Sabika v. Goshen - Motion for PI & Brief

7/28/2019 Sabika v. Goshen - Motion for PI & Brief

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Case 1:13-cv-00848 Document 33 Filed 06/25/13 Page 1 of 3 PageID #: 125

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF WEST VIRGINIABLUEFIELD DIVISIONSABIKA, INC.,

Plaintiff,v.

GOSHEN SPARKLING JEWELRY, LLC;MICHELLE OXLEY; andSHERAINE GUNNOE,

Defendants.

Civil Action No. 1:13-0848The Honorable David A. Faber, Judge

PLAINTIFF SABIKA INC.'S MOTION FOR PRELIMINARY INJUNCTIONPlaintiff Sabika, Inc. (hereinafter "Sabika"), by and through its undersigned counsel,

respectfully submits this Motion for a Preliminary Injunction, pursuant to Federal Rule ofCivilProcedure 65(a), against Defendants Goshen Sparkling Jewelry, LLC, Michelle Oxley, andSheraine Gunnoe (hereinafter "Defendants"). As more fully set forth in Sabika's Memorandumof Law filed and served simultaneously herewith and incorporated by reference, based uponDefendants' continuing copyright and trade dress infringement in this District and elsewhere,this Court should grant Sabika's Motion for Preliminary Injunction and issue an Order enjoiningDefendants from continued copyright and trade dress infringement during the pendency of thisaction.


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Respectfully submitted this 25 1h day of June, 2013.SABIKA, INC.By CounselIs/Russell D. JesseeRussell D. JesseeRussell. jessee({Vsteptoe-johnson.comW.Va. Bar No. [email protected]. Bar No. 11964STEPTOE & JOHNSON PLLCP.O. Box 1588707 Virginia Street E.Charleston, WV 25326-1588(304) 353-8000 (telephone)(304) 353-8180 (facsimile)

andMaxim H. Waldbaum (pro hac vice)[email protected] D. Katz (pro hac vice)Rkatz(i:l{evw.comEATON & VAN WINKLE LLP3 Park Ave., 16th FloorNew York, NY 10016Tel: 212.779.9910Fax: 212.779.9928Counsel to Plaintif!Sabika, Inc.

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SABIKA, INC.,Plaintiff,

v.

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF WEST VIRGINIABLUEFIELD DIVISION


GOSHEN SPARKLING JEWELRY, LLC;MICHELLE OXLEY; andSHERAINE GUNNOE,Defendants.

CERTIFICATE OF SERVICEI hereby certify that on June 25, 2013, a copy of the foregoing "Plaintiff Sabika, Inc.'s

Motion for Preliminary Injunction" was filed electronically. Notice of this filing will be sent byoperation of the Court's electronic filing system to all parties indicated on the electronic filingreceipt. There are no unrepresented parties.

Is! Russell D. JesseeRussell D. Jesseerussell. jessee@steptoe- johnson.comW.Va. Bar No. 10020STEPTOE & JOHNSON PLLCP.O. Box 1588707 Virginia Street E.Charleston, WV 25326-1588(304) 353-8000 (telephone)(304) 353-8180 (facsimile)

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Case 1:13-cv-00848 Document 33-1 Filed 06/25/13 Page 1 of 93 PageID #: 128

EXHIBIT A


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Case 1:13-cv-00848 Document 33-1 Filed 06/25/13 Page 2 of 93 PageID #: 129-------- - - - - - - -

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF WEST VIRGINIA

------------------------------------------------------XSABIKA, lNC.,

Plaintiff.

v.

GOSHEN SPARKLING JEWELRY;MICHELLE OXLEY; andSHERAlNE GUNNOE

Defendants.

)))))))))))-----------------------------------------------------X

Civil Action No. I :13-0848

DECLARATION OF JENNIFER SCHLIEPER

Jennifer Schlieper hereby declares as fo llows:1. I am the Director of Marketing for Sabika, Inc., a fami ly business founded in 2001, and

have been in this position for approximately one year. Prior to that, I had over I0 yearsof experience in marketing fo r various companies. (See 'Schlieper Resume," attachedhereto as Exh ibit l. ) I make this declaration in support of Plaintiff s Mot ion for aPreliminary Injunc tion . A ll statements contained herein are based upon personalknowledge except where stated to be on information and be lief.

Sabika s History2. Sabika is a fami ly business located in Pittsburgh. Pennsylvania, started by Karin Mayr

and her husband Konrad. Their idea was to design and sell elegant and dressy lookingAustrian crystal jewelry for eve ryday wear at af fordable prices to complement the outfits


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worn by women and to complement and coordinate with precious or mo re expensivejewelry pieces.

3. Each Sabikajewelry piece is unique ly designed and handmade. The hallmark of a Sabikadesign is the use of Austrian Swarovsk i crystals hand set in cup chains to create a un iqueappearance.

4. Upon infonnation and belief, Sabika \\-as the first and on ly company to sell high qu alityhandmade costume jewelry featuring Swarovski crystals hand set in cup chains. Thedesigns are the creations of Alexandra Mayr-Gracik, daughter of Karin and Konrad Mayr.Prior to coming to work at Sabika, Alexandra has ex tensive ex perience in fashion desi!,rn.

Sabika 's Intellectual Property5. The jewelry products of Sabika are unique, original, and subject to copyright and trade

dress protection. There are approximately one hundred seventy pending copyrightapplicat ions and ~ e v e n t y issued copyright registrations for Sabika jewelry. A completelist of those copyrights, both registered and pendi ng, is attached hereto as Exhibit 2.

6. Among the copyrights owned by Sabika are Wine and Dine, Registration No. VA 1-836-897; Ladies Lun ch Heart Pendant Registration No. VA 1-837-180; Vintage SupernaturalManhattan Choker and Bracelet, Reg istrati on No. VA 1-837-314; Sabika Pink PartyEarrings, Registration No.VA 1-839-26 1; and Sabi ka Pink Party Choker, RegistrationNo. VA 1-839-264. (See Ex hib it 2.)

7. Sabika also owns several trademarks cove ring the "SABIKA'' name as we ll as atrademark including our unique hea rt design wh ich appears at the end of an extender as aSabika de sign si gnature on se veral Sabika necklaces, an d also serves as our logo. A copyof the regi trations is attached hereto as Exhibit 3

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8. Sabika sells its products exclusively through ' 'home parties'' or other gatherings hosted byconsu ltants, who are sales representatives paid b)' commission. Hostesses invite guests toview the Sabika jewelry items and try them on. The consultants bring the various Sabikapieces on numerous trays. each holding a limited number of related designs.

9. Sabika does not presently advertise in magazines, newspapers. or other print media, nordoes it advertise on television or on radio. Sabika maintains a webs ite that givesbackground information about the company, its founders, its designer, its employees, andalso contains photographs of its current product line. It has several modes of advertising:(1) distribution of catalogs by consultants and to a mailing list; (2) displaying its designson its website; and (3) demonstration and display of its designs at home parties . Sabikadoes not sell over the Internet from its website. nor does it sell in retail stores, since itdoes not wish to undercut the sales of its consultants. Sabika se lls strictly th roughconsultants.

I 0. Sabika creates and releases photographs new designs twice yearly and prints and releasesnew designs as well as other "classic'' designs that remain in Sabika's lineup in its tw iceseasonal-Fall/Winter & Spring/Summer--catalogs. In the last several years, Sabika hasdistributed numerous catalogs each season, incurring substantial printing and d istribu tioncosts. Each consultant has te rritory, and the right to sell Sab ika jewelry in her territory.

11. Sabika has enjoyed a solid reputation and fo llow ing and has been praised by manypersons . It current ly has about 600 consultants in 37 states with most located mainly inPennsylvania, West Virgi nia, and Vi rginia. Sabika' s products have been sold in all 50states.

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Goshen 's Infringement12. Upon intonnation and belief, Defendant Goshen Sparkling Jewelry was begun by Ms.

Miche lle Oxley and Ms. Shera ine Gunnoe in March-Apri l of2012 . The original Goshenwebsite was registered on May 20, 20 12 at http: l.'.nshen'>parl-..lin2je\\cln ' '-:h .c,ml ,though that site is now inactive and di rects customers to the new website titledgoshensparklingjewelry.com. Goshen Sparkling Jewelry, LLC was officially fanned onJuly I 0, 2012 according to records obta ined from the Secretary of State of the State ofWest Virginia (See ''Certificate of a Lim ited Liability Corporation," attached he reto asExhibit 4.) Sabika first learned of Goshen and its business of selling copies of Sabikaproducts in late 2012. We had our attorney write them and ask them to cease and des istfrom infring ing our copyrights and trade dress .

13 . These discussions continued through the end of 2012, and when they fa iled to progress toour satisfaction, we instructed our attorneys to file the present action in January, 2013.

14 . Each of the designs copied by ashen appears in one of our catalogs and on our website,so Goshen clearly has access to these designs before they created their own pieces. Wehave printed out a number of photos of items that Goshen offers for sale. We have puttogether as Exhibit 5 a group of photos that show the original Sab ika design adjacent tothe Goshen design. Goshen adm its on its website that it started in busi ness in 2012, usingthe same home party fonnat as Sabika, so there is no question about who originated thedesign and who copied the design .

15. We have made a study to detenn ine w hether Goshen has affected our sales and revenues.We rev iewed the sales fi gu res for the Virginia/West Virgi nia reg ions and our other

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Case 1:13-cv-00848 Document 33-1 Filed 06/25/13 Page 6 of 93 PageID #: 133-- - ----- ------------------------

regions to see if sales in the Virginia/West Virgin ia area where Goshen salesrepresentatives seem heav ily concentrated have been affected by their presence includ ingsales by quarter, number of sales parties, customer count. sa les per active consultant,consultant commission by quarter, total number of consultants and number of newconsultants.

I6. The results show Virginia and West Virgin ia sales activity broken ou against salesactivity for the rest of the company (other regions, excluding Virginia and WestVirginia). The sales for the company as a \\'hole has grown quite nicely, but in the areasserved by Goshen (and several other infringers who have settled or are in the process ofsettling), we found significant drops in every var iable in the last twelve months, whichwe attribute to infringing activity. Thus, sales appear flat in the region, while overallsales for the Company have increased significantly. (See Sales Information," attachedhereto as Exhibit 6.)

17. The decrease in number of parties held and atte ndance at these parties, as wei as theoverall decline in the affected region has sliced into the amount of sales for activeconsultants in the affected region, particularly in the last few quarters when Goshenactivit) and sales grew signi ficantly. Decreased sales translate immediately intodecreased earnings for consultants in the region, and successful consu ltants are thelifeblood of our business. We consequently have fewer consultants working in theregion, and have been unable to increase this number in Virginia and West Vi rginia,un like in other regions. This affects sales, recruiting mora l, and longevity, and affects thecompany as a whole as we invest significantly in recruiting and training consul tants. Thelonger consultants stay with us, the more productive they get and the less we as a

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company have to spend on recruiting and training new consultants. In addition,successful consultants recruit their friends to act as consu ltants. In addition, we canattract better quality and more capable candidates if they can look forward to a salescareer unimpeded by trade dress and copyright infringement. ln sum, the copyright andtrade dress infringement perpetrated by Goshen (among others) has significantly harmedour company economically.

I 8. Sabika designs all of its own jewelry under the watchful eye of its founder Karin Mayr.It has a very distinctive look and appearance, attributable to the use of colorful, highquality Swarovski crystals made in Austr ia by artisans, and set in colored cup chains.The appearance of the product does not have any particular utilitarian advantage. Itsimply looks uniquely pretty to the eye of the consumer, and looks attractive when wornby a user. The particular colors chosen, the size and shape of the crystals and the type ofmounting all contribute to the customer appeal for the jewelry . There arc numerous otherways to make high qual ity costume jewelry that cou ld be ~ o l d to potential customerswithout copying the design or look of Sabika jewelry.

19. Sabika has been selling its line of necklaces, chokers. earrings and bracelets for over tenyears. Certain items are "classics" and remain in the line, on the website and in thequarterly catalogs distributed by consultants. Sabika has invested heavi ly in its website,in promotional shows and programs, and in catalogues to promote its jewelry line. Theseinvestments have currently, annual sales exceeding $ 10 million.

20. In addition, Sabika has received considerable media attention. Sabika was featured in anitem on KDKA-TV, the CB S affili ate in Pittsburgh, PA. Sabika jewe lry also appeared onthe cover of Seventeen magazine, and was featured in an a rticle in Pittsburgh magazine.

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Case 1:13-cv-00848 Document 33-1 Filed 06/25/13 Page 8 of 93 PageID #: 135----.

2 . I have personally reviewed the Facebook page of Goshen and there is no doubt thatGoshen has decided to compete with Sabika on Sab ika's designs. Goshen obviouslyknew of Sabika and its d istinctive line of fashion jewelry, because when we firstinvestigated their activities, they had a disclaimer on their Facebook page saying theydisc laim any relationship to Sabika. They removed that startling "disclaimer," and nowjust direct "Sab ika shoppers'' to the Sabika webs ite. Based upon my experience inmarketing for Sabika and my previous employers, these disc laimers are meaningless and,worse, harmfuL Sabika strongly believes these disclaimers are evidence of actualconfusion and malicious intent to trade on Sabika's well-known and well-receiveddesigns.

22. The Goshen Facebook references to Sabika are tantamount to saying that you can buycopies of original Sabika designs at much lower prices. In addition, Goshen customershave commented on the Goshen Faeebook pages , noting how similar the Goshen itemsresemble those of Sabika. Goshen appears to de lete these qu ickly when they appear.

23 . Goshen has recently posted a notice on its website accusing Sabika of trying to putGoshen out of business. Sabika has no such intention. Sabika 's only intention in fi lingthis lawsuit is to stop Goshen from copying Sab ika's copyrighted designs and its radedress. Sabika only wishes to stop unfair competition. Sabika has no problem w ithGoshen se ll ing items of its own design. Goshen is free to sell any jewelry design of itsown creation, but we do our bes to stop it from selling copies of our designs at lowerprices.

24 . Sab ika believes that if the Goshen activity is al lowed to continue in th is illegal mannerthere w ill be substantial fu rther inj ury to the sales and reputation destruction of Sabika.

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Case 1:13-cv-00848 Document 33-1 Filed 06/25/13 Page 9 of 93 PageID #: 136- -- - .... --- -----------

Sabika cannot effectively compete against copyists who create identical looking goods ofinferior qualit}, which they sell in the heart of our customer territory at much lowerprices. We will continue to be substantially injured if Goshen is not enjoined fromfurther sales of copes of Sabika jewelry items. Moreover, we have no way of stoppingGoshen except by resort to the court.

l declare the foregoing is true under penalty of perjury of the laws of the Uni ted States ofAmerica.

Pittsburgh'(A, 1Y( /'2 _/Dated: 0 "' /

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EXHIBIT 1


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Jennifer Schlieper 412.916.749550 Academy Drive + Pittsburgh, PA 15228 [email protected]

Non-ProfitExperiencePregnancy Resource Center of the South Hills 2003-Prese ntConsultant/Fundraiser Work with Executive Director and Board providing strategic planning for fundraising events includingtheme walks and annual fundraising dinners helping raise funds for annual multi-million dollar budgetwhile increasing overall awareness of individual programming Provide guidance and outlook for PRC brand strategy. Event Producer and creative directorLight of Life Rescue MissionConsultantWork with development te am to strategize new initiativesProvide insight for community-based challenges and programming

2010-Present

Hillcrest Christian Academy 2003-Presen tConsultant/Brand StrategistfFundraiser Re-launched Hillcrest Christian School brand to Hillcrest Christian Academy while providing strategicguidance on brand structure. Facilitated key research initiatives to give clear direction on key messaging and growth strategy. Work directly with HCA board an d Principal to lead major fundraising initiative for HCA gym project. Event produ cer and point person for event coordination Provide Board President with strategic insights onHCA initiatives.Beauty Restores FoundationBoard Member


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EXHIBITl


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EXHIBJT3,_ . - - - ~ ~ - ~ ~ " " r


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SABIKA TRADEMARKSOURDKT. TRADEMARK CLASS* SERIAL NO. FILING DATE REGISTRATION REGISTRATION

iNO. NO. DATE I6120-6 Hear t Design 14 85/843,540 February 7, 20136120-7 Golf 14 85/877,459 March 15, 20136120-8 Sabika Manhat tan 14 85/879,755 March 19, 20136120-9 Fun 14 85/877, 550 March 15, 20136120-10 London 14 85/877,506 March 15, 20136120-11 Vienna 14 85/877,570 March 15, 20136120-12 Sabika Love 35 85/889,533 March 28, 20136120-13 Sabika Classics 35 85/890,020 March 29, 20136120-18 Sabika 14&35 85/888,908 March 28, 20136120-19 Heart 14, 18, 25 & 35 85/343, 470 June 10, 2011 4,077,226 December 27,2 0116120-20 Sabika 35 85/343,359 June 10, 2011 4,087,637 January 17, 20116120-21 Sabika 14 77/261,515 August 22, 2007 3,731,881 December 29, 20096120-22 Austrian Crystal Jewelry Sabika 35 85/343,406 June 10, 2011 4,189,055 May 29,20126120-23 Sabika is the Promise of A 35 85/321,647 May 16,2011 4,087,021 January 17, 2013

Smile, The Beginning of a Storyand the End of GoingUnnoticed

*Class 14 is fo r Jewelry; Class 18 is for Tote Bags; Class 25 is fo r Aprons & T-Shirts; and Class 35 is fo r Retail Services.


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I, Natalie E. Tennant, Secretary ofState of heState of West Virginia, hereby certify thatGOSHEN SPARKLING JEWELRY, LLC

Control Number: 99VQXhas filed its "Articles ofOrganization" in my office according to the provisions ofWest VirginiaCode 31B-2-203 and 206. I hereby declare the organization to be registered as a limitedliability company from its effective date of July 10,2012 until the expiration of he term ortermination of the company.Therefore, I hereby issue thisCERTIFICATE OF A LIMITED LIABILITY COMPANY

Given under my hand and tireGreat Seal of he State ofWest Virginia on this day ofJuly 10,2012

Secretary of State


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Natalie E. TennantSecretary of State1900 Kanawha Blvd E.Bldg I, Suite 157-KCharleston, WV 25305

Penney Barker, ManagerCorporations DivisionTel: (304)558-8000Fax: (304)558-8381www .wvsos.comHrs: 8:30a.m.- 5:00p.m. ETILE ONE ORIGINAL(Two t r ~ o u want a nlecl

stamped copy returaecl to you)FEE: $100,00 (see chart foradditional fees)

WEST VIRGINIAARTICLES OF ORGANIZATIONOF LIMITED LIABILITY COMPANY C o a t r o l N ~ q v ~

We, acting as organizers according to WV Code 31B2202, ndopt the following Articles of Organization for a WestVirsinia Limited Liability Company:1. The name of he West Virginia limited liabilitycompany shall be: [Tho name mun contain one of he r c q u ~

GOSHEN SPARKLING JEWELRY, LLClcnnS such u "limited liabilit)l company" or abbreviations such u "LLC" ---------------"PLLC"- sec instructions for alil l ohcccp!Bblo terms.]

2. The company will be a: D Professional LLC for the profession or.-------Street: 385 1/2 White Pines Road3. The address of he initial designatedoffice ofthe company in WV, if anywill be:

located in the county of:City/State/Zip : _P_rin_ce_to_n,_WV_2_47_3_9 - ~ - - & . . f & l L f 2 D

Mercer JUL4. The address of the principal office

of he company will be:County:Street: 385 1/2 White Pines R o _ e 9 . v ~ 10 lOtz

' E C R ~ : r ; OFF1cPrinceton, WV 24739 J t R Y o F ~ ~ Flocated in the county of:The mailing address of he abovelocation, if different, will be:

City/State/Zip:County:Street/Box:City/State/Zip:

Mercer385 1/2 White Pines Road

P r i n c e t ~ n . WV 247395. The name and address of he penon Name: Michelle Oxleyto whom notice of process may be 385 112 White Pines Roadsent, if any, will be: Street :

Princeton, WV 24739City/State/Zip:6. E-mail address where business correspondence may be received: [email protected]. Website Address of he business, if any: QOShensparklingjewelry.webS.COm8. The name and address of each organizer:

Name No. & Street Address City, State, ZioMichelle Oxley 385 1/2 White Pines Road Princeton, WV 24739Sheraine Gunnoe 223 Nice Street Princeton, WV 24 740

laued byrhe Oftlcc oflho Sccrewy orSIIIIC Rnioed 0"12

' ~ 7 1 :

1111 k $188.88 87/U/2812 1887651


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WEST VIRGINIA ARTICLE S OF ORGANIZATION

9. The company will be:

I0. The company will be:

an at-will company, for an indefinite perioda term company, for the term of___ yearsmember-managedmanager-managed

Pagel

List the name(s) of the member(s)/manager(s) ofthe company (attach additional pages if necessary)Name Street Address City. State, Zip

Michelle OxleySheraine Gunnoe

385 1/2 White Pines Road Princeton, VW 24739223 Nice Street Princeton, VW 24740

II . All or specified members of a limited liabilitycompany are liable in their capacity as membersfor all or specified debts, obligations or liabilitiesof the company.ll1D No-All debts, obligations and liabilities are thoseof he companyYes-Those persons who are liable in their capacityas members for all debts, obligations orliability of he company have consented inwriting to the adoption of he provision or to bebound by the provision.

12. The purpose for which this limited liability company is formed are as follows:(Describe the typc(s) ofbusiness activity which will be conducted, fcor example, "real estate," ~ c o n s t r u c t i o n of residential and commercialb u i l d i n g s , ~ "commercial printing," "professional practice ofarchilcclurc.")To create, market and sell jewelry, trinkets and other collectibles, and shall Include the transactionor any and all lawful business fo1 whlclllimited liability companies may be formed in West VIrginia.

13. Is the business a Scrap Metal Dealer?D Yes [lf"Yes," you must complete the Scrap Metal Dealer Registration Form


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WEST VIRGINIA ARTICLES OF ORGANIZATION Pagel

17. Contact and Signature Information:a. Contact person to reach in case there is a problem with filing: Michelle Oxley Phone#


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EXHIBIT 5


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+ 1J htrps i www .lattDOok.ccml!!l A,lple ICtoud Fottbook Twiner News"'

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36 people t u mtsMichelle L Ox ley Thll photo docs not do this.t hoke r justi u . It 1s. abso lutetv beawtifuHIM.ly2: 1. 20Uat933.1m U ktCoshen Sparttl1ng YnM.JY 21 2012 at 9


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Home

Homr Produea zt.s tfirougfi. tfie washing ofre6irtli aua renewa{ 6y tlie Jli.>{y Spirit.

We{come to qoslien SparRfing Jewe(ry!

Page 1 of 1

Wc would like tu tllkc this oppormnity tn thank nil of our customerg who hnve upponed our businc ewer the P""'t 10 months. B ~ c n u s eofyuu, Goshen Sparkling Jrwdry has become a Kucccss >tnd in doing so, we h11vc become a L'lrgct of n multi million dollar business whoWIUIIll tu pu t smnll businesllcs out of opcnttion for their own finm1cial gnin .Goshen SpnrkingJewelry been i C C I I ~ C d or copyright and trndtm:.uk infringement by Sabika. We h a \ ~ not and will not infringe ontrodemarks or copyrights. No part& of our jewelry hns been ustd dh\t is " trademark or "opyright. There lul\'c been individuals who havetried to entrap llS by coming to our shows nnd plncing special ordcro trying to get us to usc their protected copyrigbtund rrademnrk. Ifthis bax happened, i t " ~ ' " nnintcmional and unknowingly done because 1\'C did nut know the items had been copyrighted or

t n l d ~ m a r k c d . This i a very low und scheming 111tempt to bring lcga.l action aguinst uR and ~ h u t mu business down. We nbsolutcly refuseto be dueatened or intimidated by n large company and their nttomcyR. We hnve been amised by legnl counsel not to stop making d1isheamiful jewelry but ruther to kel.'p our business moving forward Wr will continue \vith all scheduled shows and our products can bepurchased ns a . l w ~ t y s . I f you would like to buy Snbika products, t h e n arc webitcs, c : . ~ t u l o g s and conguJtants that you can contnct to doso.Tlmnks agnin for your SUJ>port prnycn;. \Vc look forwllrd to stcing you snon al a shuw nc11r you .God bless you ~ 1 1 !Tht Goshen Sparkling ]l'"'eby ftmtilyJanu;m 22,l013

htto://goshensoarklingjewelrv com/ 3/8/2013


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- ~0 E n . J K ~ I C - ' i ! :.;! _CurrentRegistrar:IP Address:Lock Status:

GODADDY.COM, LLC72.167.232.14 (ARlN & RIPE IP search)clientDeleteProhibited

The data contained in GoDaddy . com, LLC's Whols database ,while believed by th e company to be re l i ab le , i s provided "as is "with no guarantee or warranties regarding i t s accuracy. Thisinformation is provided fo r th e sole purpose of assist ing youin obtaining information about domain name regis t rat ion records.Any us e of this data fo r an y other purpose is expressly forbidden witpermission of GoDaddy.com, LLC. By submitt ing an inquiry,you agree to these terms of usage and l imita t ions of warranty. In payou agree no t to us e this data to allow, enab l e, or otherwise make pcdissemination or collection of this data, in part or in i t s ent i rety,purpose, such as the transmission of unsolic i ted adver tising andand so l i c i t a t ions of an y kind, including spam. You further agreeno t to use this data to enable high volume, automated or robot ic elecprocesses designed to collect or compile this data for any purpose,including mining this data fo r your own personal or commercia l purposPlease note: th e regis t rant of th e domain name i s specif iedin th e "regis t rant" f ield. In most cases, GoDaddy.com, LLC

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Registered through: GoDaddy.com, LLC (http://www.godaddy.com)Domain Name: GOSHENSPARKLINGJEWELRY.COMCreated on: 20-May-12Expires on: 20-May-17Last Updated on: 20-May-12Registrant:Goshen Sparkling Jewley385 1/2 white pines roadPrinceton, West Virginia 24740United States

I 1 \ . . { I ;::--, ( l

Administrative Contact: \ 'v'Gunnoe, Sheraine [email protected] Sparkling Jewley385 1/ 2 white pines roadPrinceton, West Virginia 24740United States3048098131Technical Contact:Gunnoe, Sheraine [email protected] Sparkling Jewley385 1/ 2 white pines roadPrinceton, West Virginia 24740United States

3048098131Domain servers in l i s ted order:

NS05.DOMAINCONTROL.COMNS06.DOMAIN:ONTROL.COM

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The previous information has been obtained either directly from the registrant or a registrar of thedomain name other than Network Solutions. Network Solutions, therefore, does not guarantee itsaccuracy or completeness.Show underlying registry data tbr this record

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EXHIBITD


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------------------------------------------------------){SABIKA, INC., )Plaintiff, )))v. )

GOSHEN SPARKLING JEWELRY; )MICHELLE OXLEY; and )SHERAINE GUNNOE ))Defendants. )

------------------------------------------------------){

Civil Action No. 1:13-0848

DECLARATION OF CHRISTY MCNEIL

Christy McNeil states and declares as follows:1. I work in the corporate division of Sabika in Greensboro, North Carolina as Field

Services Manager overseeing consultants over a wide geographic area covering the townof Bluefield, as well as the Blacksburg/New River Valley area .

2. I have worked for Sabika eight years . Before that, I was a sales consultant for Sabika insouthwest Virginia for eight years. I initially signed on as a consultant and served as aconsultant for seven years; I also worked as a corporate liaison for 6 of those 8 years.Before I worked for Sabika, I was in human resources at a commercial vehicle group.

3. I started at Sabika as an entry level consultant. I was the first consultant in NorthCarolina. After about a year and a half, my family moved to Blacksburg in southwestVirginia. Business grew e){ponentially and I was promoted to a suitcase manager, whichmeans I oversaw 40 to 50 consultants.


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4. My family then moved back to North Carolina and I was promoted to my currentmanagerial position overseeing the rest of the consultants in the United States.

5. I handle all of West Virginia, except for the Blacksburg/New River Valley area andBluefield, which are managed by Jeannette Boyd. Sabika's biggest areas for sales and fornumber of consultants, out of all our operations in the US, are West Virginia, Virginia,and Pittsburgh, Pennsylvania.

6. I am familiar with products by Goshen Sparkling Jewelry ("Goshen"). Goshen and othersmaller imitators have troubled Sabika in areas where Sabika has become popular.

7. I have seen products from Goshen as well as Frost yourself and Christy 's Crystals. Iknow from some of my consultants that Goshen have been traveling to parking lots andhave been evicted because they do not have permission to be there. I have heard thatGoshen is trying to recruit consultants to operate in a similar manner to Sabika.

8. My consultants have seen Goshen in hotel conference rooms in North Carolina and havetold me that Goshen does not give receipts for their sales. Further, my consultants havestated that Goshen uses the Sabika catalogues to show their customers the pieces theywill make for them. Goshen was using Sabika catalogues as recently as February andMarch of2013 .

9. Increasingly since the summer of 2012, I have received complaints from Sabikaconsultants saying that Goshen has appeared in an area preying on their customer baseand damaging Sabika sales.

10. Consultants are losing customers to Goshen because their products are so much cheaperand they look similar.

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11. I heard about one Sabika customer who had a Sabika neckJace and went to Goshen to askthem to make matching earrings. When she wore the Goshen earrings she got a terribleinfection all over her face and neck. Goshen refused to give her a refund. She came backto her old Sabika consultant saying, "I guess you get what you pay for" and said shewould never buy from Goshen again.

12. Another customer said she bought a piece from Goshen and it broke the first time shewore it. Goshen refused to fix it and told her to get a pair of pliers. Sabika, in contrast,stands behind our products and offers a lifetime warranty.

13. I have seen Goshen and it looks cheap to me. The stones are not as bright and the metaland the stones both look like plastic. The quality is not the same.

14. Swarovski has different grades ofcrysta1s, priced according to the stones' quality.15. Sabika only buys the highest grade crystals from Swarovski because we have a good

relationship with Swarovski. Goshen claims their crystals are the same, but I have seenthem and do not believe they are of the same quality.

16. I know immediately when I see Sabika and when I see a knock-off. The knock-offs lookcheap and gaudy. The stones do not look real. The necklaces do not lie naturally aroundthe neck. Rather, they look sti ff and you can tell they were constructed on a flat surface,without the care Sabika puts into our products. When a Sabika neckJace lies on the neck,it lies naturally on the contours of the body. Sabika has a process to use foil on the stonesto bring out their rich colors.

17 . I have heard that Goshen uses Sabika catalogues to show their customers the pieces theywill make for them. They are clearly imitating Sabika by producing pieces which use thesame color schemes and designs that we have come up with independently. Sabika

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works hard on designing appealing and unique color schemes and Goshen keeps comingup with the same thing. It is clear they are copying the Sabika designs that they haveaccess to.

18. Sabika has been successful because we create opportunities for local people to start abusiness within their own community.

19. Sabika is a family business that is ethically run and cares about its consultants and theircommunities. We give training to our consultants and stand behind our products.

20. Goshen is a threat to Sabika because they undercut our prices by offering similar productsfor no more than about $100: three to five times less than our prices.

21 . Sabika has been substantially negatively affected by Goshen.22. Our first quarter in 2013 is down 20% from our first quarter in 2012 even though we now

have more consultants than at this time last year. Moreover, our parties have beencancelled.

23. These effects are only increasing as Goshen moves out of its original area to expand itsbusiness geographically.

24. In areas where Sabika is not yet threatened by knock-offs, our business is growing andmore individuals are signing on to become consultants in their communities.

25. Between this time last year and now, Sabika has easily lost over $100,000 in sales.26. Because of Sabika's business model of working with local citizens in their own

communities, the detriment to Sabika's sales is not a problem affecting a facelesscorporation, it is a problem for local individuals whose personal lives and incomes areaffected.

4


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~ ~ M " ~hristy M7cil

Field Services Manager for Sabika,

s


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EXHIBITE


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IN TH E UNITED STATES DISTRICT COURTFOR TH E SOUTHERN DISTRICT OF WEST VIRGINIA

------------------------------------------------------}{SABIKA, INC.,

v.

Plaintiff, )))))

GOSHEN SPARKLING JEWELRY;)MICHELLE OXLEY; and )SHERAINE GUNNOE ))Defendants. )------------------------------------------------------}{

Civil Action No. 1:13-0848

DECLARATION OF BROOKE MULKEY

Brooke Mulkey states and declares as follows: I am a Sabika consultant from Bluefield, Virginia. I sell in both Virginia and

West Virginia in an area of about 50 miles. I started selling Sabika eight yearsago.

After I graduated from school, I started teaching full time. I first heard aboutSabika when another teacher, Karen Frier, wore it to school. She had a heartpendant and I asked her where she got it. She told me about Sabika and itsparties. Karen Frier was the first consultant in Virginia, where she still sells.

I have been ememely successful. I am a Silver Director. I have three directorsunder me, one of which is a Star Director. I have fifteen personal recruits in total.

I have been a Silver Director for almost two years now.

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I usually have fifty to eighty parties a year. There have been about 10% fewer parties in 2013 than this time last year. The decrease is definitely due to knock-offs like Goshen Sparkling Jewelry

("Goshen"), Frost Yourself, and Christy's Crystals. I know of smaller imitatorstoo, but Goshen is the biggest problem.

I know people who have been to Goshen parties and they tell me that Goshenmade available Sabika catalogues for people to look through and choose piecesthey want to order.

I have heard Goshen is looking for consultants in an effort to imitate the Sabikabusiness model.

I can tell when someone is wearing Sabika and when they are wearing a knockoff. The fakes, including Goshen, do not have the same quality in metal or instones. Their colors are not as vibrant. I know people who are careful not to bythe non-Sabika pieces after seeing them because those pieces are such poorquality.

One of my customers switched over to Goshen because she went to church with awoman associated with Goshen. She had a Goshen party for the woman;however, said everyone at the party asked for Sabika. She decided never to haveanother Goshen party because their product was lower quality and she wasembarrassed.

After the Bluefield newspaper ran a story about the lawsuit, there was an initial

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reaction in support of Goshen, but it died down and some people came back toSabika once they saw the difference in quality.

I have lost six recruits in the past year out of my fifteen total recruits because oncethe knock-offs come out the recruits know they cannot keep their customer base.

One of my recruits used to be a very strong sales representative. She earnedanywhere from $3,000 to $5,000 per month since 2007. Now her customer base isgone and she no longer sells at all.

Sabika is my livelihood and I depend on it to raise and support my own family. Imake more money selling Sabika that I do teaching. I put more money back intoour local economy because ofmy business.

I am a local business, I am a member of the community, and I was here beforeGoshen.

Dated: /a /{o h::JI ~ M W k ~Consultant for Sabika, Inc.

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EXHIBITF


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-----------------------------------------------------XSABIKA, INC., Plaintiff,

v.GOSHEN SPARKLING JEWELRY;MICHELLE OXLEY; andSHERAINE GUNNOE

Defendants.

)))))))))))--------------------- ----------------------------X

Civil Action No. 1:13-0848The Honorable David A. Faber

DECLARATION OF MARLENE RATLIFF

Marlene Ratliff states and declares as follows:1. I am a consultant for Sabika, Inc. and I have been working for the company since October

2011 .2. Before working for Sabika, I worked full time at New Peoples Bank for 17 years in

Honaker, Virg inia I stopped once I had a child and our babysitter moved away.3. I first learned about Sabika from Ginger Lawson who asked me to host a Sabika party for

her and explained the company and business opportunities.4. I was a Sabika customer for about six to eight months before I joined Sabika as a

representative in October 2011. I bought my first piece, a necklace I still have andwear, in 2010 in Bluefield, Virginia. It was expensive so I did not buy many more at thattime.


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5. As a Sabika consultant, I work with Sabika to sell their products at private parties and Ihave been very successful.

6. I am a Star Director at the company. In order to get to that level you need to have threeactive recruited representatives under you. To be an active representative, each personhas to sell at least $500 per month. To be a Star Director, I have to sell $1500 per monthand the team as a whole has to sell $5,000 per month. I have been a Star Directo r sinceSeptember of2012.

7. No one in Rosedale, Virginia knew about Sabika when I first started there. I was the firstconsultant in the area, although Sabika was known elsewhere. I continued to be arepresentative selling in West Virginia, Virginia, and Tennessee and quickly becamesuccessful as the product gained popularity.

8. I know Sabika products and can easily tell by looking at a piece if it is by Sabika or if t isa knock-off There is a real difference in quality in terms of the metals used by Sabikaand the cheaper knock-offs.

9. Goshen Sparkling Jewelry (''Goshen") has been damaging to my business because theyoffer identical or nearly identical products for a fraction of he cost.

10. I have seen Goshen 's products and they are clearly cheaper knock-offs of Sabika. Themetal is not as high quality and the stones are not as luminous, even if they are the samecolor. The color of the stones used by Goshen is not as rich and deep as Sabika's stones.I am not sure Goshen's stones are from Swarovski.

11. I know that the similarity between Goshen's products and Sabika's products has causedsome customer confusion. One woman approached me at church and proudly showed of f

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her necklace asking if I liked the Sabika piece her daughter had given her. I had to let herknow that it was not Sabika, it was a knock-off.

12. One of my customers has a Sabika supernatural necklace and asked Goshen to makeinexpensive earrings to match. When she got the earrings from Goshen she came back tome because the stones did not have the right color and vibrancy. Their stones do not havethe weight and the depth of color. They do not compare to Sabika in tenns of quality.

13. One ofmy customers came up to me at church, holding her hand over her neck. She saidshe was so ashamed, asked me not to be angry, and confessed that she had bought fromGoshen because her husband had been laid of f from his job and she could not spendmoney on Sabika. I told her she should throw a Sabika party and she would get jewel ryfrom Sabika at a discount because of the party. She agreed and said she would never buyfrom Goshen again because of their poor quality. One of our most popular stones is theluminous green supernatural color. A customer had tried to get a green supernaturalpiece from Goshen because it was cheaper, but she was not happy with it. After shethrew a Sabika party with me, she got $450 worth of Sabika jewelry.

14. I have seen Goshen jewelry several times and it is very low quality. Some of mycustomers have bought from Goshen and then come back to Sabika. The Goshenproducts look and feel cheaper.

15. I have heard about Goshen selling at churches and in parking lots or at parties and they

bring the Sabika catalogues with them so customers can look at the pieces and pick oneout. Goshen promises to make something as close as they can to the Sabika piece.

16. Goshen sales have definitely harmed my business. Since March of 2012, I have lostcustomers more and more as they increase their sales area. In October, a customer of

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mine who had scheduled a party called me to cancel because all her friends had boughtfrom Goshen already and so they did not see the point in buying more expensive jewelryfrom Sabika.

17 . The damage has only increased as Goshen is becoming increasingly bold in offering itsinfringing products and copying the Sabika selling model b y hosting private parties.

18. A recruit of mine had two scheduled parties cancelled on her in the spring of2013.19. Since this time last year, I have lost about 20-25 customers not only to Goshen but to

other imitators as well: Country Sparkle and Frost Yourself. New imitators are showingup every day. I have lost about 10% of my customer base.

20. Some of my customers who have been loyal Sabika buyers have told me that theyoriginally bought the pieces because they were unique and gave them a personal sense ofstyle. Now that there are so many imitators like Goshen, those customers have said theydo not feel special any more. Now everyone has a crystal choker like the original Sabikapieces they bough t years ago.

21 . At least two ofmy recruits, in Richland, Virginia and in Bluefield, West Virginia, are notactively selling now because knock-offs have taken over their sales. One of my recruitshad no parties this month and all her co-workers are buying the knock-offs.

22. I have heard that Goshen is recruiting people to act as consultants, imitating the Sabikabusiness model.

23. I have worked as a consultant for Sabika in my community for years as a local business .Goshen s continued damage to Sabika damages me and my local recruits . Our localbusiness is threatened by Goshen.

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Dated:? -2) U

5

-11(!L7fcczU ; /Marlene Ra thff ? Consultant for Sab ika, Inc.


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IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF WEST VIRGINIABLUEFIELD DIVISIONSABIKA, INC.,

Plaintiff,v.

GOSHEN SPARKLING JEWELRY, LLC;MICHELLE OXLEY; andSHERAINE GUNNOE,Defendants.


MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF SABIKA INC.'SMOTION FOR PRELIMINARY INJUNCTIONPlaintiff Sabika, Inc. (hereinafter "Sabika"), by and through its undersigned counsel,

respectfully submits this Memorandum of Law in Support of its Motion for a PreliminaryInjunction, pursuant to Federal Rule of Civil Procedure 65(a), against Defendants GoshenSparkling Jewelry, LLC, Michelle Oxley, and Sheraine Gunnoe (hereinafter "Defendants"),based upon Defendants' continuing copyright and trade dress infringement in this District andelsewhere.

INTRODUCTIONSabika commenced this action on January 16, 2013, and brings the present motion for

preliminary injunction to stop Defendants' intentional, ongoing copyright and trade dressinfringement of Sabika's jewelry and accessories. Plaintiff Sabika sells high-quality costumejewelry of distinctive and recognizable design.


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Sabika has a long established reputation for being a high-quality costume jewelrydesigner, selling multiple jewelry lines across the United States and heavily concentrated inPennsylvania, West Virginia, and Virginia. Its jewelry and related accessories have distinctdesigns that are either registered copyrights or are pending copyright applications, and that areprotected as trade dress on account of their widespread consumer recognition (secondarymeaning).

Defendants sell jewelry and related accessories that are either exact copies orsubstantially similar to Sabika 's protected jewelry designs. Substantial settlement discussions

over the past several months have failed to resolve this matter, and Defendants insist they havethe right to sell their imitative jewelry.

Defendants' unlawful infringement harms Sabika' s name, reputation, and good will, anddeprives it of sales it might otherwise make. The immediate and irreparable harm arising fromDefendants' intentional and ongoing infringement of Sabika's federally registered copyrights anddistinctive trade dress can be avoided only by an order enjoining Defendants from continuingsales of their confusingly similar jewelry. Accordingly, a preliminary injunction should issue.

STATEMENT OF FACTS

A. The PartiesSabika, a Pennsylvania corporation with its principal place of business in Pittsburgh,

Pennsylvania, designs, markets, and sells jewelry and fashion accessories in many states in theUnited States, including West Virginia and Virginia. This family business, founded in 2001,developed a unique business method of partnering with over 600 independent sales agents or"consultants" who currently are located in 37 states. Sabika's products have been sold in all 50

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states. Sabika's consultants promote and sell Sabikajewelry at intimate social gatherings such ashostess parties or in-home parties. Through this expansive network, attention to detail, and thequality of its products, Sabika has been an immediate and continuing success. It has designedand developed numerous popular jewelry lines, and through its carefully developed consultantprogram, it has developed a loyal following of women consumers who favor these elegantnecklaces, chokers, earrings, and bracelets. (Schlieper Dec. at ,-r 11, attached hereto as ExhibitA.)

Defendants Michelle Oxley and Sheraine Gunnoe operate Goshen Sparkling Jewelry.

According to statements contained on their website, Ms. Oxley and Ms. Gunnoe began theirbusiness around March or April 2012. (See "Goshen Sparkling Jewelry Statement," attachedhereto as Exhibit B.) On May 20, 2012, Goshen Sparkling Jewelry, through Ms. Oxley and Ms.Gunnoe, registered a website domain name, www.goshensparklingjewelry.webs.com, to markettheir jewelry. (See "Domain Name Registration," attached hereto as Exhibit C.) Ms. Oxley andMs. Gunnoe later formed Goshen Sparkling Jewelry, LLC on July 10, 2012. Because theycopied Sabika's designs outright, their original website included a disclaimer to warn potentialcustomers that they were not selling Sabika' s jewelry. After this lawsuit commenced,Defendants' shut down there website and registered a new website domain name forwww.goshensparklingjewelry.com.

B. Sabika's Copyright RegistrationsSabika now owns approximately 70 copyright registrations, 170 pending copyright

applications, and owns the trade dress related to its various jewelry designs. (Schlieper Dec. at,-r 5, Exs. 2-3.) Sabika's registered copyrights include: Wine and Dine, Registration No. VA 1-836-897; Ladies Lunch Heart Pendant, Registration No. VA 1-837-180; Vintage Supernatural

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Manhattan Choker and Bracelet, Registration No. VA 1-837-314; Sabika Pink Party Earrings,Registration No. VA 1-839-261; and Sabika Pink Party Choker, Registration No. VA 1-839-264.(Jd. at , 6.) Sabika further has numerous pending copyright applications. In addition toprotecting its intellectual property through copyright (and trademark) registrations, Sabika hasestablished a distinctive trade dress for its jewelry designs that Defendants are imitating. (!d. at,-r 5.)

C. Defendants' Infringing Activities and the Resulting ConfusionDefendants began selling their jewelry at "open houses" held at churches in West

Virginia and Virginia and are now copying Sabika's selling method by selling at home parties.Many of Defendants' jewelry pieces clearly infringe the registered copyrights of Sabika. (Jd. at,-r 14, Ex. 5.) Defendants have "hijacked" Sabika's copyrighted designs and trade dress, andDefendants continue to sell their copycat jewelry without permission or justification. Defendantsare slavishly copying the Sabika business model through and through without any right to do so.Sabika has not given Defendants permission to sell such items, and its cease and desist requestshave been ignored.

ARGUMENTA. The Standard for a Preliminary Injunction

In this District, to obtain a preliminary injunction a plaintiff must: ( 1) clearly show that itwill likely succeed on the merits; (2) clearly show that plaintiff is likely to be irreparably harmedabsent preliminary relief; (3) show that the balance of equities tips in favor of plaintiff; and (4)show that an injunction is in the public interest. Doe v. Wood County Bd. of Educ., 888 F.Supp.2d 771, 774-75 (S.D.W. Va. 2012) (citing Winter v. Natural Res. Def Council, Inc., 555

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U.S. 7, 20 (2008); The Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 346-47 (4th Cir.2009), vacated on other grounds, 130 S.Ct. 2371 (2010). The U.S. Supreme Court hasemphasized that the district court must weigh all of these factors in deciding a motion forpreliminary injunction. Winter v. Natural Res. Def Council, Inc., 555 U.S. 720 (2008). TheCourt cannot apply any looser standard. !d.

As shown below, Sabika can carry its burden necessary to obtain a preliminary injunctionunder this standard. Defendants blatantly copied and continue to sell numerous copyrightedSabika jewelry designs and to infringe the distinctive and protectable trade dress of Sabika.

Defendants have no justification or defense to their copyright and trade dress infringement, andeach sale by Defendants takes potential sales from Sabika. The irreparable harm to Sabika ismanifest. As such, the balance of equities tip decidedly in Sabika's favor, and it is in the publicinterest to stop Defendants' infringing conduct immediately.

B. Plaintiff is Likely to Succeed on the Merits of Its Claims for Copyright and TradeDress Infringement

1. Defendants have Infringed Numerous Copyrighted DesignsPursuant to 17 U.S.C. 106, a copyright holder has, among other rights, exclusive rights

to reproduce, prepare derivative works of, distribute, and display its registered work. See id.;EM!April Music, Inc. v. White, 618 F. Supp. 2d 497, 504 (E.D. Va. 2009). Anyone who violatesany of the exclusive rights of a copyright owner is an infringer of the copyright. 17 U.S.C. 501(a); see EM!April Music, Inc., 618 F. Supp.2d at 504. To prove copyright infringement, "aplainti ff must show: (1) that it [owns] a valid copyright, and (2) that the defendant copiedoriginal elements of plaintiffs copyrighted work." EM! April Music, Inc., 618 F. Supp. 2d at 504(internal citations omitted).

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Sabika owns approximately 70 copyright registrations for its jewelry designs, and hasmany others pending. (Schlieper Dec. a t , 5-6, Ex. 2.) These designs are the original creationsof Sabika's resident jewelry designer, Alexandra Mayr-Gracik, and they have achieved starlingsuccess in the market place. Indeed, Sabika, formed by the Mayr family in 2001, has grown toannual sales in excess of $10 million through its original designs and the marketing efforts andthe hard work of its consultants. (I . at , 19.) Further, the accompanying Exhibit 5 to theSchlieper Declaration sets forth page after page of comparisons between the registered Sabikadesign and the corresponding infringing copy being sold by Goshen.

Thus, Defendants' continuous sale of jewelry that clearly copies Sabika's registeredcopyright pieces indisputably demonstrates that Sabika has a very high probability of success onthe merits of the claim for copyright infringement. See Hotaling v. Church of Jesus Christ ofLatter Day Saints, 118 F.3d 199, 203 (4th Cir. 1997); Lasercomb America, Inc. v. Reynolds, 911F.2d 970, 979 (4th Cir. 1990).

2. Defendant Infringe Sabika's Trade Dressa. The Lanham Act Provides Protection of Sabika's Trade Dress

Under 43(a) of the Lanham Act (15 U.S.C. 1125(a)), the design of a product may beprotected as trade dress. See Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 209(2000) (quoting 15 U.S.C. 1125(a)). To demonstrate a likelihood of success on a claim fortrade dress infringement, the moving party must show: (1) that the trade dress is non-functional;(2) that it has acquired secondary meaning; and (3) the consuming public is likely to beconfused. See Fiji Water Co., LLC v. Fiji Mineral Water USA, LLC., 741 F. Supp. 2d 1165,1172 (C.D. Cal. 2010).

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Protectable trade dress consists of discrete elements that make up the "total image of aproduct and may include features such as size, shape, color, color combinations, texture orgraphics." !d. at 1172 (quoting Int'l Jensen, Inc. v. Metrosound USA., Inc., 4 F.3d 819, 822(9th Cir. 1993)). The trade dress must not be functional. See id.; see also Cosmos Jewelry Ltd.v. Po Sun Han Co., 470 F. Supp. 2d 1072, 1085 (C.D. Cal. 2006), aff'd, 2009 WL766517 (9thCir. 2009) (use of yellow gold with a sand blasted matte finish on the petals and highly polishedshiny edge give "a subjectively aesthetic, rather than utilitarian advantage" with consumers).

Here, Sabika's trade dress is undisputedly nonfunctional. It is based entirely on aesthetic

elements that serve to identify Sabika as its source, most notably the colorful and elegantSwarovski crystals mounted on specific colored cup chains. The Sabika necklaces, chokers,earrings, and bracelets are all handmade and assembled by European artisans at considerablymore cost than other methods of jewelry manufacture. (Schlieper Dec. a t , 18.) The Swarovskicrystals are of the higher quality and appearance than usually found in other costume jewelry,giving a more refined, more distinctive look to Sabika jewelry. Swarovski offers different gradesof crystals each priced according to the level of quality. Sabika has a good relationship withSwarovski and uses only the highest grade of crystal available. (McNeil Dec. at ,, 14-15,attached hereto as Exhibit D.) Moreover, abundant alternative designs are available, soprotecting the exclusivity of Sabika's trade dress will not hinder competition. (Schlieper Dec. at, 18.) Also, the design decisions underlying Sabika's designs were made for aesthetic reasonsand not because they were the only, the cheapest, or the most efficient manner of manufacture.See Fiji Water, 741 F. Supp. 2d at 1190 (citing Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1259 (9th Cir. 2001) ("We focus not on the individual elements, but rather on theoverall visceral impression that the combination and arrangement of those elements create.")).

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Sabika's color combinations are well known and recognizable to its customer base.Defendants continue to reproduce the same color combinations. Such products are copied fromSabika's own catalog and are clearly based on Sabika designs to which Defendants have access.Their customers place orders for items made by Defendants directly from the Sabika catalogsthat Defendants show them. (Mulkey Dec. at ,-r 8, attached hereto as Exhibit E; McNeil Dec. at,-r 17.) A more brazen manner of copyright and trade dress infringement would be hard to1magme.

So, here, where there are innumerable ways to make a necklace, choker, or bracelet, thereis no basis for concluding that Sabika's designs are functional. Defendants have chosen tomimic Sabika not for functional reasons, but entirely because they wish to trade on Sabika'swell-known and sought after look and appearance. Functional features of a product are thosewhich are "essential to the use or purpose of the article or ... affect the cost or quality of thearticles that is, if exclusive use of the feature[s] would put competitors at a significant non-reputation related disadvantage." Traffix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23,32 (2001) (quoting Qualitex Co. v. Jacobson Prods., 514 U.S. 159, 165 (1995)). Defendantscannot be heard to argue that they need to make jewelry exactly as Sabika does for functionalreasons. As such there is no basis for concluding that the Sabika trade dress is functional.

b. Sabika' s Trade Dress Indisputably Has AcquiredSecondary MeaningSecondary meaning is established when a plaintiff shows that "in the minds of the public,

the primary significance of a product feature or term is to identify the source of the productrather than the product itself." Inwood Labs, Inc. v. Ives Labs, Inc., 456 U.S. 844, 851 n.11( 1982) (internal citations omitted). Courts determine secondary meaning by weighing a numberof factors: (1) "the length or exclusivity of use of a mark," (2) "the size or prominence of

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plaintiffs' enterprise," (3) "the existence of substantial advertising by plaintiff," (4) "theproduct's established place in the market," and (5) "proof of intentional copying." J McCarthy,McCarthy on Trademarks 15:30. "The secondary meaning analysis is primarily a subjective one,looking into the minds of potential customers." !d. (citing Boston Athletic Ass'n v. Sullivan, 867F.2d 22, 32 n.9 (1st Cir.1989); President & Trustees of Colby College v. Colby College-NewHampshire, 508 F.2d 804, 809 (1st Cir. 1975)).

Sabika's jewelry designs have secondary meaning because Sabika has used its tradedress exclusively and extensively for twelve years. (Schlieper Dec. at ,-r 1.) In these twelve

years, Sabika has established consumer recognition by promoting its trade dress though hundredsof consultants, "Fall/Winter" and "Spring/Summer" catalogs, and by investing heavily in andconstantly updating and improving its website. (!d.) As a result, Sabika has received widespreadpublicity and recognition by the public and in the media. (!d. at ,-r,-r 11, 20.) Sabika's jewelrydesigns are readily recognizable by consumers as Sabika jewelry. (!d. at ,-r 18.) Equallyimportant, Defendants' slavish copying of numerous Sabika designs and the disclaimer on theirwebsite demonstrate their intentional copying and provide further proof of the secondarymeaning of Sabika's trade dress. It is indisputable, therefore, that Sabika has protectable tradedress complete with significant secondary meaning.

c. Defendants Unauthorized Copying is Likely to Cause ConfusionOnce trade dress rights have been established, proving infringement requires a showing

that defendant's similar trade dress is likely to cause confusion as to the product's source. SeeYankee Candle Co., Inc. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 38 (1st Cir. 2001). Todetermine likelihood of confusion, the Fourth Circuit has identified the following nonexclusivefactors:

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(1) the strength or distinctiveness of the plaintiffs mark;(2) the similarity ofthe two marks;(3) the similarity ofthe goods or services the marks identify;(4) the similarity of the facilities the two parties use in their businesses;(5) the similarity of the advertising used by the two parties;(6) the defendant's intent; and(7) actual confusion.

Bros. ofWheel MC. Executive Council, Inc. v. Mollohan, 2012 WL 5511726 at *29 (S.D.W. Va.Nov. 14, 2012) (citing Louis Vuitton Malletier SA. v. Haute Diggity Dog, LLC, 507 F.3d 252,259, 260-61 (4th Cir. 2007)), appeal dismissed, 2013 WL 1679440 (4th Cir. Apr. 18, 2013).Although not all of the factors must be satisfied, actual confusion is "often paramount in thelikelihood of confusion analysis." !d.

The likelihood of confusion between Sabika's trade dress and Defendants' jewelrydesigns is unmistakable. First, Sabika's trade dress is strong due to the acquired distinctivenessfrom Sabika's longstanding sale and extensive promotion of its unique trade dress. Defendants'designs are so similar as to be undistinguishable, which bears on both the similarity of the marksand Defendants' intent. Defendants admit as much by posting disclaimers on their website in atransparent attempt to trade on Sabika's distinctive trade dress. Second, Defendants have begunusing similar "facilities" to sell imitative jewelry: they are also selling their jewelry at homeparties through "consultants," a blatant imitation of Sabika's sales methods.

Both parties rely heavily on their website for promotion, another factor that points,toward likelihood of confusion. Further, the postings on Defendants Facebook page captured bySabika demonstrate that the public is confused about the origin or sponsorship of Defendants'jewelry. (Schlieper Dec. at ,-r,-r 21-22.) Defendants' intent is clear: to trade on the recognition ofSabika's designs. (!d.) There have been instances of

Documents

Sabika v. Goshen - Motion for PI & Brief