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Federal Practice Update — Isopure Name Fails to Reign Supreme

September 01, 2004

This month we review three decisions rendered by the Judges of the Eastern District of New York, Alfonse D’Amato Courthouse. In the first decision, the Honorable Thomas C. Platt denies a motion for his recusal. Next, we consider the decision of the Honorable Arthur D. Spatt denying a motion to set aside a discovery order of Magistrate Judge Arlene R. Lindsay. Finally, we review Judge Platt’s denial of a motion for a preliminary injunction in a trademark dispute.

In Fox Indus., Inc. v. Gurovich, CV-03-5166 (TCP) (E.D.N.Y. July 1, 2004), defendant moved, pursuant to 28 U.S.C. § 455(a), to compel the disqualification of Judge Platt, on the ground that the Court, throughout various rulings and statements, expressed hostility and anger with defendant. Specifically, on an earlier motion for a temporary restraining order and preliminary injunction, the Court made the motion returnable, at the request of defendant’s counsel, to November 14, 2003. Defense counsel ultimately failed to appear and the court entered a default, including a temporary restraining order under preliminary injunction against defendant. Defendant’s counsel later claimed that he and his driver “could not find” the courthouse. There were later proceedings in which plaintiff moved for contempt of the injunction order by defendant in which the court found testimony establishing contempt of the court’s orders. After reviewing the submissions, the Court concluded that the court’s reactions to conduct of defendant and his lawyer throughout the proceedings “were caused by and are attributable to” the behavior of defendant and his counsel only, and therefore no grounds for recusal exist. As a result, Judge Platt denied defendant’s motion for recusal.

United Parcel Serv. of Am. Inc., v. The Net, Inc., CV-7059 (ADS) (ARL) (E.D.N.Y. June 24, 2004), involves an action brought by UPS for trademark infringement and dilution and unfair competition. Defendant, appearing pro se, was incarcerated in Canada while the litigation was pending. Plaintiff served a request for the production of documents upon defendant, who in turn responded that relevant documents were in two locations in western Pennsylvania, and the volume ranged from 100,000 to 200,000 documents. Defendant further claimed that he was unable to bear the cost of shipping the documents to and from Canada to review them, and that his incarceration made it impossible for him to travel to Pennsylvania and review the documents to determine relevancy. Accordingly, Magistrate Judge Lindsay issued an order allowing plaintiff to discover the documents by either entering into a confidentiality order and reviewing the documents in Pennsylvania at its own cost, or bearing the cost of shipping the documents to and from Canada. UPS moved to set aside Magistrate Judge Lindsay’s order on the ground that it is contrary to the Federal Rules since it required UPS to bear the cost of its own discovery request.

On review of the Magistrate Judge’s order, Judge Spatt noted that a party seeking to overturn a discovery order bears a heavy burden and that under such a “highly deferential standard of review,” a reversal of the Magistrate’s order is warranted only if discretion is abused. The Court noted that under ordinary principles, the responding party bears the expense for complying with a discovery request. However, Federal FRCP 26(b)(2)(iii) allows the Judge to limit discovery requests when the burden outweighs the benefit. The court reasoned that the changes in Rule 26 allow Judges to increasingly use the limitations contained there, with an eye toward equity. Included within that discretion is the ability to cost-shift in discovery. Noting that financial burden or hardship alone does not excuse a party from bearing the cost of responding to discovery under usual circumstances, the defendant here was indigent, and also subject to foreign incarceration. Noting that the defendant’s position is unique, the court concluded that Magistrate Judge Lindsay’s order “correctly facilitates the ultimate disposition of this case,” affirming her order.

In Nature’s Best, Inc. v. Ultimate Nutrition, Inc., CV-04-1451 (TCP) (MLO) (E.D.N.Y. June 30, 2004), Nature’s Best sought injunctive relief to prevent Ultimate Nutrition, Inc. from using the brand name “Isopreme” in connection with protein supplements. Plaintiff has used the trademark “Isopure” on a line of protein supplements. The “Isopure” trademark is registered for food supplements in powder drink mix and beverage form. Plaintiff alleged it had expended an excess of $10 million in advertising and promotion of the “Isopure” line, resulting in sales in excess of $80 million. Defendant manufactures and distributes dietary supplements. Defendant applied for and obtained a trademark registration for “Isopreme” three years after the “Isopure” mark was registered.

The Court considered the likelihood of success on the merits by considering the Polaroid factors. In considering the Polaroid factors, the Court concluded the “iso” prefix – that portion of the mark that is the most similar between the two – is descriptive in nature. Specifically, “iso” refers to “whey protein isolate”, the primary ingredient in both products. Accordingly, the Court concluded that “iso” is merely an abbreviated descriptive term. In considering the proximity of the products and sophistication of the buyers, the Court concluded that although both products are in close market-place proximity to each other, the consumers are sophisticated given their conscientious nature in the nutrition choices that they make. Finding that there was a low likelihood of confusion and that the mark had only moderate strength, there was no finding of likelihood of success on the merits or that there would be sufficiently serious questions to be litigated. As a result, the Court did not even reach the issue of irreparable harm and denied the mete for an injunction.

Editor’s Note: The author is a Partner at Farrell Fritz, P.C., and a member of that firm’s Commercial Litigation Practice Group.

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