Presenting a live 90-minute webinar with interactive Q&A Trademark Infringement: Demonstrating Irreparable Harm to Obtain an Injunction Navigating Inconsistent Court Treatment, Proving Harm With and Without Survey Evidence TUESDAY, JANUARY 27, 2015 1pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Beth M. Goldman, Partner, Orrick Herrington & Sutcliffe, San Francisco Jonathan Hudis, Partner, Oblon McClelland Maier & Neustadt, Alexandria, Va. Uli Widmaier, Partner, Pattishall McAuliffe Newbury Hilliard & Geraldson, Chicago The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
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THE REQUIREMENT OF PROVING IRREPARABLE HARM IN TRADEMARK CASES Beth M. Goldman, Orrick, Herrington & Sutcliffe LLP (415) 773-4580 beth.goldman@orrick.com 2015 by Beth M. Goldman
Historical Standard for Granting Injunctive Relief
Historical Standard for Granting Injunctive Relief In order to obtain permanent injunctive relief, federal courts applied a long-established four-factor test, under which the movant must show: 1) That it has suffered an irreparable injury; 2) That legal remedies are inadequate; 3) That, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; 4) That an injunction would not be against public interest. See, e.g., Weinberger v. Romero-Barcelo, 456 U.S. 305, 313 (U.S. 1982) 7
Historical Standard for Granting Injunctive Relief In order to obtain temporary injunctive relief, federal courts applied a similar four-factor test, under which the movant must show: 1) That it has a likelihood of success on the merits; 2) That it is likely to suffer an irreparable injury; 3) That, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; 4) That an injunction is in the public interest. See, e.g., Univ. of Tex. v. Camenisch, 451 U.S. 390, 392 (U.S. 1981) 8
Historical Standard for Granting Injunctive Relief in IP Cases
Historical Standard for Granting Injunctive Relief in IP Cases Federal Courts had traditionally applied a more lenient standard when granting injunctions in patent, trademark, and copyright cases:» Once a plaintiff showed that it had a valid mark, copyright, or patent that was infringed or a likelihood of success on the merits irreparable harm was presumed. See Brookfield Communs., Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1066 (9th Cir. 1999) (noting application of presumption in trademark cases). 10
Historical Standard for Granting Injunctive Relief in IP Cases The presumption of irreparable harm in trademark cases was longstanding and developed, at least in part, from Judge Learned Hand s pronouncement in Yale Electric Corp. v. Robertson, 26 F.2d 972 (2d Cir. 1928), where he declared the following regarding infringement and loss of control of goodwill when granting an injunction:» This is an injury, even though the borrower does not tarnish [the mark], or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. 11
Historical Standard for Granting Injunctive Relief in IP Cases Irreparable harm was presumed in trademark cases because:» Likelihood of confusion puts a trademark owner s business and goodwill at risk.» This type of injury is difficult to quantify.» Monetary relief is considered inadequate to compensate for loss of control of reputation. 12
The Landscape of Irreparable Harm Changes
The Landscape of Irreparable Harm Changes In 2006, the Supreme Court held that the presumption of irreparable harm was no longer appropriate in cases brought under the Patent Act. The Supreme Court made no pronouncements regarding the continued validity of the presumption of irreparable harm in cases brought under the Lanham Act. ebay Inc. v. MercExchange, L.L.C, 547 U.S. 388 (2006) 14
The Landscape of Irreparable Harm Changes In 2008, the Supreme Court held that a preliminary injunction cannot be based on the mere possibility of irreparable harm. Irreparable harm must be likely. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) 15
Circuit Split After ebay
Circuit Split After ebay The current holder of the THE PLATTERS trademark sued a promoter using the mark in connection with its own musical group. The district court found infringement and granted preliminary injunction based on a presumption of irreparable harm. In December 2013, the 9 th Circuit became the first court of appeals to rule that ebay applies to cases brought under the Lanham Act, thereby eliminating the presumption of irreparable harm. The Court gave no explicit guidance on what might constitute a sufficient showing of irreparable harm, opining that evidence of loss of control over business reputation and damage to goodwill could constitute irreparable harm. Herb Reed Enters. v. Florida Entertainment Mgmt., 736 F.3d 1239 (9th Cir. 2013) 17
Circuit Split After ebay Evidence of past confusion is not sufficient evidence of irreparable harm. A trademark owner must show a likelihood that there will be future irreparable harm. The Supreme Court denied certiorari in October 2014. Herb Reed Enters. v. Florida Entertainment Mgmt., 736 F.3d 1239 (9th Cir. 2013) (cont d) 18
Circuit Split After ebay» In the same year that the 9 th Circuit ruled in Herb Reed, the 5 th Circuit, while citing ebay, continued to apply the presumption of irreparable harm to a trademark infringement case. Abraham v. Alpha Chi Omega, 708 F.3d 614 (5 th Cir. 2013) ( All that must be proven to establish liability and the need for an injunction against infringement is the likelihood of confusion injury is presumed. ).» In 2014, the 3 rd Circuit ruled in Ferring Pharm., Inc. v. Watson Pharm., Inc., 765 F.3d 205 (3rd Cir. 2014) that ebay applied to trademark cases and the presumption of irreparable harm was no longer appropriate.» Following the Supreme Court s denial of certiorari in Herb Reed, the presumption has been eradicated in western courts.» The remainder of the Circuits have not ruled on the issue explicitly and there remains some confusion in district courts. 19
Circuit Split After ebay CIRCUIT SPLIT SUMMARY The 9 th and 3 rd Circuits have explicitly ruled that ebay applies to trademark cases The 2 nd Circuit affirmed at least one district court case applying ebay to trademark cases The 1 st and 11 th Circuits have not ruled on the matter directly, but have indicated in dicta an inclination to apply ebay to trademark cases and not apply the presumption The 10 th Circuit has not yet ruled but appears inclined to apply ebay to trademark cases Most district courts in the 5 th Circuit have continued to apply the presumption per Abraham, but some have acknowledged some uncertainty The 4 th, 6 th, and 7 th Circuits have not ruled on the matter directly, but district courts continue to apply the presumption The 8 th Circuit has not ruled and the district courts appear to be divided. Most district court cases continued to apply the presumption after ebay, but a few recent decisions have found the presumption no longer applicable to trademark cases 20
Proving Irreparable Harm in the 9 th Circuit After Herb Reed
Proving Irreparable Harm In the 9 th Circuit After Herb Reed The Court of Appeals reversed the district court s grant of a preliminary injunction where plaintiff complained its marks were being used in connection with a website specifically catering to marijuana growers. The allegation of irreparable harm was merely speculative, because there was no evidence that plaintiff s customers knew of the website, that the customers would associate the website with marijuana, or that an association with marijuana growers would harm sales. Titaness Light Shop, LLC v. Sunlight Supply, Inc., 585 Fed. Appx. 390 (9th Cir. 2014) (Vacating preliminary injunction against party using TITANESS in connection with indoor grow lighting systems through a website associated with marijuana growth). 22
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Irreparable harm found not likely even though the Court agreed there was a strong possibility of confusion from defendant s use of the MGM mark. Plaintiff failed to carry its burden because it did not provide evidence of actual confusion or evidence showing that any such confusion would result in reputational harm. MGM Resorts, Int l v. Unknown Registrant, 2014 U.S. Dist. LEXIS 167326 (D. Nev. Dec. 3, 2014) (Refusing to enjoin defendant s unauthorized use of the MGM mark in connection with online casino services). 23
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Broad or vague claims of damage to reputation or goodwill were insufficient. Delay in taking legal action for over a year weighed against a showing of irreparable harm. Evidence of many negative reviews of defendant s products were insufficient to show irreparable harm where:» (1) There was no evidence that the amount of negative reviews was significant;» (2) There was no evidence that customers would likely be confused;» (3) There was no evidence of loss of sales or likely loss of sales. Cutting Edge Solutions, LLC v. Sustainable Low Maintenance Grass, LLC, U.S. Dist. LEXIS 149575 (N.D. Cal. Oct. 20, 2014) (denying a producer of hydroponic products injunctive relief for defendant s use of CUTTING EDGE in connection with grass seeds for use outdoors). 24
Proving Irreparable Harm in the 9 th Circuit After Herb Reed Claims of irreparable harm due to defendant s shoddily manufactured shorts using the disputed trademark were insufficient to demonstrate a likelihood of irreparable harm. Plaintiffs were required to produce actual evidence of inferior manufacturing. Absent actual evidence, a claim of irreparable harm due to shoddy manufacturing is merely speculative. Purdum v. Wolfe, 2014 WL 171546 (N.D. Ca. Jan. 15, 2014) (denying request for injunctive relief in trademark ownership dispute between clothing manufacturers where the defendant was alleged to make inferior quality items). 25
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Citing Herb Reed, the Court found [i]t is well established that damage to goodwill or loss of control over business reputation can constitute irreparable harm. The Court granted a preliminary injunction because the plaintiff was able to demonstrate irreparable harm by showing:» (1) evidence of lost sales;» (2) evidence of consumers who opted to do business with defendant instead, many of whom pointed to the false advertising on defendant's website as the motivation for their choice; and» (3) the false and deceptive advertising was ongoing. Am. Bullion, Inc. v. Regal Assets, LLC, 2014 U.S. Dist. LEXIS 161082 (C.D. Cal. Nov. 17, 2014) (business offering services of adding gold and precious metals to retirement accounts preliminarily enjoined from using plaintiff s mark while disparaging plaintiff s business through third party websites). 26
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Irreparable harm found where:» (1) the defendant sold counterfeit products bearing the Starbucks marks in places where Starbucks prohibited sales;» (2) there was evidence of poor business practices, inferior products, consumer complaints, and evidence that consumers were misled;» (3) the defendant s products competed with Starbucks products;» (4) Starbucks suffered a loss of control, goodwill, and reputation. Starbucks Corp. v. Heller, 2014 U.S. Dist. LEXIS 165801 (C.D. Cal. Nov. 26, 2014) (granting preliminary injunction against manufacturer of counterfeit goods bearing the STARBUCKS marks). 27
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Evidence of loss of prospective customers, goodwill, or reputation may be sufficient. Here, several trial witnesses testified regarding loss of reputation and goodwill resulting from actual confusion. Treemo, Inc. v. Flipboard, Inc., 2014 U.S. Dist. LEXIS 147162 (W.D. Wash. Oct. 15, 2014) (granting permanent injunction against FLOWBOARD for a mobile app for creating a portfolio of user-generated multimedia content because of likelihood of confusion with FLIPBOARD for a mobile app for collecting and reporting news). 28
Proving Irreparable Harm In the 9 th Circuit After Herb Reed Evidence of ongoing actual confusion and continued deceptive statements by the defendant constituted irreparable harm and the loss of the trademark owner s control over its goodwill and reputation. United Tactical Sys., LLC v. Real Action Paintball, Inc., 2014 U.S. Dist. LEXIS 166982 (N.D. Cal. Dec. 2, 2014) (granting preliminary injunctive relief against manufacturer of irritant projectiles who was claiming to sell products authorized or affiliated with the PEPPERBALL TECHNOLOGIES marks). 29
Proving Irreparable Harm In the 9 th Circuit After Herb Reed TAKEAWAY POINTS FROM THE 9TH CIRCUIT Courts will not accept broad or vague allegations of harm to goodwill or reputation. Plaintiffs are generally required to put forth some evidence of actual or likely harm, such as customer testimonials or evidence of lost sales. Courts may be less inclined to grant preliminary injunctions where defendants provide assurances to stop infringing or deceptive conduct. Evidence of actual confusion supports a finding of irreparable harm. Delay in seeking relief weighs against a finding of irreparable harm. 30
Proving Irreparable Harm in Other Circuits After Herb Reed
Proving Irreparable Harm In Other Circuits After Herb Reed The Court explicitly agreed with the holding of Herb Reed and found that ebay applies with equal force to trademark cases. The Court of Appeals affirmed the district court s refusal of injunctive relief where the evidence showed the misrepresentations regarding plaintiff s products were taken down and the defendants certified not to make any further misrepresentations in the future. It was not error for the district court to credit the statements of defendant when denying the preliminary injunction. Ferring Pharm., Inc. v. Watson Pharm., Inc., 765 F.3d 205 (3rd Cir. 2014) (affirming denial of preliminary injunction where doctors made allegedly false and misleading statements about FDA approved estrogen supplements for women). 32
Proving Irreparable Harm In Other Circuits After Herb Reed Affirmed district court finding of irreparable harm based on:» Substantial investments in advertising and promotion;» Direct competition between the parties products, which were often sold side by side;» Testimony that the claims of defendant were literally false and identified plaintiff s product by name;» Defendant s product was sold at a lower price. The Court noted that it was not connecting these facts using a veiled presumption of irreparable harm. Courts may still draw inferences from the facts. Group SEB US, Inc. v. Euro-Pro Operating, LLC, 2014 U.S. App. LEXIS 23785 (3d Cir. Sept. 9, 2014) (affirming grant of preliminary injunction against manufacturer of irons making comparative advertising claims using a competitor s mark). 33
Proving Irreparable Harm In Other Circuits After Herb Reed Without deciding whether ebay applies to trademark cases, the court found sufficient evidence of irreparable harm, with or without the presumption. Several witnesses testified to instances of ongoing actual confusion. Without a permanent injunction, there would be loss of control of goodwill and reputation. Plaintiff would be forced to file additional lawsuits in the future. 165 Park Row, Inc. v. JHR Dev., LLC, 2014 WL 442554 (D. Me. Feb. 4, 2014) (granting permanent injunctive relief against defendant s use of the mark THE INN AT BRUNSWICK STATION where it was likely to be confused with the plaintiff s earlier use of the mark BRUNSWICK INN, which had acquired distinctiveness at the time defendant adopted its mark). 34
Proving Irreparable Harm In Other Circuits After Herb Reed Without deciding whether the presumption still applies, the court found irreparable harm where:» (1) there was a likelihood of confusion and evidence of actual confusion;» (2) the use of a mark that was likely infringing compromised the trademark owner s control over its reputation and goodwill;» (4) the trademark owner would likely have had a harder time marketing its own products as a result of the infringement. JL Powell Clothing LLC v. Powell, U.S. Dist. LEXIS 169094 (D. Me. Nov. 24, 2014) (granting preliminary injunction against clothing designer from using his name in connection with a clothing magazine, where clothing designer had previously granted JL Powell Clothing LLC the exclusive right to use his name and endorsement in connection with another competing clothing magazine). 35
Proving Irreparable Harm In Other Circuits After Herb Reed The Court explicitly adopted ebay, but found irreparable harm based only on a likelihood of confusion and resulting loss of the trademark owner s control of its goodwill and reputation. Balady, Inc. v. Elhindi, 2014 U.S. Dist. LEXIS 177166 (E.D.N.Y. Dec. 3, 2014), adopted by 2014 U.S. Dist. LEXIS 176845 (E.D.N.Y. Dec. 19, 2014) (Middle Eastern food market enjoined from using the mark BALADY WA BALADAK, which was found likely to be confused with BALADY for the same services). 36
Proving Irreparable Harm In Other Circuits After Herb Reed Irreparable harm found where counterfeit goods were sold with identical or nearly identical marks. The court indicated that irreparable harm is likely in instances of counterfeiting. Mitchell Group USA, LLC v. Nkem Udeh, 2014 U.S. LEXIS 143001 (E.D.N.Y. Oct. 7, 2014) (granting preliminary injunction where defendant produced counterfeit creams and gels bearing the plaintiff s trademarks). 37
Proving Irreparable Harm In Other Circuits After Herb Reed Injury must be certain and great. A former franchisee s continued, unauthorized use of a trademark poses a substantial likelihood of irreparable harm to the trademark owner. The court noted that there is usually a substantial risk of irreparable harm in cases of infringement by former franchisees. IHOP Franchising, LLC v. Tabel, 2014 U.S. Dist. LEXIS 60028 (D. Kan. Apr. 15, 2014) (granting preliminary injunction against franchisee of IHOP who continued use of the IHOP mark for pancake houses after assigning the franchise and failing to honor IHOP s right of first refusal contrary to the franchise agreement). 38
Proving Irreparable Harm In Other Circuits After Herb Reed TAKEAWAY POINTS OUTSIDE THE 9TH CIRCUIT The application of the presumption will depend on the circuit and district court hearing the case. Even where courts claimed not to apply the presumption, they frequently found irreparable harm based on vague claims of loss of control of goodwill or reputation. Courts outside of the 9 th Circuit appear to continue to conflate the analyses for likelihood of confusion and irreparable harm. Many courts have not required solid evidence of likely harm. Even if the presumption is not applied, courts may still infer irreparable harm from the facts. 39
THE REQUIREMENT OF PROVING IRREPARABLE HARM IN TRADEMARK CASES Beth M. Goldman, Orrick, Herrington & Sutcliffe LLP (415) 773-4580 beth.goldman@orrick.com 2015 by Beth M. Goldman
TRADEMARK INFRINGEMENT: DEMONSTRATING IRREPARABLE HARM TO OBTAIN AN INJUNCTION PROVING HARM WITHOUT SURVEY EVIDENCE Jonathan Hudis JHudis@oblon.com 703. 412. 7047 Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 41
What is Required for an Injunction? Plaintiff Has Suffered Irreparable Injury Remedies Available at Law, such as Monetary Damages, are Inadequate to Compensate for that Injury Considering the Balance of Hardships between the Plaintiff and Defendant, an Equitable Remedy is Warranted The Public Interest would not be Disserved by the Entry of the Injunction ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 42
For Purposes of Our Discussion: Points to Remember about ebay ebay was a Patent Case The Relief Sought in ebay was a Permanent Injunction Among the Pronouncements of ebay was that an Injunction is Not Automatic upon a Finding of Validity and Infringement (that is, Irreparable Injury must be Proven, and Not Presumed) ebay v. MercExchange, 547 U.S. at 392-94. Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 43
The Traditional Trademark Law Presumption Federal Courts Considering whether a Preliminary Injunction would Issue Required an Essential Fifth Element: a Showing of a Probability of Success on the Merits at Trial If a Probability of Success on the Merits was Shown, there was a Presumption that the Requirement of Proving Irreparable Harm was Satisfied McCarthy, T. J., McCarthy on Trademarks and Unfair Competition, 30:47.30 (4 th ed., Thomson Reuters 2014). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 44
If ebay Effectively Dispensed with the Presumption of Irreparable Harm in Trademark Cases, then What is Required to Show Irreparable Harm for Purposes of Obtaining an Injunction? (McCarthy) The TM Owner s Business Goodwill and Reputation are in Peril Mistaken Association of Negative Impressions of Def s G/S with Pl Loss of Control over Quality over G/S Associated with the Mark McCarthy, Thomas J., McCarthy on Trademarks and Unfair Competition, 30:47.30 (4 th ed., Thomson Reuters 2014). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 45
If ebay Effectively Dispensed with the Presumption of Irreparable Harm in Trademark Cases, then What is Required to Show Irreparable Harm for Purposes of Obtaining an Injunction? (Ross) Loss of Customers Loss of Goodwill / Reputation Actual (Past/Ongoing) or Threatened (In the Future) Ross, Terence P., Intellectual Property Law: Damages and Remedies 11.05[2][a][i] (Law Journal Press 2014). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 46
If ebay Effectively Dispensed with the Presumption of Irreparable Harm in Trademark Cases, then What is Required to Show Irreparable Harm for Purposes of Obtaining an Injunction? (Banner) Risk of Reputational Loss Lack of Quality Control over G/S Associated with the Mark Def s Acts or Omissions that have a Tendency to Deceive Complaints as to Quality of G/S Provided Queries as to Whether the Pl and Def are Related Lost Business Due to the Confusion Banner, Brian E., Trademark Infringement Remedies, Chs. 4.III.B., 5.I.C.2., 6.III.A.2. (2d ed., Bloomberg BNA 2014). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 47
Proof of Irreparable Harm & TM Preliminary Injunctions: What Has Worked? Substantial Proof of Likelihood of Confusion Risk of Loss of Goodwill and Control over Food Products associated with Mark Difficulty of Quantifying the Effect on Pl s Brand during Nontrivial Period of Consumer Confusion Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store, Inc., 735 F.3d 735 (7 th Cir. 2013). Impairment of TM Owner s marketing of its own products and services Interference of TM Owner s use of the Mark by Defendant s Continuing to Represent to 3 rd Parties that Defendant Owned the Mark Mercado-Salinas v. Bart Enters. Int l, 671 F.3d 12 (1 st Cir. 2011). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 48
Proof of Irreparable Harm & TM Preliminary Injunctions: What Has Worked? (Cont d) Removal of UPC Codes Absence of UPC Codes Increased Risk that Consumers Would Unwittingly Purchase Counterfeit or Defective Merchandise Associated with the Mark Zino Davidoff SA v. CVS Corp., 571 F.3d 238 (2d Cir. 2009). Threat to Loss of Sizeable Business in Mexico in Connection with Pl s Mark Potential Confusion by Customers as to Who Was Providing services in Mexico under Pl s Mark Loss of Control over Technology being Associated with Pl s Mark Paulsson Geophysical Servs. v. Sigmar, 529 F.3d 303 (5 th Cir. 2008). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 49
Proof of Irreparable Harm & TM Preliminary Injunctions: What Has Worked? (Cont d) Holdover Franchisee: Terms in Franchise Agreement Included Specific Concession that Post-Termination Use of Pl s mark Constitutes Irreparable Harm Dunkin Donuts Franchised Rests, LLC v. ABM Donuts, Inc., 2011 U.S. Dist. LEXIS 139074 (D.R.I. October 4, 2011). Risk to Substantial Goodwill if Def is Allowed to Continue Using Confusingly Similar Marks Risk to Ability in Securing Sponsors due to Confusion between Parties Marks Lack of Control over Reputation and Services offered under Pl s Name and Mark Actual Confusion Exhibited by Highly Sophisticated Consumer New York City Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F.Supp.2d 305 (S.D.N.Y. 2010). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 50
Proof of Irreparable Harm & TM Preliminary Injunctions: What Has Not Worked? Issuance of Preliminary Injunction Reversed and Remanded for Further Findings District Ct s Analysis of Irreparable Harm Cursory and Conclusory Evidence of Loss of Control over Business Reputation and Damage to Goodwill Could Constitute Irreparable Harm The Record Here Lacks Such Evidence Evidence of Consumer Confusion is Not Equivalent to Irreparable Harm Herb Reed Enters., LLC v. Fla. Entm t Mgt., 736 F.3d 1239 (9 th Cir. 2013) [Heavily Criticized by McCarthy] Co-Existence of Parties Marks and Banking Services for Three Months with Scant Evidence of Actual Confusion Pl Failed to Make a Showing of Likelihood of Consumer Confusion Peoples Fed. Sav. Bank v. People s United Bank, 750 F. Supp.2d 217 (D. Mass. 2010), aff d, 672 F.3d 1 (1 st Cir. 2012). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 51
Proof of Irreparable Harm & TM Preliminary Injunctions: What Has Not Worked? (Cont d) Issuance of Preliminary Injunction Reversed and Remanded for Further Findings District Ct s Analysis of did Not Include Sufficient Findings on the Likelihood of Confusion Factors District Ct s Analysis of did Not Include Sufficient Findings on Likelihood of Irreparable Harm due to Def s Ad Using Pl s Mark for Re-Sales of Crystal Figurines Swarovski Aktiengesellschaft v. Bldg. #19, Inc., 704 F.3d 44 (1 st Cir. 2014). Pl s Delay in Bringing Suit and Requesting Prelim Injunction Pl Failed to Show that Money Damages are Insufficient to Remedy Infringing Activity Pl s Proof of Loss of Control over Business Reputation or Damage to Goodwill was based on Conclusory Testimony without Corroborating Evidence of Consumer Confusion Sturgis Motorcycle Rally, Inc. v. Mortimer, Civil Action No. 2:14-cv-00175-WCO (N. D. Ga. December 23, 2014). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 52
Proof of Irreparable Harm & TM Permanent Injunctions: What Has Worked? Loss of Control over Pl s Reputation and Goodwill Remedies at Law Inadequate to Compensate for this Type of Harm United States Polo Ass n v. PRL USA Holdings, Inc., 800 F. Supp.2d 515 (S.D.N.Y. 2011), aff d, 511 Fed. Appx. 81 (2d Cir. 2013). Def s Website and Domain Name Used Pl s Mark to Sell Counterfeit Goods Online Remedies at Law Inadequate to Compensate for this Type of Harm Audi AG v. D Amato, 469 F.3d 534 (6 th Cir. 2006). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 53
Proof of Irreparable Harm & TM Permanent Injunctions: What Has Worked? (Cont d) The Difficulty in Assessing Damages Associated with Harm to Pl s Reputation and Loss of Goodwill Supports a Finding that Pl Sustained Irreparable Harm Legal Remedies Inadequate because Monetary Damages are Impossible to Quantify and Inadequate to Compensate Pl for Damage to its Reputation and Goodwill as a Result of Def s Ongoing Illegal Actions Proof of Multiple Unsatisfied Judgments against Def and Affiliated Cos. Def Unlikely Able to Satisfy a Money Judgment Zeltiq Aesthetics, Inc. v. Brown Health Relaxation Station LLC, 2014 U.S. Dist. LEXIS 63064 (E.D. Wis. May 6, 2014). Holdover Licensee: Terms in License Agreement Included Specific Acknowledgement that Breach of the Agreement Constitutes Irreparable Harm to Pl s Mark, with Damages Difficult to Measure Permanent Injunction Awarded in Addition to Substantial Jury Award of Contract (License Agreement) Damages Fresh Del Monte Produce Inc. v. Del Monte Foods Co., 933 F.Supp.2d 655 (S.D.N.Y. 2013). Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 54
THANK YOU QUESTIONS? Jonathan Hudis JHudis@oblon.com 703. 412. 7047 Copyright 2015 Oblon, McClelland, Maier & Neustadt, LLP 55
Trademark Infringement: Proving Irreparable Harm through Survey Evidence Strafford Live CLE Webinar January 27, 2015 Uli Widmaier Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP UW@pattishall.com (312) 554-7923 56
What must the survey evidence establish? [P]laintiffs seeking preliminary relief [must] demonstrate that irreparable injury is likely in the absence of an injunction. It is impermissible to infer irreparable harm from strong likelihood of success on the merits. Winter v. Nat l Resources Defense Council, Inc., 555 U.S. 7 (2008) (emphasis in original) (about harm to marine mammals from NAVY sonar!). Cited in numerous recent trademark cases, including Herb Reed and Ferring Pharmaceuticals, Inc., v. Watson Pharmaceuticals, Inc., 765 F.3d 205, 217 (3d Cir. 2014). 57
What must the survey evidence establish? [A] party seeking a preliminary injunction in a Lanham Act case is... required to demonstrate that she is likely to suffer irreparable harm if an injunction is not granted. Ferring Pharmaceuticals, Inc., v. Watson Pharmaceuticals, Inc., 765 F.3d 205, 217 (3d Cir. 2014). 58
But what does that mean? Is showing irreparable harm the same as proving via survey that consumers are likely to be confused, deceived, or misled? Or must something else be shown? If so, what would that something else be? 59
Guidance from the Case Law? No presumption of irreparable harm based solely on a strong case of trademark infringement. Evidence of actual confusion simply underscores customer confusion, not irreparable harm. Herb Reed Enterprises, LLC v. Fla. Ent ment Mgmt., 736 F.3d 1239 (9th Cir. 2013). 60
A Catch-22? Assume a Lanham Act plaintiff conducts a valid survey showing strong likelihood of confusion. Before ebay/winter, that survey would have supported injunctive relief as a matter of course. But a valid likelihood of confusion survey indicates strong likelihood of prevailing on the merits. Can that same survey be used to show irreparable injury? Or is that the type of presumption that ebay/winter prohibits? 61
Recent Case Law: Likelihood of Confusion May Not Be Enough Adopting ebay/winter. [W]e do not address whether our previous rule... that a trademark plaintiff who demonstrates a likelihood of success on the merits creates a presumption of irreparable harm... is consistent with traditional equitable principles. In other words, we decline to decide whether the aforementioned presumption is analogous to the general or categorical rules rejected by the Supreme Court in ebay. Voice of the Arab World, Inc., v. MDTV Medical News Now, Inc., 645 F.3d 26, 34 (1 st Cir. 2011). 62
Recent Case Law: Likelihood of Confusion Is Enough Quoting ebay on irreparable harm. But holding on irreparable harm: All that must be proven to establish liability and the need for an injunction against infringement is the likelihood of confusion injury is presumed (quoting McCarthy). Abraham v. Alpha Chi Omega, 708 F.3d 614, 627 (5 th Cir. 2013). 63
So which is it? The case law suggests that in [the Fifth Circuit], in a Lanham Act case, the presumption is somewhere between shaky and reaffirmed. T-Mobile US, Inc. v. AIO Wireless LLC, 991 F. Supp. 2d 888, 928 (S.D. Tex. 2014) (emphasis added). 64
T-Mobile: A Promising Case? The record is clear that Aio wanted to capture T Mobile customers. Through consumer-survey analysis and through Aio's own focus-group testing, T Mobile has presented credible evidence demonstrating that Aio's use of broad swaths or blocks of Aio plum is likely to, and, at least in some instances, actually did, cause initial-interest confusion.... This court finds a substantial likelihood of irreparable injury. T-Mobile, 991 F. Supp. 2d at 926 (emphasis added). So far, so good... 65
T-Mobile: A Promising Case? T Mobile has established a likelihood of confusion. T Mobile has shown a likelihood that potential customers will be confused into thinking that Aio is affiliated or associated with T Mobile based on the confused association between Aio's use of its plum color and T Mobile's similar use of its similar magenta color. T-Mobile, 991 F. Supp. 2d at 929. Still so far, so good... 66
T-Mobile: Complications The court is not ruling that finding a likelihood of confusion automatically results in finding irreparable injury and issuing an injunction unless the defendant shows that the case is exceptional. The narrow ruling is that based on the record evidence, the likelihood of confusion over source and affiliation in this market for no-contract wireless telecommunications services creates a substantial likelihood of injury that money damages cannot remedy. T-Mobile, id. (emphasis added). 67
T-Mobile: Complications The products and services sold are fundamentally the same. What separates the companies is their brand identity. The evidence shows that color is a critical part of that brand identity. On this record, without presuming injury, this court finds and concludes that T Mobile has shown a likelihood of irreparable injury absent an injunction against Aio's use of large blocks or swaths of plum in its marketing and stores. T-Mobile, id. (emphasis added) (emphasis added). 68
Wells Fargo: a case that goes the other way? Likelihood of confusion survey: admitted into evidence, but given very little weight because of its serious deficiencies. No preliminary injunction because Wells Fargo has not presented any evidence that its brand, reputation, and/or goodwill will be harmed by defendants' alleged trademark infringement, false affiliation, and/or false advertising, and offers only the type of platitudes that were rejected by the Ninth Circuit in Herb Reed. Well Fargo & Co. v. ABD Ins. & Financial Serv s, Inc., 2014 WL 4312021 (N.D. Cal. Aug. 28, 2014). 69
An Instructive Contrast T-Mobile: solid and credible survey evidence establishes irreparable harm without resort to any presumption. Wells Fargo: admissible but flawed survey is given very little weight and thus contributes nothing to the irreparable harm analysis. 70
Meeting the ebay/winter standard for irreparable harm Pre-eBay cases on showing irreparable harm through surveys in Lanham Act cases: are they still good law? Proceed with caution! Do not simply rely on a pre-ebay case that found that irreparable harm was shown via survey evidence! Despite a survey, the decision may still be based on an impermissible presumption. Look for a solid causal nexus between survey results and irreparable harm. 71
Pre-eBay Precedents: The Second Circuit s False Advertising Cases We have previously endorsed the ASI format as probative of the meaning consumers derive from commercial advertising.... The results of the test ASI conducted for Sassoon suggest that most potential purchasers would incorrectly believe defendant s allegedly false ad claims. Vidal Sassoon, Inc. v. Bristol-Myers Co., 661 F.2d 272, 276 (2d Cir. 1981). 72
The Second Circuit s False Advertising Cases Sassoon and Body on Tap compete in the same market, and it is quite likely that the apparently effective suggestions of competitive superiority, if repeatedly communicated to consumers, would eventually result in loss of sales to Sassoon. This constitutes that Sassoon is likely to be damaged as a result of the false advertising. Vidal Sassoon, 661 F.2d at 278. 73
The Second Circuit s False Advertising Cases A party seeking issuance of a preliminary injunction in this Circuit must always show that it is likely to suffer possible irreparable harm if the requested relief is not granted. The likelihood of injury and causation will not be presumed, but must be demonstrated in some manner. Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 316 (2d Cir. 1982). 74
The Second Circuit s False Advertising Cases To indicate a likelihood of injury, market studies [must supply] the causative link between the advertising and the plaintiffs potential lost sales. Coca-Cola, 690 F.2d at 317 (emphasis added). 75
The Second Circuit s False Advertising Cases Plaintiff s two surveys were flawed, making it difficult to determine for certain whether a large number of consumers were misled. Nevertheless, both surveys showed that a not insubstantial number of consumers were clearly misled. Likelihood of irreparable injury is thus established, despite the surveys flaws. Coca-Cola, id. 76
Poor Survey Negates Irreparable Harm Preliminary injunction denied because the focus group and survey evidence submitted by Scotts was not reliable or probative of the critical question in this case. [E]ven if the Vigoro packaging were misleading, the denial of a preliminary injunction would cause very little harm to Scotts. The weakness of the survey evidence even though formally directed at likelihood of success on the merits in truth negated any irreparable harm. Scotts Co. v. United Industries Corp., 315 F.3d 264 (2002). 77
Takeaways The law is in flux. Weak or methodologically flawed surveys are actively counterproductive. Think twice before introducing a survey whose design is vulnerable or whose results are feeble. A strong survey showing consumers are confused or misled may serve to establish irreparable harm. But there are no guarantees. Your survey may have to establish an exceptional case T- Mobile) on the merits in order to obtain a finding of irreparable harm. 78
Thank you! Any question? Uli Widmaier Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP 200 South Wacker Drive, Suite 2900 Chicago, IL (312) 554-7923 uwidmaier@pattishall.com 79