Matrix Essentials v. Quality King Distributors, Inc., 90-CV-1070 (E.D.N.Y. 2009)

The Eastern District of New York found on Friday that a 1990 injunction entered between Quality King and Matrix Essentials was retroactively vacated to 2002, when the first proven breach of the injunction occurred:

The dramatic change in the diversion market from 1990 (when the consent decree was issued), to the period for which L’Oreal seeks damages (2002-2007), is sufficient, in the court’s view, to justify retroactive vacatur.  Other factors, however, also support the court’s conclusion.  As noted in Matrix I, the re-sale of untainted product is completely lawful, as it can support neither a claim of unfair competition nor trademark infringement.  See Matrix I, 522 F.Supp.2d at 478.  There was never an allegation that product sold during the time period of 2002-2007 was in any way tainted or mislabeled.  Accordingly, there is no question but that the conduct engaged in by Defendants, and the Pro’s Choice Parties was, in the absence of the 1990 Incunciton, completely lawful. Finally, the fact that the 1990 Injunction was entereed into upon consent of the parties, and not after any hearing or findings by the court, weighs in favor of retroactive vacatur.

(H/t Daniel Ballard for the docs, the highlighting and the pointer.)