Monday, April 1, 2013, 12:40 PM

“FIT U” Health Clubs Appeal Preliminary Injunction in TM Case to 11th Circuit, but War Rages On in District Court

Introduction
Motion for sanctions.  Motion for contempt.  Motion to set aside default.  Motion for permanent injunction.  Motion to dismiss counterclaims.  March 29 Order to Show Cause.  All currently stand as pending in the U.S. District Court for the Middle District of Florida.  The March 12 appeal of a preliminary injunction order has thus far done nothing to diminish district court activity.

On March 15, 2013, the U.S. Court of Appeals for the Eleventh Circuit docketed an appeal filed on March 12, 2013 by Pleasanton Fitness, LLC, OM Fitness LLC, Zeus Fitness, LLC, and Monterey Fitness, LLC (collectively “Appellants”).  They appealed from a February 11, 2013 order from the Middle District of Florida, which granted a motion for preliminary injunction brought by You Fit, Inc., YF Holdings, Inc., and You Fit Enterprises, Inc. (collectively “Plaintiffs”). 
 
District Court’s Grant of Preliminary Injunction

You Fit, Inc. is the owner of record of U.S. Trademark Registration No. 4,116,876 for the mark YOUFIT® for health club services.  That registration recites a date of first use of February 19, 2008.  Additionally, You Fit, Inc. is the named owner of U.S. Trademark Registrations Nos. 3,951,566 and 3,754,692 for the slogan “It’s Where YOU FIT In®” and the stylized slogan “Fit begins with You®,” respectively.

On August 23, 2012, Plaintiffs filed suit in the Middle District of Florida, asserting several counts against all defendants, including but not limited to trademark infringement, trade name infringement, trademark dilution, and trade secret misappropriation.  As to the trademark aspects, Plaintiffs objected to the defendants’ use of the mark FIT U, as well as the slogan FIT BEGINS AND ENDS WITH U, for fitness clubs in California, an example usage of which Plaintiffs depicted in Exhibit F to their complaint, excerpted at right.

The same day, Plaintiffs filed a motion for temporary restraining order (“TRO”) and a motion for preliminary injunction as to trademark infringement and trade secret misappropriation.  The district court summarily denied the TRO motion but referred the preliminary injunction motion to a federal magistrate.

As detailed in a February 19, 2013 post in the Florida IP Blog (published by Florida attorney Woodrow Pollack), the federal magistrate issued a report and recommendation, concluding that the district court should grant Plaintiffs’ preliminary injunction motion, and the Middle District of Florida adopted that report and recommendation in its February 11, 2013 order.  That court granted the injunction against not only the Appellants but also against Sanjiv and Sheena Chopra (“the Chopra Defendants”) and Michael and Tracey Zarrillo (“the Zarillo Defendants”).  In that order, the court enjoined all defendants “from using the mark ‘Fit U’ or otherwise using ‘Fit U’ in any manner in the offer, sale, or advertising of any goods or services.”

Appellants’ Efforts to Comply with Preliminary Injunction

As did different parties to a different recent appeal, the defendants in this district court case have detailed recent efforts to comply with a preliminary injunction, including but not limited to the following:
·         Ensuring that exterior signage at the ten larger (20,000 sq. ft.) gyms that they own/operate (“the Ten Locations”) no longer displays the FIT U mark.  At eight of those gyms where signage was changed (two of which are said to not have used FIT U in the first place), defendants show use of new mark FITNESS EVOLUTION, one example of which is shown below.[1]
·         “Informed all LLC Defendant[[2]] personnel the ‘FitU’ was no longer to be associated with the Ten Locations or its business and that the new made ‘Fitness Evolution’ was to be exclusively used.”
·         “Removed all interior ‘FitU’ signs or printed materials.”
·         “All of the many references of ‘FitU’ were removed in social media under the control of the LLC Defendants.”[3]
·         Re-directing Internet traffic from www.fitu.com to another website.[4]  That other website is now http://www.fitnessevolution.com/.
·         Where physically possible, exchanging “FitU” customer cards with Fitness Evolution customer cards.[5]

District Court Litigation Continues Unabated (at Least, For Now)

At the time Appellants filed their Eleventh Circuit appeal, several motions were pending in the Middle District of Florida, namely:
·         Plaintiffs’ motion for permanent injunctive relief as to the Chopra Defendants, based upon a November 5, 2012 entry of default by the Clerk of Court against the Chopra Defendants.[6]
·         Plaintiffs’ motion for sanctions and attorneys’ fees, grounded on the assertion that the Chopra Defendants’ failed attempt to stay the litigation on bankruptcy grounds and to transfer the case to a federal bankruptcy court in California “unreasonably and vexatiously multiplied the proceedings” under 28 U.S.C. § 1927.[7]
·         Plaintiffs’ motion for contempt, filed against all defendants except the Zarrillo Defendants, for alleged noncompliance with preliminary injunction.[8]
·         Chopra Defendants’ motion to set aside clerk’s entry of default.[9]
·         Plaintiffs’ motion to dismiss LLC Defendants’ counterclaims.[10]  The LLC Defendants, after having been granted an extension of time to respond to the complaint, filed an answer and counterclaimed for cancellation of You Fit, Inc.’s trademark registrations on the ground of alleged fraud.[11] The dismissal motion contends that the LLC Defendants failed to plead their fraud allegations with the required degree of specificity.

All of the above motions remain pending at the time of this writing.  Appellants did not move to stay the district court litigation pending their appeal, but that is not to say they would have succeeded had they done so.[12]  Absent any such stay, district court litigation is expected to continue.[13]

Indeed, the Middle District of Florida’s docket sheet recites post-appeal filings, including one on March 29, 2013 by the court itself: an Order to Show Cause, directed to all parties, as to why the entire litigation should not be dismissed on the failure of the parties to file a Case Management Report pursuant to a local rule.  The order states that if the parties do not respond to it within 11 days, the case will be dismissed immediately.[14]  Although Rule 16(f) of the Federal Rules of Civil Procedure authorizes such dismissal, whether that ultimately occurs remains to be seen.  Quoting Eleventh Circuit precedent, an earlier Middle District of Florida decision observed: “Dismissal for failure to comply with local rules or a court order is appropriate where ‘(1) a party engages in a clear pattern of delay or willful contempt (contumacious conduct); and (2) the district court specifically finds that lesser sanctions would not suffice . . . .’”[15]

The appeal is You Fit, Inc. v. Sanjiv Chopra, et al., No. 13-11072, filed 03/12/13, and docketed 03/15/13 in the U.S. Court of Appeals for the Eleventh Circuit.

The underlying district court litigation is You Fit, Inc. et al. v. Pleasanton Fitness, LLC et al., No. 8:12-cv-1917-JDW-EAJ, U.S. District Court for the Middle District of Florida.


[1] You Fit, Inc. et al. v. Pleasanton Fitness, LLC et al., No. 8:12-cv-1917-JDW-EAJ (M.D. Fla.), Dkt. 84-1, Declaration of Sanjiv Chopra [in Opposition to Plaintiffs’ Motion for Contempt] (03/08/13), at ¶¶ 6 & 8.
[2] As used in the district court filings, the term “LLC Defendants” means all named defendants except the Chopra Defendants and the Zarillo Defendants; in other words, the same entities comprising the group “Appellants.”
[3] You Fit, Inc., supra, Dkt. 84-1 at ¶ 9.
[4] Id. at ¶ 11.
[5] Id. at ¶ 10.
[6] You Fit, Inc., supra, at Dkt. 74 (02/14/13).
[7] Id. at Dkt. 75 (02/15/13).
[8] Id. at Dkt. 77 (02/22/13).
[9] Id. at Dkt. 78 (02/27/13).
[10] Id. at Dkt. 81 (03/05/13).
[11] Id. at Dkt. 73 (02/12/13).
[12] See our March 20, 2013 post detailing an unsuccessful stay attempt in other litigation.
[13] “‘[A]n appeal from an order granting or denying a preliminary injunction does not divest the district court of jurisdiction to proceed with the action on the merits.’”  Zundel v. Holder, 687 F.3d 271, 282 (6th Cir. 2012) (citations omitted).
[14] You Fit, Inc., supra, at Dkt. 89 (03/29/13).
[15] Pine v. Bd. of County Comm’n of Brevard County, No. 6:06-cv-1551-Orl-19JGG, 2007 U.S. Dist. LEXIS 90305, at *18 (M.D. Fla. Dec. 7, 2007) (quoting Betty K Agencies, Ltd. v. M/V Monada, 432 F.3d 1333, 1338-39 (11th Cir. 2005)).

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