BMW of North America, LLC and Bayerische Motoren Werke AG v. Ammar Issa, Rheingold USA, LLC, and Rheingold USA, Inc. — Court grants expedited discovery and orders defendants to show cause why they should not be held in contempt of a trademark and copyright injunction

Background

BMW of North America, LLC and Bayerische Motoren Werke AG sued Ammar Issa, Rheingold USA, LLC, and Rheingold USA, Inc. on April 2, 2019, alleging trademark counterfeiting, trademark infringement, trademark dilution, copyright infringement, and cybersquatting under the Lanham Act, the Copyright Act, Utah law, and common law over internet sales of unauthorized merchandise and software. After a temporary restraining order in April 2019 and a stipulated preliminary injunction in May 2019, the parties entered a consent judgment that included a 2020 permanent injunction barring continued copyright and trademark infringement by the defendants and the persons and entities acting in concert with them.

On March 6, 2026, BMW moved for contempt, enforcement of the parties' settlement agreement, and expedited discovery, alleging that a new nonparty, OBD Hawk, was using the BMW and ISTA logos on hardware products, cables, tablets, and flash drives and selling suspected illegal copies of BMW's proprietary ISTA diagnostic software. BMW pointed to shared contact information, a matching package return address, a PayPal receipt associated with individuals at Issa's address, and similarities between the Rheingold USA and OBD Hawk websites. It also served a January 29, 2026 demand letter enclosing the injunction, with Issa personally served. Defendants did not respond to the motion, and BMW requested submission for decision on April 3, 2026.

The Court’s Holding

Chief District Judge Jill N. Parrish explained that civil contempt requires clear and convincing evidence of a valid court order, the defendant's knowledge of it, and disobedience. The court found the 2020 injunction valid and found knowledge supported by Issa's party status, the shared OBD Hawk and Rheingold USA address, and his apparent acceptance of the demand letter. Applying Rule 65(d)(2)'s privity exception, the court held that OBD Hawk, though a nonparty, was bound as a successor in interest operating as a disguised continuance of Rheingold USA because it sold the same products from the same location under the direction of the same people, relying on the Tenth Circuit's Paragon Contractors authority that a party cannot evade an injunction merely by changing its name.

The court found clear and convincing evidence that OBD Hawk's operations violated the injunction, but it declined to adjudicate contempt immediately, citing due process and the extraordinary, severe nature of civil contempt. It granted sixty days of expedited discovery beginning on the order date, finding good cause in the evidence connecting defendants to OBD Hawk, the absence of any defense response, and the narrow scope of the requests, which cover a full inventory of infringing and counterfeit products sold, an accounting of profits, and the connection between defendants and OBD Hawk. Responses and production were due by email within seven calendar days of service.

BMW must file a status report within fourteen days after the discovery period closes, and defendants must then show cause within thirty days of that report why they should not be held in civil contempt. The motion was granted only in part: no contempt was adjudicated and no monetary penalty, liquidated damages, or attorneys' fees were awarded. BMW must serve the order on defendants and their counsel within seven days.

Key Takeaways

• Rule 65(d)(2) can bind a nonparty successor in interest that operates as a disguised continuance of an enjoined business.
• Shared products, location, and personnel supported the court's conclusion that OBD Hawk was effectively the same operation as Rheingold USA.
• The court granted narrow, sixty-day expedited discovery into infringing inventory, profits, and the defendants-OBD Hawk connection.
• Despite finding clear and convincing evidence of a violation, the court deferred any contempt adjudication and ordered a show-cause response to protect due process.
• The ruling grants the motion only in part and awards no monetary penalty, liquidated damages, or fees.

Why It Matters

The decision illustrates how trademark and copyright owners can enforce an existing injunction against an allegedly renamed or successor operation, focusing on operational continuity and evasion rather than the new entity's formal name, while grounding enforcement in Rule 65(d)(2) and established contempt requirements.

It also separates a strong preliminary evidentiary showing from the final contempt remedy: by pairing rapid, targeted discovery with a later show-cause opportunity, the order creates a procedural path for testing the scope of infringement and profits before any contempt or monetary relief is decided.