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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 1 of 7

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA

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CYTOSPORT, INC.

Plaintiff,

v.

VITAL PHARMACEUTICALS, INC.,

Defendant.

NO. CIV. S-08-2632 FCD/GGH

MEMORANDUM AND ORDER

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This matter is before the court on defendant Vital

Pharmaceutical, Inc.’s (“VPX”) motion to stay the court’s order
of May 6, 2009, granting plaintiff CytoSport, Inc. (“CS”) a
preliminary injunction enjoining VPX from marketing, selling,
advertising or promoting a ready-to-drink (“RTD”) liquid protein
product using the name MUSCLE POWER® or any other trademark
confusingly similar to CS’s MUSCLE MILK® trademark or using a
trade dress confusingly similar to the trade dress associated
with MUSCLE MILK. (Mem. & Order, filed May 6, 2009 [Docket #72],
hereinafter “May 6 Order.”) VPX moves to stay enforcement of the
preliminary injunction pending resolution of its appeal of the

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 2 of 7

court’s order to the Ninth Circuit.1 VPX filed its notice of
appeal on May 7, 2009. Pursuant to the Ninth Circuit’s order of
May 15, 2009, VPX’s opening brief is due on or before June 4,
2009; CS’s answering brief is due July 2, 2009 or 28 days after
service of the opening brief; and VPX’s optional reply is due
within 14 days of service of CS’s brief. VPX alternatively moves
this court for a stay of its order pending VPX’s motion to the
Ninth Circuit for a stay of the injunction.

For the reasons set forth below, the court DENIES VPX’s

motion for a stay in its entirety. VPX cannot make the requisite
showing under Federal Rule of Civil Procedure 62(c).

Federal Rule of Civil Procedure 62(c) provides that “[w]hile

an appeal is pending from an interlocutory order or final
judgment that grants . . . an injunction, the court may suspend,
modify, restore, or grant an injunction on terms for bond or
other terms that secure the opposing party’s rights.” In
determining whether to issue a stay pending appeal, the court
must consider: “(1) whether the stay applicant has made a strong
showing that [it] is likely to succeed on the merits; (2) whether
the applicant will be irreparably injured absent a stay;
(3) whether issuance of the stay will substantially injure the
other parties interested in the proceeding; and (4) where the
public interest lies.” Cal. Pharmacists Ass’n v. Maxwell-Jolly,

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The court granted VPX’s application to hear this motion

on shorten time (Docket #85). (Minute Order, filed May 19,
2009.) In light of the extensive briefing on the underlying
motion for a preliminary injunction and considering the lengthy
hearing held on May 1, 2009, the court found that oral argument
on the instant motion to stay was unnecessary. (Id.; E.D. Cal.
L.R. 78-230(h).)

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 3 of 7

--- F.3d ---, No. 09-55365, 2009 WL 975458, at *1 (9th Cir. Apr.
6, 2009) (citing Humane Soc’y of U.S. v. Gutierrez, 527 F.3d 788,
789-90 (9th Cir. 2008)). This standard presents a continuum.
Golden Gate Rest. Ass’n v. City & County of San Francisco, 512
F.3d 1112, 1119 (9th Cir. 2008). At one end of the continuum, if
there is a “probability” or “strong likelihood” of success on the
merits of the appeal, a relatively low standard of hardship is
sufficient. Id. At the other end, if the balance of hardships
tips sharply in favor of the party seeking the stay, a relatively
low standard of likelihood of success on the merits is
sufficient. Id. Lastly, “where the public interest lies” must
be considered separately from and in addition to whether the
applicant for a stay will be irreparably injured absent a stay.
National Resources Def. Council v. Winter, 502 F.3d 859, 863 (9th
Cir. 2007).

Here, VPX’s motion for a stay raises essentially the same
arguments made in its original opposition to CS’s motion for a
preliminary injunction. Particularly, with respect to the merits
of CS’s trademark and trade dress infringement claims, VPX simply
reiterates its prior arguments against a finding of infringement.
While VPX attempts to repackage those arguments herein, by
asserting that the court made certain alleged factual errors,
overlooked pertinent evidence and misapplied controlling legal
standards, its arguments are not compelling.2 The court

2

For example, the court disagrees that it made any
factual errors in describing how VPX incorporated critical
elements of CS’s trade dress which, when all the elements are
considered as a whole, resulted in a product that is confusingly
similar to CS’s MUSCLE MILK® product. (May 6 Order at 15-20.)
Moreover, the court did not overlook the various differences in

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 4 of 7

addressed each of VPX’s arguments (made then and now) in its May
6 Order, and it need not repeat that analysis here. For the
reasons fully set forth in the May 6 Order, CS demonstrated a
strong likelihood of success on the merits of its infringement
claims against VPX, entitling CS to a preliminary injunction.
(May 6 Order at 13-45.)

To overturn the preliminary injunction, VPX must show that

this court abused its discretion in issuing it. Ashcroft v.
ACLU, 542 U.S. 656, 664 (2004) (recognizing that appellate review
of the grant of a preliminary injunction under the abuse of
discretion standard is limited and deferential). This court’s
factual determinations, including findings of irreparable harm,
are reviewed for clear error; they will not be overturned “as
long as [the] findings are plausible . . . [considering] the
record viewed in its entirety” and in the light “most favorable
to the prevailing party.” Nat’l Wildlife Fed’n v. Nat’l Marine

the products’ trade dresses; rather, the court specifically
acknowledged those differences and explained why, under the
controlling law, those differences were not compelling (as for
example, VPX’s use of its logo on its product) and why the
similarities in the trade dresses had to be weighed more heavily.
(Id.) Finally, it is not this court, but instead VPX, who
continues to misapply the governing standards. For instance, VPX
continues to point to individual components of the MUSCLE MILK
trade dress to argue that each component serves some useful,
functional purpose. However, as the court’s order made clear,
while individual components of a trade dress may serve some
purpose, it is the particular placement and orientation of those
components on the MUSLCE MILK packaging that is protectable; in
assessing functionality, it is the combination of the elements as
a whole which the court must examine. (Id. 41-42.) Similarly,
contrary to VPX’s vigorous protestations, secondary meaning may
be established through direct and circumstantial evidence; here,
CS proffered substantial circumstantial evidence, namely, its
extensive marketing and sales of the MUSCLE MILK® RTD product
since 2004 as well as evidence of actual customer confusion.
(Id. at 44-45.)

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 5 of 7

Fisheries Serv., 422 F.3d 782, 795 (9th Cir. 2005); Minidoka
Irrigation Dist. v. Dep’t of Interior of U.S., 406 F.3d 567, 572
(9th Cir. 2005). Under this standard of review and considering
the strong showing CS made on the merits of its claims against
VPX, VPX cannot demonstrate a probability that it will prevail on
the merits of its appeal.

Therefore, in order to obtain a stay, VPX must show that the

balance of hardships tips decidedly in its favor and that the
public interest is better served by issuance of a stay. VPX
likewise cannot make this showing. VPX contends primarily that
it will sustain significant financial losses if the injunction is
not stayed pending its appeal. (See Owoc Decl., filed under
seal, May 13, 2009 [Docket #83], ¶s 3-5.) However, such
financial harm does not constitute “irreparable” harm for
purposes of an injunction or stay. Sampson v. Murray, 415 U.S.
61, 90 (1974) (“The possibility that adequate compensatory or
other corrective relief will be available at a later date, in the
ordinary course of litigation, weighs heavily against a claim of
irreparable harm.”) Moreover, in this case, the court required
CS to post a $500,000.00 bond to ameliorate the economic losses
that VPX would suffer should CS ultimately not prevail on the
merits of its claims. (May 6 Order at 49.) Finally, VPX
concedes that its appeal will likely be resolved within a matter
of months. If true, VPX’s shelf-stable products do not need to
be destroyed and could be later reintroduced into the
marketplace, thus further mitigating any alleged harm.

In contrast to the lack of irreparable harm that VPX will

sustain, CS has established that it would suffer likely

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 6 of 7

irreparable harm in the absence of an injunction. (May 6 Order
at 47:1, 14.) As set forth in the order and for the reasons
fully stated therein, CS established a “likelihood” that VPX’s
continued infringing activities “will cause CS irreparable harm
because these activities prevent CS from controlling the
reputation of its highly recognizable and valuable MUSCLE MILK®
brand,” and if VPX’s products remain in the marketplace, “it will
be extremely difficult for CS to maintain and restore its
goodwill among customers, some of whom are already being confused
by [VPX’s] products.” (May 6 Order at 47.)

Finally, VPX has not shown that the public interest is
better served by issuance of a stay. VPX contends that the
public is hurt by the injunction because VPX’s loyal customers
will be deprived of VPX’s product which is a healthier
alternative to MUSCLE MILK®. As support, VPX proffers evidence,
which it did not submit on the original motion, from its various
distributors and retailers who assert that there is no customer
confusion between VPX’s and CS’s RTD products, and that VPX’s
customers should not be deprived of an alternative product to
CS’s MUSCLE MILK® product. (Owoc Decl., ¶ 8b., Ex. 1.) CS
rightfully objects to the court’s consideration of this evidence
as VPX offers no reason why it was not submitted previously, but
even if the court considers the evidence, it does not establish
that the public interest is better served by issuing a stay. As
set forth in the May 6 Order, numerous competitors of CS offer
RTD protein products which do not infringe CS’s trademark and
trade dress. VPX can do the same. To date, however, it has not.
The public interest is best served by preventing continued

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Case 2:08-cv-02632-FCD-GGH Document 91 Filed 05/22/2009 Page 7 of 7

customer confusion in the marketplace. See e.g. Moroccanoil,
Inc. v. Moroccan Gold, LLC, 590 F. Supp. 2d 1271, 1282 (C.D. Cal.
2009).

Therefore, because VPX has not shown that it is likely it
will prevail on its appeal, that the balance of hardships tips
considerably in its favor or that the public interest is best
served by a stay, the court must DENY VPX’s instant motion.3

IT IS SO ORDERED.

DATED: May 22, 2009




FRANK C. DAMRELL, JR.
UNITED STATES DISTRICT JUDGE



3

As the standard for granting a stay is the same whether
VPX seeks a stay pending final resolution of its appeal or simply
pending it moving the Ninth Circuit to grant a stay, the court
likewise DENIES VPX’s alternative request for a stay pending a
decision on its intended motion to the Ninth Circuit for a stay
of the injunction.

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