278 F. Supp. 3d 1157
C.D. Cal.2017Background
- Moroccanoil owns trademarks for its Moroccanoil Treatment hair product sold in the U.S. with country-specific packaging and a unique, scannable matrix code on each unit.
- Groupon sold and resold purported Moroccanoil Treatment via its marketplace between Aug 21, 2015 and Oct 14, 2015; Moroccanoil purchased three units and obtained a sample from Groupon for testing.
- Laboratory testing and matrix-code analysis showed the tested items were not authentic and had identical (non‑unique) matrix codes, indicating counterfeit goods; packaging also differed from U.S. authorized packaging (languages, distributor info, units, symbols, ingredient lists).
- Customers complained to Groupon about authenticity and unfamiliar packaging; Groupon received at least one sample that leaked and whose packaging surprised Groupon employees.
- Moroccanoil moved for partial summary adjudication on liability for trademark infringement under counterfeiting and material‑difference (gray market) theories; Groupon moved for summary adjudication on remedies and mootness of injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability for selling counterfeit goods | Moroccanoil: Groupon sold counterfeit Moroccanoil treatments bearing its marks (proved by non‑unique matrix codes and lab testing) | Groupon: Plaintiff tested only three purchases, so liability cannot be established for all sales | Granted — Court finds sampled evidence sufficient to establish liability for selling counterfeit goods; counterfeits are inherently confusing |
| Liability under material‑difference (gray market) theory | Moroccanoil: Groupon’s products materially differed from U.S. authorized goods (labeling, language, volume, symbols, ingredients) | Groupon: (implicit) material‑difference theory would support infringement if goods were genuine gray‑market imports | Denied — theory applies to genuine gray‑market goods, not counterfeit products; cannot grant summary adjudication on this theory |
| Willfulness and availability of enhanced remedies (disgorgement, treble, punitive, fees) | Moroccanoil: Groupon had red flags (non‑English packaging, customer complaints, leaking sample) creating triable issues of willfulness and profits | Groupon: No evidence of willfulness; no profits; equity bars damages for failing to promptly notify | Denied (as to Groupon’s motion) — court finds triable issues of fact on willfulness and profits preclude summary adjudication |
| Mootness of injunctive relief | Moroccanoil: Injunction remains necessary given prior conduct and triable issues of willfulness | Groupon: Stopped selling the items once informed; injunction is moot | Denied — factual disputes about intent and risk of recurrence mean injunction may still be necessary |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard and genuine issue analysis)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s initial burden on summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574 (no genuine issue if record could not lead rational trier of fact to find for nonmoving party)
- Hard Rock Cafe Licensing Corp. v. Concession Servs., 955 F.2d 1143 (willful blindness standard)
- Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (willful blindness and online marketplace duties)
- Gucci Am., Inc. v. Duty Free Apparel, Ltd., 286 F. Supp. 2d 284 (counterfeits are inherently confusing)
- Toho Co., Ltd. v. William Morrow & Co., 33 F. Supp. 2d 1206 (elements of trademark infringement)