IP Law Daily, TRADEMARK—D. Ariz.: Armored vehicle maker denied preliminary injunction against former employees, (Feb 19, 2025)

By Kevin M. Finson, J.D.

A likelihood of success on the merits for false association was not shown because the allegations largely concerned actions by a third-party that took place outside of the United States.

A seller of armored vehicles was not entitled to a preliminary injunction against former employees now competing against it, the U.S. District Court in Phoenix has held. There were substantial questions about liability for false association, false advertising, and related stated law claims, and an unreasonable six-month delay in seeking injunctive relief weighed heavily against a finding of immediate, irreparable harm (Armored Group LLC v. Lutzker, No. 2:24-cv-01516-SPL (D. Ariz. Feb. 18, 2025)).

Armored Group, LLC (Armored) was a manufacturer and global supplier of armored vehicles. Monty Lutzker, Beau Gailey, and Ryan Holden (Defendants) were former employees of Armored who allegedly solicited and became business partners with a foreign independent contractor of Armored’s, The Armored Group Middle East FZC (FZC), a non-party. FZC rebranded as TAG DYNAMICS, and Defendants allegedly appeared at trade shows and solicited business on behalf of FZC, selling armored cars under Armored’s trademarks and soliciting Armored’s customers and employees.

Armored brought suit against the three individual Defendants for false association and false advertising under the Lanham Act, as well as for unlawful competition, tortious interference with business expectancy and contracts, civil conspiracy, and defamation, and breach of contract under state law. Six months later, Armored filed a motion for a preliminary injunction. The court considered the traditional injunction factors.

Likelihood of success on the merits. The court found that claims for false association and false advertising were largely based on the conduct of a non-party, FZC, and on statements allegedly made outside the United States, which were not actionable under the Lanham Act. State law claims for unlawful competition, tortious interference with business expectancy, civil conspiracy, and defamation lacked specific information about the actual harm suffered and the specific false statements alleged. Breach of contract claims related to confidentiality, non-compete, and non-solicitation provisions appeared to the court to be unenforceable due to their over-broad geographic scope. Ultimately, the court held that Armored had at best shown a “question” of success on the merits as to its false association claim, not a “likelihood” of success.

Irreparable harm. The court held that the six-month delay from the filing of the case to the filing of the petition for injunctive relief foreclosed a preliminary injunction. Armored was unable to show a justification for the delay, and there was no showing of any new, imminent harm.

Finding that Armored had failed to show either a likelihood of success on the merits or a risk of immediate, irreparable harm, the court denied the preliminary injunction without reaching the remaining factors.

The Case is No. 2:24-cv-01516-SPL.

Judge: Logan, S.

Attorneys: Katherine L. Benveniste (Greenberg Traurig LLP) for Armored Group LLC. Adam Elliott Lang (Snell & Wilmer LLP) for Monty Lutzker.

Companies: Armored Group LLC

Cases: Trademark ArizonaNews