Sulzer Mixpac AG v. DXM Co. Ltd.

Background

Sulzer Mixpac AG makes a proprietary system for mixing two-part dental adhesives. Its mixing tips have historically been sold in distinctive colors—yellow, teal, blue, pink, purple, and brown—which Mixpac calls the “Candy Colors.” The opinion states that Mixpac obtained multiple United States trademark registrations covering those colors on mixing tips and related products, and that it spent substantial amounts on marketing and enforcement.

Mixpac previously sued DXM Co., Ltd. and Dentazon Corporation over colored mixing tips. That dispute ended in a confidential 2016 settlement agreement and a consent judgment permanently enjoining the defendants from selling the products involved in that earlier case. Under the settlement agreement, the defendants could sell “New Mixing Tips,” defined as mixing tips that did not include the Candy Colors “in any manner.” The agreement also barred other mixing tips that created a likelihood of confusion with Mixpac’s Candy Colors. The defendants thereafter sold clear mixing tips.

According to the opinion, the defendants later offered mixing tips with Candy-Colored wing-shaped covers. The colors initially included yellow, teal, and blue, and later included pink and brown. Online advertisements for the defendants’ products referred to Mixpac products and described the defendants’ tips as well-made imitations. Mixpac sued in October 2019, asserting claims including breach of the settlement agreement, enforcement of the earlier judgment and injunction, federal trademark infringement and counterfeiting, false designation of origin, common-law trademark infringement, and common-law unfair competition.

Preliminary-injunction standard

A preliminary injunction is temporary relief issued before a final judgment. To obtain one, Mixpac had to show irreparable harm and either a likelihood of success on the merits or serious questions suitable for litigation combined with a balance of hardships strongly favoring Mixpac.

Irreparable harm

The court found that continued production and sale of the accused tips threatened Mixpac’s brand reputation and goodwill. It relied on Mixpac’s long-term investment in the Candy Colors, its sales and marketing efforts, and evidence that dental-industry consumers associated the colors with Mixpac products. The court also considered online advertising that allegedly suggested the defendants’ tips were made in Switzerland and were imitations of Mixpac products, even though the opinion states that the defendants’ tips were not made in Switzerland.

The defendants argued that Mixpac’s delay in seeking an injunction undermined its claim of irreparable harm. The court rejected that argument, finding that Mixpac had pursued its rights through warnings, settlement efforts, and the lawsuit before seeking the injunction after the defendants expanded their use of the colors and online sellers began referring directly to Mixpac’s products. The court also relied on the settlement agreement’s provision stating that a breach would cause irreparable harm and entitle Mixpac to injunctive relief.

Likelihood of success

The court concluded that Mixpac had a strong likelihood of success on its breach-of-contract claim under New York law. The agreement allowed the defendants to sell “New Mixing Tips,” but defined those tips as ones that did not include the Candy Colors in any manner. The court viewed the accused tips as nearly identical to the permitted clear tips, except for the addition of Candy-Colored wings. Because the clear base and the colored wing were sold together as one unit, the court found at this preliminary stage that the accused tips likely fell within the agreement’s broad prohibition.

The court also reasoned that interpreting the agreement to permit the defendants to add a Candy-Colored wing to an otherwise permitted clear tip would be commercially unreasonable and would defeat the agreement’s purpose of preventing further disputes over the use of the Candy Colors. The court stated that this likelihood of success alone justified preliminary relief. It additionally stated that Mixpac had shown serious questions going to the merits even if it had not shown a likelihood of success.

Ruling and scope of order

Senior United States District Judge Loretta A. Preska granted Mixpac’s motion for a preliminary injunction. No bond was required because of Mixpac’s financial condition and the parties’ litigation history. The order preliminarily enjoined DXM Co., Ltd., Dentazon Corporation, and their principals, officers, members, agents, servants, employees, attorneys, and persons acting under their control or in active concert with them from selling, offering for sale, distributing, or advertising the accused mixing tips or other dental mixing tips bearing Mixpac’s Candy Colors, or colorable imitations of those colors. It also prohibited using the colors in connection with the sale or promotion of dental mixing tips or accessories, including on products, packaging, and displays, and prohibited assisting or encouraging others to engage in those activities.