No Fire Yet in Hookah Tobacconist’s Lawsuit

     SAN DIEGO (CN) – A manufacturer of hookah tobacco cannot block certain e-liquid products that it says infringe on its products, a federal judge ruled.
     Starbuzz Tobacco is suing Wisam Namou and Sukrat Namou over e-liquid products that have labels and designs on them substantially similar to Starbuzz’s copyrighted designs and marks.
     Starbuzz manufactures and distributes hookah tobacco, hookah accessories, cigars, energy drinks, electronic cigarettes and more. It does not, however, produce any e-liquid products.
     After learning from one of its distributors that the Namous were selling e-liquid products with similar markings to Starbuzz’s products at their store in Lakeside, Calif., Starbuzz sent in an investigator to get additional evidence. The investigator purchased e-liquid products from two of defendants’ stores.
     Starbuzz has said that the Namous package their e-liquid products in a container that mimics the appearance of Starbuzz products. The products allegedly use plaintiff’s house mark “Starbuzz” as well as a design that is substantially similar to Starbuzz’s copyrighted design.
     The e-liquid flavors are furthermore nearly identical to Starbuzz’s trademarks for its flavored hookah tobacco, according to the complaint.
     Starbuzz additionally claimed that the Namous added a warning label to their products stating that ingestion may prove fatal.
     Since this warning implied that the e-liquid products are potentially fatal and harmful to consumers, Starbuzz wanted the Southern District of California to stop sales of the e-liquid products immediately, so as to avoid further potential death or injury.
     Any harm that arises from the use of the e-liquid products would be unfairly and mistakenly attributed to Starbuzz, negatively impacting its reputation, according to the complaint.
     U.S. District Judge Michael Anello nevertheless declined to give Starbuzz a temporary restraining order Tuesday.
     “Plaintiff provides no evidence of the potential danger of the product other than the warning label,” he wrote. “Yet, the presence of a warning label does not establish that the e-liquid creates a ‘clear and present danger’ to consumers. Warning labels are ubiquitous, and serve to decrease, not increase, harm. Thus, the court finds this argument to be purely speculative. So, to, is the corresponding argument that plaintiff will be erroneously blamed should a consumer be injured by the product.”
     Starbuzz also failed to provide any evidence that defendants would likely dispose of or hide their allegedly infringing products if they were given notice of a restraining order, according to the ruling.
     “Furthermore, it appears that notice to the defendants would not render fruitless the further prosecution of the action because plaintiff already has in its possession several allegedly infringing products,” Anello wrote. “Without voicing an opinion as to the veracity of this evidence, the Court simply points out that such evidence may already form the basis of a claim.”
     Anello also refused to grant Starbuzz’s motion for a seizure order because Starbuzz was not able to show that such an order would be appropriate, nor did Starbuzz address all of the requirements for a seizure order.
     The judge did, however, order the Namous to show cause as to why they should not face a preliminary injunction.
     “Although plaintiff is not entitled to an ex parte TRO, given the declarations submitted by plaintiff and the evidence attached thereto, which raise serious allegations of trademark and copyright infringement, the court will issue an evidence preservation order and set an expedited briefing schedule for a hearing regarding plaintiff’s request for a preliminary injunction,” Anello wrote.
     Anello ordered defendants to preserve all of their products that bear Starbuzz marks and any records or documents related to the products.

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