Diamond Hands Consulting Ltd. v. Bongers

Background

Diamond Hands Consulting Ltd. moved for a preliminary injunction, which is a court order issued before final judgment to prevent specified conduct while the case continues. The defendants named in the caption were Kyler R. Bongers, also known as “BTCVIX” and “DARTHVIX”; Hurley Blake Starling, also known as “DR.CRYPTOVENDOR”; and John Doe 1.

The motion concerned Diamond Hands’s SATOSHISTREETBETS trademark. The order addressed the defendants’ use of that mark in connection with online communities and related goods and services, including the Satoshi Street Bets Token ($SSB), SatoshiStreetBets non-fungible tokens, social-media accounts, websites, and promotional programs.

Court’s Findings

The court found that Diamond Hands had a protectable interest in the SATOSHISTREETBETS trademark and that the defendants were not licensed or otherwise authorized to use it. The court further found that the defendants’ uses of the mark were likely to confuse consumers about the products’ or services’ origin, affiliation, association, or sponsorship.

The court also found that the defendants’ statements promoting their goods and services as “the only” or “the original” SATOSHISTREETBETS were literally false and material to consumers’ decisions about joining an online community or purchasing related goods and services.

The court concluded that the defendants’ continued unauthorized use would irreparably harm Diamond Hands by unfairly capitalizing on and diminishing the trademark’s goodwill and signifying power, reducing potential sales opportunities, and diminishing the potential growth of Diamond Hands’s online communities. The court found that monetary damages would not adequately address the harm, that the balance of harms favored Diamond Hands, and that the public interest favored an injunction to reduce consumer confusion.

Ruling and Injunction

Judge Ronnie Abrams granted Diamond Hands’s motion under Federal Rule of Civil Procedure 65. The court preliminarily enjoined the defendants and persons acting with them from:

- Creating, distributing, selling, advertising, marketing, promoting, offering for sale, or causing the sale of products that infringe the SATOSHISTREETBETS trademark, including $SSB and SatoshiStreetBets non-fungible tokens; - Offering, advertising, marketing, or promoting infringing services, including online communities using the SATOSHISTREETBETS name and specified social-media accounts, websites, and promotional services; - Representing that the defendants’ products or services were Diamond Hands’s products or services, or vice versa, or otherwise acting in a way likely to cause confusion, mistake, or deception about origin or sponsorship; - Promoting products or services as “the only” or “the original” SATOSHISTREETBETS; - Otherwise competing unfairly with Diamond Hands; and - Assisting or encouraging others to engage in those activities.

The court also ordered the defendants to turn over control of social-media accounts and domain names that had infringed Diamond Hands’s trademarks, including those identified in the verified complaint. The defendants were required to file a written, sworn notice describing their compliance within 30 days after entry of the injunction. The court required no bond and directed the Clerk to terminate the motion at docket 23.