Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_16-cv-04380/USCOURTS-cand-5_16-cv-04380-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MERSCORP HOLDINGS, INC., et al.,

Plaintiffs,

v.

MERS, INC, et al.,

Defendants.

Case No. 16-cv-04380-BLF 

ORDER GRANTING IN PART AND 

DENYING IN PART PLAINTIFFS’ EX 

PARTE APPLICATION FOR 

TEMPORARY RESTRAINING ORDER, 

ORDER TO SHOW CAUSE RE: 

PRELIMINARY INJUNCTION, AND 

REQUEST TO SERVE VIA

PUBLICATION

[RE: ECF 12]

Plaintiffs MERSCORP Holdings, Inc. and Mortgage Electronic Registration Systems, Inc.

sue Defendants MERS, Inc and Mortgage Electronic Registration System, Inc. (MERS) for 

trademark infringement and related claims. Presently before the Court is Plaintiffs’ Ex Parte 

Application for Temporary Restraining Order, Order to Show Cause Re: Preliminary Injunction, 

and Request to Serve via Publication. 

For the reasons discussed below, the application for a temporary restraining order (“TRO”)

is GRANTED IN PART AND DENIED IN PART, the application for an Order to Show Cause

Re: Preliminary Injunction is GRANTED, and the request for permission to serve Defendants via 

publication is GRANTED. 

 I. BACKGROUND

Plaintiffs present evidence of the following facts. Plaintiff MERSCORP Holdings, Inc.

owns and operates the MERS® System database, “a national electronic registry system that tracks 

the changes in servicing rights and beneficial ownership interests in mortgage loans that are 

registered on the system.” Marmion Decl. ¶ 2, ECF 12-4. The MERS® System database is the 

only national database that provides free information regarding the servicers of registered home 

mortgages. Id. The MERS® System database is used by local governmental entities to identify 

Case 5:16-cv-04380-BLF Document 15 Filed 08/23/16 Page 1 of 10
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the parties responsible for maintaining vacant properties. Id. 

Plaintiff Mortgage Electronic Registration System, Inc., a wholly-owned subsidiary of 

MERSCORP Holdings, Inc., serves as the beneficiary or mortgagee of record and nominee for the 

beneficial owner of mortgage loans registered on the MERS® System database. Marmion Decl. ¶ 

4. 

While there have been various iterations of their company names over time, Plaintiffs have 

continuously used the trade names “MERSCORP” and “Mortgage Electronic Registration 

Systems, Inc.” in connection with the above-described services since 1995. Marmion Decl. ¶ 2 

and n.1. Additionally, Plaintiff MERSCORP Holdings, Inc. owns the federal trademark 

registration for the MERS® word mark, which was issued in 1997. Id. ¶ 6. That federal 

registration has obtained incontestable status. Id. ¶ 7 and Exh. C.

On December 16, 2015, an individual named Jack Lyles filed Articles of Incorporation 

with the California Secretary of State for “MERS, Inc,” and on the same date an individual named 

Connie Vargas filed Articles of Incorporation with the California Secretary of State for “Mortgage 

Electronic Registration System, Inc. (MERS).” Marmion Decl. ¶ 10. On March 29, 2016, 

Statements of Information were filed with the California Secretary of State indicating that MERS, 

Inc and Mortgage Electronic Registration System, Inc. (MERS) would be in the business of 

“loans.” Id. ¶ 11. The documents filed with the Secretary of State identified the corporate address 

of MERS, Inc as 248 3rd Street, #42, Oakland, California 94607, and the corporate address of 

Mortgage Electronic Registration System, Inc. (MERS) as 248 3rd Street, #429, Oakland, 

California 94607. Id. ¶ 12. 

Plaintiffs retain a trademark monitoring vendor to provide alerts as to any suspected 

trademark infringement. Marmion Decl. ¶ 9. That vendor informed Plaintiffs of the incorporation 

of Defendants in California. Id. ¶ 10. In April and May 2016, Plaintiffs sent Defendants multiple 

cease and desist letters to the addresses set forth in their corporate registration records. Id. ¶¶ 13-

14. All of the letters were returned as undeliverable. Id. ¶ 14. The street address provided in 

Defendants’ corporate records is a business, Jack London Mail, which offers packing and mailing 

services as well as rental mailboxes. Nguyen Decl., ¶ 2. Mailbox number 42 – the registered 

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address of MERS, Inc – does not exist. Id. ¶ 3. Mailbox number 429 – the registered address of 

Mortgage Electronic Registration System, Inc. (MERS) – does not belong to Connie Vargas or to 

an entity named Mortgage Electronic Registration System, Inc. (MERS). Id. ¶ 4. The owner of 

Jack London Mail states that approximately six months ago, Jack London Mail began receiving 

mail and service of process documents intended for Plaintiffs on a regular basis, generally once or 

twice per week. Id. ¶¶ 5, 7. The mail is rejected and process servers are turned away. Id. ¶ 6. 

Plaintiffs hired an investigator to locate Defendants. Phillips Decl. ¶ 3, ECF 12-3. The 

investigator could not locate Jack Lyles, who is listed with the California Secretary of State as the 

corporate officer for MERS, Inc Id. The investigator located a residential address and cellular 

telephone number for a Connie Vargas, who is listed with the California Secretary of state as the 

corporate officer for Mortgage Electronic Registration System, Inc. (MERS). Id. ¶ 4. However, 

when Plaintiffs’ counsel called the cellular telephone number, the woman who answered denied 

being Connie Vargas and hung up. Id. ¶ 5. 

Plaintiffs filed this action on August 3, 2016, alleging claims for: (1) trademark 

infringement under 15 U.S.C. § 1114; (2) false designation of origin under 15 U.S.C. § 1125(a); 

and (3) unfair competition under California Business & Professions Code § 17200. 

Plaintiffs now seek a TRO enjoining Defendants, their officers, agents, servants, 

employees, and attorneys and all those in active concert or participation with them from the 

following conduct: 

1. Using the MERS® Mark, MERSCORP trade name, or Mortgage 

Electronic Information Systems, Inc. trade name, or any confusingly similar 

versions thereof, in commerce in the United States;

2. Maintaining an active corporation with the name MERS, Inc or 

Mortgage Electronic Registration System, Inc. (MERS) or any confusingly 

similar name; and

3. Assisting, aiding, or abetting any other person or entity in engaging in or 

performing any of the activities referred to in subparagraphs (i) and (ii) 

above. 

Pls.’ Proposed Order, ECF 12-1. 

Plaintiffs also request that the Court order the California Secretary of State to:

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1. Suspend the incorporation for MERS, Inc, entity no. C3851651, and 

Mortgage Electronic Registration System, Inc. (MERS), entity no. 

C3851652; and

2. Post an order and notice of the correct address for Plaintiffs, as follows: 

1818 Library Street, Suite 300, Reston, Virginia 20190 to its public records 

for Defendants, including but not limited to its online registry of business 

entities.

Pls.’ Proposed Order, ECF 12-1.

 II. LEGAL STANDARD

A. Notice

The Court may issue a TRO without notice to the adverse party only if (1) “specific facts 

in an affidavit or a verified complaint” show that immediate and irreparable injury will occur 

before the adverse party can be heard and (2) the movant’s attorney certifies in writing what 

efforts were made to give notice and the reasons why notice should not be required. Fed. R. Civ. 

P. 65(b). In addition, this district’s Civil Local Rules require that “[u]nless relieved by order of a 

Judge for good cause shown, on or before the day of an ex parte motion for a temporary 

restraining order, counsel applying for the temporary restraining order must deliver notice of such 

motion to opposing counsel or party.” Civ. L.R. 65-1(b).

Plaintiffs have submitted declarations of counsel, the investigator hired to locate 

Defendants, and the owner of Jack London Mail documenting Plaintiffs’ unsuccessful efforts to 

locate Defendants. See Phillips Decl., ECF 12-3; Marmion Decl., ECF 12-4; Nguyen Decl., ECF 

12-12; and Imperial Decl., ECF 12-13. Those declarations show that for at least six months, a 

significant amount of mail intended for Plaintiffs has been misdirected to Jack London Mail. 

Marmion Decl. ¶ 17-18. The mail is rejected by Jack London Mail and does not reach Plaintiffs. 

Id. ¶ 18-19. Process servers and delivery personnel with documents for Plaintiffs are turned away 

from Jack London Mail. Id. Plaintiffs’ counsel states that Plaintiffs are being irreparably harmed 

by these circumstances, as they are being deprived of their rights and ability to receive mail and 

service of process, which threatens their ability to conduct business. Id. ¶ 19. Counsel also notes 

that Plaintiffs manage a large volume of legal cases, and their ability to meet important deadlines 

is impaired by the misdirected mail, process servers, and delivery personnel. Id. ¶¶ 19-20.

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The Court concludes that Plaintiffs have met the requirements of Federal Rule of Civil 

Procedure 65(b) and Civil Local Rule 65-1(b). The Court thus may issue the requested TRO if 

Plaintiffs make an appropriate showing under the legal standard set forth below.

B. Standard for Issuing TRO

The standard for issuing a temporary restraining order is identical to the standard for 

issuing a preliminary injunction. Stuhlbarg Int’l Sales Co., Inc. v. John D. Brush & Co., 240 F.3d 

832, 839 n.7 (9th Cir. 2001); Lockheed Missile & Space Co. v. Hughes Aircraft, 887 F. Supp. 

1320, 1323 (N.D. Cal. 1995). An injunction is a matter of equitable discretion and is “an 

extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled 

to such relief.” Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008). A 

plaintiff seeking preliminary injunctive relief must establish “[1] that he is likely to succeed on the 

merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that 

the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Id. at 

20. “[I]f a plaintiff can only show that there are serious questions going to the merits – a lesser 

showing than likelihood of success on the merits – then a preliminary injunction may still issue if 

the balance of hardships tips sharply in the plaintiff's favor, and the other two Winter factors are 

satisfied.” Friends of the Wild Swan v. Weber, 767 F.3d 936, 942 (9th Cir. 2014) (internal 

quotation marks and citations omitted).

 III. DISCUSSION

A. TRO Directed to Defendants

The Court has no difficulty concluding that Plaintiffs are entitled to the requested 

temporary injunctive relief directed to Defendants’ conduct. 

1. Likelihood of Success

Plaintiffs have demonstrated a likelihood of success with respect to their claims for 

trademark infringement (Claim 1) and false designation of origin (Claim 2). Taking those claims 

in order, a plaintiff asserting trademark infringement must demonstrate that it “owns a valid mark, 

and thus a protectable interest” and that Defendants’ “use of the mark ‘is likely to cause confusion, 

or to cause mistake, or to deceive.’” Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1196 (9th Cir.

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2009) (quoting KP Permanent Make–Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th 

Cir. 2005); see also 15 U.S.C. § 1114(1)(a), (b). Plaintiffs have demonstrated that MERSCORP 

Holdings, Inc. owns the federal trademark registration for the MERS® word mark, which was 

issued in 1997. Marmion Decl. ¶ 6 and Exhs. A, B. The mark has become incontestable. Id. ¶ 7 

and Exh. C.

“To determine whether a likelihood of consumer confusion exists, our court relies on the 

eight-factor Sleekcraft test, which reviews: (1) the strength of the mark; (2) proximity or 

relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) 

marketing channels used; (6) type of goods and the degree of care likely to be exercised by the 

purchaser; (7) the defendant’s intent in selecting the mark; and (8) the likelihood of expansion of 

the product lines.” JL Beverage Co., LLC v. Jim Beam Brands Co., --- F.3d ----, 2016 WL 

3770484, at *5 (9th Cir. July 14, 2016) (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 

(9th Cir. 1979), abrogated in part on other grounds by Mattel, Inc. v. Walking Mountain Prods., 

353 F.3d 792, 810 (9th Cir. 2003)). “The factors are non-exhaustive and applied flexibly; the 

Sleekcraft factors are not intended to be a rote checklist.” Id. (internal quotation marks and 

citation omitted). 

Plaintiffs present evidence that the MERS® word mark has been used by MERSCORP 

Holdings, Inc. or its predecessors continuously since 1997 in connection with mortgage 

registration services, which include the MERS® System database (factor 1). Marmion Decl. ¶¶ 2, 

6-8. Defendants filed Statements of Information with the California Secretary of State indicating 

that they would be in the business of “loans” (factor 2) and Defendants’ company names are 

confusingly similar to the MERS® mark (factor 3). Id. ¶ 11. There is ample evidence of actual 

confusion in that mail, process servers, and delivery persons attempting to reach Plaintiffs have 

attempted to do so at Defendants’ address of record (factor 4). Id. ¶¶ 17-18. Plaintiffs have not 

made a specific showing as to marketing channels used (factor 5), but the confusion regarding 

Plaintiffs’ addresses suggests a low degree of care is likely to be exercised by consumers (factor 

6). The closeness of Defendants’ company names to the MERS® mark suggests an intent to 

confuse the public (factor 7). The likelihood of expansion of product lines is unknown (factor 8).

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This showing is sufficient to establish a likelihood of customer confusion and thus, in conjunction 

with Plaintiffs’ showing of ownership of the MERS® word mark, is sufficient to establish a 

likelihood of success on the merits of Claim 1.

A plaintiff asserting false designation of origin based upon similar trade names must make 

virtually the same showing. See Accuride Int’l, Inc. v. Accuride Corp., 871 F.2d 1531, 1534 

(1989) (“[T]he same broad standards of protection apply to trademarks and trade names.”). 

“[L]ikelihood of confusion is unquestionably the key to a finding of infringement in either case.” 

Id. at 1535. The Ninth Circuit has held specifically that the Sleekcraft test is an appropriate means 

for determining likelihood of confusion with respect to a claim for false designation of origin 

based upon similar trade names. Id. at 1536. Applying the Sleekcraft test here, Plaintiffs present 

evidence that they have continuously used the trade names “MERSCORP” and “Mortgage 

Electronic Registration Systems, Inc.” in connection with mortgage related services since 1995 

(factor 1). Marmion Decl. ¶ 2 and n.1. Defendants’ company names are confusingly similar to 

Plaintiffs’ company names (factor 3). Evaluation of the remaining factors is identical to the 

evaluation performed above with respect to the trademark claim. Accordingly, Plaintiffs have 

demonstrated a likelihood of success on the merits of Claim 2.

2. Irreparable Harm

Plaintiffs have demonstrated that they will suffer irreparable harm absent issuance of the 

TRO. For at least six months, a significant amount of mail intended for Plaintiffs has been 

misdirected to Jack London Mail, as have process servers and delivery personnel. Marmion Decl. 

¶ 17-19. Plaintiffs are being irreparably harmed by these circumstances, as they are being 

deprived of their rights and ability to receive mail and service of process, which threatens their 

ability to conduct business. Id. ¶ 19. Plaintiffs’ counsel notes specifically that Plaintiffs manage a 

large volume of legal cases, and their ability to meet important deadlines is impaired by the 

misdirected mail, process servers, and delivery personnel. Id. ¶¶ 19-20.

3. Balance of Equities

As discussed above, Plaintiffs are suffering continuous harm as a result of Defendants’ use 

of confusingly similar business names. However, it does not appear that either of the defendant 

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companies is a going concern, since Plaintiffs’ diligent attempts to locate Defendants were 

unsuccessful. As a result, it is unclear how a TRO precluding Defendants from using their 

business names would cause them harm.

4. Public Interest

Public policy favors granting an injunction when there is a likelihood of consumer 

confusion. See Playboy Enterprises, Inc. v. Baccarat Clothing Co., 692 F.2d 1272, 1275 (9th Cir. 

1982) (“In addition to the harm caused the trademark owner, the consuming public is equally 

injured by an inadequate judicial response to trademark infringement.”).

Accordingly, Plaintiffs’ request for a TRO directed to Defendants’ conduct is GRANTED.

B. TRO Directed to the California Secretary of State

Plaintiffs request not only an order enjoining Defendants from using the subject trademark 

and trade names, but also an order requiring the California Secretary of State to suspend the 

incorporation for Defendants and post Plaintiffs’ address to California’s public records for 

Defendants. Plaintiffs have not cited, and the Court has not discovered, any statute or case law 

granting this Court authority to order the California Secretary of State to take the requested 

actions. Plaintiffs argued at the hearing that the Court could issue the requested order based upon 

its inherent authority or based upon analogy to courts’ statutory authority to cancel trademark 

registrations under the Lanham Act, 15 U.S.C. § 1119 and under California Business & 

Professions Code § 14230. The Court is not persuaded that these authorities provide a sufficient 

basis for it to issue a TRO directed to the California Secretary of State.

Accordingly, Plaintiffs’ application for TRO is DENIED WITHOUT PREJUDICE with 

respect to Plaintiffs’ request for an order directed to the California Secretary of State.

C. Security

Federal Rule of Civil Procedure 65(c) provides that “[t]he court may issue a preliminary 

injunction or a temporary restraining order only if the movant gives security in an amount that the 

court considers proper to pay the costs and damages sustained by any party found to have been 

wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). The Ninth Circuit has “recognized that 

Rule 65(c) invests the district court with discretion as to the amount of security required, if any.”

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Jorgensen v. Cassiday, 320 F.3d 906, 919 (9th Cir. 2003) (internal quotation marks and citation 

omitted) (italics in original). “The district court may dispense with the filing of a bond when it 

concludes there is no realistic likelihood of harm to the defendant from enjoining his or her 

conduct.” Id. 

As discussed above, it does not appear that either of the defendant companies is doing 

business at this time, since Plaintiffs have been unable to locate them. Thus it does not appear that 

enjoining Defendants from using their business names would cause them harm. Under these 

circumstances, the Court finds it appropriate to issue the TRO without requiring Plaintiffs to 

provide security.

D. Duration of TRO

The TRO will expire “at the time after entry – not to exceed 14 days – that the court sets, 

unless before that time the court, for good cause, extends it for a like period or the adverse party 

consents to a longer extension.” Fed. R. Civ. P. 65(b)(2). “The reasons for an extension must be 

entered in the record.” Id. Because Plaintiffs have been unable to locate Defendants, Plaintiffs 

have requested leave to effect service of process via publication. As discussed below, the Court 

finds that request to be well-taken and will grant Plaintiffs’ request to effect service via 

publication in accordance with the requirements of California Code of Civil Procedure § 415.50. 

The minimum time to effect service under that statute exceeds fourteen days. The Court therefore 

finds good cause to extend the TRO an additional fourteen days, for a total of twenty-eight days, 

until September 20, 2016.

E. Order to Show Cause Re: Preliminary Injunction

The Court HEREBY SETS a hearing on Plaintiffs’ motion for a preliminary injunction for 

Tuesday, September 20, 2016, at 2:00 p.m., twenty-eight days after issuance of the TRO. A 

separate Order to Show Cause Re: Preliminary Injunction is issued contemporaneously with the 

present order.

F. Notice via Publication

Plaintiffs have presented evidence establishing that despite diligent efforts that have been 

unable to locate Defendants. The Court therefore GRANTS Plaintiffs’ request for leave to effect 

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service of process via publication that meets the requirements of California Code of Civil 

Procedure 415.50. Those requirements are addressed in detail in a separate order issued 

contemporaneously with the present order.

 IV. ORDER

(1) Plaintiffs’ application for TRO is GRANTED IN PART as follows, but is DENIED 

WITHOUT PREJUDICE with respect to Plaintiffs’ request for an order directed to 

the California Secretary of State:

Defendants, their officers, agents, servants, employees, and attorneys and all those 

in active concert or participation with them are ENJOINED from the following 

conduct: 

1. Using the MERS® Mark, MERSCORP trade name, or Mortgage 

Electronic Information Systems, Inc. trade name, or any confusingly 

similar versions thereof, in commerce in the United States;

2. Maintaining an active corporation with the name MERS, Inc or 

Mortgage Electronic Registration System, Inc. (MERS) or any 

confusingly similar name; and

3. Assisting, aiding, or abetting any other person or entity in engaging in or 

performing any of the activities referred to in subparagraphs (i) and (ii)

above.

(2) The TRO is granted without security;

(3) The TRO shall remain in effect for a total of twenty-eight days, until September 20, 

2016, unless otherwise ordered by the Court;

(4) Plaintiffs’ motion for preliminary injunction is SET FOR HEARING on September 

20, 2016, at 2:00 p.m.; 

(5) Plaintiffs’ request for leave to effect service of process via publication is 

GRANTED as set forth herein; and

(6) The Court separately issues a TRO and OSC Re: Preliminary Injunction directed to 

Defendants, compelling their compliance with this order, and setting a hearing on 

Plaintiff’s motion for preliminary injunction.

Dated: August 23, 2016 ______________________________________

BETH LABSON FREEMAN

United States District Judge

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