Judge Alison Nathan
Dealextreme.com (Deal Extreme) was among defendants alleged to have sold counterfeit Klipsch-branded goods. In Klipsch’s suit under the Lanham Act, defendants objected to a temporary restraining order requiring their preservation of evidence, as well as a broad preliminary injunction pursuant to which Klipsch seized $2 million from one of Deal Extreme’s PayPal accounts. District court’s Oct. 11, 2012, order reduced to $20,000, the amount of Deal Extreme’s assets that Klipsch could restrain under the preliminary injunction. Klipsch moved to stay reduction. In addition to claiming that the balance of hardships favored it, Klipsch argued that statutory damages are an equitable remedy and thus the court had authority to freeze Deal Extreme’s assets, even under the Supreme Court’s 1999 ruling in Grupo de Desarrollo SA v. Alliance Bond Fund Inc. Finding Klipsch’s case indistinguishable from the 2006 ruling in NorthFace Apparel Corp. v. TC Fashions Inc., the court reduced the amount of frozen assets to $20,000. Based on Klipsch’s minimal evidentiary showing, especially in light of Deal Extreme’s evidence, the court found $20,000 sufficient to preserve Klipsch’s remedy of an adequate equitable award should it succeed on the merits of its case.
