1 'O' 2 3 4 5 6 7 8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10 11 12 VITAL PHARMACEUTICALS, Case No. 2:20-cv-06745- INC. d/b/a Bang Energy; RSWL-JCx 13

JHO INTELLECTUAL PROPERTY

14 HOLDINGS, ORDER re: Plaintiffs’ Motion for Preliminary 15 Plaintiffs, Injunction [76] 16 v. 17

PHD MARKETING, INC.; DOES

18 1 to 10, 19 Defendants. 20 21 Currently before the Court is Plaintiffs’ Motion 22 23 for Preliminary Injunction [76]. Having reviewed all 24 papers submitted pertaining to this Motion, the Court 25 NOW FINDS AND RULES AS FOLLOWS: the Court DENIES the 26 27 Motion. 28 1 I. BACKGROUND 2 A. Factual Background 3 4 Plaintiff Vital Pharmaceuticals, Inc. d/b/a Bang 5 | Energy (“Vital”) is a manufacturer of nutritional 6 supplements and energy drinks, including the BANG energy 7 9 drink. Compl. 4 11, ECF No. 1. Plaintiff JHO 9 | Intellectual Property Holdings, LLC (“JHO”) owns the 10 BANG trademarks, and Vital is the exclusive licensee of 11 12 all intellectual property rights relating to those 13 | trademarks. Id. 449 15-16. Specifically, JHO holds 14 trademark registration number 3,545,129 (the “BANG 15 16 Mark”), which was registered in 2008. Id. ¢ 17. JHO 17 | also holds registration numbers 4,985,030 and 4,990,091 18 (together, the “BANG Logo”). Id. | 19. Vital uses both 19 50 the BANG Mark and the BANG Logo in connection with its

21 | BANG energy drinks. Those marks are pictured below. 22 BANG Mark: 23 24 tm 25 26 27 28

1 | Compl. 4 17. 2 BANG Logo: 3 4 5 » 6 Qe 7 8 | Compl. 20. 9 Vital sells its BANG energy drinks to a wide range 10 11 of consumers across the United States. Decl. of Eugene 12 | Bukovi in Supp. of Pls.’ Mot. (“Decl. of Bukovi”) 4 6, 13 ECF No. 78. Each unit sells for less than $3. Id. q 8. 14 15 BANG energy drinks are the third-largest selling energy 16 | drink in the United States and have generated over $1 1 billion in gross revenue since 2017. Id. 10-11. 18 19 Defendant PhD Marketing, Inc. (“Defendant”) sells, 20 | manufactures, and imports electronic cigarette (“e- 21 cigarette”) devices under the name “Bang.” Id. 4 26. 22 33 Plaintiffs allege that Defendant’s e-cigarettes use a

24 | mark and logo that are highly similar to the BANG Mark 25 | and BANG Logo. Id. 4 27. Plaintiffs allege that 26 37 Defendant uses the following marks for its e-cigarettes: 28

1 2 5 6 Plaintiffs have not authorized Defendant to use the 7 BANG Mark or BANG Logo in any form. Id. 4 30-31. 8 9 B. Procedural Background 10 Plaintiffs filed their Complaint [1] on May 19, 11 2020, in the Southern District of Florida. Four days 12 13 prior, on May 15, 2020, Defendant had initiated a

14 | separate action (the “First Action”) for declaratory 15 judgment in this district. See PhD Mktg., Inc. v. Vital 16 WW Pharm., Inc., et al., No. 2:20-cv-04417-RSWL-JC; Notice

18 | of Related Case, ECF No. 51. On June 1, Plaintiffs 19 | filed a Motion to Dismiss the First Action. See 20 generally Mot. to Dismiss, PhD Mktg., Inc. v. Vital

92 | Pharm., Inc., et al., No. 2:20-cv-04417-RSWL-JC, ECF No. 23 113. During the pendency of that motion, this Action 24 was transferred from the Southern District of Florida to 25 96 | this district [44] and ultimately to this Court [67]. 27 On October 1, the Court granted Plaintiffs’ Motion 28

1 to Dismiss the First Action with leave to amend and 2 denied the Joint Motion to Consolidate as Moot. See 3 generally id., ECF No. 29. On October 15, Defendant 4 5 filed its First Amended Complaint in the First Action. 6 Id., ECF No. 35. 7 On September 28, Plaintiffs filed the pending 8 9 Motion for Preliminary Injunction [76] in this Action. 10 Defendant opposed [83] the Motion on October 6, and 11 Plaintiffs replied [86] on October 13. 12 13 On October 20, Defendant filed an ex parte 14 Application [91] to submit additional evidence and 15 provide evidentiary objections, which the Court denied 16 17 [95] on October 26. 18

II. DISCUSSION

19 A. Legal Standard 20 21 A court may grant a preliminary injunction pursuant 22 to Federal Rule of Civil Procedure 65(a). A preliminary 23 injunction, however, “is an extraordinary remedy never 24 25 awarded as of right.” Winter v. Nat. Res. Def. Council, 26 Inc., 555 U.S. 7, 24 (2008). “A [party] seeking a 27 preliminary injunction must establish that he is likely 28 1 to succeed on the merits, that he is likely to suffer 2 irreparable harm in the absence of preliminary relief, 3 that the balance of equities tips in his favor, and that 4 5 an injunction is in the public interest.” Am. Trucking 6 Ass'ns v. City of Los Angeles, 559 F.3d 1046, 1052 (9th 7 Cir. 2009) (quoting Winter, 555 U.S. at 20 (2008)). 8 9 The Ninth Circuit employs a sliding scale when 10 considering a party’s showing as to the likelihood of 11 success on the merits and the likelihood of irreparable 12 13 harm. All. for the Wild Rockies v. Cottrell, 632 F.3d 14 1127, 1131 (9th Cir. 2011). “Under this approach, the 15 elements of the preliminary injunction test are 16 17 balanced, so that a stronger showing of one element may 18 offset a weaker showing of another.” Id. 19 B. Discussion 20 21 1. Defendant’s Evidentiary Objections 22 Defendant has filed several evidentiary objections 23 to the declaration of Eugene Bukovi [78], which 24 25 accompanies Plaintiffs’ Motion. See generally Def.’s 26 Evidentiary Objections, ECF No. 83-5. However, “courts 27 may consider otherwise inadmissible evidence in 28 1 preliminary injunction proceedings.” Garcia v. Green 2 Fleet Sys., LLC, No. 2:14-cv-06220-PSG-JEM, 2014 WL 3 5343814, at *5 (C.D. Cal. Oct. 10, 2014). “[E]videntiary 4 5 objections to evidence submitted in connection with a 6 motion for a preliminary injunction ‘properly go to 7 weight, rather than admissibility.’” Hope Med. Enter., 8 9 Inc. v. Fagron Compounding Servs., LLC, No. 2:19-cv- 10 07748-CAS(PLAx), 2020 WL 3803029, at *5 (C.D. Cal. July 11 7, 2020) (quoting Garcia, 2014 WL 5343814, at *5). 12 13 Accordingly, those objections are OVERRULED. 14 2. Likelihood of Success on the Merits 15 To prevail on a trademark infringement claim under 16 17 the Lanham Act, a party must prove (1) that it has a 18 protectable ownership interest in the mark; and (2) that 19 the defendant’s use of the mark is likely to cause 20 21 consumer confusion. Network Automation, Inc. v. 22 Advanced Sys. Concepts, 638 F.3d 1137, 1144 (9th Cir. 23 2011)(citation omitted). 24 25 a. Protectable Ownership Interest 26 Federal registration of a trademark is “prima facie 27 evidence of the validity of the registered mark . . . , 28 1 of the owner’s ownership of the mark, and of the owner’s 2 exclusive right to use the registered mark . . . .” 15 3 U.S.C. § 1057(b). The defendant then carries the burden 4 5 of challenging the registration. Jevo Inc. v. Barre 6 Physique LLC, No. CV-08-06315-R, 2010 WL 11597823, at *8 7 (C.D. Cal. Feb. 22, 2010). 8 9 The parties do not dispute that JHO owns the 10 asserted trademarks, but Defendant contends that, under 11 the U.S. Patent and Trademark Office’s Trademark Manual 12 13 of Examining Procedure (“TMEP”) § 1201.02(b), JHO’s 14 registrations are invalid because JHO, the owner of the 15 marks, is not the entity that filed the registrations. 16 17 Def.’s Opp’n to Mot. for Prelim. Inj. (“Opp’n”) 11:17- 18 12:10, ECF No. 83. 19 However, TMEP § 1201.02(b) allows an application by 20 21 “the party who is the owner (or is entitled to use) the 22 mark.” TMEP § 1201.02(b) (emphasis added). Moreover, 23 15 U.S.C. § 1055 provides that, “[w]here a registered 24 25 mark or a mark sought to be registered is or may be used 26 legitimately by related companies, such use shall inure 27 to the benefit of the registrant or applicant for 28 1 registration.” Plaintiffs provide evidence that Vital 2 was the sole member of Bang Energy, LLC at the time Bang 3 Energy, LLC filed the registrations and that, as an 4 5 affiliate, Vital was permitted to use the marks. Decl. 6 of Michael W. Carwin in Supp. of Pls.’ Reply (“Decl. of 7 Carwin”) ¶ 2, ECF No. 88. Plaintiffs have thus 8 9 established a valid, protectable interest in the 10 asserted marks. 11 b. Consumer Confusion 12 13 The Ninth Circuit considers eight factors, termed 14 the Sleekcraft factors, to determine likelihood of 15 consumer confusion: (1) strength of the mark; (2) 16 17 proximity of the goods; (3) similarity of the marks; (4) 18 evidence of actual confusion; (5) marketing channels 19 used; (6) type of goods and the degree of care likely to 20 21 be exercised by the purchaser; (7) defendant’s intent in 22 selecting the mark; and (8) the likelihood of expansion 23 of the product lines. AMF Inc. v. Sleekcraft Boats, 599 24 25 F.2d 341, 348-49 (9th Cir. 1979), abrogated in part on 26 other grounds by Mattel, Inc. v. Walking Mountain 27 Prods., 353 F.3d 792, 810 (9th Cir. 2003). The Court 28 1 considers each factor in turn. 2 i. Strength of the Mark 3 “The stronger a mark—meaning the more likely it is 4 5 to be remembered and associated in the public mind with 6 the mark's owner—the greater the protection it is 7 accorded by the trademark laws.” Network Automation, 8 9 638 F.3d at 1149 (quoting Brookfield Commc’ns, Inc. v. 10 W. Coast Ent. Corp., 174 F.3d 1036, 1058 (9th Cir. 11 1999)). Courts evaluate the strength of a mark 12 13 conceptually and commercially. Id. Conceptual strength 14 refers to the classification of a mark based on its 15 “inherent distinctiveness as generic, descriptive, 16 17 suggestive, arbitrary, or fanciful.” Id. (citing 18 Brookfield, 174 F.3d at 1058). Commercial strength, on 19 the other hand, refers to the mark’s “actual marketplace 20 21 recognition.” Id. (citing Brookfield, 174 F.3d at 22 1058). “[A] suggestive or descriptive mark, which is 23 conceptually weak, can have its overall strength as a 24 25 mark bolstered by its commercial success.” Monster 26 Energy Co. v. BeastUp LLC, 395 F. Supp. 3d 1334, 1352 27 (E.D. Cal. 2019) (citing M2 Software, Inc. v. Madacy 28 1 Ent., 421 F.3d 1073, 1081 (9th Cir. 2005)). 2 Plaintiffs argue that the BANG Mark and BANG Logo 3 are arbitrary—and therefore conceptually strong—because 4 5 “they bear no relationship to the actual product.” Mem. 6 of P. & A. in Supp. of Mot. for Prelim. Inj. (“Mot.”) 7 17:17, ECF No. 77. Defendant counters that the marks 8 9 are “at best suggestive, and more realistically . . . 10 descriptive.” Opp’n 13:7-8. 11 The determination of a mark’s conceptual strength 12 13 turns on “the obviousness of its connection to the good 14 . . . to which it refers.” Id. (citing Fortune Dynamic, 15 618 F.3d at 1032-33). The distinction between 16 17 suggestive marks and descriptive marks is thus: 18 The “primary criterion for distinguishing between a 19 suggestive and a descriptive mark is the imaginativeness involved in the suggestion, that 20 is, how immediate and direct is the thought process 21 from the mark to the particular product.” A mark is suggestive “if ‘imagination’ or a ‘mental 22 leap’ is required in order to reach a conclusion 23 as to the nature of the product being referenced. By contrast, a mark is descriptive if it defines a 24 particular characteristic of the product in a way 25 that does not require any exercise of the imagination.” 26 27 Home Comfort Heating & Air Conditioning, Inc. v. Ken 28 1 Starr, Inc., No. 818CV00469JLSDFM, 2018 WL 3816745, at 2 *3 (C.D. Cal. July 24, 2018) (citations omitted) 3 (quoting Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1197- 4 5 98 (9th Cir. 2009)). 6 The word “bang” for an energy drink is at least 7 suggestive, as it requires some degree of imagination to 8 9 make the association between the mark and the product. 10 “Bang” does not directly describe the product but 11 instead seems to suggest the product’s effect, if it 12 13 relates to the product at all. Although Plaintiffs may 14 later prove the mark to be stronger, the Court concludes 15 that the BANG Mark is at least suggestive. Perhaps even 16 17 stronger is the BANG Logo, which in no way suggests the 18 nature of the product or its effects. 19 Defendant argues, however, that the crowded field 20 21 of similar products using similar marks weakens 22 Plaintiffs’ marks. Opp’n 13:13-14:3. “[W]hen ‘the 23 marketplace is replete with products using a 24 25 particularly trademarked’ symbol, it ‘indicates not only 26 the difficulty in avoiding its use but also, and 27 directly, the likelihood that consumers will not be 28 1 confused by its use.’” JL Beverage Co., LLC v. Jim Beam 2 Brands Co., 828 F.3d 1098, 1108 (9th Cir. 2016) 3 (emphasis in original) (quoting Entrepreneur Media, Inc. 4 5 v. Smith, 279 F.3d 1135, 1144 (9th Cir. 2002)). 6 To support its contention that the field is 7 crowded, Defendant proffers numerous registrations of 8 9 marks containing the term “Bang” or the letter “b” for 10 “beverages, tobacco products and food items.” Decl. of 11 Randal Robinson in Supp. of Def.’s Opp’n (“Decl. of 12 13 Robinson”) ¶¶ 5-6, ECF No. 83-3. 14 Plaintiffs correctly point out that the mere 15 existence of third-party registrations does not 16 17 establish a crowded field “without evidence that the 18 marks were actually used in commerce and viewed by 19 consumers.” Boldface Licensing + Branding v. By Lee 20 21 Tillett, 940 F. Supp. 2d 1178, 1191 (C.D. Cal. 2013) 22 (citing cases). Thus, the evidence to which Defendant 23 cites regarding the existence of numerous registrations 24 25 is immaterial without an indication that those 26 registrations have been viewed by consumers. 27 In addition, Plaintiffs seek to define the relevant 28 1 field more narrowly than “beverages” and “food items,” 2 Pls.’ Reply in Supp. of Mot. for Prelim. Inj. (“Reply”) 3 9:16-17, ECF No. 78, because Defendant provides no 4 5 evidence of marks similar to those of Plaintiffs in the 6 field of energy drinks. Although Defendant deems energy 7 drinks to be in the same field as coffee beverages, 8 9 there is no evidence showing coffee beverages “would 10 likely [be] sold side-by-side” with the BANG energy 11 drink. Hansen Beverage Co. v. Cytosport, Inc., No. CV 12 13 09-0031-VBF(AGRx), 2009 WL 5104260, at *8 (C.D. Cal. 14 Nov. 4, 2009). Moreover, even assuming Defendant is 15 correct that sports drinks and energy drinks are within 16 17 the same field, Defendant offers only one instance of a 18 sports drink with a comparable mark. Opp’n 14:11-21. 19 This is insufficient to determine that the BANG Mark and 20 21 BANG Logo operate in a crowded field. 22 Moreover, whatever weakness there is in a 23 suggestive mark may be overcome by a showing of 24 25 commercial strength. See Entrepreneur Media, 279 F.3d 26 at 1144 (citing Am. Int’l Grp., Inc. v. Am. Int’l Bank, 27 926 F.2d 829, 832 (9th Cir. 1991)). Plaintiffs argue 28 1 that the marks are commercially strong, as BANG energy 2 drinks have generated over $1 billion in gross revenue 3 since 2017 and “are considered the third largest selling 4 5 energy drink in the United States.” Mot. 17:22-26; 6 Reply 7:26-8:5; Decl. of Bukovi ¶¶ 10-11, ECF No. 78. 7 This commercial success, which Defendant does not 8 9 dispute, evidences a stronger mark. Because the BANG 10 Logo and BANG Mark are at least suggestive and are 11 further bolstered by the commercial success of BANG 12 13 energy drinks, this factor weighs in favor of confusion. 14 ii. Proximity of the Goods 15 “Related goods are generally more likely than 16 17 unrelated goods to confuse the public as to the 18 producers of the goods.” Network Automation, 638 F.3d 19 at 1150 (citing Brookfield, 174 F.3d at 1055). The key 20 21 question is whether, based on the relevant marks, 22 consumers are likely to associate Plaintiffs’ BANG 23 energy drinks with Defendant’s e-cigarettes. See 24 25 Fortune Dynamic, 618 F.3d at 1035 (“In addressing this 26 factor, our focus is on whether the consuming public is 27 likely somehow to associate [Fortune’s DELICIOUS 28 1 footwear] with [Victoria’s Secret’s tank top].”). This 2 determination is made by evaluating “whether the 3 products are: (1) complementary; (2) sold to the same 4 5 class of purchasers; and (3) similar in use and 6 function.” Network Automation, 638 F.3d at 1150. 7 There is no evidence that the products at issue are 8 9 complementary or that they are similar in use and 10 function. An energy drink is used for considerably 11 different purposes than an e-cigarette. See Kiva Health 12 13 Brands LLC v. Kiva Brands Inc., 402 F. Supp. 3d 877, 893 14 (N.D. Cal. 2019) (determining that health supplements 15 and cannabis-infused snacks, although both food items, 16 17 are not complementary because they are used for “quite 18 different” purposes). Moreover, although Plaintiffs 19 proffer some evidence that the products may be sold in 20 21 similar channels, Plaintiffs provide no evidence that 22 their products and Defendant’s products are sold to the 23 same class of purchasers. 24 25 Accordingly, this factor weighs against consumer 26 confusion. 27 /// 28 1 iii. Similarity of the Marks 2 This factor is critical in evaluating the 3 4 likelihood of confusion. GoTo.com, Inc. v. Walt Disney 5 | Co., 202 F.3d 1199, 1205 (9th Cir. 2000) (“[T]he 6 Similarity of the marks .. . has always been considered 7 g | 2 critical question in the likelihood-of-confusion 9] analysis.”). Similarity is principally tested by sight, 10 sound, and meaning. Network Automation, 638 F.3d at 11 12 1150. A court must consider the marks “as they appear 13 | in the marketplace” and weigh “similarities . . . more 14 heavily than differences.” Fortune Dynamic, 618 F.3d at 15 16 1032 (citing GoTo.com, 202 F.3d at 1206). 17 Plaintiffs provide the below comparison of the BANG 18 Logo and BANG Mark, on the left, and Defendant’s alleged 19 50 infringing marks, on the right: 21 22 23 24 25 °° WON 27 (“ciseosasue vares _] 28 17

1 Mot. 2:6-16. 2 With respect to the BANG Mark and Defendant’s 3 “bang” mark, there is no question as to the overwhelming 4 5 similarities. The words, expressed all in lowercase, 6 are the same. As Plaintiffs point out, the marks have 7 “the exact same stylized font, font bordering, and font 8 9 proportions.” Mot. 17:1. 10 With respect to the BANG Logo and Defendant’s “b” 11 mark, the similarities are substantial. Looking at the 12 13 respective “b” marks, there are likenesses in the font 14 and borders. Apart from those similarities, however, 15 there are some differences which lessen the likelihood 16 17 of consumer confusion as compared to the BANG Mark. 18 In summary, although Plaintiffs’ BANG Mark and 19 Defendant’s “bang” mark are not identical, they are 20 21 exceptionally similar. Moreover, the BANG Logo and 22 Defendant’s “b” mark maintain sufficient similarities as 23 to engender consumer confusion. Therefore, this factor 24 25 militates in favor of confusion. 26 iv. Evidence of Actual Confusion 27 “[A] showing of actual confusion among significant 28 1 numbers of consumers provides strong support for the 2 likelihood of confusion.” Network Automation, 638 F.3d 3 1137 at 1151 (citing Playboy Enters., Inc. v. Netscape 4 5 Commc’n Corp., 354 F.3d 1020, 1026 (2004)). But actual 6 confusion is not necessary to establish a likelihood of 7 confusion. Id. 8 9 Plaintiffs cite several instances of actual 10 confusion. Specifically, Plaintiffs attach several 11 social media posts and email communications whereby 12 13 consumers believe that Vital is the source of 14 Defendant’s e-cigarettes. See Decl. of Bukovi, Ex. 3; 15 Decl. of Bukovi, Ex. 12; Decl. of Bukovi, Ex. 13; Decl. 16 17 of Bukovi, Ex. 15. 18 The instances to which Plaintiffs cite demonstrate 19 that consumers have indeed believed Vital to be the 20 21 source of Defendant’s e-cigarettes. This evidence of 22 actual confusion “is persuasive proof that future 23 confusion is likely.” Sleekcraft, 599 F.2d at 352. 24 25 However, the Court cannot determine at this stage that 26 twelve such instances necessarily establish that the 27 alleged infringement is “likely to confuse an 28 1 appreciable number of people as to the source of the 2 product.” Entrepreneur Media, 279 F.3d at 1151 3 (emphasis in original); see also Chron. Publ’g Co. v. 4 5 Chron. Publ’ns, Inc., 733 F.Supp. 1371, 1377-78 (N.D. 6 Cal. 1989) (finding the “actual confusion” factor to 7 weigh heavily in plaintiff’s favor when plaintiff 8 9 provided over 100 instances of confusion). 10 Despite the compelling nature of the actual 11 instances of confusion, this factor weighs only slightly 12 13 in favor of confusion because of the unremarkable number 14 of cited instances. Regardless, failure to conclusively 15 establish actual confusion is not dispositive. 16 17 Sleekcraft, 599 F.2d at 352. 18 v. Marketing and Trade Channels Used 19 “Convergent marketing channels increase the 20 21 likelihood of confusion.” Network Automation, 638 F.3d 22 1137 at 1151 (citing Sleekcraft, 599 F.2d at 353). The 23 question is “whether the predominant purchasers of the 24 25 parties’ goods are similar or different, and whether the 26 marketing approaches used resemble each other.” Glow 27 Indus., Inc. v. Lopez, 252 F. Supp. 2d 962, 1000 (C.D. 28 1 Cal. 2002). Although the parties need not target the 2 same customers, there must be “some overlap.” Boldface 3 Licensing + Branding v. By Lee Tillett, Inc., 940 F. 4 5 Supp. 2d 1178, 1194 (C.D. Cal. 2013); see also Glow 6 Indus., 252 F. Supp. 2d at 1000 (“[S]ome degree of 7 overlap must be present before the factor favors a 8 9 finding of likelihood of confusion.”). 10 There is no question here that the parties employ 11 distinct marketing approaches. Vital primarily markets 12 13 the BANG energy drinks through “athletes, brand 14 ambassadors, and social media influencers” as well as at 15 trade shows and fitness expos. Mot. 5:19-15, 6:6-7. 16 17 There is no evidence that Defendant has a similar 18 marketing approach. To the extent the parties’ 19 marketing approaches overlap through use of the 20 21 internet, “the shared use of a ubiquitous marketing 22 channel does not shed much light on the likelihood of 23 consumer confusion.” Network Automation, 638 F.3d at 24 25 1151. 26 The more pertinent question is whether the 27 predominant purchasers of the respective products are 28 1 similar. Plaintiffs and Defendant each provide evidence 2 that their products are sold at smoke shops. Decl. of 3 KJ Semikian in Supp. of Opp’n (“Decl. of Semikian”) ¶ 9, 4 5 ECF No. 83-1; Suppl. Decl. of Eugene Bukovi in Supp. of 6 Pls.’ Mot. for Prelim. Inj. (“Suppl. Decl. of Bukovi”) ¶ 7 9, ECF No. 87. Even if a substantial part of Vital’s 8 9 sales come from sources other than smoke shops, 10 Plaintiffs have made a sufficient showing of at least 11 “some overlap” between the predominant purchasers. This 12 13 factor weighs slightly in favor of confusion. 14 vi. Degree of Care Likely to Be Exercised 15 by the Purchaser 16 17 Where consumers exercise a lesser degree of care, 18 there is a higher likelihood of confusion. Network 19 Automation, 638 F.3d 1137 at 1152. Courts evaluate the 20 21 degree of care based on “the typical buyer exercising 22 ordinary caution.” Id. at 1152. 23 “[W]hen dealing with inexpensive products, 24 25 customers are likely to exercise less care, thus making 26 confusion more likely.” Brookfield, 174 F.3d at 1060. 27 The BANG energy drink sells at less than $3 per unit, 28 1 while Defendant’s e-cigarette sells at less than $10 per 2 unit. Decl. of Bukovi ¶¶ 8, 40. 3 Defendant focuses on the nature of the consumer, 4 5 rather than the products’ price points, in arguing that 6 health-conscious consumers, to whom Vital sells, 7 exercise greater care in selecting products regardless 8 9 of price. Opp’n 18:21-19:1. Although courts have 10 recognized a heightened degree of care where the product 11 appeals to a group that is particularly health- 12 13 conscious, that elevated standard of care is not 14 applicable where only some of the customers may be more 15 sophisticated. See Suja, Life, LLC v. Pines Int’l, 16 17 Inc., No. 16CV985-GPC(WVG), 2016 WL 6157950, at *12 18 (S.D. Cal. Oct. 24, 2016) (noting a higher degree of 19 care where “[b]oth parties agree that their consumers 20 21 are health-conscious and environmentally aware 22 shoppers”); see also Worthington Foods, Inc. v. Kellogg 23 Co., 732 F.Supp. 1417, 1448 (S.D. Ohio 1990) (finding a 24 25 higher degree of care where plaintiff conceded “that 26 those who purchase its products are well-educated, 27 health-conscious consumers”). Even though Vital 28 1 promotes a health-conscious brand, its consumers are not 2 necessarily health-conscious in every instance, or even 3 most instances. See Decl. of Bukovi ¶ 6 (“BANG energy 4 5 drinks . . . are sold to a wide range of customers . . . 6 .”); Compl. ¶ 14 (“[Vital] sells BANG energy drinks to 7 various types of consumers . . . .”). 8 9 Because of the low price points of both the BANG 10 energy drinks and Defendant’s e-cigarettes, consumers 11 are more likely to exercise a lesser degree of care. 12 13 This factor weighs in favor of confusion. 14 vii. Defendant’s Intent 15 “When an alleged infringer knowingly adopts a mark 16 17 similar to another’s, courts will presume an intent to 18 deceive the public.” Off. Airline Guides, Inc. v. Goss, 19 6 F.3d 1385, 1394 (9th Cir. 1993). Courts may infer 20 21 knowledge based on the plaintiff’s reputation or the 22 similarity of the marks. See, e.g., Fiji Water Co., LLC 23 v. Fiji Mineral Water USA, LLC, 741 F. Supp. 2d 1165, 24 25 1181 (C.D. Cal. 2010) (“In light of how well-known the 26 FIJI packaging was by 2007 and the wide variety of 27 alternative designs used in the bottled water industry, 28 1 it seems unlikely that such similarity could result from 2 a coincidence.”); K-Swiss, Inc. v. USA AISIQI Shoes 3 Inc., 291 F. Supp. 2d 1116, 1125 (C.D. Cal. 2003) 4 5 (inferring an intent to deceive the public based on “K- 6 Swiss’ strong reputation and the similarity of the marks 7 used”). 8 9 There is no direct evidence that Defendant knew of 10 the BANG Logo and BANG Mark. But Plaintiffs contend 11 that Defendant must have known about the BANG Mark and 12 13 BANG Logo because Defendant’s marks are virtually 14 identical. Mot. 20:8-10. As discussed above, although 15 the marks may have a close resemblance, they are not 16 17 identical. Moreover, Defendant is not in the business 18 of selling beverages, so the Court declines to impute 19 knowledge to Defendant based on the prominence of the 20 21 BANG energy drinks. 22 viii. Likelihood of Expansion of Product 23 Lines 24 25 This factor weighs in favor of the plaintiff where 26 there is a “‘strong possibility’ that either party may 27 expand his business to compete with the other.” Network 28 1 Automation, 638 F.3d 1137 at 1153 (quoting Sleekcraft, 2 599 F.2d at 354). Plaintiff fails to address this 3 factor. It therefore weighs against confusion. 4 5 ix. Conclusion as to Likelihood of Success 6 As shown above, the Sleekcraft factors do not 7 uniformly command a result. However, “the relative 8 9 importance of each individual factor [is] case- 10 specific.” Fortune Dynamic, 618 F.3d at 1030 (quoting 11 Brookfield Commc’ns, 174 F.3d at 1054). Here, 12 13 Plaintiffs hold the rights to the BANG Mark and the BANG 14 Logo. The remarkable similarities between Plaintiffs’ 15 and Defendant’s marks—as well as the strength of 16 17 Plaintiffs’ marks, the convergence of marketing 18 channels, the instances of actual confusion, and the low 19 degree of consumer care—insist upon consumer confusion. 20 21 As consumer confusion is “the linchpin of trademark 22 infringement,” Network Automation, 638 F.3d at 1154, 23 Plaintiffs have made a sufficient showing that they are 24 25 likely to succeed on their claim for trademark 26 infringement. 27 /// 28 1 3. Irreparable Harm 2 Plaintiffs must demonstrate that they are likely to 3 suffer irreparable harm if the Court does not grant the 4 5 preliminary injunction. Winter, 555 U.S. at 20 6 (emphasis added). Mere customer confusion, on its own, 7 cannot constitute irreparable harm. See Herb Reed 8 9 Enters., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 10 1250 (9th Cir. 2013) (distinguishing evidence that 11 “simply underscores customer confusion, not irreparable 12 13 harm”). However, “[e]vidence of loss of control over 14 business reputation and damage to goodwill” may be 15 sufficient. Id. 16 17 Here, Plaintiffs contend that irreparable harm 18 comes in the form of reputational damage and loss of 19 goodwill. Mot. 21:7-9. They point to several customer 20 21 communications. Reply 16:22-17:7. For instance, one 22 customer remarked, “I was excited to try all of your 23 wonderful flavors but because of this incident I don’t 24 25 think I will buy another one because I feel like I will 26 get the same result. Sincerely, a disappointed 27 customer.” Decl. of Bukovi, Ex. 13. Another customer 28 1 wrote, “I bought a bang disposable [e-cigarette] today 2 from a local liquor store in my area . . . . I would 3 like a refund . . . . This is my first time buying this 4 5 product and it didn’t work, very disappointed.” Decl. 6 of Bukovi, Ex. 15. But the dissatisfaction of these 7 customers with the e-cigarettes—and ultimately whether 8 9 these customers will elect to purchase another e- 10 cigarette—is of no moment to Plaintiffs. Because 11 Plaintiffs’ reputation is premised on its sales of 12 13 energy drinks, not e-cigarettes, the Court cannot infer 14 that customer dissatisfaction with e-cigarettes 15 establishes a likelihood of irreparable harm if an 16 17 injunction does not issue. 18 The cases to which Plaintiffs cite on this point 19 are inapposite. See Reply 15:13-16:16. In those cases 20 21 cited by Plaintiffs, there was affirmative evidence of 22 irreparable harm—namely, that customers diverted from 23 the plaintiff’s business because of the infringement. 24 25 See, e.g., OTR Wheel Eng’g, Inc. v. W. Worldwide Servs., 26 Inc., 602 Fed. Appx. 669, 672 (9th Cir. 2015) (affirming 27 the conclusion of irreparable harm where the defendant 28 1 “was selling its allegedly infringing tire to 2 [plaintiff’s] major customer”); Grupo Salinas Inc. v. JR 3 Salinas Wheels & Tires Inc., No. SACV 16-1923 JVS 4 5 (KESx), 2016 WL 9277320, at *7 (C.D. Cal. Dec. 22, 2016) 6 (finding irreparable harm where evidence “suggest[ed] 7 that customers may become frustrated with prices and 8 9 ultimately choose JR Salinas over Grupo Salinas”); 10 Kreation Juicery, Inc. v. Shekarchi, No. CV 14-658 DMG 11 (ASx), 2014 WL 7564679, at *12 (C.D. Cal. Sept. 17, 12 13 2014) (holding that the plaintiff established 14 irreparable harm where defendant was diverting customers 15 from plaintiff’s business); Nestle USA, Inc. v. Gunther 16 17 Grant, Inc., No. CV-13-6754 MMM (ASx), 2014 WL 12558008, 18 at *18 (C.D. Cal. May 13, 2014) (issuing a permanent 19 injunction where the defendants’ infringement “diverts 20 21 potential Nestle customers to defendants’ business”). 22 Here, Plaintiffs have only provided instances of 23 confusion—not actual, irreparable harm. Although there 24 25 may be examples of customer dissatisfaction with the e- 26 cigarettes, there is no evidence currently before the 27 Court concerning how the confusion has impacted or will 28 1 impact Plaintiffs’ reputation or commercial success. 2 Furthermore, Plaintiffs’ assertions that Vital 3 “will continue to suffer tremendous loss of goodwill to 4 5 its BANG brand” and “will loss [sic] control of the 6 reputation of the BANG brand”, Decl. of Bukovi ¶¶ 48-49, 7 are conclusory and thus insufficient to demonstrate a 8 9 likelihood of irreparable harm. See Kiva Health, 402 F. 10 Supp. 3d 877, 896 (N.D. Cal. 2019). 11 Finally, although a delay in filing for injunctive 12 13 relief is not determinative, it “implies a lack of 14 urgency and irreparable harm.” Cuviello v. City of 15 Vallejo, 944 F.3d 816, 833 (9th Cir. 2019) (citations 16 17 omitted); see also Dahl v. Swift Distrib., Inc., No. CV 18 10-00551 SJO (RZx), 2010 WL 1458957, at *3 (C.D. Cal. 19 Apr. 1, 2010) (noting that an “unexplained delay . . . 20 21 undercuts a claim that an injunction is necessary to 22 prevent immediate and irreparable injury”). Plaintiffs’ 23 two-month delay in filing this Motion weighs against 24 25 irreparable harm. See AK Metals, LLC v. Norman Indus. 26 Materials, Inc., No. 12cv2595-IEG (WVG), 2013 WL 417323, 27 at *10 (S.D. Cal. Jan. 31, 2013) (“Plaintiff’s [two- 28 1 month] delay in filing the motion . . . weighs against 2 the immediacy of the harm.”). 3 In summary, Plaintiffs have established a strong 4 5 likelihood of success on the merits. However, given 6 their failure to establish a likelihood of irreparable 7 harm, Plaintiffs have failed to meet their burden to 8 9 prevail on this Motion. 10 Accordingly, the Court need not address the balance 11 of hardships factor, the public interest factor, or the 12 13 need for a bond. 14

III. CONCLUSION

15 Based on the foregoing, the Court DENIES the 16 17 Motion. 18 IT IS SO ORDERED. 19 20 21 DATED: November 6, 2020 /s/ Ronald S.W. Lew______ __

HONORABLE RONALD S.W. LEW

22 Senior U.S. District Judge 23 24 25 26 27 28