United States District Court, W.D. Texas, Austin Division
PITMAN UNITED STATES DISTRICT JUDGE.
the Court is Defendant and Counter-Plaintiff Crazy Train,
LLC's (“Crazy Train”) Motion for a
Preliminary Injunction, (Dkt. 39), based on its counterclaim
against Plaintiff and Counter-Defendant ARX Fit, LLC
(“ARX”). The parties filed responsive briefing,
(Dkts. 47, 50), and the Court held a hearing on the motion,
(Dkt. 107). Having considered the briefing, the arguments
made at the hearing, the evidence, and the relevant law, the
Court will deny the motion.
an Austin company that makes and sells two
adaptive-resistance exercise machines: the Alpha and the
Omni. (ARX Am. Compl., Dkt. 29. at 2, 6). Randy Rindfleisch
(“Rindfleisch”) was a co-founder of ARX and
remained a part-owner of the company until 2016.
(Id. at 2, 5). He is the inventor on two patents for
adaptive-resistance exercise equipment, which he later
assigned to his company Crazy Train, LLC (“Crazy
Train”). (Id. at 2, 5).
Rindfleisch left ARX, the company licensed his patents for
about six months, at which point it decided that its exercise
machines did not infringe the patents and terminated the two
patent licenses. (Id. at 5-6). Rindfleisch then
founded Defendant Outstrip Equipment, LLC
(“Outstrip”) with Defendant Ariel Huskins
(“Huskins”)-who formerly leased exercise machines
from ARX-to start making competing adaptive-resistance
exercise machines. (Id. at 6-8). After Outstrip sold
or leased a pair of machines to Austin customers,
(id.), ARX sued Rindfleisch, Huskins, Outstrip, and
Crazy Train, seeking a declaration that its exercise machines
do not infringe Rindfleisch's patents and alleging that
each defendant infringed its software copyrights and
tortuously interfered with its business. (Id. at
response, Crazy Train filed a counterclaim against ARX for
infringing one of Rindfleisch's patents: U.S. Patent 8,
105, 206 (the “‘206 Patent”). (Ans., Dkt.
38, at 15). Based on this counterclaim, Crazy Train moved for
a preliminary injunction, asking this Court to enjoin ARX
from selling the Alpha or the Omni for the duration of this
litigation. (Mot., Dkt. 39, at 10). On July 22, 2019, the
Court held a hearing on the motion. (Dkt. 107).
preliminary injunction is an extraordinary remedy, and the
decision to grant such relief is to be treated as the
exception rather than the rule. Valley v. Rapides Par.
Sch. Bd., 118 F.3d 1047, 1050 (5th Cir. 1997). “A
plaintiff seeking a preliminary injunction must establish
that he is likely to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of preliminary
relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest.”
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7,
20 (2008). The party seeking injunctive relief carries the
burden of persuasion on all four requirements. PCI
Transp. Inc. v. W. R.R. Co., 418 F.3d 535, 545 (5th Cir.
2005). A movant cannot be granted a preliminary injunction
unless it can establish that it will suffer irreparable harm
without an injunction. Amazon.com, Inc. v.
Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir.
2001). Here, the Court's analysis begins and ends with
its finding that Crazy Train has not met its burden to show
that it will be irreparably harmed in the absence of an
party seeking a preliminary injunction must prove that
irreparable harm is likely, not merely possible.
Winter, 555 U.S. at 22. Irreparable harm
“consists of harm that could not be sufficiently
compensated by money damages or avoided by a later decision
on the merits.” Canon, Inc. v. GCC Int'l
Ltd., 263 Fed.Appx. 57, 62 (Fed. Cir. 2008). There is no
longer any presumption of irreparable harm based on a finding
of substantially likely infringement at this stage.
Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142,
1149 (Fed. Cir. 2011). “Price erosion, loss of goodwill,
damage to reputation, and loss of business opportunities are
all valid grounds for finding irreparable harm.”
Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d
922, 930 (Fed. Cir. 2012).
motion, filed in January, Crazy Train admitted that it was
not then selling any exercise machines. (Mot., Dkt. 39, at
9). But at that time, it “plan[ned] to enter the
adaptive resistance exercise machine market” in April
2019. (Id.). That market, Crazy Train argued, is a
“fledgling” one: only ARX and Outstrip sell
adaptive-resistance machines, and once a health facility buys
one, it will not replace the machine for years. (Rindfleisch
Aff., Dkt. 41, at 3). Crazy Train therefore asked to enjoin
ARX's sales so that when it started selling machines in
April, it would not be shut out of a cornered market. (Mot.,
Dkt. 39, at 9).
was Crazy Train's position in January. In May,
Rindfleisch filed an affidavit conceding that Crazy Train was
still not selling any exercise machines. (Rindfleisch Aff.,
Dkt. 83, at 2). According to Rindfleisch, Crazy Train showed
a demo machine at a fitness conference in April and expected
to “be able to accept order for its machines within . .
. several weeks” of May 3. (Id.).
weeks passed, and several more, before the preliminary
injunction hearing held on July 22, 2019. (Dkt. 107). At that
hearing, Crazy Train offered no evidence that it had begun
taking orders for its exercise machines or when it expected
to be able to do so. It produced no evidence that it could
produce machines to fill whatever orders it had received. And
it produced no evidence of what the market for its machines
would be whenever it did begin selling them-for example,
would it be selling machines in the same parts of the country
as ARX? Asked to identify how soon Crazy Train would be able
to sell exercise machines, counsel for Crazy Train could
point only to the company's April demonstration of its
model. There is no evidence that Crazy Train is even
participating in the market for adaptive-resistance
exercise machines, much less being shut out of that market by
hearing, Crazy Train argued that the machines ARX sells today
nonetheless harm Crazy Train because the customers buying
those machines will not be buying another adaptive-resistance
exercise machine when Crazy Train is ready to sell them. ARX
argues that this harm amounts to no more than lost sales,
which can be reliably reduced to damages. (Resp., Dkt. 47, at
7 (citing Automated Merch. Sys., Inc. v. Crane Co.,
357 Fed.Appx. 297, 301 (Fed. Cir. 2009) (“Lost sales
(without more) are presumed to be compensable through
damages, so they do not require injunctive relief.”))).
Crazy Train responds that these lost sales also mean lost
market share, which can affect its bottom line in ways that
are more difficult to calculate. (Reply, Dkt. 50, at 5
(citing Trebro Mfg., Inc. v. Firefly Equip., LLC,
748 F.3d 1159, 1170 (Fed. Cir. 2014))). But ARX is one of
only two companies that currently make adaptive-resistance
exercise machines, (Rindfleisch Aff., Dkt. 41, at 3), and if
Crazy Train ultimately succeeds in this action, the result
might be that ARX is permanently enjoined from selling its
only two products. At the hearing, Crazy Train conceded that
ARX's market share would not be an ongoing concern if ARX
were unable to sell its adaptive-resistance machines. Because
Crazy Train is not selling anything and can reduce any sales
it loses during the pendency of this litigation to damages,
it has not carried its burden to show that it is likely to be
irreparably harmed in the absence of a preliminary
injunction. A preliminary injunction is not warranted.