Tre Milano v. Amazon Opening Appellate Brief

8/3/2019 Tre Milano v. Amazon Opening Appellate Brief

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2nd

DISTRICT COURT OF APPEAL CASE NO. B234753Appeal from Superior Court Case No. BC460511

IN THE COURT OF APPEAL

OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION PENDING________________________________

TRE MILANO, LLC,

Appellant,

vs.

AMAZON.COM, INC., et al.

Respondents

__________________________________

Appeal from the Superior Court of California

County of Los Angeles, Central District, Department 17

The Honorable Richard E. Rico, presiding

__________________________________

APPELLANTS OPENING BRIEF__________________________________

TANTALO & ADLER LLPThomas J. Peistrup, SBN 213407

Michael S. Adler, SBN 190119

1901 Avenue of the Stars, Suite 1000Los Angeles, California 90067-6012

Tel: (310) 734-8695 | Fax: (310) 734-8696

Attorneys for Appellant Tre Milano, LLC


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2nd

DISTRICT COURT OF APPEAL CASE NO. B234753Appeal from Superior Court Case No. BC460511

IN THE COURT OF APPEAL

OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION PENDING________________________________

TRE MILANO, LLC,

Plaintiff and Appellant,

vs.

AMAZON.COM, INC., et al.

Defendants and Respondents

__________________________________

Appeal from the Superior Court of California

County of Los Angeles, Central District, Department 17

The Honorable Richard E. Rico, presiding

__________________________________

APPELLANTS OPENING BRIEF__________________________________

TANTALO & ADLER LLPThomas J. Peistrup, SBN 213407

Michael S. Adler, SBN 190119

1901 Avenue of the Stars, Suite 1000Los Angeles, California 90067-6012

Tel: (310) 734-8695 | Fax: (310) 734-8696

Attorneys for Appellant Tre Milano, LLC


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TABLE OF CONTENTS

I. INTRODUCTION .......................................................................................................... 1

II. STATEMENT OF APPEALABILITY & TIMELY APPEAL ................................... 7

III. STANDARD ON APPEAL ......................................................................................... 8

IV. BACKGROUND ..................................................................................................... 9

A. Tre Milano Sells a Highly Successful Line of Hair Appliances

under the Federally-Registered InStyler Trademark. ................................ 9

B. Amazon Claims to Have Three Sales Channels, All of which

Originate from an Amazon Product Page that Makes

Extensive Use of the InStyler Trademark. .............................................. 10

1. Amazon Direct Sales. ...................................................................... 12

2. Fulfilled by Amazon Sales. ......................................................... 12

3. Amazon Marketplace Third Party Sales. ........................................ 14

C. Amazon Fails to Appropriately Address Known Counterfeit

Goods Originating From Unverifiable Sources. ........................................ 15

D. A Consumer Was Burned by a Counterfeit InStyler Purchasedon Amazon.com Nearly Two Weeks After Tre Milano

Notified Amazon that the Seller was Selling Counterfeits. ....................... 17

E. Despite Actual Notice, Amazon Continues to List and Process

Sales of Counterfeit InStylers in each of its Sales Channels. ................. 19

1. Amazon Itself Has Sold Made Direct Sales of

Counterfeit InStylers. ...................................................................... 20

2. Fulfilled by Amazon Sales. ......................................................... 21

3. Amazon Marketplace Sales. ............................................................ 22

F. There Are Material Differences Between Amazon and eBay. ................... 24

G. Tre Milano is Suffering Irreparable Harm From Negative

Feedback in Which the Shortcomings of Counterfeit InStylers

are Attributed to the Genuine Product. ...................................................... 28


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1. Amazon Counterfeits Are of Inferior Quality, with a

High Fault Rate and an Unacceptable Risk of Injury to

Consumers. ...................................................................................... 28

2. Consumers Post Negative Reviews of the InStyler

Based on Poor Quality Fakes. ......................................................... 29

3. Counterfeit Amazon InStylers Deceive Even

Professional Reviewers. .................................................................. 31

V. THE TRIAL COURT ERRED IN FAILING TO ENJOIN AMAZON

FROM ASSISTING THE SALE OF FAKE INSTYLER

PRODUCTS .......................................................................................................... 32

A. Amazon Is Liable as a Direct Infringer Because Amazon

Itself Is Using the Registered InStyler Mark In Connection

With the Sale of Counterfeit Goods. .......................................................... 32

1. Any Person Who Uses a Mark In Connection With

Any Offering for Sale, Distribution, or

Advertising Infringes Regardless of Who Nominally

Makes the Sale. ............................................................................... 32

2. The Safe Harbor Provisions of the Lanham Act

Confirm That Liability Extends To Any Party Using

the Mark Even to Facilitate a Sale. ................................................. 35

3. Amazon Is Liable BecauseItIs Using the RegisteredInStyler Mark. .............................................................................. 38

4. The Lanham Act is a Strict Liability Statute as to

Counterfeit Goods. .......................................................................... 40

B. Even If Amazons Actions Were Evaluated Under a

Contributory Infringement Theory, Amazon Would Still Be

Liable Because It Was Required, But Failed, to Take

Reasonable Steps to Prevent Infringement. ............................................... 42

1. A Party Who Has Sufficient Knowledge of Possible

Infringement and Has the Ability to Control Such

Infringement May Be Held Contributorily Liable. ......................... 42

2. Amazon Is Contributorily Liable. ................................................... 45


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VI. THE BALANCE OF HARDSHIPS TILTS STRONGLY IN FAVOR

OF THE INJUNCTION. ....................................................................................... 50

A. Continued Sales of Counterfeits will Cause Tre Milano

Irreparable Harm. ............................................................................ 50

B. These Counterfeit Products Threaten the Consuming

Public At Large ............................................................................... 51

C. Amazon Has Not Identified Any Specific Harm that

Would Overcome the Interests in Favor of the

Injunction. ....................................................................................... 52

VII. CONCLUSION ........................................................................................................ 54


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TABLE OF AUTHORITIES\

Cases

Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174

F.3d 1036 (9th Cir. 1999) ......................................................................... 51

Century 21 Real Estate Corp. v. Century 21 Real Estate, Inc., 929 F.2d 827

(1st

Cir. 1991) ....................................................................................... 4, 40

Fendi Adele S.R.L. v. Filenes Basement, Inc., 696 F.Supp.2d 368

(S.D.N.Y. 2010) ....................................................................................... 54

Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th

Cir. 1996) 38, 43, 45

Getty Petroleum Corp. v. Aris Getty, Inc., 55 F.3d 718 (1st

Cir. 1995) ...... 35

GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th

Cir. 2000) ............ 50

Gucci America, Inc. v. Duty Free Apparel, Ltd., 286 F.Supp.2d 284

(S.D.N.Y. 2003) ....................................................................................... 41

Gucci America, Inc. v. Frontline Processing Corp., 721 F.Supp.2d 228

(S.D.N.Y. 2010) ................................................................................... 5, 43

Hard Rock Caf Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143

(7th

Cir. 1992) .............................................................................. 38, 40, 43

Huong Que, Inc. v. Luu, 150 Cal. App. 4th 400 (2007). ............................... 9

In re Charlisse C., 45 Cal. 4th 145 (2008) .................................................... 8

Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 102

S.Ct. 2182, 72 L.Ed2d 606 (1982) .................................................... 42, 45

Jay Bharat Developers, Inc. v. Minidis, 167 Cal.App.4th

444 (2008) ......... 50

Levi Strauss & Co. v. Shilon, 121 F.3d 1309 (9th

Cir. 1997) ...................... 34

Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th

Cir.

1999) .................................................................................................. 42, 45

Lorillard Tobacco Co. v. Amouris Grand Foods, Inc., 453 F.3d 377 (6th

Cir. 2006) ..................................................................................... 38, 40, 51


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Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., -- F.3d --, 2011 WL

4014320 (9th Cir. Sept. 9, 2011) ...................................................... passim

Miller Brewing Co. v. Carling OKeefe Breweries of Canada, Ltd., 452

F.Supp. 429 (W.D.N.Y. 1978) .......................................................... 34, 37

O'Connell v. Superior Court, 141 Cal.App.4th 1452 (2006) ........................ 8

Patsys Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209 (2nd

Cir. 2003)..... 53

Phillip Morris U.S.A. Inc. v. Shalabi, 352 F.Supp.2d 1067 (C.D.Cal 2004)

..................................................................................................... 40, 41, 52

Saxlehner v. Siegel-Cooper Co., 179 U.S. 42 (1900) .................................. 40

Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378 (9th

Cir. 1984) ................... 47

Tiffany (NJ) Inc. v. eBay, Inc., 576 F.Supp.2d 463 (S.D.N.Y. 2008) .. 25, 39,

48

Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (2nd

Cir. 2010) ................. passim

Tisch Hotels, Inc. v. Americana Inn, Inc., 350 F.2d 609 (7th

Cir. 1965) ..... 40

Wolfard Glassblowing Co. v. Vanbraght, 118 F.3d 1320 (9th

Cir. 1997) ... 53

Statutes

15 U.S.C. 1114(1) ...................................................................................... 37

15 U.S.C. 1114(1)(a) ................................................................... 1, 4, 33, 35

15 U.S.C. 1114(2) ...................................................................................... 35

15 U.S.C. 1114(2)(A) ................................................................................ 36

18 U.S.C. 2320 .......................................................................................... 51

Cal. Code Civ. Proc. 904.1(6) .................................................................... 8

Cal. Penal Code 350(a) (2) ........................................................................ 51

Louis Vuitton S.A. v. Spencer Handbags Corp, 597 F.Supp. 1186 (E.D.N.Y.

1984) ........................................................................................................ 51


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Other Authorities

4 McCarthy on Trademarks and Unfair Competition 25:10 (4th

ed. 2011)

................................................................................................................. 51

4 McCarthy on Trademarks and Unfair Competition 25:26 (4

th

ed. 2011)................................................................................................................. 34

Rules

Cal. Rule of Court 8.104(a) ........................................................................... 8

Cal. Rule of Court 8.204(d) ........................................................................... 2


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I. INTRODUCTIONTre Milano LLC, (Tre Milano) has sued Amazon for

marketing, advertising, storing, selling, and shipping counterfeit

InStyler hair irons (and Tre Milano has documented numerous such

(sales). Tre Milano hereby appeals from the trial courts denial of

preliminarily injunction precluding the sale of such counterfeits. Tre

Milano sought the preliminary injunction not only because the

counterfeit products threaten Tre Milanos hard-earned reputation for

quality (and they do), but as demonstrated by a fake InStyler from

Amazon that literally blew up in the hands of an unsuspecting

consumer these fake appliances also endanger the safety of the

consuming public.

Under the federal Lanham Act, Amazon is a direct infringer of

Tre Milanos federally-registered InStyler trademark because

Amazon itself actively uses Tre Milanos mark in connection with the

marking, advertising, sale and fulfillment of counterfeit InStyler hot

irons (InStylers). Federal law defines trademark infringement as

any unauthorized use of a registered trademark in connection with

the sale, offering for sale, distribution, oradvertising of any goods

or services. 15 U.S.C. 1114(1)(a) (emphasis added). Here, it is


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undisputed and indisputable that every single sale of an InStyler

through Amazon.com begins on the InStyler Product Page created

and maintained by Amazon. [1 JA 260-66].1

As the Court can see, the Amazon.com Product Page makes

extensive use of Tre Milanos registered InStyler trademark. While

(as explained more fully below) Amazon purports to maintain three

separate sales channels on its Amazon.com website,

2

1 For the Courts convenience, the Amazon.com InStyler Product

Page is attached to this brief as Exhibit 1. Cal. Rule of Court

8.204(d).

they all begin at

the Product Page where Amazonitselfuses the InStyler mark to

describe the products and direct consumers to its various sales

channels. Moreover, all three separate sales channels involve

Amazons use of the InStyler mark as part of Amazons actions in

processing payment for all sales made via Amazon.com.

2 Amazon describes its three nominally-separate sales channels as:

(1) direct sales by Amazon itself; (2) sales by Amazon

Marketplace sellers using Amazon's advertising and paymentprocessing services and Fulfilled by Amazon (i.e., warehoused

and shipped by Amazon in addition to being marketed and

processed by Amazon); and (3) sales by Amazon Marketplace

sellers using Amazon's advertising and payment processing

services that are shipped by the sellers themselves. [1 JA 65:3-28.]


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In other words, despite Amazons attempt to shift all

responsibility to third party sellers, the evidence clearly shows that

Amazonitselfis using the InStyler mark in connection with the

advertising, offering for sale, and distribution of counterfeit InStyler

products. This is true whether it is Amazons own sales or the sales

on Amazon.com for Amazon Marketplace sellers (out of which

Amazon gets a cut). As the user of the registered InStyler mark,

Amazon is therefore a direct infringer of Tre Milanos mark.3

Unfortunately, the court below erroneously reached the legal

conclusion that Amazon merely facilitated the sale of counterfeit

goods and therefore was not a direct infringer. [2 JA 458 (Appealed

Order).] In so reasoning, the court below apparently accepting

Amazon's claim that it does not actually sell the goods because it

does not take formal title to Amazon Marketplace sales.

This was clear reversible legal error because, as explained

above, the Lanham Act does not impose direct infringement liability

3In fact, while Amazons marketing and advertising of counterfeit

products alone constitute trademark infringement, Amazon goes

further: it also processes the sales, warehouses the products, and

ships them to its customers in its own direct Amazon channel and

Fulfilled by Amazon channel.


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only on the seller of an infringing product. 15 U.S.C. 1114(1)(a).

Instead, as even Amazon has acknowledged,4

The trial court additionally committed legal error when it ruled

that Amazon was not a contributory infringer. Under the Lanham

Act, a party is liable for contributory trademark infringement where:

(i) a direct infringer uses the goods or services of the defendant; (ii)

the defendant knows or has reason to know that such goods and

services are being used for infringement; and, (iii) the defendant has

the ability to control such infringement, but does not. Louis Vuitton

Malletier, S.A. v. Akanoc Solutions, Inc., -- F.3d --, 2011 WL 4014320

at *3 (9th Cir. Sept. 9, 2011).

the Lanham Act creates

a strict liability regime where anyuse of a registered mark in

connection with a counterfeit sale gives rise to liability, including uses

involving advertising or marketing. Id; see also Century 21 Real

Estate Corp. v. Century 21 Real Estate, Inc., 929 F.2d 827, 829 (1st

Cir. 1991). Because the undisputed facts show that Amazon uses the

mark in connection with advertising, marketing, offering for sale, and

distributing the counterfeit product, Amazon is strictly liable.

4 See Reporters Transcript (RT) 5:22-24.


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With respect to contributory infringement, the only issue in

dispute was the second prong Amazons knowledge. The trial court

concluded that a generalized knowledge of infringement is not

sufficient to establish contributory liability, it apparently assumed that

the only way for Tre Milano to satisfy that prong was to show willful

blindness. [Appealed Order, 2 JA 459 (citingTiffany (NJ) Inc. v.

eBay Inc., 600 F.3d 93, 110 (2nd

Cir. 2010) (Tiffany)).]

The trial court was clearly wrong. Willful blindness may be

one way but it is not the only way to establish that a defendant

knows or has reason to know that it is participating in the

advertising, marketing, sale, or distribution of infringing goods.5

Here, for example, there was no need to resort to the doctrine of

willful blindness because the undisputed evidence shows that Amazon

5 In fact, the Tiffany decision and others confirm that actual

knowledge of particularized listings is sufficient to establish

liability, regardless of whether there is also willful blindness.

Tiffany, 600 F.3d at 109;Hard Rock Caf Licensing Corp. v.

Concession Servs., Inc., 955 F.2d 1143, 1151 (7th

Cir. 1992)

(contributory liability will be found based on reason to knoweven if a party is not willfully blind); Gucci America, Inc. v.

Frontline Processing Corp., 721 F.Supp.2d 228, 249 (S.D.N.Y.

2010) (explaining that willful blindness is also sufficient in the

absence of particularized information about listings that likely

infringe).


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has actual knowledge with respect to the verysuppliers and sellers of

counterfeit InStylers about which Tre Milano has complained. The

evidence further shows that Amazon has regularly continued to

market, advertise, offer for sale, process sales, store, and ultimately

ship infringing products from its own warehouses for weeks and even

months after Tre Milano specifically identified particular suppliers

and sellers for Amazon.

Because of its legal error of misconstruing the standard for

contributory infringement, the trial court improperly likened

Amazons conduct to that of eBay. [Appealed Order, 2 JA at p. 459,

quotingTiffany, 600 F.3d at 110 for the proposition that eBay did

not ignore the information it was given about counterfeit sales on its

website.] However, the eBay case depended on two separate

findings: first, the eBay was not generally a willful infringer and

second, that eBay acted on specific information byautomatically

removing questionable products withintwenty-four hoursof any

objection. Tiffany, 600 F.3d at 99. In other words, eBay was not

liable for contributory infringement because it acted promptly when

put on notice. Id. Amazon, by contrast, is recalcitrant: Amazon takes

weeks or months to respond after it receives notice and in fact fails


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to respond at all in more than a quarter of the cases. Meanwhile,

Amazon continues to advertise and fulfill counterfeit sales despite

having knowledge of the counterfeit nature of the products.

Finally, although the trial court did not evaluate the balance of

hardships because of the legal errors noted above, the evidence clearly

establishes that the balance tilts in favor of the requested injunction.

On the one hand, Tre Milano has established that its reputation is

seriously threatened by sales of fake InStyler products from a source

that bills itself as reputable. Tre Milano has also established that the

consuming public is at risk from such counterfeit products, such as the

exploding fake InStyler that Amazon processed almost two weeks

after Tre Milano provided specific notice that the particular Amazon

Marketplace seller at issue was trafficking in counterfeit product. [1

JA 99-100, 90.] On the other hand, Amazon has presented no viable

reason why it should be allowed to continue marketing, advertising,

offering for sale, selling, storing, or shipping counterfeit InStyler

products.

II. STATEMENT OF APPEALABILITY &TIMELY APPEAL

This appeal arises from the trial courts July 20, 2011 Order

denying Tre Milanos motion for preliminary injunction. An order


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denying a motion for preliminary injunction is immediately

appealable. Cal. Code Civ. Proc. 904.1(6).

Tre Milanos Notice of Appeal was filed on July 26, 2011 (six

days after issuance of the subject order), and therefore is clearly

timely. Cal. Rule of Court 8.104(a).

III. STANDARD ON APPEALDenial of a request for preliminary injunction is generally

reviewed under an abuse of discretion standard. O'Connell v.

Superior Court, 141 Cal.App.4th 1452, 1463 (2006) (citations

omitted). However, the Court of Appeal reviews the trial courts

application of law de novo, and a material error of law necessarily

constitutes an abuse of discretion. In re Charlisse C., 45 Cal. 4th 145,

159 (2008). In addition, while the trial courts underlying factual

determinations are typically reviewed for substantial evidence. [t]o

the extent that the trial court's assessment of likelihood of success on

the merits depends on legal rather than factual questions, [appellate]

review is de novo. O'Connell, 141 Cal.App.4th at 1463 (2006)

(citations omitted).

This appeal concerns a ruling wholly dependent upon the trial

courts misapplication of applicable law, and hence is subject to this


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Courts independent, de novo, appellate review. Huong Que, Inc. v.

Luu, 150 Cal. App. 4th 400, 408 (2007).

IV. BACKGROUNDA. Tre Milano Sells a Highly Successful Line of Hair

Appliances under the Federally-Registered InStylerTrademark.

Tre Milano designs, creates and markets innovative hair care

appliances. [1 JA 64:16-26.] Its most popular product is the

InStyler rotating hot iron, which straightens, curls, polishes and

styles hair in ways unlike prior or competing products. [Id.]

Compared to other electrical hair appliances, the InStyler rotating

iron has an innovative design that prevents the risk of scorching hair

associated with traditional flat irons. The product operates through

the calibrated coordination of electrical, electronic and mechanical

components resulting in internal operating temperatures of nearly 400

degrees. [1 JA 69:10-13, 69:24-25.]

Consequently, Tre Milano is highly attuned to the quality and

safety of its InStyler product. Tre Milano has obtained product

safety certification for the InStyler from ETL, and the InStyler

conforms to UL Standard 859 and CSA specifications. [1 JA 68:14-

23; 69:24-70:3.] Tre Milano also regularly reviews the design of the


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InStyler product to determine what possible modifications might

improve its operation and safety, keeps careful control over the

manufacture of its InStyler product, and maintains a tightly-

controlled distribution chain. [1 JA 69:26-70:1.]

Tre Milano has extensive trademark rights under state and

federal law, including federal trademark registration No. 3,496,525

and California registration No. 114550 for the InStyler mark. [1 JA

64:16-26, 108-112.]

B. Amazon Claims to Have Three Sales Channels, All ofWhich Originate from an Amazon Product Page that

Makes Extensive Use of the InStyler Trademark.

Amazon purports to differentiate between three sales

channels: (1) Direct Amazon.com sales, through which Amazon

markets and advertises the product, offers the product for sale, stores

the product (which it holds title to), processes the sale, and ships the

goods to the consumer, (2) Amazon Marketplace sales Fulfillment

by Amazon, whereby Amazon markets and advertises the product,

offers the product for sale, stores the product for the third party seller,

processes the sale, and ships the goods to the consumer, and (3) (3)

Amazon Marketplace sales Fulfilled by Third Party, whereby

Amazon markets and advertises the product, offers the product for


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sale, and processes the sale, with the third party itself storing and

shipping the goods to the consumer.

Regardless of the Amazon channel through which the product

is sold, however, all sales originate from the same Amazon Product

Page that Amazon itself creates and maintains. The Amazon Product

Page for each product offered for sale by Amazon generally contains

photographs of the product, a description of the product, user-

generated reviews of the product, manufacturer-supplied advertising

copy, and a unique Amazon Standard Identification Number (an

ASIN). [1 JA 65:13-28, 260-66.]

As the Court can see in Exhibit 1 to this brief, the Amazon

Product Page for the InStyler makes extensive use of the Tre

Milanos InStyler trademark and photographs of the authentic and

legitimate InStyler packaging, identifying the product as originating

from Tre Milano even when the product offered by sale on Amazon

is, in fact, counterfeit. [1 JA 260-66; see also 1 JA 171-73, 182-84,

192-95, 2 JA 350-56, 366-68, 390:12-13.] Thus it is clear that

Amazon which creates and maintains this Product Page actively

uses Tre Milanos InStyler mark to describe the counterfeit products

being sold via that Product Page. [See, e.g., 2 JA 350-56, 366-68,


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402.]

As discussed below, as a sale progresses beyond the Product

Page, Amazon provides various additional services for each of its

allegedly separate sales channels. These various Amazon services

also contribute to the sales of counterfeit items on its websites.

1. Amazon Direct Sales.Amazon direct sales are traditional retail sales by which all

aspects of the transaction marketing, advertising, sale, payment

processing, invoicing, shipping, customer service, warranty service

and returns are carried out by Amazon. As noted above, the

consumer begins any purchase of an InStyler by accessing Amazons

Product Page. The transaction is completed on the Amazon website,

payment is rendered to Amazon, and the goods are shipped by

Amazon from one of its warehouses in Amazon packaging. Amazon

Super Saver shipping rates apply and the purchase is eligible for

loyalty programs such as Amazon Prime. [See, e.g., 1 JA 123-24,

171-73, 182-84, 192-95.]

2. Fulfilled by Amazon Sales.Fulfilled by Amazon is a service by which Amazon

Marketplace sellers ship inventory to Amazon warehouses for sale


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through Amazon.com. Fulfilled by Amazon sellers pay a

commission to Amazon to use the service, and Amazon provides an

accounting. [See generally 2 JA 403 (Get Started with Fulfilled by

Amazon video and FBA Fulfillment Tour videos, marked as Exs.

270 & 271 respectively); see also 1 JA 260-66.]

Once inventory is received by Amazon, Amazon frequently

commingles that inventory with goods from other suppliers. [See

generally Stickerless, Commingled Inventory video (Ex. 272 on

CD-ROM at 2 JA 403); see also 2 JA 404-406 (video captures about

commingling practice).]

While there are differences in the manner by which the goods

are acquired by Amazon, there is no difference in the use of the

InStyler mark between Fulfilled by Amazon and Amazons

own direct sales: the consumer starts the transaction at Amazons

InStyler Product Page and completes the transaction on

Amazon.com. [See, e.g., 1 JA 81:6-9, 260-66, 2 JA 402.]

All aspects of the Fulfilled by Amazon transaction are carried

out by Amazon. [Id.] In fact, from the customers perspective,

Fulfilled by Amazon is indistinguishable from Amazon direct sales:

the transaction is completed on the Amazon website, payment is


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rendered to Amazon, the goods are shipped from an Amazon

warehouse in Amazon packaging, Amazon Super Saver shipping

rates apply, and the purchases are eligible for loyalty programs such

as Amazon Prime. [Id.; see also 2 JA 403 (videos marked as Exs.

270 & 271); 2 JA 389:26-390:5.]6

3. Amazon Marketplace Third Party Sales.Finally, Amazon provides marketing, advertising, and extensive

support services for Amazon Marketplace sellers who fulfill sales

on their own. As with Fulfilled by Amazon vendors, these sellers

list their inventory for display on the InStyler Product Page. [1 JA

65:13-15.] As with the other two sales channels, the consumer

starts the transaction by accessing Amazons Product Page. [See, e.g.,

1 JA 171-73, 182-84, 192-95.] The consumer also purchases the

goods through the checkout process on Amazon.com, makes

payments through Amazon.com using his or her Amazon.com

6 Amazon asserts that Fulfilled by Amazon is distinguishable from

direct sales primarily in that Amazon does not take formal legaltitle of the inventory that it takes into its possession. Even if true,

however, that is a distinction without a difference either to the

customer, who receives the exact same consumer experience as an

Amazon direct sale, or to the Lanham Act, since Amazons use of

the registered InStyler mark is the same.


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account, and receives a receipt from Amazon.com. [1 JA 65:15-28.]

The only perceivable distinctions from the perspective of the

consumer are that the product is shipped directly by the seller, and the

seller is responsible for customer service (including returns). [Id.]7

Nevertheless, even though Amazon explains that the product is

provided from the inventory of the third party seller, Amazon still

expressly guarantees the quality of the goods. Specifically,

Amazon.com provides that:

We want you to buy with confidence anytime

you purchase products on Amazon.com. That

is why we guarantee purchases from Amazon

Marketplace, Auctions, zShops, and Merchant

sellers. The condition of the item you buy and

its timely delivery are guaranteed under theAmazon A-to-Z program.

[1 JA 103.]

C. Amazon Fails to Appropriately Address KnownCounterfeit Goods Originating From UnverifiableSources.

Amazon purports to maintain a process for trademark owners to

report suspected counterfeit items sold on Amazon.com, but it is

7 Notably, this communication takes place entirely through the

Amazon messaging system, which hides all identifying

information about the seller. [1 JA 65:15-28.]


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notable primarily for Amazons indifference to the rights of trademark

owners. Upon identifying suspected counterfeits, trademark owners

are instructed to send their Notices of Claimed Infringement

(NOCIs) to Amazons copyright agent so that Amazon can take

action. Since the beginning of 2010, Tre Milano has sent Amazon

more than 300 NOCIs relating to apparently counterfeit InStylers. [1

JA 60:8-10.]

Amazon has reacted slowly, if at all, to Tre Milanos

notifications. In contrast to the systems on true marketplace sites

like eBay or Craigslist (both of which have automatically removed

counterfeit items nearly immediately after notice from Tre Milano),

Amazon often takes weeks or even months to respond. [1 JA 60:28-

61:1.]

Amazon admits that it has often required Tre Milano to submit

duplicate notifications because Amazon failed to respond to an

original notification. [1 JA 304:9-10 (Stressing that only 85 (27%)

[of Tre Milanos NOCIs] were for listings that Amazon.com failed to

remove after initial notice.); see also 1 JA 60:8-16.]

Moreover, despite Amazon's vague and generic claims of

diligence, Amazon has been able to provide accurate contact


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information for only one of the thirteen Amazon Marketplace sellers

initially named as co-defendants in this case. [2 JA 392:21-24]

Indeed, Amazon admitted that it had no contact information

whatsoever for two of these thirteen defendants even though one of

these was a Fulfilled by Amazon seller for whom Amazon was

warehousing and shipping counterfeit goods. [2 JA 392:18-20,

394:14-24, 398.] Of the remaining Amazon Marketplace sellers,

Amazon had inaccurate contact information for ten of them, including

incomplete addresses, apparently fake names, and (in one case) the

address of a Kroger supermarket. [2 JA 392:21-393:18, 399-400.]

D. A Consumer Was Burned by a CounterfeitInStyler Purchased on Amazon.com Nearly

Two Weeks After Tre Milano Notified Amazon

that the Seller was Selling Counterfeits.

On March 2, 2011, Tre Milano notified Amazon that a

Marketplace seller called Success Store was using Amazon's

marketing, advertising, and payment processing system to sell fake

InStylers. [1 JA 61:8-13, 100.]

Almost two weeks later, an individual named Pete Day went to

the Amazon website and, through Amazons Product Page, bought a

purported InStyler for his wife in a Third Party Sale from Success

Store. [1 JA 44:11-14, 45:2-8 (Pete Day Dec.), 90.] Mr. Day made


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his payment to Amazon and received his receipt from Amazon. [1 JA

45:2-8, 90.] He knew that the product was not coming directly from

the inventory of Amazon.com, but he did not realize that there was

any possibility that the product sold on Amazon.com could be fake.

[1 JA 44:22-25.]

As Tre Milano had expressly warned, the purported InStyler

product Mr. Day received and which Amazon.com had marketed,

advertised, offered for sale, and processed the sale for Success Store

was, in fact, counterfeit. [1 JA 71:24-73:4.]

Soon after receiving the fake InStyler, Mr. Days wife, Jodi,

was doing her hair when the product exploded in her hand. [1 JA

45:13-17 (Pete Day Dec.), 1 JA 48:26-49:1 (Jodi Day Dec.).] The

explosion burned Ms. Days hand and vaporized portions of the

products internal wiring. [1 JA 45:28-46:2, 49:7-10, 91-93, 95-96

(photos).]

Although her injuries were terrible enough, Ms. Day was lucky

it was not worse: only the fact that the fake Amazon.com InStyler

happened to be plugged into her computers surge protector prevented

a house fire (or an even greater explosion). [1 JA 45:24-27, 49:2-6.]


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E. Despite Actual Notice, Amazon Continues to List andProcess Sales of Counterfeit InStylers in each of its

Sales Channels.

Amazon continues to sell and fulfill products involving

Amazon Marketplace sellers who are known traffickers of fake

InStyler products. In fact, Amazon has brazenly continued to sell

fake InStylers for sellers even after they were named as co-defendants

in this action.

For example, Tre Milano notified Amazon on March 14, 2011

that a Fulfilled by Amazon seller that goes by the name OnxyBay

was trafficking in counterfeit InStylers. [1 JA 62:1-6, 271-72.] But

Amazon continued to fulfill sales for OynxBay for at leastthree

more months, when a test buy by Tre Milano at the end of May

confirmed that Amazon was still marketing, advertising, warehousing,

and shipping counterfeit product from OnyxBay. [1 JA 71:24-73:4,

81:18-82:10.]

Even more egregious is the case of Kafonika, another

Fulfillment by Amazon seller. In that instance, Tre Milano did

more than just provide a standard NOCI (although it also did that). [1

JA 273.] After two weeks of inaction by Amazon, Tre Milano named

Kafonika as a defendant in this lawsuit. [1 JA 5:6-10.]


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Nevertheless, Amazon continued to sell and fulfill on behalf of

Kafonika, and even shipped a counterfeit Kakonika InStyler to

Tre Milanos litigation counsel three days later. [1 JA 269-70, 71:24-

73:4.] 8

These are not isolated instances. Amazon continued through the

filing of the preliminary injunction motion to provide services to

Marketplace sellers notwithstanding express notice from Tre Milano

in the form of NOCIs and the filing of this suit that specific

sellers were believed to be selling counterfeit goods. [1 JA 77:13-24.]

Indeed, as explained below, counterfeit sales have occurred on each of

Amazons purported sales channels.

1. Amazon Itself Has Sold Made Direct Sales ofCounterfeit InStylers.

Despite its efforts to avoid liability by playing up the allegedly

distinct sales channels, Amazon itself has sold counterfeit InStylers

directly to customers. [1 JA 52:10-25, 57:16-58:5.]

8Amazon was still fulfilling orders for purported InStylers from the

inventory of its co-defendant Media Liquidations up to the eve

of Tre Milanos Motion for Preliminary Injunction, nearly three

weeks after that enterprise was named as a defendant. [1 JA

77:13-15.]


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Amazon has acknowledged that it has ongoing problems with

its own inventory being mixed with third party inventory at Amazon

warehouses. [1 JA 53:8-12.] Amazon does not vet the inventories of

Fulfillment by Amazon marketplace sellers to ascertain if the goods

are legitimate, and Amazon has acknowledged that it has made direct

sales of InStylers from those inventories. [1 JA 54:5-11, 66:13-20.]

In fact, the Fulfilled by Amazon enrollment web pages and videos

confirm that commingling is standard operating procedure at Amazon.

[See, generally, 2 JA 403 (Stickerless, Commingled Inventory video

marked as Ex. 272 on CD-ROM), see also 2 JA 404-406.] Because

Fulfilled by Amazon inventory is not necessarily segregated,

products purportedly direct from Amazon include counterfeits

because the Fulfilled by Amazon channel contains so much

counterfeit product.

2. Fulfilled by Amazon Sales.Between the time Tre Milano commenced this suit and filed its

motion for a preliminary injunction, Tre Milano made test purchases

from each of the four Fulfilled by Amazon sellers with InStyler

listings during this period: Kafonika, Media Liquidations,

EveryDayGiftGivers and OnyxBay. [1 JA 77:3-7, 80:23-82:10,


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83:5-25, 86:1-87:16; 1 JA 167, 169, 176, 190, 196; 1 JA 71:24-73:4.]

Every single purported InStyler purchased from these Fulfilled

by Amazon sellers was counterfeit. [1 JA 77:3-7; 1 JA 71:24-

73:4.] Moreover, purchases from two of these sellers took place long

after Tre Milano had notified Amazon that the respective sellers were

trafficking in counterfeit InStylers. [1 JA 271-72, 273-74 (NOCIs); 1

JA 167, 169, 196.]

Each of these InStyler purchases was made by going to

Amazon.com. [1 JA 81:6-9, 82:1-4, 83:16-19, 86:12-15, 87:7-10.]

Each purchase was initiated at the InStyler Product Page where

Amazon uses the InStyler mark to describe the appliance. [Id.]

Each purchase was made through Amazon.com by making payment

through an Amazon.com payment account, with a receipt sent from

Amazon.com. [Id.] Finally, each purchase was delivered by Amazon

from an Amazon.com warehouse in Amazon.com packaging. [Id.; 1

JA 168, 170, 177, 191, 197.]

3. Amazon Marketplace Sales.Additional test purchases made during the same period revealed

yet more Amazon Marketplace sellers involved in the sale of

counterfeit InStylers: (i) Aileen X. Nguyen d/b/a This Online Store,


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(ii) Nick Grieco d/b/a Tony,s Loop d/b/a Beach Direct, (iii)

Hotsale1010, (iv) RSB Inc. and (v) Marland. [1 JA 78:21-80:20,

83:28-85:26; 1 JA 162, 164, 166, 179, 181, 186; 1 JA 71:24-73:4.]

Although Tre Milano had sent NOCIs to Amazon with respect

to every one of these sellers prior to purchase, two cases are especially

egregious. One involves Tony,s Loop, which was the subject of a

Tre Milano NOCI to Amazon and is a named defendant in this suit.

[1 JA 62:19-24; 1 JA 277.] Although Amazon initially removed his

account, the individual behind Tony,s Loop simply changed his

Amazon screen name to Beach Direct and Amazon allowed him to

continue selling counterfeit InStylers on Amazon.com. [1 JA 80:3-

14.]

Even more outrageous is Amazons failure to permanently

remove the seller Marland. Tre Milano sent an NOCI to Amazon

regarding Marland on March 7, 2011. [1 JA 61:23-28; 1 JA 269.]

Nearly three months later, on May 29, Tre Milano made a test

purchase from Marland and verified that the unit purchased was

counterfeit. [1 JA 85:10-26; 1 JA 72:16, 72:23-73:4.] Nevertheless,

Marland listings for InStylers continued to periodically appear on

the Amazon site well into June. [1 JA 77:16-18; 1 JA 182.] During


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these three full months, Amazon apparently did nothing to address

this specific Amazon Marketplace seller who traffics in counterfeit

InStylers.

F. There Are Material Differences BetweenAmazon and eBay.

While the trial court apparently found that Amazons conduct

was no different from eBay in terms of contributing to the

infringement by others, the undisputed facts show otherwise. [2 JA

384:1-27.]

As an initial matter, Amazon is different because it is more

directly involved in each sale than eBay. eBay is an auction site that

does nothing more than provide a space in which a seller may post

his or her own description of the items for sale and a mechanism for

bidding. [2 JA 389:20-25.]9

9 See generally Tiffany, 600 F.3d at 97 (Explaining that eBay

operates to connect buyers and sellers and enable transactions,

which are carried out directly between eBay members, and that

eBay provides the venue for the sale [of goods] and support forthe transaction[s], [but] it does not itself sell the items listed for

sale on the site, nor does it ever take physical possession of

them.) (emphasis added) (quoting Tiffany (NJ) Inc. v. eBay, Inc.,

576 F.Supp.2d 463, 475 (S.D.N.Y. 2008)).

eBay does not describe the item or

provide pictures of the proposed item. [2 JA 390:7-9.] Moreover,


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eBay allows a trademark holder to create and maintain an About Me

page for the express purpose of informing consumers about the

products at issue, and that certain items (such as Tiffany products) are

particularly likely to be counterfeit. Tiffany, 600 F. 3d at 99-100

(citingTiffany (NJ) Inc. v. eBay, Inc., 576 F.Supp.2d 463, 479

(S.D.N.Y. 2008)).

Here, by contrast, Amazon itselfcreates the Product Page that

describes the products as legitimate InStylers and Amazon provides

the photographs of legitimate InStyler packaging to reinforce

Amazons representation that the products sold via that page are

actual InStylers. Amazon in no way suggests that the descriptions

come from third parties or that the descriptions are only as reliable as

the third party offering the goods. Moreover, while Amazon itself

internally recognizes that the InStyler is currently being counterfeited

in high volumes, Amazon provides no such warning to the public. [2

JA 302:24-25 (long before this suit, Amazon.com identified InStylers

as high risk, defined as currently being counterfeited in high

volumes).] To the contrary, rather than warning the public, Amazon

instead expressly guarantees the items sold via all channels on

Amazon.com. [1 JA 103.]


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Additionally, whereas eBay does not require use of any

particular payment system, Amazon requires use of the Amazon.com

payment system to process any purchase through any Amazon

channel. [2 JA 389:20- 390:5; 2 JA 403 (FBA Fulfillment Tour

video).] Amazon also expressly warehouses and ships products for

third parties, whereas eBay does not warehouse or ship any products

for third parties.Id. As a result, numerous of the counterfeits at

issue in this case have been physically handled and delivered by

Amazon itself. See, e.g., 1 JA 168, 170, 177, 191, 197 (photos).

Finally, of course, Amazon also provides customer service for the

Fullfilled by Amazon sales.

Turning to the question of Amazons responsiveness to

questions of legitimacy, the undisputed facts again reflect significant

differences between Amazon and eBay:

1. eBay invariably removes questionable listings within

twenty-four hours (and typically within one to two hours) of

objection by the trademark holder. [2 JA 390:15-19; see also Tiffany,

600 F.3d at 99.] By contrast, Amazon frequently takes months to

respond and, in more than a quarter of cases, does not respond at all

until at least a second notice from Tre Milano. [2 JA 390:20-26.]


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2. eBay always promptly provides the contact information

for the seller after any question about the sellers legitimacy. [2 JA

391:3-6; see also Tiffany, 600 F.3d at 99.] By contrast, Amazon

absolutely refuses to provide contact information for its Amazon

Marketplace sellers. [2 JA 391:7-8.]

3. To prevent sales from taking place before trademark

holders can react, eBay prohibits short auctions on highly-

counterfeited items and allows trademark holders to pre-inspect

potential auctions of such items before the auctions go live. Tiffany,

600 F.3d 93, 100. By contrast, despite admitting that it knows the

InStyler is frequently counterfeited, Amazon provides no advance

notice before it advertises, sells and even ships counterfeit InStyler

products via its Fulfilled by Amazon and Amazon Marketplace

programs. [2 JA 302:24-25 (long before this suit, Amazon.com

identified InStylers as high risk, defined as currently being

counterfeited in high volumes); 2 JA 390:20-26.]

4. eBay maintains at least 200 employees who focus

exclusively on anti-counterfeiting efforts. While Amazon attempts to

finesse the issue by noting that it has anti-fraud employees, there is

no evidence that any of those employees focus exclusively even


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principally on anti-counterfeiting efforts. In fact, reading between the

cleverly drawn lines, it is clear that the anti-fraud employees are

principally charged with avoiding bad debt risk and that any anti-

counterfeiting is merely incidental to their primary purpose. [2 JA

338:7-10 (My teams primary responsibilities are to reduce bad debt

risk to Amazon and protect the buying experience by ensuring third

party sellers comply with our policies and meet our performance

standards.).]

In sum, the evidence shows that Amazon does not in fact take

the steps that eBay has taken to allow trademark holders like Tre

Milano to protect their trademark rights. Instead, Amazon moves

slowly (if at all) to address issues while continuing in the meantime to

use the InStyler mark to sell and facilitate the sales of counterfeit

InStyler products.

G. Tre Milano is Suffering Irreparable HarmFrom Negative Feedback in Which the

Shortcomings of Counterfeit InStylers Are

Attributed to the Genuine Product.

1. Amazon Counterfeits Are of InferiorQuality, with a High Fault Rate and anUnacceptable Risk of Injury to

Consumers.

As noted above, at least one counterfeit sold by Amazon


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exploded in the hand of an Amazon customer, and other consumers

have complained of burns or other injuries. [1 JA 45:10-46:2 (P. Day

Dec.); 1 JA 48:26-49:10 (J. Day Dec.); 1 JA 67:25-68:5.] More

generally, counterfeit InStylers typically are of poor quality, with

substandard components not designed to withstand the heat or

mechanical functionality involved in the sophisticated, patented

InStyler design. [1 JA 67:12:20, 68:14-23.] Moreover, like most

counterfeit InStylers, all ofthe counterfeits purchased through

Amazon since inception of this suit lack the heat shield attachment

which is a key safety component included with every genuine

InStyler. [1 JA 67:15-16; 1 JA 71:12-13, 73:3-4.] As a result, these

fake products not only have a high fault rate but also present an

unacceptable risk of injury to consumers.

2. Consumers Post Negative Reviews of theInStyler Based on Poor Quality Fakes.

Unlike sites such as eBay, Amazon customers are invited to

provide reviews that are attributed to the product sold and not to the

seller. [1 JA 67:8-9.] As a result, dozens of Amazon consumers have

given the InStyler 1-Star reviews based entirely on problems with

Amazon and its Marketplace sellers, including the sale of used or

broken InStylers or lack of communications from Amazon or the


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sellers. [Id.; 1 JA 67:9-12; 1 JA 77:4-5.] Many more of the negative

reviews reflect the high fault rate inherent to counterfeit appliances.

[1 JA 67:12-13; 1 JA 286.]

One illustrative complaint on the Amazon website, giving Tre

Milanos InStyler a 1-Star review, reads as follows:

These people are liars. I ordered the instyler for a good

price. The reason why I order from Amazon is to pay

less. ... The sellers are GDHDMI. They sent me a thing

that looked like an instyler, it was the exact thing but

BOOTLEG!!!! it was a fake. It was much fatter and a lotof plastic and it made a pop sound on the first try an

didn't work. I thought it was a real instyler until I actually

purchased one from ULTA. I noticed it wasn't. It was a

rip off. No one sould [sic] order from them. [1 JA 241-

242; see also 1 JA 67:21-24.]

This review is noteworthy not only because the consumer was astute

enough to recognize that she had received a counterfeit InStyler, but

also because Tre Milano had provided multiple notices to Amazon

about this very seller. In fact, Tre Milano sent three separate NOCIs

to Amazon demanding the Amazon halt GDHDMIs counterfeit sales

beginning in November 2009, a full threemonths prior to the

publication of this 1-star review for the InStyler. [1 JA 54:17-

55:18; 1 JA 138-147 (NOCIs re GDHDMI).] In other words, Amazon

had actual notice that GDHDMI was selling counterfeit InStylers, but

it did not block GDHDMIs sales and then, to compound the harm,


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Amazon allowed a consumer to post a disparaging 1-star review of

the InStyler based upon a product that Amazon knows to be

counterfeit. Moreover, this review remains on Amazon.com to this

day, two years after Amazon was given notice.

3. Counterfeit Amazon InStylers DeceiveEven Professional Reviewers.

Even professional consumer reviewers have falsely assumed

that a product purchased via Amazon must be genuine. For

example, in late 2010, Tre Milano learned of a disparaging video

review of the InStyler posted by AOL on one of the principal AOL

web pages. [1 JA 67:25-68:5; 1 JA 77:26-78:7.] The AOL reviewer

concluded that the product she purchased was unsafe and even

attributed specific physical injuries sustained from its use to supposed

design flaws with the InStyler product. [Id.] Upon examination of

the video review, Tre Milano determined that the reviewer had

purchased a counterfeit InStyler sold through Amazon.com. [Id.; 1

JA 259 (AOL/WalletPop Retraction).] In other words, this review and

the unjustified negative publicity for Tre Milanos InStylers resulted

entirely from the sale of counterfeit products on Amazon.com.


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V. THE TRIAL COURT ERRED IN FAILING TO ENJOINAMAZON FROM ASSISTING THE SALE OF FAKE

INSTYLER PRODUCTS

The trial court made two legal errors in this matter. First,the

trial court wrongly concluded that Amazon could not be a direct

infringer merely for facilitating the sales of counterfeit products

even though Amazon is using the InStyler mark itself. Second, the

trial court wrongly concluded that Amazon could not be a

contributory infringer because it was not shown (on the preliminary

record) to be willfully blind to the possibility of counterfeit sales. As

discussed below, Amazon is also a contributory infringer because it

has assisted in sales of counterfeit product for weeks and months with

specific knowledge of infringing product.

A. Amazon Is Liable as a Direct Infringer BecauseAmazon Itself Is Using the Registered InStyler MarkIn Connection With the Sale of Counterfeit Goods.

1. Any Person Who Uses a Mark In ConnectionWith Any Offering for Sale, Distribution,

or Advertising Infringes Regardless of Who

Nominally Makes the Sale.

At the hearing on Tre Milanos motion for a preliminary

injunction, the trial court erroneously accepted Amazons argument

that it was not a direct infringer because Amazon purportedly never


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held legal title to the counterfeit items being sold via Amazon.com.10

Specifically, the Lanham Act expressly provides liability for

any person who, without the consent of the registrant:

However, the plain language of the Lanham Act makes clear that legal

title isnot necessary for direct liability. 15 U.S.C. 1114(1)(a).

Uses in commerce any reproduction, counterfeit, copy,

or colorable imitation of a registered markin connection

with the sale, offering for sale, distribution or

advertising of any goods or services on or in connection

with which such use is likely to cause confusion, or tocause mistake, or to deceive.

15 U.S.C. 1114(1)(a) (emphasis added).11

As Professor McCarthy observes, the language is an

intentionally broad definition that means exactly what it says: it

imposes liability for infringement of a registered mark upon any

10 As discussed below, formal title is legally irrelevant to liability

under the Lanham Act. Nevertheless, Tre Milano notes that

Amazon did not produce any evidence to support its assertion that

it never takes legal title to the purported InStylers that Amazon

holds in its possession from Fulfilled by Amazon sellers.

11 As a matter of law, any violation of the Federal Lanham Act is also

a violation of Californias Business and Professions Code Section17200. Cal. Bus. & Prof. Code 17200 et seq.;M2 Software Inc.

v. Madacy Ent., 4231 F.3d 1073, 1089-90 (9th

Cir. 2005);Barquis

v. Merchants Collection Assn., 7 Cal.3d 94, 113 (1972) (Section

17200 applies to any conduct made illegal under any applicable

law).


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person who uses an infringing mark in interstate commerce in

connection with the sales or advertising of goods or services. 4

McCarthy on Trademarks and Unfair Competition 25:26 (4th

ed.

2011) (emphasis in theoriginal).

Indeed, as the Ninth Circuit observed inLevi Strauss & Co. v.

Shilon, 121 F.3d 1309, 1312 (9th

Cir. 1997), there does not even have

to be a sale for a party to infringe under Section 1114(1). InLevi, the

defendant used the Levi Strauss trademarks as part of an offer to sell

counterfeit goods but the goods themselves did not yet exist. 121 F.3d

at 1311. The Ninth Circuit found the matter to be governed by the

clear language of the statute. Id. at 1312. The statute focuses on

the use of the mark rather than the sales transaction itself, which

means that the use of the mark to market, advertise or offer to sell is

infringement even without any actual sales. Id.; see also Miller

Brewing Co. v. Carling OKeefe Breweries of Canada, Ltd., 452

F.Supp. 429, 442 (W.D.N.Y. 1978) (use of the mark alone in U.S.

advertising is actionably infringement notwithstanding the lack of any

U.S. distribution or sales).

The language of the Lanham Act clearly applies on its face to

the conduct of any party such as Amazon who uses a registered mark


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in connection with any counterfeit sale, whether that use is part of the

sale, the advertising, or the distribution. 15 U.S.C. 1114(1)(a); see

also Getty Petroleum Corp. v. Aris Getty, Inc., 55 F.3d 718, 719-720

(1st

Cir. 1995) (defendants liability was direct, for an affirmative

act where it distributed product despite the fact that it did not have

title to the goods at issue).

In sum, the trial court committed plain legal error when it

concluded that Amazons purported lack of legal title insulated it from

liability for direct trademark infringement.

2. The Safe Harbor Provisions of the LanhamAct Confirm That Liability Extends To Any

Party Using the Mark Even to Facilitate a Sale.

Section 1114(2) of Lanham Act includes a safe harbor for a

series of specifically identified third-party users of a registered mark

who would otherwise be liable for infringement under Section

1114(1). 15 U.S.C. 1114(2). Generally speaking, the Section

1114(2) safe harbors extend to innocent third-parties who are

merely paid printers, publishers, or broadcasters of newspapers,

magazines, and the like. 15 U.S.C. 1114(2)(A-D). Upon a showing

of true innocence, these parties are exempt from damages under the

Lanham Act. Id. Notably, those third parties remain subject to


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injunctive relief . Id.12

The text of the first safe harbor is illustrative:

The safe harbor provisions confirm that

those innocent third parties are nevertheless trademark infringers

subject to injunctive relief.

Where an infringer or violator is engaged solely in the

business of printing the mark or violating matter for

others and establishes that he or she was an innocent

infringer or innocent violator, the owner of the right

infringed or person bringing the action under section

43(a) shall be entitled as against such infringer or violator

only to an injunction against future printing.

15 U.S.C. 1114(2)(A). Like the other three safe harbor provisions,

the effect of this safe harbor provision confirms that a truly-

disinterested and innocent third party is still an infringer but limits the

remedies against such an infringer to injunctive relief. 15 U.S.C.

1114(2)(A-D).

The reason that the safe harbors in Section 1114(2) are

necessary is because unauthorized printing or publication of a

12 Amazon does not qualify under any of the safe harbor provisions

of Section 1114(2) in this case since Amazon is not merely a

printer, publisher, broadcaster, or domain-name registrar, muchless one who can claim to be innocent. 15 U.S.C. 1114(2)(A-D).

Moreover, the issue is irrelevant to this appeal since the appeal

involves only injunctive relief. Even under the safe harbor

provisions, innocent third-party printers, publishers, etc. are still

infringers and still subject to injunctive relief. Id.


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registered markis an infringement under Section 1114(1) of the

Lanham Act even though a printer may not itself sell any of the goods

and services being infringed. Put differently, the parties who use the

mark at issue in connection with the advertising, offering for sale, or

distribution of a good are infringers even though innocent publishers,

broadcasters, and the like may never actually sell or have title

themselves to such goods. 15 U.S.C. 1114(1-2); see generally

Miller Brewing, 452 F.Supp. at 442 (W.D.N.Y. 1978) (issuing

injunction to prohibit advertising in the United States notwithstanding

the lack of any possible sales in the United States). This confirms that

the language of the prior section means exactly what it says: useof

themarkalone is infringement even if it only facilitates a sale so long

as that use is in connection with a sale or attempt to sell.

In short, any party (like Amazon) who uses a registered mark

in connection with the sales of counterfeit goods is an infringer. It

does not matter whether the party itself is part of the actual sales

transaction. Although in certain (factually inapposite) circumstances

relief is limited to only injunctive relief, the use of the mark alone

indisputably constitutes direct infringement subject to injunctive

relief. 15 U.S.C. 1114(1)-(2).


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3. Amazon Is Liable BecauseIt Is Using the RegisteredInStyler Mark.

Unlike a web hosting site or even an auction site like eBay,

Amazon maintains the Product Page at issue and Amazon is the party

using the InStyler trademark on its Product Page. Consequently,

Amazon is statutorily liable if it turns out (and it has) that the products

sold in connection with that mark are counterfeit. 15 U.S.C.

1114(1)(a); see generally Lorillard Tobacco Co. v. Amouris Grand

Foods, Inc., 453 F.3d 377, 381 (6th

Cir. 2006) (party who

unknowingly sells counterfeit nevertheless liable for participating in

distribution of same).

In this regard, Amazon differs from a contributory infringer

who merely provides a good or service of assistance to the parties who

directly infringe the mark. Consider, for example, the situation of

swap meet sellers. See e.g., Fonovisa, Inc. v. Cherry Auction, Inc., 76

F.3d 259, 264-65 (9th

Cir. 1996), Hard Rock Caf, 955 F.2d at 1146,

et seq. At a typical swap meet, the manager of the swap meet merely

provides a space for the vendor to sell goods. The manager may be

contributorily liable if it turns out that the vendor is selling counterfeit

goods with the managers knowledge, but the manager unlike

Amazon has not directly used the mark and thus cannot be a direct


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infringer. Likewise, Amazon differs from eBay, which (like the swap

meet) merely provides a space for a vender to offer various products.

[2 JA 389:20-25.] Unlike Amazon, eBay does not maintain its own

Product Page onto which sellers can tag along. [RT 4:17-18

(Amazons description of how Amazon allows third parties to use its

Product Page).] To the contrary, eBay requires that actual sellers

provide their own product descriptions and photographs in each

listing. [2 JA 390:7-13.] Moreover, for highly counterfeited items,

eBay expressly disclaims any responsibility for the accuracy of such

descriptions or pictures. Tiffany (NJ) Inc. v. eBay, Inc., 576

F.Supp.2d 463, 498 (S.D.N.Y. 2008).

By contrast, Amazon uses the InStyler mark as part of its own

efforts to sell InStyler products. As Amazons counsel admitted at

hearing, Amazon then allows various third parties to tag along on

Amazons sales efforts. [RT 4:17-18.] In so doing, Amazon is

plainly telling consumers that in addition to Amazon, these various

third parties are also selling InStyler products. [See, e.g., 1 JA 171-

73, 182-84, 192-95; 2 JA 350-56, 366-68.] Because Amazon itself

provides the product description, there is naturally no disclaimer on

the Amazon website about product descriptions being potentially


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unreliable. As the party who is using the mark, Amazon is therefore a

direct infringer. 15 U.S.C. 1114(1).

4. The Lanham Act is a Strict Liability Statute asto Counterfeit Goods.

Like product liability statutes, the Lanham Act is a strict

liability statute.Lorillard Tobacco Co., 453 F.3d at 381 (6th

Cir. 2006)

(quotingHard Rock Cafe, 955 F.2d at 1152 n.6 (7th

Cir. 1992));

Phillip Morris U.S.A. Inc. v. Shalabi, 352 F.Supp.2d 1067, 1073-74

(C.D.Cal 2004). Courts may enjoin violations of its provisions

regardless of the mental state of the violator. Century 21 Real Estate

Corp., 929 F.2d 827, 829(1st

Cir. 1991) (citingTisch Hotels, Inc. v.

Americana Inn, Inc., 350 F.2d 609, 613 (7th

Cir. 1965); see also 15

U.S.C. 1114(2) (A-D) (safe harbor for innocent printers, publishers,

broadcasters and the like nevertheless permits injunctive relief). This

has been the law in the United States for well over a century.

Saxlehner v. Siegel-Cooper Co., 179 U.S. 42, 43 (1900) (The fact

that the Siegel-Cooper Company acted innocently does not exonerate

it from the charge of infringement.).

Moreover, while Section 1114(1)(a) applies only to uses that

are likely to cause consumer confusion, counterfeit goods are likely to

cause confusion as a matter of law. Philip Morris USA, Inc., 352


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F.Supp.2d at 1073; Gucci America, Inc. v. Duty Free Apparel, Ltd.,

286 F.Supp.2d 284, 287 (S.D.N.Y. 2003). In addition, of course, the

evidence in this case clearly shows that the individuals who are

purchasing from Amazon.com would be and are expecting to purchase

genuine InStyler products and not counterfeits. [2 JA 350-56, 366-

68, 402-06; 1 JA 46:9-47:2; 1 JA 49:18-50; 1 JA 67:25-68:5; 1 JA

77:10- 78:7; 1 JA 259.] In other words,the evidence confirms the

obvious fact that consumers are likely to be confused by any

counterfeit items sold via the Amazon InStyler Product Page.13

13 Although counterfeit goods are inherently confusing, Amazonheightens the confusion among the consuming public by

publishing purported customer images of the InStyler, many of

which have not been posted by actual consumers and do not show

authentic InStylers. Several such photos are, in fact, images of

counterfeit InStylers that originated with known traffickers of

counterfeit, including several such photos from a seller described

as a Trusted 5-Star Seller. Notably, Tre Milano sent four

separate NOCIs to Amazon about this Trusted 5-Star Seller,

more than a year and a half ago, yet his photos of counterfeitInStylers remain posted on the Amazon.com website where they

mislead consumers into believing that the fake InStylers obtained

through Amazon are, in fact, authentic. [ 1 JA 73:14-75:4 (Table)

and 1 JA 199-234 (Customer Images); 1 55:21-56:22 and 1 JA.

148-160 (NOCIS re Stoneledge of Cornwall).]


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B. Even If Amazons Actions Were Evaluated Under aContributory Infringement Theory, Amazon

Would Still Be Liable Because It Was Required, But

Failed, to Take Reasonable Steps to Prevent

Infringement.

Even if Amazon were not directly liable for trademark

infringement under the Lanham Act (and it is), Amazon would

nevertheless be liable for contributory infringement given Amazons

level of knowledge and ability to control matters here.

1. A Party Who Has Sufficient Knowledge ofPossible Infringement and Has the Ability to

Control Such Infringement May Be HeldContributorily Liable.

Liability for trademark infringement extends beyond those who

are direct infringers. Inwood Laboratories, Inc. v. Ives Laboratories,

Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed2d 606 (1982). A

party will be liable for trademark infringement as a contributory

infringer where: (a) the party provides a good or service to a direct

infringer; (b) the party knows or has reason to know that the direct

infringer is using the good or service in trademark infringement; and

(c) the party has control over the instrumentality used by the direct

infringer to infringe the plaintiffs mark. Louis Vuitton Malletier, S.A.

v. Akanoc Solutions, Inc., -- F.3d --, 2011 WL 4014320 at *3 (citing


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Inwood, 456 U.S. at 854;Lockheed Martin Corp. v. Network

Solutions, Inc., 194 F.3d 980, 984 (9th

Cir. 1999); see alsoFonovisa,

76 F.3d at 264-65; Tiffany, 600 F.3d at 104.

In its ruling, the trial court focused on the second prong of the

contributory infringementtest because it was the only factor in

dispute. The trial court started with the proposition that a party is not

considered a contributory infringer merely because it has a

generalized knowledge that its services might be used for

infringement. [Appealed Order, 2 JA 459, citing Tiffany, 600 F.3d at

107.] The trial court then erroneously assumed that the only other

way to establish contributory infringement was to show willful

blindness. [Appealed Order, 2 JA 459, citing Tiffany, 600 F.3d at

110 (eBay did not ignore the information it was given about

counterfeit sales on its website.).]14

14 In fact, the Tiffany decision on which the trial court relied actually

provides that some contemporary knowledge of which listings

infringe or will infringe is sufficient to establish liability. Tiffany,600 F.3d at 107. Willful blindness to infringing conduct is also

sufficient, but it is merely an alternative ground if the plaintiff

cannot show contemporary knowledge of infringing listings.Id.;

Hard Rock Caf, 955 F.2d at 1151(contributory liability will be

found based on reason to know even if a party is not willfully

Since the trial court found that

[Footnote continued on next page]


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the limited record did not support a finding of willful blindness, it

concluded that Tre Milano had failed to show the necessary level of

knowledge on Amazons part. [Appealed Order, 2 JA 459.]

The courts ruling with respect to contributory infringement

was erroneous because it overlooks the fact that contributory

infringement lies not simply where a defendant has reason to know

of an infringement. It also lies when, as here, a partyactually knows

of the infringement and still provides services necessary to such

infringement. As discussed below, the undisputed evidence in the

court below showed that Amazon continues sales of counterfeit items

for weeks or months after receiving specific knowledge about specific

sources of counterfeit on Amazon.com. Amazons continued

advertising, processing, warehousing, and shipping after specific

notice is more than sufficient to establish contributory infringement as

well as direct infringement.

[Footnote continued from previous page]

blind); Gucci America, Inc. v. Frontline Processing Corp., 721

F.Supp.2d 228, 249 (S.D.N.Y. 2010) (explaining that willful

blindness is also sufficient in the absence of particularized

information about listings that likely infringe).


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2. Amazon Is Contributorily Liable.As discussed herein, Amazons conduct meets each of the three

prongs required to establish liability under the contributory

infringement standard articulated by the federal courts. Louis Vuitton

Malletier, S.A. v. Akanoc Solutions, Inc., -- F.3d --, 2011 WL 4014320

at *3 (citing Inwood, 456 U.S. at 854;Lockheed Martin Corp. v.

Network Solutions, Inc., 194 F.3d 980, 984 (9th

Cir. 1999); see also

Fonovisa, 76 F.3d at 264-65; Tiffany, 600 F.3d at 104..

a) Amazons Services Are Being Used to SellCounterfeit Products

As to the first prong, the undisputed (and indisputable)

evidence shows that Amazon is providing services that are used to sell

counterfeit products. The primary service consists of Amazons

creation and maintenance of the InStyler Product Page where the

InStyler trademark is used to initiate every single sale. [1 JA 260-

66.] Without such a Product Page, there would be no sales to the

consuming public via Amazon.com.

In addition, however, Amazon also provides the transactional

services at the core of the transaction. The consumer pays Amazon

via the Amazon payment system (using the consumers Amazon.com


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account) for all transactions on Amazon.com, regardless of whether

the sold item originates from Amazon itself, from inventory Fulfilled

by Amazon, or from inventory fulfilled directly by an Amazon

Marketplace seller. In all three cases, Amazons payment handling

services are indispensible to the transaction.

Critically, many of the counterfeit transactions in this case

involve Fulfilled by Amazon sellers. As noted in the fact section,

for every Fulfilled by Amazon test buy, Amazon has delivered a

counterfeit InStyler. [1 JA 77:3-7.] For Fulfilled by Amazon sales,

Amazon does more than just advertise the product and process the

payments. For such sales: (1) Amazon holds the inventory in

Amazons own warehouse; (2) Amazon ships the product in

Amazons boxes; and, (3) Amazon handles all customer service.

b) Amazon Continues to Provide SalesDespite Specific, Particularized

Knowledge of Infringement

Regarding actual notice, the facts are simple: Amazon routinely

continues to provide sales and fulfillment services to Amazon

Marketplace sellers for weeks or even months after Tre Milano has

identified those specific sellers as likely traffickers in counterfeits. [2

JA 390:20-26.] This stands in stark contrast to eBay, which always


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responds in twenty-four hours and more typically responds within one

to two hours and thereby prevents any sale from taking place after

notice. [2 JA 390:15-19.]15

Even the Tiffany decision on which the trial court relied makes

clear that a party will be guilty of contributory infringement if it

continues to provide services after notice that a particular, specified

seller may be selling counterfeits. Tiffany, 600 F.3d at 107-08; see

alsoLouis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., -- F.3d --,

2011 WL 4014320 at *3. This is a different issue than willful

blindness.Id.

Here, the issue is not generalized notice. [See Appealed

Order, 2 JA 459.] Instead, the issue is that Amazon continues to

provide services in connection with the sale of counterfeit goods

despite havingactualand specific notice. As discussed above,

Amazon continues to provide these services for weeks or even months

after notice, rendering it liable for such sales (at a minimum) as a

15 Moreover, because of the auction nature of most sales over eBay, a

response within 24 hours (and particularly a response within 1-2

hours) will typically happen before the end of the auction and will

therefore prevent any actual sale from taking place.


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contributory infringer. Louis Vuitton Malletier, S.A. v. Akanoc

Solutions, Inc., -- F.3d --, 2011 WL 4014320 at *3; see also Sealy,

Inc. v. Easy Living, Inc., 743 F.2d 1378, 1382 (9th

Cir. 1984)

(defendant liable for contributory infringement where it took

inadequate measures to prevent infringement that it otherwise knew

would occur.).

c) Amazon Has Sufficient Ability to Controlthe Instrumentalities At Issue

The undisputed evidence also establishes the third prong of the

contributory infringement test. Cf.Louis Vuitton Malletier, S.A. v.

Akanoc Solutions, Inc., -- F.3d --, 2011 WL 4014320 at *3 (describing

defendants as having direct control over the master switch that kept

[infringing] websites online and available); Tiffany, 600 F. 3d at 97

(eBay simply provides the venue for the sale [of goods] [and]

does not itself sell the items listed for sale nor does it even take

physical possession of them.) (quoting Tiffany (NJ) Inc. v. eBay, Inc.,

576 F.Supp.2d 463, 475 (S.D.N.Y. 2008). Amazon has absolute

control over the InStyler Product Page and has sole discretion about

whether or not to allow specific sellers to have inventory listed on that

page, or to provide any of its other support services. Once Amazon

decides not to permit the sale of purported InStylers by a specific


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Amazon Marketplace seller, no such sale can take place.

Moreover, for Fulfilled by Amazon sales, Amazons control

extends to actual possession of the counterfeit goods. They are in

Amazons warehouses for Amazon employees to ship directly to

consumers. As a result, Amazon can inspect the goods itself.16

Amazon can refuse to accept for sale those products which are

counterfeit, or Amazon can return those goods once it has other reason

to suspect that a specific Amazon Marketplace seller is trafficking in

counterfeit goods. Finally, Amazon can simply refuse to sell or

deliver the counterfeit goods. There is no question that Amazon has

sufficient control and ability to monitor its own services that it can

preclude the sales of counterfeit goods once it decides to do so.

16 In fact, for this very purpose, Tre Milano provided Amazon in

December 2009 with a manual titled How to Tell Its

Counterfeit. The guide was specifically prepared so that a personwithout any specialized experience can readily identify the most

common indicia of counterfeit InStylers, and every counterfeit

purchased from Amazon since inception of this suit has been

determined to be fake using the criteria in that guide. [JA 1 JA

53:8-14; 1 JA 113-122; 1 JA 70:19-71:22; 1 JA 72:23-73:4.]


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VI. THE BALANCE OF HARDSHIPS TILTS STRONGLY INFAVOR OF THE INJUNCTION.

A. Continued Sales of Counterfeits will Cause TreMilano Irreparable Harm.

It has been repeatedly noted that potential trademark violations

create the presumption of irreparable harm because the reputational

harm may be impossible to rectify. Jay Bharat Developers, Inc. v.

Minidis, 167 Cal.App.4th

437, 444 (2008) (citingGoTo.com, Inc. v.

Walt Disney Co., 202 F.3d 1199, 1205 n. 4 (9th

Cir. 2000) (In a

trademark infringement claim, irreparable harm may be presumed

from a showing of a likelihood of success on the merits.).

Here, beyond any presumption, there is concrete evidence that

the InStyler reputation is being harmed by counterfeit products sold

on Amazon.com. Tre Milano has introduced specific evidence

showing that counterfeit product purchased on Amazon.com has

resulted in negative reviews and obviously damaging (and inaccurate)

publicity for the InStyler product. These reviews appear not only on

Amazons own website but on other major websites like AOL. Once

a consumer is erroneously told that the InStyler is poor quality or

potentially dangerous, it is virtually impossible for Tre Milano to


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unring the bell and correct such negative publicity. Any further

sales of counterfeit InStylers on Amazon.com would create

irreparable harm for Tre Milano.

B. These Counterfeit Products Threaten the ConsumingPublic At Large

Beyond the general public interest in avoiding misleading sales

practices in the marketplace, it is clear that counterfeit products can

(and do) represent a threat to public health and safety. 4 McCarthy on

Trademarks and Unfair Competition 25:10 (4th

ed. 2011); see

generally Lorillard Tobacco Co v. Amouris Grand Foods, Inc.., 453

F.3d 377, 383(6th

Cir. 2006) (general public interest strongly in favor

of injunction to prevent consumer confusion and deception in the

marketplace);Brookfield Communications, Inc. v. West Coast

Entertainment Corp., 174 F.3d 1036, 1066 (9th

Cir. 1999). Both the

federal government and the California legislature have addressed

these threats through criminal statutes as well as civil liability. 18

U.S.C. 2320 (Trademark Counterfeiting Act of 1984); Cal. Penal

Code 350(a) (2) (felony for sale of counterfeit goods);Louis Vuitton

S.A. v. Spencer Handbags Corp, 597 F.Supp. 1186, 1193 (E.D.N.Y.

1984) (citing S.Rep. No. 526, 98th

Congress, 2d Sess. 1-5 (1984)

(explaining Congressional concerns that trademark counterfeiting is


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not just an economic injury but a threat to public health and safety).

This case underscores the acute public safety risk of which

Congress and the California legislature expressed such alarm. The

authentic InStyler is an electronically-regulated, mechanically-rotating

electrical appliance that heats to 400 degrees and is used in the

consumers hair. Counterfeiters obviously do not submit their

products to any certification body or consumer safety agency for

examination or approval, and here there is concrete evidence of

consumer injuries. [1 JA 45:10-46:2; 1 JA 48:26-49:10; 1 JA 67:26-

28; 1 JA 77:26-78:7.]

C. Amazon Has Not Identified Any Specific Harm thatWould Overcome the Interests in Favor of the

Injunction.

Although Amazon complains generically that having to live up

to the law will interfere with its business operations, the injunction

seeks only to p

Tre Milano v. Amazon Opening Appellate Brief

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