 7 Avenue Iron had only a limited, non-exclusive license to use the Design Patents and 8 Marks to manufacture, market, and sell Tom Kundig Collection products; and (3) Olson 9 Kundig’s termination of the Agreement also terminated 12th Avenue Iron’s license to use 10 Olson Kundig’s Design Patents and Marks. (See Reply at 2-9; Mot. at 10-15; Compl. at 11 10-17, 19-20.) In response, 12th Avenue Iron contends that: (1) the Agreement is not 12 enforceable because the parties did not sign it or agree to its terms; and (2) it is not liable 13 for infringement because the parties orally agreed that the Tom Kundig Collection would 14 be a partnership, and thus the parties co-own the Design Patents and Marks. (See Resp. 15 at 8-12; Marks Decl. ¶¶ 10-12, 35-40.) The court first considers whether Olson Kundig is 16 likely to succeed in establishing the existence of a binding contract before turning to 17 address whether 12th Avenue Iron is likely to succeed in establishing the existence of a 18 partnership. 19 20 a. Existence of an Enforceable Contract To establish the existence of an enforceable contract under Washington law, a 21 plaintiff must demonstrate that the parties manifested a mutual intent to be bound on the 22 essential terms of the agreement. McEachern v. Sherwood & Roberts, Inc., 675 P.2d ORDER - 14 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 15 of 42 1 1266, 1268 (Wash. Ct. App. 1984). Washington follows the “objective manifestation 2 test” to determine the existence of a contract. Keystone Land & Dev. Co. v. Xerox Corp., 3 94 P.3d 945, 949 (Wash. 2004). The unexpressed subjective intent of the parties is 4 irrelevant; mutual assent is instead determined by looking to the parties’ objective acts or 5 outward manifestations. Wilson Ct. Ltd. P’ship v. Tony Maroni’s, Inc., 952 P.2d 590, 6 594 (Wash. 1998). “Manifestation of assent requires either an acknowledgment of a 7 promise or performance under the terms of the agreement.” Glacier Water Co., LLC v. 8 Earl, No. C08-1705RSL, 2010 WL 3430518, at *1 (W.D. Wash. Aug. 30, 2010) (citing 9 Restatement (Second) of Contracts § 18 (Am. Law Inst. 2022)); see also Jacob’s 10 Meadow Owners Ass’n v. Plateau 44 II, LLC, 162 P.3d 1153, 1166 (Wash. Ct. App. 11 2007) (“The existence of mutual assent may be deduced from the circumstances, 12 including the ordinary course of dealing between the parties. Signatures of the parties are 13 not essential to the determination.” (citations omitted)). 14 Olson Kundig alleges that the Agreement, although unsigned, is enforceable 15 because the parties “expressed a mutual intention to be bound on the essential terms of 16 the Agreement” by “perform[ing] in compliance with the essential terms of the 17 Agreement for a decade.” (Mot. at 14-15; Reply at 3 (referencing 12th Avenue Iron’s 18 statements, Mr. Marks’ declaration, and Mr. Parwani’s declaration and supporting 19 evidence).) 12th Avenue Iron, on the other hand, contends that Olson Kundig cannot 20 establish that the Agreement is enforceable because: (1) the parties did not sign the 21 Agreement or discuss its terms; (2) genuine disputes of material fact exist regarding 22 whether there was a meeting of the minds with respect to the Agreement’s terms; and ORDER - 15 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 16 of 42 1 (3) the parties agreed to be partners with respect to the Tom Kundig Collection. (See 2 Resp. at 11-12; see also id. at 8-10 (alleging the existence of a partnership).) 3 At this preliminary stage, the court concludes that Olson Kundig is likely to 4 succeed in establishing that the Agreement is enforceable. First, Olson Kundig submits 5 the parties’ meeting notes and correspondence regarding the formation of a business 6 relationship and demonstrates that the parties incorporated the essential terms from those 7 discussions into the Agreement. (Compare Parwani Decl. ¶¶ 12-14, Exs. 6-7, with 8 Agreement ¶¶ 1.1-1.4; see also Marks Decl. ¶ 58 (admitting that the meeting notes were 9 drafted by Mr. Marks).) Second, Olson Kundig submits substantial evidence establishing 10 that it is likely that the parties objectively manifested an intent to be bound by the 11 essential terms of the Agreement by performing in accordance with the Agreement’s 12 essential terms for almost a decade. For example, the Agreement provides that “Product 13 sales shall initially be carried out through a web site owned and/or controlled by 14 Manufacturer” and “Manufacturer shall be responsible for the performance of any and all 15 marketing activities related to the Products”; “for managing the Product inventory”; “for 16 all costs associated with inventory management and shall bear all responsibility for order 17 fulfillment”; and “for invoicing Customers for Products sold [and] collecting payment.” 18 (Agreement ¶ 1.3.) It is undisputed that 12th Avenue Iron’s website has a section 19 dedicated to the sale of Tom Kundig Collection products and that 12th Avenue Iron was 20 solely responsible for invoicing customers and fulfilling orders. (See Marks Decl. ¶ 14.) 21 The Agreement also provides that “Manufacturer shall be solely responsible for 22 determining the price point at which the Products will be sold to Customers” and “shall ORDER - 16 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 17 of 42 1 pay Architect a [quarterly] royalty of seven percent (7%) of the gross amount received 2 from the sale of Products.” (Agreement ¶ 1.4.) It appears that 12th Avenue Iron was 3 solely responsible for determining the price point of each of the products, again in 4 accordance with Agreement. (See, e.g., Parwani Decl. ¶ 17, Ex. 9 (submitting illustrative 5 captures from 12th Avenue Iron’s website, which include the prices for each Tom Kundig 6 Collection product); Marks Decl. ¶¶ 46-47, Exs. F-G (listing prices for sales of custom 7 and standard Tom Kundig Collection products in the first and second quarters of 2022 8 and demonstrating that the prices may vary from those listed on the website and from 9 quarter to quarter).) Additionally, 12th Avenue Iron admits, and Olson Kundig’s Chief 10 Executive Officer, Hemanshu Parwani, submits a declaration stating, that for nearly ten 11 years, 12th Avenue Iron paid Olson Kundig a royalty of 7% quarterly, exactly in 12 accordance with the Agreement. (See Resp. at 10; 7 Parwani Decl. ¶ 21.) 13 With respect to licensing, the Agreement states that “Architect hereby grants 14 Manufacturer under Architect’s Intellectual Property Rights, a limited, non-exclusive, 15 worldwide, royalty-bearing, non-transferrable, non-sublicensable license to manufacture, 16 market and sell the Products in accordance with the terms hereof during the term of this 17 Agreement.” (Agreement at ¶ 2.3.) 12th Avenue Iron’s argues that “[b]ecause 12th Ave. 18 Iron has been the sole fabricator and manufacturer of the [Tom Kundig] Collection since 19 it launched in 2012, it uses the Kundig mark and [Tom Kundig] Collection mark on its 20 21 22 7 As discussed in greater detail below, see infra Section III.B.1.b, the court does not find support in the current record for 12th Avenue Iron’s implicit characterization of the 7% payments as something other than a royalty (Resp. at 10). ORDER - 17 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 18 of 42 1 website with Kundig’s approval and authorization of the same.” (Resp. at 14.) However, 2 the court agrees with Olson Kundig that, based on the current record, the only plausible 3 “approval and authorization” of 12th Avenue Iron’s use of the Marks and Design Patents 4 comes from the license in the Agreement. (See Reply at 5-6.) Moreover, 12th Avenue 5 Iron’s payment of royalties to Olson Kundig is consistent with the conclusion that the 6 parties objectively understood that 12th Avenue Iron had a license to use Olson Kundig’s 7 intellectual property to manufacture, market, and sell the Tom Kundig Collection 8 products. 9 With respect to design and manufacturing, the Agreement provides that “Architect 10 shall be solely responsible for performing all design work related to the 11 Products . . . from which Manufacturer shall develop shop drawings of sufficient detail to 12 enable the manufacturer of the Products.” (Agreement ¶ 1.1.) It further states that 13 “Manufacturer shall build, assemble and manufacture Product prototypes . . . in 14 accordance with the approved Shop Drawings . . . [and] Product Design” and that 15 “Manufacturer shall be solely responsible for all matters and costs relating the building, 16 assembling and manufacturing of Prototypes and Products,” including “engaging and 17 supervising any third-party contractors necessary for the building, assembling or 18 manufacturing of the Prototypes and Products.” (Id. ¶ 1.2 (providing that Olson Kundig 19 had to approve the prototype prior to the manufacturing of a product for sale to 20 customers, but that 12th Avenue Iron was under no obligation to manufacture every 21 product design provided by Olson Kundig).) Mr. Marks states in his declaration that Mr. 22 Kundig was responsible for the initial product sketches, and that Mr. Kundig would ORDER - 18 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 19 of 42 1 provide his rough sketches to Ms. Kennedy, who would convert them into computer 2 drawings with rough dimensions and designs. 8 (Marks Decl. ¶ 11.) 12th Avenue Iron 3 and Mr. Marks would then make shop drawings and prototypes and determine “the best 4 way to fabricate, weld and finish” the products based on Olson Kundig’s designs. (Id. 5 ¶¶ 11-12, 37; see id. ¶ 12 (alleging that Mr. Marks had “veto power over proposed 6 products for the [Tom Kundig] Collection”).) Therefore, it is undisputed that Olson 7 Kundig was responsible for the design of the products, and 12th Avenue Iron was 8 responsible for developing shop drawings based on Olson Kundig’s design, in accordance 9 with the Agreement. There is similarly no question that 12th Avenue Iron was 10 responsible, in accordance with the Agreement, for building, assembling, and 11 manufacturing the Tom Kundig Collection products based on approved prototypes and 12 product designs. (See, e.g., id. ¶ 37 (stating that “12th Ave. Iron essentially took it from 13 there – performing research, sourcing materials, lining up vendors, doing shop drawings 14 for our crew, and parts drawings for vendors”); id. ¶ 41 (stating that 12th Avenue Iron 15 was the sole manufacturer for the Tom Kundig Collection products; as such, Mr. Marks 16 had to “inform job superintendents or managing architects that they could not hand out 17 12th Ave[nue] Iron’s product specification drawings to another fabrication shop and have 18 them build one of our products”).) 19 20 21 22 8 The description of each product on 12th Avenue Iron website also states, “Designed by: Tom Kundig.” (See Parwani Decl. ¶ 17, Ex. 9 (including illustrative captures of the products’ webpages on the 12th Avenue Iron’s website); see also id. ¶ 33, Ex. 15 (attaching an article from 12th Avenue Iron that states that “the Tom Kundig Collection from Olson Kundig” is 12th Avenue Iron’s “first line of guest-authored design products”).) ORDER - 19 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 20 of 42 1 In sum, the parties’ objective conduct over the past decade demonstrates that it is 2 likely that there was a mutual intent to be bound on the material terms of the Agreement. 3 The only source of contradictory evidence 12th Avenue Iron offers to negate Olson 4 Kundig’s evidence of the parties’ objective intent is Mr. Mark’s uncorroborated 5 statements that the parties were instead partners. However, as discussed below, the court 6 cannot presently conclude that 12th Avenue Iron is likely to succeed in establishing the 7 existence of a partnership. Accordingly, the court concludes that Olson Kundig is likely 8 to establish that the Agreement is enforceable. 9 b. Existence of a Partnership 10 In Washington, a partnership is “an association of two or more persons to carry on 11 as co-owners a business for profit.” RCW 25.05.005(6). “A partnership agreement must 12 contemplate a common venture, a sharing of profits and losses, and a joint right of 13 control.” Samra v. Singh, 479 P.3d 713, 720 (Wash. Ct. App. 2020). The burden of 14 proving a partnership is upon the party asserting its existence, and the “evidence must be 15 stronger where the dispute is between alleged partners rather than with a third party.” Id. 16 Where, as here, there is no express contract that identifies Olson Kundig and 12th 17 Avenue Iron as partners, 9 “the existence of a partnership depends on the intention of the 18 parties.” Id. “That intention must be ascertained from all of the facts and circumstances 19 and the actions and conduct of the parties.” Malnar v. Carlson, 910 P.2d 455, 461 20 (Wash. 1996). “Facts gleaned from the parties’ conduct are preferred over anything the 21 9 22 The Agreement explicitly states that it “does not create any agency, partnership, or joint venture relation between Architect and Manufacturer.” (Agreement ¶ 8.2.) ORDER - 20 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 21 of 42 1 parties have said.” Samra, 479 P.3d at 720; DeFelice v. State, Emp. Sec. Dep’t, 351 P.3d 2 197, 201 (Wash. Ct. App. 2015) (“Just because the parties call their arrangement a 3 partnership does not make it a partnership.”). For instance, evidence that the parties 4 share profits and losses as well as a common partnership fund or shared account supports 5 the existence of a partnership, notwithstanding the absence of an express partnership 6 agreement. Samra, 479 P.3d at 721 (finding no partnership in part because of the lack of 7 evidence regarding sharing profits and losses and where there was no evidence showing 8 that defendant ever deposited any of his own funds into the partnership account or had 9 authority to direct how the funds within that account were used); Gottlieb Bros. v. 10 Culbertson’s, 277 P. 447, 449 (Wash. 1929) (“One of the most important tests of a 11 partnership or joint adventure is whether there is a share in losses.”). 12 Here, the evidence presented does not lead the court to conclude that 12th Avenue 13 Iron is likely to succeed on its defense to liability—i.e., that a partnership exists between 14 Olson Kundig and 12th Avenue Iron and that they are thus co-owners of the Marks and 15 Design Patents. (See Resp. at 8-10.) While Mr. Marks claims that Olson Kundig and 16 12th Avenue Iron agreed to form a partnership with respect to the Tom Kundig 17 Collection (see Marks Decl. ¶ 10), there is little indicia of a partnership beyond his 18 statement. For example, the record lacks evidence of a plausible profit-sharing structure 19 between Olson Kundig and 12th Avenue Iron. Over the course of the parties’ 20 relationship, the only money that Olson Kundig received was 7% from the gross amount 21 received from the sale of Tom Kundig Collection products each quarter. (See, e.g., 22 Parwani Decl. ¶ 21; Reply at 7.) 12th Avenue Iron asserts that the parties agreed on this ORDER - 21 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 22 of 42 1 amount because the Collection “was [Mr. Marks’s] idea” and “12th Ave[nue] Iron was 2 the one fronting all the time, resources, and effort to launch the [Tom Kundig] Collection 3 from start to finish.” (Resp. at 10.) However, 12th Avenue Iron provides no evidentiary 4 support for this assertion (see id.) and the court agrees with Olson Kundig that “[h]ad 5 there been a partnership, it would be unreasonable and extremely unfair for Olson Kundig 6 to only receive a 7% royalty from the gross amount received from the sale of Tom 7 Kundig Collection products, as opposed to receiving 50% profit” (Reply at 7). See 8 Samra, 479 P.3d at 721 (finding no partnership in part because of the lack of evidence 9 regarding sharing profits and losses). Additionally, there is no evidence that Olson 10 Kundig and 12th Avenue Iron shared losses. (See generally Reply at 7 (describing 12th 11 Avenue Iron’s various losses and stating that Olson Kundig never shared or carried any 12 burden for those losses); Resp. (citing no evidence that Olson Kundig and 12th Avenue 13 Iron shared losses); Marks Decl. (stating nothing about the sharing of losses)); see also 14 Gottlieb Bros., 277 P. at 449 (requiring evidence of shared losses to establish existence of 15 partnership). There is also no evidence of a partnership fund or account jointly owned or 16 operated by Olson Kundig and 12th Avenue Iron. (See generally Reply at 7; Resp. 17 (citing no evidence of a joint account or fund); Marks Decl. (stating nothing about a joint 18 account or fund)); see also Samra, 479 P.3d at 721. 19 Finally, Mr. Marks states that when Olson Kundig asked Argent to assist 12th 20 Avenue Iron with its unfulfilled orders, he “was told that if the partnership between 21 Argent and 12th Ave[nue] Iron was successful, 12th Ave[nue] Iron and Argent’s joint 22 venture would continue perhaps to merger, but if the partnership was unsuccessful, ORDER - 22 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 23 of 42 1 neither company would get the product line.” (Marks Decl. ¶ 22.) The court agrees with 2 Olson Kundig, however, that “it is inconsistent with an alleged partnership that Olson 3 Kundig alone determined whether 12th Avenue Iron or Argent ultimately got the product 4 line.” (Reply at 8.) Mr. Marks’s statement indicates the absence of a partnership because 5 it shows that 12th Avenue Iron lacked control over the Tom Kundig Collection’s business 6 affairs. See Eder v. Reddick, 278 P.2d 361, 366 (Wash. 1955) (holding that plaintiff had 7 failed to establish existence of oral contract of partnership where no partnership fund or 8 account was ever established between the parties and plaintiff exercised no control over 9 the project except such as would be consistent with the duties of a foreman). 10 Where, as here, there is no express partnership agreement, circumstantial evidence 11 tends prove the existence of a partnership only if “is inconsistent with any other theory.” 12 Id. at 366. At this stage, the court concludes that the circumstantial evidence in the 13 record is inconsistent with 12th Avenue Iron’s partnership theory and is instead 14 consistent with Olson Kundig’s theory that the parties were bound by the Agreement. 15 See supra Section III.B.1.a. 10 16 // 17 // 18 // 19 // 20 21 22 10 The court also notes that even if 12th Avenue Iron had established the existence of a partnership, the mere fact that Olson Kundig and 12th Avenue Iron were partners would not automatically render them joint owners with respect to the Marks and Design Patents, as discussed in more detail below. ORDER - 23 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 24 of 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2. Infringement of the D352, D197, D933, and D422 Design Patents Under 35 U.S.C. § 271 To demonstrate likelihood of success on the merits of a design patent infringement claim, a plaintiff must establish the validity and infringement of its patent. Reebok Int’l. Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed. Cir. 1994). Olson Kundig has established that the D352, D197, D933, and D422 Design Patents are registered with the United States Patent and Trademark Office (“USPTO”) and that it is the named applicant and assignee for all four Design Patents. (See Parwani Decl. ¶¶ 8-11, Exs. 2-5 (naming Mr. Kundig as the inventor for all four Design Patents). 11) In its response to the instant motion, 12th Avenue Iron does not dispute the validity of the Design Patents. (See Resp. at 13-15.) “[I]f a patentee moves for a preliminary injunction and the alleged infringer does not challenge validity, the very existence of the patent with its concomitant presumption of validity satisfies the patentee’s burden of showing a likelihood of success on the validity issue.” Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1377 (Fed. Cir. 2009); see also 35 U.S.C. § 282(a) (“A patent shall be presumed valid.”). Thus, Olson Kundig has 16 17 18 19 20 21 22 11 12th Avenue Iron does not dispute that Olson Kundig is the named applicant and assignee for all four registered Design Patents, nor does it contend that the registration certificates are flawed. (See Resp. at 13-15.) While 12th Avenue Iron argues that it is a joint owner of the Design Patents because of the alleged partnership between the parties, it provides no support for that contention aside from its arguments regarding the existence of a partnership (see id.), which the court has already found to be insufficient, see supra Section III.B.1.b. Moreover, even if a partnership existed, that would not automatically entail that 12th Avenue Iron is a joint inventor or owner of the Design Patents. Accordingly, 12th Avenue Iron fails to establish a credible dispute with respect to the inventor and assignee listed in the Design Patents’ registration certificates. ORDER - 24 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 25 of 42 1 established a likelihood of success on the issues of its ownership and the validity of the 2 Design Patents. See Titan Tire, 566 F.3d at 1377. 3 An entity with a license to use intellectual property infringes on the licensor’s 4 rights by continuing to use the intellectual property after the license is terminated. See 5 Peer Int’l Corp. v. Pausa Recs., Inc., 909 F.2d 1332, 1335-36 (9th Cir. 1990) (finding 6 infringement where former licensee continued to use licensor’s copyrighted works after 7 termination of the license). Here, 12th Avenue Iron admits that “[t]here is no question 8 that the [Tom Kundig] Collection products made by 12th Ave[nue] Iron are those of the 9 design patents.” (Resp. at 13.) It also admits that it continues to use the Design Patents 10 by manufacturing and selling Tom Kundig Collection products. (See id. at 14; Marks 11 Decl. ¶¶ 46-47, Exs. F-G; Parwani Decl., Exs. 9, 11-14.) In light of these admissions, the 12 court agrees with Olson Kundig that “the only scenario that could make 12th Avenue 13 Iron’s continued usage of Olson Kundig’s [Design Patents] permissible is if 12th Avenue 14 Iron met its burden to establish the existence of an oral partnership agreement and 15 evidence that the partnership owned the intellectual property through an assignment or 16 license from Olson Kundig to the partnership (presumably another oral agreement) and 17 from the partnership to 12th Avenue Iron (presumably yet another different oral 18 agreement).” (Reply at 10.) However, the court has already concluded that 12th Avenue 19 Iron is not likely to succeed in establishing the existence of a partnership between the 20 // 21 // 22 // ORDER - 25 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 26 of 42 1 parties 12 and that Olson Kundig is likely to succeed in establishing the enforceability of 2 the Agreement. See supra Section III.B.1. Thus, after Olson Kundig terminated the 3 Agreement, 12th Avenue Iron no longer holds a license to make, use, or sell products 4 covered by the Design Patents. (See Agreement ¶¶ 2.3, 3.2; Parwani Decl. ¶¶ 24-26; 5 Compl. ¶¶ 48-49.) The court concludes that it is likely that 12th Avenue Iron’s continued 6 sale and manufacture of the Tom Kundig Collection products without a license 7 constitutes ongoing infringement of Olson Kundig’s Design Patents. See Peer Int’l 8 Corp., 909 F.2d at 1335-36. Accordingly, Olson Kundig has established that it is likely 9 to succeed on its patent infringement claims. 10 3. Infringement of the OLSON KUNDIG Trademark Under 15 U.S.C. § 1114 11 To establish federal trademark infringement, a party must demonstrate that it owns 12 a valid trademark and that the alleged infringer’s unauthorized use of the mark is likely to 13 confuse consumers. See 15 U.S.C. § 1114(1); Brookfield Commc’ns, Inc. v. W. Coast 14 Entm’t Corp., 174 F.3d 1036, 1046 (9th Cir. 1999). 15 The registration certificate for the OLSON KUNDIG mark states that the mark is 16 registered with the USPTO and lists Olson Kundig as the registrant of the mark. (See 17 Parwani Decl. ¶ 7, Ex. 1; see also id. ¶ 38 (stating that Olson Kundig began using the 18 OLSON KUNDIG mark “as [an] indicator[] of its products and designs” long before the 19 parties’ business relationship commenced).) Registration of a mark with the USPTO is 20 21 22 12 Even if 12th Avenue Iron had established the existence of a partnership, 12th Avenue Iron would not be shielded from liability because it has not made any effort to establish the layers of necessary oral agreements concerning intellectual property licensing. (Reply at 10.) ORDER - 26 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 27 of 42 1 “prima facie evidence of the validity of the mark, the registrant’s ownership of the mark, 2 and the registrant’s exclusive right to use the mark in connection with the goods specified 3 in the registration.” Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1124 (9th Cir. 4 2014) (citing 15 U.S.C. § 1115(a)); Hollywood Athletic Club Licensing Corp. v. 5 GHAC-CityWalk, 938 F. Supp. 612, 614 (C.D. Cal. 1996) (“A plaintiff makes a prima 6 facie showing of ownership of a protectable trademark by producing a certificate of 7 registration.” (citing 15 U.S.C. § 1057(b))). When proof of registration is uncontested, 8 the ownership interest and valid trademark elements of a trademark infringement claim 9 are met. See Sengoku Works Ltd. v. RMC Int’l, Ltd., 96 F.3d 1217, 1219-20 (9th Cir.), as 10 modified, 97 F.3d 1460 (9th Cir. 1996); Zobmondo Entm’t, LLC v. Falls Media, LLC, 602 11 F.3d 1108, 1114 (9th Cir. 2010). Because 12th Avenue Iron did not submit evidence or 12 arguments attacking the OLSON KUNDIG mark’s registration (see generally Resp.), 13 13 Olson Kundig has established a likelihood of success on the issue of its ownership of the 14 OLSON KUNDIG mark and the mark’s validity. 15 “Where a licensee persists in the unauthorized use of a licensor’s trademark, 16 courts have found that the continued use alone establishes a likelihood of consumer 17 confusion.” 14 Robert Trent Jones II, Inc. v. GFSI, Inc., 537 F. Supp. 2d 1061, 1065 (N.D. 18 19 20 21 13 The court has concluded that 12th Avenue Iron is not likely to succeed in establishing the existence of a partnership between the parties and that Olson Kundig is likely to succeed in establishing that the Agreement is enforceable. See supra Section III.B.1. Thus, to the extent 12th Avenue Iron contends that it should be considered a joint owner of the OLSON KUNDIG mark because of the parties’ alleged partnership, that argument fails. 14 22 The likelihood of confusion inquiry focuses on “whether a reasonably prudent consumer in the marketplace is likely to be confused as to the origin or source of the goods or ORDER - 27 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 28 of 42 1 Cal. 2008) (noting that there is no need to compare the plaintiff’s marks or products with 2 defendant’s marks or products under the Sleekcraft factors in a dispute between a licensee 3 and licensor because “they are identical by virtue of the Agreement”) (quoting Sun 4 Microsystems v. Microsoft Corp., 999 F. Supp. 1301, 1311 (N.D. Cal. 1998) (concluding 5 that plaintiff “demonstrated a likelihood of success of establishing a likelihood of 6 confusion caused by” the licensee’s continued and unauthorized use of the plaintiff’s 7 trademark)). 15 8 9 Here, 12th Avenue Iron admits its ongoing use of the OLSON KUNDIG mark through its continued sale and manufacturing of Tom Kundig Collection products. (See 10 Resp. at 14; Marks Decl. ¶¶ 46-47, Exs. F-G; see also Parwani Decl., Exs. 9, 11-14.) 11 Having found that the Agreement is likely enforceable and that the existence of a 12 partnership between the parties is unlikely, see supra Section III.B.1, the court concludes 13 14 15 services bearing one of the marks or names at issue in the case.” Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1209 (9th Cir. 2012). 15 16 17 18 19 20 21 22 See also, e.g., Hollywood Athletic Club, 938 F. Supp. at 614 (unauthorized use of identical marks after termination of licensing agreement established likelihood of confusion); Wetzel’s Pretzels, LLC v. Johnson, 797 F. Supp. 2d 1020, 1028 (C.D. Cal. 2011) (“Continued use by former franchisee, dealer or licensee of the mark constitutes a fraud on the public, since they are led to think that the continuing user is still connected with the trademark owner.” (quoting J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 25:31 (5th ed. 2022))); 2Die4Kourt v. Hillair Cap. Mgmt., LLC, No. SACV1601304JVSDFMX, 2016 WL 4487895, at *6 (C.D. Cal. Aug. 23, 2016), aff’d, 692 F. App’x 366 (9th Cir. 2017) (concluding that former licensee’s continued use of plaintiff’s trademarks without authorization “will likely confuse consumers”); LINE-X LLC v. Tefft, No. 5:20-CV-01707-SB-SHK, 2021 WL 4722662, at *3 (C.D. Cal. Feb. 22, 2021) (“Plaintiffs executed a valid termination of the franchise agreement and, consequently, Defendants continued use of the trademarks after that termination is sufficient to establish a likelihood of confusion.”); State of Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708, 721 (9th Cir. 2005) (stating that “many courts have held that an ex-licensee’s continued use of a trademark is enough to establish likelihood of confusion”). ORDER - 28 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 29 of 42 1 that 12th Avenue Iron’s license to use the OLSON KUNDIG mark was terminated no 2 later than May 28, 2022 16 and that, as a result, any continuing use of the mark is 3 unauthorized. (See Agreement ¶¶ 2.3, 3.2.) The court agrees with Olson Kundig that by 4 continuing to display the OLSON KUNDIG mark on its official website and sell the Tom 5 Kundig Collection products “after the termination of its license, 12th Avenue Iron is 6 deceiving the public, suggesting to consumers at large that it is still associated, or 7 affiliated, with Olson Kundig when in fact it is not.” (Mot. at 12; see also Parwani Decl. 8 ¶ 37); see, e.g., Sizzler USA Franchise Inc. v. Advanced Home Care Med. Supply, Inc., 9 No. CV 08-1856 PSG (RZX), 2008 WL 11338554, at *2 (C.D. Cal. May 6, 2008) 10 (finding that defendants’ continued operation of their restaurant using Sizzler’s marks 11 after Sizzler’s termination of defendants’ license “falsely implies that their restaurant is 12 affiliated with Sizzler”). Thus, 12th Avenue Iron’s continued and unauthorized use of the 13 OLSON KUNDIG mark will likely confuse consumers. Accordingly, the court 14 concludes that Olson Kundig has demonstrated a likelihood of success on its federal 15 trademark infringement claim. 16 // 17 // 18 19 20 21 22 16 Olson Kundig delivered a letter to 12th Avenue Iron on April 28, 2022, notifying 12th Avenue Iron of its breach of the Agreement and Olson Kundig’s intent to terminate the Agreement in accordance with Paragraphs 3.2 and 3.3 of the Agreement. (See Parwani Decl. ¶¶ 24-25, Ex. 10.) 12th Avenue Iron failed to take any action to remedy its alleged breaches. (See Parwani Decl. ¶ 26; Compl. ¶ 48.) Accordingly, the court concludes that it is likely that the Agreement was terminated no later than May 28, 2022, whether through the Agreement’s no-fault termination clause or through the termination for breach clause. (See Compl. ¶ 49; Agreement ¶¶ 3.2-3.3 (describing the Agreement’s termination mechanisms).) ORDER - 29 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 30 of 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 4. Infringement of the TOM KUNDIG COLLECTION Trademark Under Washington Common Law “Where an alleged trademark has not been registered under state or federal law, an allegation of trademark infringement must be tested by rules of common law.” Unisplay S.A. v. Am. Elec. Sign Co. Inc., No. CS-92-214-JLQ, 1993 WL 493857, at *10 (E.D. Wash. May 26, 1993), aff’d, 69 F.3d 512 (Fed. Cir. 1995); see also RCW 19.77.900 (“Nothing herein shall adversely affect the rights or the enforcement of rights in trademarks acquired in good faith at common law . . . .”). To prevail on a trademark or trade name infringement claim for an unregistered mark or name, Olson Kundig must demonstrate both that (1) it owns a valid trademark or trade name and (2) 12th Avenue Iron’s unauthorized use of the mark or name is likely to cause consumer confusion. See Seattle Endeavors, Inc. v. Mastro, 868 P.2d 120, 124-25 (Wash. 1994) (noting that the plaintiff “must establish the defendant has infringed on a distinctive feature of his name in a manner that tends to confuse the two businesses in the public mind”). To begin, 12th Avenue Iron does not challenge the validity of the TOM KUNDIG COLLECTION mark (see generally Resp. at 13-15), and the court finds that the mark is likely a valid, protectable trademark. See Glow Indus., Inc. v. Lopez, 252 F. Supp. 2d 17 962, 976-77 (C.D. Cal. 2002) (noting that a valid, protectable trademark or trade name is 18 either (1) inherently distinctive or (2) has acquired secondary meaning associated with 19 the trademark holder’s business); Seattle Endeavors, 868 P.2d at 124-25 (evaluating 20 whether the trade name “Willows Apartments” was valid and protectable and the strength 21 of the protectable trademark interest in the distinctive feature of the name); Nordstrom, 22 ORDER - 30 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 31 of 42 1 Inc. v. Tampourlos, 717 P.2d 293, 295 (Wash. Ct. App. 1986), rev’d on other grounds, 2 733 P.2d 208 (Wash. 1987) (“‘Nordstrom’ is a family name used for many years by the 3 plaintiff in a consistent form as a logo identifying a growing number of successful shoe 4 and apparel stores over the western United States. As such, the trade name ‘Nordstrom’ 5 has acquired a secondary meaning, which is entitled to protection from unauthorized 6 use.”); (see also Mot. at 13 (arguing that the “general consuming public of Washington 7 State recognizes and relies upon the TOM KUNDIG COLLECTION mark as an indicator 8 of the high quality associated with the products designed by Olson Kundig”); Compl. 9 ¶ 138 (same); Parwani Decl. ¶¶ 6, 34 (discussing how Olson Kundig has developed and 10 promoted the Tom Kundig Collection over the last decade “by using or promoting the 11 TOM KUNDIG COLLECTION mark through media and magazines”); id. ¶ 38 (stating 12 that Olson Kundig has used “Tom Kundig’s name” as an indicator of its products and 13 designs for decades)). 14 Turning to the issue of ownership, “[t]he right to use a particular name as a trade 15 name belongs to the one who first appropriates and uses it in connection with a particular 16 business.” Seattle St. Ry. & Mun. Emps. Relief Ass’n v. Amalgamated Ass’n of St., Elec. 17 Ry. & Motor Coach Emps., 101 P.2d 338, 343 (Wash. 1940) (stating that “it is not 18 necessary that the name be used for any considerable length of time”). Here, Olson 19 Kundig and 12th Avenue Iron were together the first to appropriate and use the TOM 20 KUNDIG COLLECTION mark in connection with the design, marketing, manufacturing, 21 // 22 // ORDER - 31 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 32 of 42 1 and sale of the Tom Kundig Collection products. 17 (See, e.g., Marks Decl. ¶¶ 11-14, 42; 2 Parwani Decl. ¶¶ 6, 34, 38; id. ¶ 33, Ex. 15.) The Agreement, however, provides that 3 Olson Kundig owns “all intellectual property rights in and to the” Tom Kundig 4 Collection products, including any trademarks that were created during the course of the 5 parties’ business relationship. (Agreement ¶ 2.1.) Thus, because the court has concluded 6 that the Agreement is likely enforceable, it also concludes that Olson Kundig is likely to 7 succeed in establishing that it is the sole owner of the TOM KUNDIG COLLECTION 8 mark. See Sengoku Works, 96 F.3d at 1221 (noting that courts, in determining who has 9 priority ownership of a trademark, must first look to the language of any agreement 10 between the parties regarding trademark rights). 11 As to the likelihood of confusion, a party can rely on indications of public 12 confusion to establish that injunctive relief is warranted; proof of actual confusion is not 13 required. See Money Savers Pharmacy, Inc. v. Koffler Stores (Western) Ltd., 682 P.2d 14 960, 963 (Wash. Ct. App. 1984); see also Seattle St. Ry., 101 P.2d at 344 (“It is enough if 15 the one so resembles another as to deceive or mislead persons of ordinary caution into the 16 belief that they are dealing with the one concern when in fact they are dealing with the 17 other.”); Olympia Brewing Co. v. Nw. Brewing Co., 35 P.2d 104, 107 (Wash. 1934) 18 (“The question to be determined in every case is whether . . . defendant . . . is by his 19 conduct passing off his goods as plaintiff’s goods, or his business as plaintiff’s business. 20 21 22 17 The parties have continued to use the TOM KUNDIG COLLECTION mark in connection with the Tom Kundig Collection products since the Collection’s launch in 2012. (See, e.g., Parwani Decl. ¶¶ 4, 6, 34; id., Exs. 9, 11-14; Marks Decl. ¶¶ 13-14, 42, 46-47, Exs. F-G.) ORDER - 32 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 33 of 42 1 The universal test question is whether the public is likely to be deceived.”). After Olson 2 Kundig terminated the Agreement, 12th Avenue Iron no longer holds a license to use the 3 TOM KUNDIG COLLECTION mark. (See Agreement ¶¶ 2.3, 3.2; Parwani Decl. 4 ¶¶ 24-26; see also Compl. ¶¶ 48-49); supra Section III.B.1 (finding that the Agreement is 5 likely enforceable and that the existence of a partnership is unlikely). Thus, the court 6 agrees with Olson Kundig that 12th Avenue Iron’s unauthorized use of the TOM 7 KUNDIG COLLECTION mark is likely to confuse, mislead, or deceive consumers, 8 “because in the public mind, the products currently being displayed under the Tom 9 Kundig Collection on 12th Avenue Iron’s official website still originate from, are 10 associated with, or endorsed by, Olson Kundig, when in fact [they are] not.” (Mot. at 11 13-14; see Parwani Decl. ¶ 37 (discussing evidence of consumer dissatisfaction and 12 misattribution); Resp. at 14 (admitting continued usage); Marks Decl. ¶¶ 46-47, Exs. F-G 13 (establishing the same); Parwani Decl., Exs. 9, 11-14 (same)); see, e.g., Wetzel’s Pretzels, 14 797 F. Supp. 2d at 1028 (stating that a licensee’s continued use of the licensor’s 15 trademark after the termination of its license “constitutes a fraud on the public, since they 16 are led to think that the continuing user is still connected with the trademark owner” 17 (quoting McCarthy, supra, § 25:31)). Accordingly, the court concludes that Olson 18 Kundig is likely to succeed on its trademark infringement claim under Washington 19 common law. 20 C. 21 22 Likelihood of Irreparable Harm “A plaintiff seeking a preliminary injunction must demonstrate that irreparable injury is likely in the absence of preliminary relief. Mere possibility of harm is not ORDER - 33 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 34 of 42 1 enough.” Enyart v. Nat’l Conference of Bar Exam’rs, 630 F.3d 1153, 1165 (9th Cir. 2 2011) (citation omitted). “Irreparable harm is traditionally defined as harm for which 3 there is no adequate legal remedy, such as an award of damages.” Ariz. Dream Act Coal. 4 v. Brewer, 757 F.3d 1053, 1068 (9th Cir. 2014). Because of the difficulty of valuing 5 goodwill and reputation, courts have recognized that “evidence of loss of control over 6 business reputation and damage to goodwill [can] constitute irreparable harm.” Herb 7 Reed Enters., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 1250 (9th Cir. 2013); see also 8 Pom Wonderful LLC v. Pur Beverages LLC, No. CV1306917MMMCWX, 2015 WL 9 10433693, at *12 (C.D. Cal. Aug. 6, 2015) (noting that, in a trademark infringement case, 10 “one way to show a likelihood of future irreparable harm is to show that there has, to 11 date, been some actual confusion or harm” (emphasis in original)); Celsis In Vitro, Inc. v. 12 CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012) (holding that damage to ongoing 13 customer relationships and loss of customer goodwill constitutes irreparable harm in 14 patent infringement context). 15 As discussed above, 12th Avenue Iron continues to use the Marks and Design 16 Patents through its manufacturing, marketing, and sale of Tom Kundig Collection 17 products. (See Resp. at 14; Marks Decl. ¶¶ 46-47, Exs. F-G; Parwani Decl., Exs. 9, 18 11-14.) 12th Avenue Iron’s unauthorized use of Olson Kundig’s Marks and Design 19 Patents likely confuses the public regarding Olson Kundig’s affiliation with 12th Avenue 20 Iron and the products it sells and “deprives Olson Kundig of the opportunity to control 21 the products as well as the services associated with Olson Kundig’s [M]arks and patented 22 design[s].” (Mot. at 16; see Parwani Decl. ¶¶ 36-38); see also Paisa, Inc. v. N & G Auto, ORDER - 34 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 35 of 42 1 Inc., 928 F. Supp. 1009, 1013 (C.D. Cal. 1996) (“A [licensee] who once possessed 2 authorization to use the trademarks of its [licensor] becomes associated in the public’s 3 mind with the trademark holder. When [a licensee] loses its authorization yet continues 4 to use the mark, the unauthorized use confuses . . . the public.” (citation omitted)). Thus, 5 a customer who is dissatisfied with the Tom Kundig Collection products or the manner in 6 which 12th Avenue Iron fulfilled their order is unlikely to continue buying Tom Kundig 7 Collection products and may make negative statements about the products to other 8 potential customers. See, e.g., Am. Rena Int’l Corp v. Sis-Joyce Int’l Co. Ltd., No. 9 CV1206972DMGJEMX, 2012 WL 12538385, at *9 (C.D. Cal. Oct. 15, 2012), aff’d, 534 10 F. App’x 633 (9th Cir. 2013) (finding a loss of control over plaintiff’s business reputation 11 based on defendants’ sales of a product under plaintiff’s trademarks “that customers find 12 does not work well”). It is likely that such negative experiences will be wrongfully 13 attributed to Olson Kundig based on 12th Avenue Iron’s unauthorized use of its Marks 14 and Design Patents and will irreparably harm Olson Kundig’s reputation and customer 15 goodwill. (See Compl. at ¶¶ 10-11, 35 (alleging that Olson Kundig has developed 16 significant goodwill and a strong reputation over the course of several decades); Parwani 17 Decl. ¶¶ 2-3, 27, 36, 38 (same); see also Mot. at 17 (claiming that Olson Kundig enjoys 18 “a valuable recognition among the trade and purchasing public with respect to its 19 architectural design” “due to the excellent quality of the products designed by it” and its 20 “extensive promotion and advertisement . . . of its architectural design”).) 21 According to Olson Kundig, customer misattribution and dissatisfaction have in 22 fact occurred. Mr. Parwani states that “Olson Kundig has received complaints from its ORDER - 35 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 36 of 42 1 clients regarding 12th Avenue Iron’s services and failure to timely produce the orders it 2 took from Olson Kundig clients,” as well as inquiries from clients “asking Olson Kundig 3 to do something about the late order[s] or bad service from 12th Avenue Iron.” 18 4 (Parwani Decl. ¶ 37.) Such evidence “substantiates the threat to [Olson Kundig’s] 5 goodwill and reputation.” See Life Alert Emergency Response, Inc. v. LifeWatch, Inc., 6 601 F. App’x 469, 473-74 (9th Cir. 2015) (finding irreparable harm in the face of 7 “numerous and persistent complaints from would-be customers” along with emails and 8 social media posts from confused consumers). 19 Accordingly, Olson Kundig has 9 established a likelihood of irreparable harm to its goodwill and reputation in the absence 10 of injunctive relief. See id. (“This material substantiates the threat to Life Alert’s 11 reputation and goodwill. This type of harm constitutes irreparable harm, as it is not 12 readily compensable.”). 13 14 15 16 17 18 19 20 21 22 18 12th Avenue Iron states that Mr. Parwani’s statements regarding customer complaints are “inadmissible hearsay.” (See Resp. at 15.) However, “[d]ue to the urgency of obtaining a preliminary injunction at a point when there has been limited factual development, the rules of evidence do not apply strictly to preliminary injunction proceedings.” Herb Reed, 736 F.3d at 1250 n.5; see also Johnson v. Couturier, 572 F.3d 1067, 1083 (9th Cir. 2009) (“A district court may, however, consider hearsay in deciding whether to issue a preliminary injunction.”). Accordingly, the court will consider Mr. Parwani’s statements in assessing the evidence of irreparable harm. 19 See also, e.g., Home Comfort Heating & Air Conditioning, Inc. v. Ken Starr, Inc., No. 818CV00469JLSDFM, 2018 WL 3816745, at *7, *9 (C.D. Cal. July 24, 2018) (concluding that Plaintiff “substantiate[d] the threat to [its] goodwill and reputation” by producing “evidence of actual confusion, including negative online reviews and customer complaints that were intended for Defendant”); Hollywood Athletic Club, 938 F. Supp. at 615 (noting that the licensor’s loss of control over its trademark mark at the hands of a licensee “is the very thing that constitutes irreparable harm in the licensing context”); 2Die4Kourt, 2016 WL 4487895, at *7 (finding irreparable harm based on the Kardashians’ loss of “control over their reputation and good will related to [defendant’s] unauthorized use of their trademarks in connection with the design, manufacture, and distribution of Kardashian Beauty-branded cosmetic products”). ORDER - 36 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 37 of 42 1 2 D. Balance of Equities With respect to the third factor, the court “must balance the competing claims of 3 injury and must consider the effect on each party of the granting or withholding of the 4 requested relief.” Winter, 555 U.S. at 24 (quoting Amoco, 480 U.S. at 542). However, 5 “when the harm complained of results from a defendant’s allegedly infringing conduct, 6 [courts in the Ninth Circuit] have nonetheless approved the entry of a preliminary 7 injunction.” 2Die4Kourt v. Hillair Cap. Mgmt., LLC, 692 F. App’x 366, 369 (9th Cir. 8 2017) (affirming grant of preliminary injunction to trademark owner even though 9 defendant argued that an injunction would force it to shut down its business, terminate its 10 employees, and default on its obligations to creditors and distributors); see also Am. Rena 11 Int’l Corp. v. Sis-Joyce Int’l Co., 534 F. App’x 633, 636 (9th Cir. 2013) (“That the 12 present injunction will allegedly drive Sis-Joyce out of business does not weigh in 13 Sis-Joyce’s favor where it appears that Sis-Joyce’s entire business model is premised on 14 its infringing use of the ARëna mark.”). 15 Olson Kundig and 12th Avenue Iron each maintains that the balance of hardships 16 favors it. (See Resp. at 17-20; Mot. at 15-18; Reply at 10-12.) The court concludes, 17 however, that the balance of hardships, although close, tips in Olson Kundig’s favor. As 18 explained above, Olson Kundig is likely to suffer irreparable harm to its goodwill and 19 reputation in the absence of injunctive relief in light of 12th Avenue Iron’s ongoing, 20 unauthorized usage of Olson Kundig’s Marks and Design Patents. See supra Section 21 III.C; see, e.g., 2Die4Kourt, 692 F. App’x at 369 (concluding that defendant’s 22 unauthorized use of plaintiff’s trademarks to release products after the termination of the ORDER - 37 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 38 of 42 1 licensing agreement was enough to support a finding that plaintiff would lose some 2 measure of control over its business reputation and thus be irreparably harmed in the 3 absence of injunctive relief). 4 12th Avenue Iron also demonstrates that it will likely suffer irreparable harm if 5 enjoined from continuing to use Olson Kundig’s Marks and Design Patents because an 6 injunction would leave it “unable to fulfill its current orders resulting in an immediate 7 loss of sales in the amount of $391,418.95 and loss of customer goodwill” and would 8 effectively force it “to shut down all business operations and layoff seven” given its lack 9 of customers outside of the Tom Kundig Collection. (See Resp. at 17-20.) However, the 10 harm that 12th Avenue Iron will allegedly suffer if enjoined is a result of activities that 11 the court has found likely to be infringing. See supra Sections III.B.2-4; 2Die4Kourt, 12 692 F. App’x at 369. Olson Kundig notified 12th Avenue Iron of its intent to terminate 13 the Agreement and of 12th Avenue Iron’s breaches and reminded 12th Avenue Iron of its 14 post-termination contractual obligations. (See Parwani Decl. ¶¶ 24-25, Ex. 10 (breach 15 and termination notice letter); see also Answer ¶ C35 (noting that 12th Avenue Iron 16 received the letter).) Thus, 12th Avenue Iron was aware that it would no longer have a 17 license to use Olson Kundig’s Marks and Design Patents after the termination of the 18 Agreement. Nevertheless, 12th Avenue Iron continued to use the Marks and Design 19 Patents to manufacture, market, and sell Tom Kundig Collection products after the 20 termination became effective, despite its clear obligations under the Agreement to cease 21 such activities. (See Parwani Decl. ¶¶ 26, 39; id., Exs. 9, 11-14; Resp. at 14; Marks Decl. 22 ¶¶ 46-47, Exs. F-G; Agreement ¶ 3.2); see also Cadence Design Sys. v. Avant! Corp., 125 ORDER - 38 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 39 of 42 1 F.3d 824, 829 (9th Cir. 1997) (stating that a defendant who knowingly infringes “cannot 2 complain” when properly required to cease infringing activities). As such, the court 3 concludes that the potential damage to 12th Avenue Iron’s business resulting from an 4 injunction does not justify withholding injunctive relief. See, e.g., Wetzel’s Pretzels, 797 5 F. Supp. 2d at 1029 (finding likelihood of irreparable harm to trademark holder’s 6 goodwill and reputation outweighed the harm that defendant, a small business, would 7 likely face if enjoined because while defendant “would suffer a loss of revenue” and “its 8 employees would, in all likelihood, lose their employment, it is [d]efendants who brought 9 on those risks”); 2Die4Kourt, 2016 WL 4487895, at *10 (“[A] denial of injunctive relief 10 here would reward Haven Beauty for its misconduct.”). 11 Accordingly, the court concludes that the equities do not weigh in 12th Avenue 12 Iron’s favor. See, e.g., Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1084 13 (C.D. Cal. 2012) (“[T]he balance of hardships favors Plaintiff because without an 14 injunction, Plaintiff will lose profits and goodwill, while an injunction will only proscribe 15 Defendants’ infringing activities.”). Further, the court reminds 12th Avenue Iron that an 16 injunction will not prevent it from engaging in any other lawful business. 17 E. Public Interest 18 Finally, the court must weigh the impact of a preliminary injunction on the public 19 interest. In trademark and patent cases, the public has an interest in ensuring that courts 20 protect the legal rights of patent and trademark holders and in preventing consumer 21 confusion or deception. See e.g., Brookfield, 174 F.3d at 1066 (finding injunctive relief 22 appropriate “to prevent irreparable injury to [plaintiff’s] interests in its trademark” and ORDER - 39 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 40 of 42 1 “to promote the public interest in protecting trademarks generally”); Abbott Labs. v. 2 Andrx Pharm., Inc., 452 F.3d 1331, 1348 (Fed. Cir. 2006) (“[A]bsent any other relevant 3 concerns . . . the public is best served by enforcing patents that are likely valid and 4 infringed.”); Internet Specialties West, Inc. v. Milon-DiGiorgio Enters., Inc., 559 F.3d 5 985, 993 (9th Cir. 2009) (noting that an injunction that seeks to prevent confusion to 6 consumers in a trademark case is in the public interest). 7 As discussed above, Olson Kundig has established that it is more likely than not 8 that the Marks and Design Patents are valid; that Olson Kundig owns the Marks and 9 Design Patents; and that 12th Avenue’s continued use of Olson Kundig’s Marks and 10 Design Patents is unauthorized because 12th Avenue Iron no longer holds a license to use 11 the Marks and Design Patents. See supra Section III.B (concluding that Olson Kundig 12 has demonstrated that the Agreement is likely enforceable and that it is likely to succeed 13 on its patent and trademark infringement claims); (see also Resp. at 14 (admitting that 14 12th Avenue Iron continues to use the Marks and Design Patents)). As Olson Kundig 15 asserts, such unauthorized use is likely to mislead the public “because in the public mind, 16 the products currently being displayed under the Tom Kundig Collection line on 12th 17 Avenue Iron’s official website still originate from, are associated with, or endorsed by, 18 Olson Kundig” (Mot. at 14). See, e.g., Paisa, 928 F. Supp. at 1013 (noting that because a 19 licensee becomes associated in the public’s mind with the trademark holder, a licensee’s 20 continued use of the trademark without authorization “confuses and defrauds the 21 public”). The public interest is best served by preventing such confusion and protecting 22 Olson Kundig’s patent and trademark rights from infringement. See, e.g., Treemo, Inc. v. ORDER - 40 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 41 of 42 1 Flipboard, Inc., 53 F. Supp. 3d 1342, 1368 (W.D. Wash. 2014) (holding that an 2 injunction would serve public interests of protecting the rights of trademark holders 3 against infringement and minimizing consumer confusion); Eko Brands, LLC v. Adrian 4 Rivera Maynez Enters., Inc., 325 F. Supp. 3d 1116, 1129 (W.D. Wash. 2018), aff’d, 946 5 F.3d 1367 (Fed. Cir. 2020) (“[The public interest] is better served by recognizing the 6 property rights conveyed by a patent and giving honor to those rights.”). Accordingly, 7 this factor weighs in favor of a preliminary injunction. 8 In sum, the court finds that Olson Kundig has met the requirements for the 9 issuance of a preliminary injunction. See Winter, 555 U.S. at 20. 10 IV. 11 CONCLUSION For the foregoing reasons, the court GRANTS Olson Kundig’s motion for a 12 preliminary injunction (Dkt. # 6). Having concluded that a preliminary injunction is 13 warranted, the court ORDERS the parties to submit a joint statement, not to exceed ten 14 (10) pages, that includes the parties’ position(s) as to: (1) the bond amount 20 and (2) the 15 specific language of the preliminary injunction. 21 The parties should confer and attempt 16 to reach agreement on both of the above issues. If the parties are unable to reach 17 20 18 19 20 21 22 Under Federal Rule of Civil Procedure 65(c), a court may issue a preliminary injunction “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.” Fed. R. Civ. P. 65(c). 21 Rule 65(b) requires that every order granting an injunction must, among other things “state its terms specifically and “describe in reasonable detail—and not by referring to the complaint or other document—the act or acts restrained or required.” Fed. R. Civ. P. 65(d)(1)(B)-(C). While Olson Kundig’s motion includes broad language regarding the acts that it would like the court to restrain or require (see generally Mot. at 19; Prop. Order (Dkt. # 6-1)), such broad language does not meet the specificity requirements set forth in Rule 65(d)(1). ORDER - 41 Case 2:22-cv-00825-JLR Document 26 Filed 09/12/22 Page 42 of 42 1 agreement on all or some of the issues, the parties shall indicate any agreed upon terms 2 and may include separate statements containing their own proposed terms with respect to 3 the remaining areas of dispute. The parties shall file their statement no later September 4 22, 2022. 5 Dated this 12th day of September, 2022. 6 7 A 8 JAMES L. ROBART United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ORDER - 42

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