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					                    DEFENDING AGAINST TRADEMARK INJUNCTION
                                Copyright 2008 Professor Xuan-Thao Nguyen
                                       SMU Dedman School of Law
                                            xnguyen@smu.edu

        From March 2003 to March 2008, there were roughly 307 trademark preliminary
injunction cases decided. 172 cases were granted preliminary injunction and 135 cases denied.
During the same time period, 99 permanent injunction cases were granted and 4 denied.

        Below is a summary of selected cases wherein courts denied injunction requests. 1

Likelihood of Confusion

1.      Playmakers LLC v. ESPN, Inc., 376 F.3d 894 (9th Cir. 2004)

Plaintiff provides agency services to represent professional athletes in contract negotiations with
professional sport teams and in endorsements and appearances, and relies primarily on word-of-
mouth for its marketing. ESPN is a sports entertainment cable network that began airing a new
dramatic series called “Play-makers,” providing a behind-the-scenes view of a fictional
professional football team. ESPN advertised heavily in the mainstream media before the series
debut. Plaintiff contends that it will likely succeed on the merits of its “reverse confusion”
infringement claim. The district court denied the motion for preliminary injunction finding no
likelihood of confusion, and the Ninth Circuit Court of Appeals agreed. The court indicated in a
footnote that although the two marks share the same sound and meaning, they are distinguishable
in visual appearance as the parties typically use the marks in print. Therefore, despite the marks’
similarities in sound and meaning, the commonness of the term “playmaker,” the remoteness of
the parties’ lines of business, the differences in their choices of marketing channel, and the
degree of care professional and aspiring professional athletes are likely to exercise before
choosing an agent, strongly suggest that the plaintiff’s prospective clients are not likely to be
confused.

2.      Brennan’s, Inc. v. Brennan’s Rest., L.L.C., 360 F.3d 125 (2d Cir. 2004)

Owner of the widely-renowned New Orleans restaurant named “Brennan’s” moved for a
preliminary injunction against the owners of a New York City restaurant called “Terrance
Brennan’s Seafood & Chop House,” owned by Terrance Brennan, a well-known “named” chef in
the city. The district court denied the motion, and concluded that the plaintiff had not
demonstrated a likelihood of success on the merits, finding minimal evidence of actual confusion
due to the use of Terrance Brennan’s first name in his mark, the sophistication of the relevant
consumer market, and the substantial geographic distance of more than 1,000 miles between the
two restaurants. The Second Circuit Court of Appeals affirmed the district court despite
disagreeing with certain aspects of the findings, specifically three of the “likelihood of
confusion” factors: the strength of the plaintiff’s mark, the degree of similarity of the two marks,
and the proximity of the services. The court found that the plaintiff’s mark is inherently weak,

1
 The case summary was prepared with the research assistance from Ms. Huyen Luong under Professor Nguyen’s
supervision.


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since it is a common last name and has not acquired distinctiveness in New York – the relevant
market. This conclusion is contrary to the district court’s finding that the mark was strong due to
its incontestability status. The court agreed with the district court that the addition of
“Terrance” to the defendant’s mark was meaningful since it is common to name a restaurant after
its chef in the restaurant industry where the marks compete. This common occurrence suggests
the awareness of diners to connect the restaurant name to its chef, and the importance of
permitting a chef to use his own name. Lastly, the court looked at the competitive proximity of
the marks and concluded that both services have close market proximity being upscale
restaurants; however, the geographic remoteness of the two plays a crucial role for the court in
favoring the defendant in this factor. The district court found that the rest of the factors favored
the defendant, and the Court of Appeals agreed.

3.     Chicago Tribune Co. v. Fox News Network, LLC, 520 F. Supp. 2d 930 (N.D. Ill. 2007)

In 2002, plaintiff began publishing a free, tabloid-style daily newspaper called the REDEYE. It
also obtained federal registration for the REDEYE mark. In 2007, Fox News started a late-night
show in the Chicago area called “Redeye with Greg Gutfeld.” The court first concluded that the
Fox News mark was at suggestive and thus was entitled to trademark protection. Next, the court
found that, although there were differences in the marks’ visual characteristics, the aural likeness
among the titles tipped the factor in favor of the plaintiff. The similarity of the products, on the
other hand, favored the defendant, because there was little overlap in their content. REDEYE
focused mostly on entertainment news, while the television program was a talk show with host
and guests discussing any news items that interested the host. The rest of the factors, except for
the mark’s strength, favored the defendant. Therefore, the court concluded that there was no
likelihood of confusion.

4.     Brennan’s, Inc. v. Brennan, 512 F.Supp.2d 559 (S.D. Miss. 2007)

Plaintiff owns the famous Brennan’s restaurant in the French Quarter of New Orleans.
Defendants planned to open several restaurants soon in Florida and Mississippi called “Clark and
Blake Brennan’s Royal B.” The defendants are sons of one of the owners of Brennan’s, and
worked as general managers at the restaurant for about 10 years before resigning in order to start
their new venture. The court recognized that the mark “Brennan’s” was entitled to protection
because of its federal registration and continuous use for decades. The court, however, did not
categorize the mark “Brennan’s” or decide whether it was a strong or weak mark. Instead, the
court stated that it is widely know that members of the Brennan family independently own and
operate several famous restaurants, many of which have the “Brennan’s” name. Thus, under
these circumstances, the defendants’ use of the Brennan surname would not tend to create
confusion, especially since the names of the defendant’s restaurants include their first names.
The addition of the first names also distinguishes the marks sufficiently. The court also found
that the rest of the factors weighed in favor of finding no likelihood of confusion.

5.    Tyco Healthcare Group LP v. Kimberly-Clark Corp., 463 F. Supp. 2d 127 (D. Mass.
2006)




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Tyco held a federally registered mark “FLEXI-WINGS” and Kimberly-Clark had the federal
registration for “Comfort-Flex.” Both were used on competing brands of maxi pads, referring to
the flexible tabs protruding from the sides of the pad. Defendant began using its trademark
“Comfort-Flex” in conjunction with the word “wings,” which prompted Tyco to file suit. The
court concluded that, although the term “wings” was generic when used in the current context to
describe these side tabs, when taken as a whole, “FLEXI-WINGS” was at least suggestive to
support a finding that was likely valid. The court found that the marks were similar but the
goods were not because of the difference in packaging and appearance. Furthermore, Tyco did
not produce sufficient evidence to show that its mark was sufficiently strong that consumers
would shop for the ‘FLEXI-WINGS” feature and not for the brand. The rest of the factors did
not play a crucial role in the court’s analysis. Finally, the court noted that the defendant was
entitled to a fair use defense wherein the defendant’s use of the generic term “wings” was to
describe a feature of its product.

6.     eAcceleration Corp. v. Trend Micro, Inc., 408 F. Supp. 2d 1110 (W.D. Wash. 2006)

 eAcceleration produced and sold computer security software products over the Internet. It had a
federal registration for the phrase “StopSign,” and also owned an unregistered graphic image
mark consisting of a red octagon with white strip and the word “STOP” in the center (“Stop-Sign
Image”). Trend Micro also produced and sold computer security software and services, and had
a product line called PC-cillin, which can be purchased at retail stores or on the Internet. The
packaging on one PC-cillin product included a photograph of an actual stop sign atop a wood
post (“Stop-Sign Photo”). The court concluded initially that the Stop-Sign Image fell in the
“suggestive” category of trademarks, and there was a strong likelihood it would be considered a
valid mark. The court did not discuss the strength of the mark in a commercial context, but
simply stated that because the mark was deemed a suggestive mark, this factor weighed in favor
of the plaintiff. The court actually found that the rest of the factors remained neutral or weighed
in favor of the plaintiff, resulting in serious questions as to the merits of the likelihood of
confusion. Nevertheless, the court denied the injunction for several reasons. First, it decided
that Trend had a strong fair use defense. Second, the plaintiff’s delay of over a year before
bringing the suit significantly undercut the possibility of irreparable injury. Lastly, the balance
of hardships and public interest weighed in favor of denying the injunction.

7.     Wonder Works v. Cranium, Inc., 455 F. Supp. 2d 453 (D.S.C. 2006)

For nearly sixteen years, the plaintiff had been selling and distributing toys and games under its
WONDER WORKS mark, which it obtained federal registration for in 1992. Defendant, also a
toy manufacturer, sold its products in the plaintiff’s retail toy stores. Despite this relationship, in
2005 defendant filed for federal registration of the mark WONDERWORKS in association
generally with toys. The PTO rejected defendant’s application, which prompted the defendant to
file instead another application for the mark CRANIUM WONDERWORKS in 2006. In
addition, the defendant contacted plaintiff seeking permission to use its mark for a new line of
toys. The plaintiff refused to grant permission, but the defendant proceeded to use the mark in
advertising, marketing, and selling three games that target the same type of customers to which
the plaintiff targets its retail toy store services. The court concluded that the plaintiff had not
established a likelihood of confusion. First, the prevelant third-party use of the mark WONDER



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WORKS in association with children’s activities and products umdermines the claim that the
mark was distinctive. Second, the court did not consider the mark to be so similar as to cause
confusion due to the defendant’s use of its signature purple brain logo. The court did not analyze
any other factor before concluding there was no likelihood of confusion. Furthermore, the court
noted the substantial costs to the defendant if an injunction was issued.

8.     Wild Willy’s Holding Co. v. Palladino, 463 F. Supp. 2d 65 (D. Me. 2006)

The plaintiff opened Wild Willy’s Burgers restaurant in 2001, and obtained registration for the
mark “Wild Willy’s Burgers” in 2003. The defendant operated a restaurant called “The Shed”
which included the bar “Wild Willy’s Aleroom at the Shed.” The court found that the sound,
sight, and meaning of the two marks were sufficiently similar to favor a finding of confusion.
However, the theme and menu of the two restaurants were sufficiently different that there was no
similarity in the type of businesses and the goods marketed. The rest of the factors do not favor a
finding of a likelihood of confusion due to, among other things, the distance separating the
restaurants. Finally, the court found that the plaintiff’s mark was strong, but insufficient
evidence to establish a likelihood of confusion.

9.    First Franklin Fin. Corp. v. Franklin First Fin., Ltd, 356 F. Supp. 2d 1048 (N.D. Cal.
2005)

The plaintiff was a national mortgage lender, with headquarters in California, and had owned the
federal registration of “First Franklin” for use in mortgage services since 1995. Defendant was
incorporated in New York, and it started using the name Franklin First Financial, Ltd. in 1993.
The court deemed the strength of the mark factor to be neutral. The court stated that the
incontestability status of the plaintiff’s marks were insufficient to demonstrate that its use of
“First Franklin” was inherently distinctive, or, to have acquired sufficient secondary meaning to
be considered strong. Furthermore, the court noted that one of the trademarks had expired and
the other had been assigned to its parent company. Therefore, the plaintiffs owned no registered
mark, incontestable or not. The strength, if any, was further eroded by extensive third-party use.
The marks were sufficiently different because they looked different, each incorporating a
different picture in its mark. The court proceeded to conclude the rest of the factors to favor the
defendant.

10.    Hershey Foods Corp. v. Voortman Cookies Ltd., 367 F. Supp. 2d 596 (S.D.N.Y. 2005)

Hershey’s ZERO candy bar was a caramel, peanut, and almond nougat center covered with white
fudge candy bar. Voortman’s Zeer-Oh’s cookies resembled Oreo cookies, but had the logo
“ZERO grams TRANS FAT!” on the packet. The court went straight to the point, concluding
that the Hershey’s mark was strong, but it was substantially dissimilar to the Voortman’s mark
due to the different colors, design, products, and their nutritional values. The fact that both
products belonged to the genus of sweet snack foods that were occasionally cross-marketed was
of little relevance due to the highly visible packaging barriers to potential confusion. There was
no evidence of actual confusion, or any proof the defendant’s bad faith. The final two factors
also weighed against a finding of confusion; therefore, the plaintiffs failed to demonstrate a
likelihood of success.



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11.    Klein-Becker USA, LLC v. Prod. Quest Mfg., 429 F. Supp. 2d 1248 (D. Utah 2005)

Plaintiff was the exclusive licensee for the anti-wrinkle cream called StriVectin-SD, which was
registered in both the United States and Canada. Defendant sold a cheaper alternative to
StriVectin called NuVectin, which also purported to treat wrinkles. The court found that the
strength of the mark favored neither party, because the evidence was inconclusive as to whether
StriVectin-SD was inherently distinctive, or whether it had acquired secondary meaning since
only 5% of the target market was aware of StriVectin-SD. Although the two terms were similar,
the court found this factor weighed in favor of the defendant due to extensive third-party use of
the word “vectin.” The court concluded that the rest of the factors also weighed in favor of the
defendant, especially noting that the products are not sold in each other’s market area.

12.    The Deal, LLC v. Korangy Publ’g, Inc., 309 F. Supp. 2d 512 (S.D.N.Y. 2004)

The Deal is a national media company that owns The Deal (a newsweekly), The Daily Deal ( a
daily financial newspaper), and TheDeal.com. The defendant, Korangy Publishing, publishes
The Real Deal, a monthly magazine that provides information about New York City real estate
market. The Deal owns the following marks: THE DEAL, THE DAILY DEAL, DEAL DIARY,
and CHARTING THE DEAL ECONOMY. The Deal claimed that its marks were infringed
upon by the defendant’s The Real Deal. Since The Deal offered a reasonable explanation for the
six-month delay in seeking injunctive relief, the court found that the delay was not so lengthy as
to require denial of the motion. Applying the likelihood of confusion factors, the court found
that The Deal’s marks were valid but weak due to current third party use of the word “deal” in
connection with either financial or legal publications. In comparing The Deal and The Real
Deal, the court concluded that the two publications are unlikely to appear similar to the
consumers because the layouts were different, with the titles printed in different fonts, sizes, and
colors. The court based its conclusion on the following factors: similarity of the marks, intent of
alleged infringer, quality of defendant’s products, and the sophistication of the consumers which
tip in favor of the defendant versus the strength of mark and competitive proximity favoring the
plaintiff. The Deal’s delay in filing for injunctive relief played a crucial role in the court’s
finding that The Deal did not establish an independent showing of irreparable harm.

13.    Nature’s Best, Inc. v. Ultimate Nutrition, Inc., 323 F. Supp. 2d 429 (E.D.N.Y. 2004)

Nature’s Best is a distributor of vitamins, minerals and food supplements. Since 1998 it has used
the trademark “Isopure” on a line of whey protein meal replacement/after-workout supplements.
The mark had been registered with the USPTO for food supplements since 1999. Ultimate
Nutrition is a manufacturer and distributor of dietary supplements. In 2004, the defendant
obtained a federal registration for the trademark “Isopreme,” without any opposition or any
marks cited against it. “Isopreme” is also used on a line of whey protein meal replacements. In
applying the factors, the court found that “Isopure” had only moderate strength because of
pervasive third party use of “Iso.” Next, the products’ different serving sizes, prices, and
manufacturing processes, each of which are promoted accordingly, coupled with consumers’
sophistication, led the court to conclude that the marks were not sufficiently similar so as to
cause confusion. Although the products were in direct competition, the court deemed the close



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marketplace proximity to be less meaningful when considered in light of the sophistication of the
consumers who purchase these products. The rest of the factors weighed in favor of defendant,
thus the court concluded the plaintiff had failed to establish a likelihood of success on the merits.

14.    Moose Creek, Inc. v. Abercrombie & Fitch Co., 331 F. Supp. 2d 1214 (C.D. Cal. 2004)

Plaintiffs manufactured and sold a clothing line under the brand name “Moose Creek” to retailers
worldwide. Since 1989 plaintiffs have used eight principal “Moss Creek” logos affixed on the
clothes. In 1998, Abercrombie first offered for sale apparel depicting a moose. Between 1998
and 2004, the defendant earned approximately $207 million in aggregate retail sales revenue
from merchandising bearing a moose logo. Furthermore, the defendant owned four federal
copyright registrations related to its logo and had six pending trademark applications with the
USPTO. The court found that all of the plaintiff’s marks were protectable, even the ones without
a federal registration, because they were arbitrary. The court applied the factors and found that
first, the plaintiff’s arbitrary marks were conceptually weak due to extensive third-party use in
association with the apparel. Yet the court concluded that Abercrombie’s marks were “robust,”
judging from its revenues and advertising budget. Second, the proximity of the goods weighed
in equipoise because the parties’ clothing lines were complementary but not ultimately directed
toward the same group of customers. Since the plaintiffs use a variety of moose pictures as
logos, the court concluded that customers would not associate any picture of a moose specifically
with plaintiff’s goods; and they therefore these were not similar to the defendant’s mark. Also,
the words “Moose Creek” did not create an impression of a moose with customers in association
with the plaintiff’s apparel. There was no overlap in marketing channels because the plaintiff’s
advertisement targeted retailers while the defendant focused on end-users. The rest of the
factors, the court concluded, also weighed against finding a likelihood of confusion.

15.   The Honorable Order of Ky. Colonels v. Building Champions, LLC, 345 F. Supp. 2d 716
(W.D. Ky. 2004)

The Honorable Order was a not-for-profit Kentucky corporation that had used “Kentucky
Colonels” on merchandise since 1931, but it only obtained federal registration of the mark in
2004 for use on novelty merchandise. Building Champions owned a recently formed American
Basketball Association team in Kentucky, which it decided to name “Kentucky Colonels.” The
defendant started selling merchandise bearing the term “Kentucky Colonels” before the season
started, and planned on expanding its customer base. The court concluded that the term was
between descriptive and suggestive, and that it was less strong in identifying the Honorable
Order and the novelty merchandise. The court did not decide on the relatedness of the goods
since the consumers, the court reasoned, would not be merely looking to purchase a t-shirt in
either case. The appearance in design and presentation of the two terms were sufficiently
different for the court to deem that each use of the term “Kentucky Colonels” would not cause
confusion. The court proceeded to conclude that the rest of the factors favored against a finding
of confusion, thus despite the strength of the mark, there was no likelihood of confusion.

16.   Iowa Paint Mfg. Co. v. Hirshfield’s Paint Mfg., Inc., 296 F. Supp. 2d 983 (S.D. Iowa
2003)




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Since September 30, 1995, Iowa Paint began to use “ProWall” in association with paint products
it sold throughout the state of Iowa. Meanwhile, in March 1995, Hirshfield’s began using the
term “Pro-wall” and variants thereof in connection with various paint goods. Hirschfield’s use
of the term had been limited to only Minnesota until it opened a store in Urbandale, Iowa in early
2003, which sparked a lawsuit and this preliminary injunction hearing. The court found that the
first factor favored Iowa Paint because even if its “ProWall” mark is not suggestive, it had
acquired secondary meaning in the relevant market area with its continuous use since 1995,
including sales of over 687,000 gallons of paint under the mark, totaling $5.7 million in sales.
Despite the marks being virtually identical, the court found that they were not similar enough to
be confusing when considered in the manner in which the products were purchased. The court
found the following factors—similarity of the marks, intent of alleged infringer, actual
confusion, and sophistication of consumers—weighed against a finding of likelihood of
confusion, versus the strength of the mark and competitive proximity weighing in favor of the
plaintiff. Furthermore, since Iowa Paint did not establish economic or financial loss, it must
show a likelihood of confusion, a burden it did not meet. Therefore, the court concluded there
was no irreparable harm. Lastly, the court found that the balance of harm tips only slightly in
favor of Iowa Paint because granting a preliminary injunction would be costly to Hirshfield.

17.    M & G Elecs. Sales Corp. v. Sony, 250 F. Supp. 2d 91 (E.D.N.Y. 2003)

M & G sells finished electronic products for distribution to the consumer market as well as
electronic products for sale to “original equipment manufacturers” that use them in their
electronic items. Sony, a well-known company that manufactures various electronics, started
selling a computer storage device called Memory Stick. Some Memory Stick includes a new
music software called Magic Gate. To differentiate between the ones containing this new
technology and those that did not, Sony placed MG on the Memory Stick and other electronic
products compatible with this Magic Gate program. Sony’s appeal of the denial for its
registration of the MG designation is currently pending before the TTAB. The district court
found that, according to the Second Circuit law, the PTO’s decisions denying Sony’s application
for the MG designation because of the plaintiff’s mark are entitled to great weight on the issue of
likelihood of confusion. Nevertheless, all eight factors of the likelihood of confusion test favor
Sony, most notably the strength of plaintiff’s mark being diluted by extensive use by third-party
and the difference in the marks’ appearance. Thus, the plaintiff failed to show a clear likelihood
of confusion between its products and the defendant’s Magic Gate products. Accordingly, the
plaintiff is unable to show irreparable harm and a likelihood of success on the merits.

18.    Katz v. Modiri, 283 F. Supp. 2d 883 (S.D.N.Y. 2003)

Plaintiff’s business, Juva MediSpa, is a day spa in New York City that also provides cosmetic
medical treatments. Juvenex, also a day spa, was founded by defendants who only provide spa
services that center around an Asian theme. Upon knowledge of Juvenex’s opening in New
York City, plaintiff sent a letter to defendants advising them of a potential trademark
infringement. Defendants replied that the services offered by them are completely different, and
opened the spa under the name Juvenex. Although the federally registered Juva mark is
suggestive and the two marks compete in the same general industry, there was no likelihood of
confusion, given: (1) the obvious differences between the two marks in appearance, sound and



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use of the marks, even if the junior user’s mark might call to mind the senior user’s mark; (2) the
lack of evidence that Juvenex adopted its name in bad faith or that its product is inferior in
quality and (3) the sophistication level of the ordinary customers in purchasing the costly
services provided by the parties. In finding no similarity, the court also noted that the name Juva
is never used alone and is always displayed in conjunction with “MediSpa.” In addition, the
Juva logo is quite distinct from Juvenex’s “water and star” logo. Juva is printed in large, capital
letters with a leaf design across the last letter. Juvenex’s logo includes the name in small,
lowercase letters with some ornamentation, also a design of a star with rays, one of which
resembles water.

19.    The Echo Design Group, Inc. v. Zino Davidoff, 283 F. Supp. 2d 963 (S.D.N.Y. 2003)

Plaintiff, Echo, is an eighty-year old fashion accessories and home design goods manufacturer of
high-end goods sold under the federally registered trademark Echo. Defendant is a tobacco
manufacturer whose products have evolved over the past ninety years to include fragrances.
Lancaster licensed from Davidoff to sell these fragrances that recently have grown to include
fragrances named Echo Davidoff. Echo contended that Davidoff products’ packaging and
promotion use similar font to that used with the plaintiff’s trademark, and that the plaintiff’s full
company name was being used on Davidoff’s website in promoting its products. Nevertheless,
the court was not convinced that the plaintiff had sufficiently demonstrated for the purposes of
prevailing on a motion for a preliminary injunction that the defendants’ use of the word Echo
would cause a likelihood of confusion among ordinarily prudent consumers. Accordingly, Echo
failed to demonstrate a likelihood of success on the merits and irreparable harm. Furthermore,
the court noted that even assuming likelihood of confusion, the court was not satisfied that Echo
would suffer irreparable harm prior to Release Date when Davidoff products would actually
enter the American market. Thus, the court set a trial date before Release Date to give the parties
sufficient time to conduct discovery and try the case.

20.    Medical Econs. Co. v. Prescribing Reference, Inc., 294 F. Supp. 2d 456 (S.D.N.Y. 2003)

MEC and PRI are leading providers of publications and communications products and services
to customers in the healthcare industry. MEC is known for its “Physicians’ Desk Reference” and
“PDR” brands in association with its annual publication that provide prescription drug data. In
1985, PRI began using the title “Monthly Prescribing Reference” on its monthly publication
containing information regarding ordering or recommending a specific drug. In 2001, MEC
begin advertising its soon-to-be-published periodical entitled “PDR Monthly Prescribing Guide.”
PRI now seeks a preliminary injunction to prevent MEC from using “PDR Monthly Prescribing
Guide.” The court found that, in balancing the hardships of an injunction on the parties, the scale
does not tip decidedly towards PRI. PRI’s major revenue comes from advertising dollars, and it
has given no indication that advertisers are likely to switch their advertising dollars from PRI to
MEC based upon any confusion of titles by doctors. The hardships on MEC, however, would be
great, since it invested considerable advertising and other resources in releasing the new
periodical. Furthermore, PRI has not clearly demonstrated a likelihood of success on the merits.
PRI owns a federal registration for “Monthly Prescribing Reference,” with “Reference” being
disclaimed in the registration. The mark is weak, since it is descriptive despite its continuous use
for 16 years. Although PRI’s mark and MEC’s “PDR Monthly Prescribing Guide” are similar in



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sound and meaning, the court found that prominent display of MEC’s house mark in its
publication will significantly reduce the likelihood of confusion as to the source of the
periodical. Furthermore, the parties use different typefaces, logotypes, and color schemes.
Despite the proximity of the products, the court found the other factors to favor MEC, since there
was no bad faith in adopting the mark, MEC’s product possessed a high quality, and consumers,
who are physicians, possessed a high degree of sophistication.

Priority

1.     Gonannies, Inc. v. GoAupair.com, Inc., 464 F. Supp. 2d 603 (N.D. Tex. 2006)

Both parties were companies in the domestic personnel staffing industry, matching employees
with families who needed their assistance. The plaintiff started using the term “GoNannies” and
registered the domain name www.gonanies.com in 2003. The U.S. Trademark Office granted
registration for the mark “GO NANIES” in 2005. Defendant and its predecessor had used the
term “goNANI” and the domain name www.gonani.com continuously since 1999. More than six
months after discovering the defendant’s alleged infringement use and more than five months
after filing this lawsuit, plaintiff filed a motion for preliminary injunction. Since it is the actual
use of a designation as a mark that creates rights and priority over others, not the registration, the
defendant’s copious evidence if its use of the term “goNANI” in nationwide commerce, many
years prior to the plaintiff’s use of the term “GoNanies,” at a minimum defeated the plaintiff’s
argument that it had a substantial likelihood of succeeding on the merits. Finally, the plaintiff
did not introduce any evidence to show a threat of irreparable injury.


Reverse Confusion

1.     Strange Music, Inc. v. Strange Music, Inc., 326 F. Supp. 2d 481 (S.D.N.Y. 2004)

Plaintiff was Peter Grant, a composer and performer in the genre of “new music,” who created
sTRANGEmUSIC in 1998 and registered the mark and website www.strangemusic.com. The
defendant, TECH N9NE, claimed that he had successfully built STRANGE MUSIC into a
successful and critically acclaimed record label in the field of rap and hip-hop. The plaintiff
Grant brought an action on a reverse confusion theory. The court concluded that Grant’s mark
was suggestive, because a consumer looking at the two products would not immediately be able
to discern to which genre the music belonged. Next, the court compared the sales and
advertising budgets of both parties, and found that Grant’s mark was weak while the defendant’s
mark was stronger; thus, the factor weighed in Grant’s favor. Despite the identical sounding of
the two marks, the court found that the marks differed greatly in the fonts, colors, and emblems.
Although online searches resulted in both parties’ websites, there was little proximity of the
products since it was easily discernable that the two sites were not related. Since Grant’s music
was in the “new music” genre and the defendant’s music was hip-hop, there was no bridging the
gap, especially when Grant contended that the defendant’s music would tarnish his image.
Misdirected e-mails and phone calls from the defendant’s customers to Grant were insufficient to
show that actual confusion existed. The final three factors were the defendant’s good faith, the




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quality of the products and the sophistication of the purchasers—all weighed against finding a
likelihood of confusion.


Initial Interest Confusion

1.     SMJ Group, Inc. v. 417 Lafayette Rest., LLC, 439 F. Supp. 281 (S.D.N.Y. 2006)

One of the defendants was a non-profit organization that sought to improve conditions for NYC
restaurant workers. It also owned a 40% interest in a restaurant operated by the other defendant
named the Colors Restaurant. Beginning in March 2006, the defendants stationed individuals
outside of the restaurants owned by the plaintiff to distribute leaflets. The leaflets displayed the
logos of the plaintiff’s restaurants, and attempted to lure customers away by including
information regarding the working conditions of the workers at these restaurants. The court
found that the distribution of the leaflets displaying the logo was considered a service as defined
by the Lanham Act, and their non-profit status did not place the defendant’s activities beyond the
scope of the Act. The court disagreed with the Fourth Circuit, and found that the Act does not
require a commercial advantage requirement, stating that the defendants’ use of the plaintiff’s
marks caused confusion and therefore falls within the scope of the Act. Thus, the court found
that the plaintiffs were likely to succeed on the merits of the infringement claims. Furthermore,
since the defendants used the plaintiffs’ marks as a source identifier, the use was not protected by
the First Amendment, irrespective of the content of the leaflets. The plaintiffs, however, did not
present any evidence that it would suffer irreparable harm in the absence of an injunction, relying
on the presumption of harm based on a finding of confusion. The court distinguished the facts of
this case from the facts of the case that established this presumption, because the defendant’s use
of the marks did not frustrate an individual’s attempts to purchase the plaintiff’s goods. The
customers were still able to enter the restaurant after receiving and reading the leaflets.
Furthermore, the defedant’s service was not a substitute for the plaintiff’s restaurants.

Mark Not Entitled to Protection

1.    Dep’t of Parks and Recreation for Cal. v. Bazaar del Mundo Inc., 448 F.3d 1118 (9th Cir.
2006)

        In 1968, the State of California acquired a title to some land to establish the historic Old
Town, which included the Casa de Pico and Casa de Bandini, built by the last Mexican governor
of California and a prominent San Diegan, respectively, in the 1820’s. From 1971 to 2001, the
State and Bazaar del Mundo began to enter into a series of “Concession Agreements” that
granted Bazaar del Mundo the “privilege and duty” to operate and maintain, among other things,
the restaurants named Casa de Pico and Casa de Bandini. In 1985, after receiving no opposition,
the USPTO granted a trademark registration to Bazaar del Mundo for Casa de Pico, and Casa de
Bandini. The application contains a historic description of Casa de Bandini and Casa de Pico
including the location of these buildings. In 2005, Delaware North, Inc., took over the
concession in 2005 after winning a bid in 2001.




                                                                                                  10
        After vacating Old Town, Bazaar del Mundo announced plans to open new restaurants
under the names “Casa de Pico Restaurant” and “Casa de Bandini Restaurant.” The State moved
for a preliminary injunction to prevent the use of the mark in connection with the new
restaurants. The district court denied the State’s motion and the Court of Appeals affirmed,
finding that the State failed to produce sufficient evidence of ownership of the marks. Therefore,
the State failed to demonstrate any chance of success on the merits. The State’s use of these
marks in books, brochures, and guides did not constitute evidence of commercial use of the
marks in connection with the State’s Old Town tourism and recreational activities. Furthermore,
even if the court had conceded that the brochure for the 1969 Fiesta 200 celebration was a prior
commercial use of the marks, the State failed to establish a continuous use of the marks since,
and Bazaar del Mundo would have been able to acquire priority. In addition, the marks were
descriptive, even if the State has prior commercial use, it had not established that the marks have
acquired “secondary meaning.” Finally, the Concession Agreement was solely to lease premises
and not to license trademarks.

2.     Hasbro, Inc. v. MGA Entm’t, Inc., 497 F. Supp. 2d 337 (D.R.I. 2007)

Hasbro is a toy manufacturer; and predecessor acquired the rights to a game called “Memory”,
and obtained a federal trademark registration for the term “Memory” in 1967. The registration
was renewed over the years. The defendant produced a 3-D version of this game when it
acquired a license from Marvel for the “Spider-Man” name, logo, images, and characters. The
defendant’s game contained 10 molded plastic characters. After receiving correspondence from
Hasbro, defendant changed the name of its game from “Memory Match-Up” to “3-D Memory
Match-Up.” Hasbro was still unhappy with the name change. MGA was able to meet its burden
of proving that the term “Memory” had been a generic term not entitled to trademark protection.
MGA submitted compelling evidence that the term “Memory” had been used to describe the
generic card game since before the first trademark registration in 1967. In addition, MGA
submitted the dictionary use of the term in the 1961 edition of the Random House Dictionary.
Furthermore, MGA had produced evidence of Hasbro’s own generic use of the term in
conjunction with other board games, calling all of them “memory games.” The court did not
penalize MGA for failing to offer any supporting consumer surveys.

3.     Vista India v. RAAGA, LLC, 501 F. Supp. 2d 605 (D.N.J. 2007)

Vista was the owner of “Raaga Entertainment Superstores,” which sold Indian and other South
Asian music within the United States. Defendant Raaga owned and operated the website
“raga.com,” which provided Indian music downloads and streaming. Raaga filed trademark
applications for the word mark RAAGA, plain and stylized. 18 months later, Vista filed its
trademark applications to register RAAGA, but its applications had been suspended pending the
applications filed by Raaga. After negotiations by Vista to acquire Raaga fell through, Vista
filed the above lawsuit. The court found that the term RAAGA, although foreign, was generic,
and thus was not entitled to protection. At most, the term could be deemed merely descriptive,
because RAAGA was commonly understood to refer to Indian or South Asian music generally,
even though it literally meant color or passion or rhythmic patterns. At best, Vista was entitled
to protection only in its geographic vicinity since it barely demonstrated that its mark had
acquired secondary meaning locally at the time Raaga began to use the mark.



                                                                                                11
4.     FURminator, Inc. v. Ontel Prods. Corp., 429 F. Supp. 2d 1153 (E.D. Mo. 2006)

FURminator promoted and sold pet grooming products and claimed that it had used the word
“deshedding” in connection with certain grooming products since 2003. In 2006, the PTO
rejected the plaintiff’s application for “DESHEDDING” because it was merely descriptive of the
associated goods, and it was generic. The defendants used the word “deshedding” on packaging
for its deshedding grooming tools to describe the function of these tools. The court concluded
that “deshedding” was a common generic name for removing the loose undercoat of pets, and
was incapable of functioning as a source- identifier for the plaintiff’s goods. Even if
“deshedding” were considered descriptive, the plaintiff failed to submit any evidence that its use
had acquired a secondary meaning. The plaintiff did not establish any irreparable harm, and
thus, the balancing of hardships and the public interest favored denying an injunctive relief.

5.     Kangadis, Inc. v. Euphrates, Inc., 378 F. Supp. 2d 162 (E.D.N.Y. 2005)

Plaintiff imported and distributed cheese and has been selling feta cheese under the label
TRADITIONAL since 1986. Defendant manufactured its own feta cheese and also sold it under
the label TRADITIONAL beginning in 2004. Despite Kangadis’ argument that its mark
TRADITIONAL was suggestive, the court found that TRADITIONAL was a descriptive term
that must acquire secondary meaning in order to be protected. The factors the court considered
were advertising expenditures, consumer studies, sales successes, unsolicited media coverage,
attempts to plagiarize and lengths and exclusivity of use. Evidence of the plaintiff’s $200,000
advertising expense was inconclusive as to how effective the advertising efforts were in
generating sales, since it could not specify the size of its market share or the number of food
vendors it serviced. The court chose to believe the testimony of a professional cheese buyer who
testified for the defendant over the plaintiff’s numerous affidavits from the officers of companies
that did business with plaintiff. The testimony unequivocally stated that in the buyer’s mind
there was no association of TRADITIONAL with the plaintiff. The court also found that the
defendant did not attempt to copy the plaintiff’s mark. Furthermore, several other companies
have used TRADITIONAL on their feta cheese labels, so its use could not be characterized as
exclusive. Therefore, in the end, the mark TRADITIONAL had not acquired a secondary
meaning and was ineligible for trademark protection.

6.    Bay State Savings Bank v. Baystate Fin. Servs., LLC, 338 F. Supp. 2d 181 (D. Mass.
2004)

        Savings Bank has used the name “Bay State Savings” since 1895 for banking and
financial services. Finally by 2002, it obtained both state and federal registrations for its marks
containing “Bay State.” Financial started using “Baystate Financial Services” in 1982 and
obtained only a state registration for its mark. The ownership of this registration changed hands
several times between 1996 and 1997, but each owner continued to use the mark since 1997 until
the lawsuit was filed in connection with the offered financial services.

       In denying injunctive relief, the court concluded that “Bay State Savings” was
geographically descriptive, and that the plaintiff failed to prove it established a sufficient



                                                                                                 12
secondary meaning. The plaintiff produced surveys that showed approximately 75% of the
general population recognizes the “Bay State” mark. Half of those surveyed reported that they
had seen or heard Savings Bank advertisements. Despite these findings, the court stated that
these surveys actually “demonstrate a relatively small portion of the consuming public was
familiar with the bank’s services[:]…among residents of towns where [plaintiff] is active in
banking and advertises extensively, approximately 10% to 20% of residents identified Savings
Bank as a bank they could recall offhand.” Furthermore, the court construed evidence that the
PTO agreed to register the marks only after the bank submitted declarations that it had become
distinctive as a concession that its marks were not inherently distinctive. The court also found
the distinction between insurance and investment services and commercial banking to be
significant because Financial’s use of its mark in association with investment services pre-dates
Savings Bank’s use of its mark for similar services. Since Savings Bank failed to establish a
likelihood of success on the merits, the court concluded it was not at risk of irreparable harm.
Finally, to compel Financial to change its name would cause it to suffer harm due to the goodwill
it built in providing investment services for the last 20 years.

7.     Steak n Shake Co. v. Burger King Corp., 323 F. Supp. 2d 983 (E.D. Mo. 2004)

Steak n Shake sought a preliminary injunction against Burger King (BK) to prevent them from
using the term “steakburger” in their newly introduced burger called “The Angus Steak Burger,”
BK had also applied for federal trademark protection on “The American Steakburger.” Steak n
Shake asserted that it had a common-law trademark in the term “steakburger.” The court
concluded that the term was generic; thus, Steak n Shake was unlikely to prevail on the merits of
its claims. BK’s expert witness testified extensively on the history of the use of the term, which
dated back to the 1920s. The court recognized that the testimony was not determinative on the
issue, but since the witness was testifying as a historian and linguist, it provided helpful guidance
as to the term’s use and roots. The court rejected the plaintiff’s argument that the surveys
submitted showed non-genericness of the term; if the mark is generic, evidence of secondary
meaning cannot create legal protection. Additionally, the court stated that, even assuming the
term “steakburger” was descriptive, the plaintiff still did not establish that the mark had acquired
secondary meaning. The surveys submitted were awkwardly worded and at best showed that
consumers were familiar with the terms. Since the term was generic, irreparable harm could not
be presumed. Furthermore, the balance of harm and public interest in free competition weighed
in favor of denying the injunction.

No Irreparable Harm

1.     Gucci Am., Inc. v. Daffy’s, Inc., 354 F.3d 228 (3d Cir. 2003)

        Daffy’s, a chain retail clothing store, acquired several hundred Gucci “Jackie-O”
handbags of various sizes from its reputable supplier. Daffy’s took measures to authenticate the
bags before selling them by taking one bag to a Gucci outlet store under the guise of it being a
gift. The clerk examined the bag and informed the Daffy’s employee that the bag was authentic
based on certain indicia of authenticity. Furthermore, Daffy’s sent a damaged bag into a Gucci
repair center; Gucci repaired the bag and returned it without comment or further inquiry. Daffy’s
sold all but six bags before receiving a cease and desist letter from Gucci. Despite believing the



                                                                                                  13
bags obtained were genuine, Daffy’s immediately withdrew the remaining handbags from the
store and has since adopted a policy of not buying any Gucci merchandise.

        The district court concluded that Daffy’s had infringed on Gucci’s trademark, but denied
Gucci’s request for a permanent injunction because Gucci could not demonstrate irreparable
harm. The Third Circuit Court of Appeals affirmed the denial of injunctive relief without
prejudice, noting initially that Gucci’s concerns for future infringement were substantially
satisfied by Daffy’s voluntarily enacted policy of dealing with Gucci products. The court
distinguished the case at bar from S & R Corp., where it stated that “trademark infringement
amounts to irreparable injury as a matter of law,” citing Opticians as support. In Opticians, the
court concluded that infringement constitutes per se even if the infringing products are of high
quality because the inability of an owner to control its own mark caused by infringement creates
the potential for damage to its reputation. Unfortunately for Gucci, it argued injury from loss of
control for the first time on appeal and therefore waived this argument. Therefore, the district
court correctly focused on the actual injury to Gucci’s reputation and goodwill, found that Gucci
had not established irreparable harm for purposes of injunctive relief.

2.    Total Control Apparel, Inc. v. DMD Inter’l Imports, LLC, 409 F. Supp. 2d 403 (S.D.N.Y.
2006)

Total Control, a manufacturer of apparel for other companies, had its inventory and other assets
sold to DMD by creditors when it experienced financial difficulties. After the sale, Total
Control’s executive officer worked for DMD and permitted DMD to use the “David Loren” mark
during the employment period. The parties were in dispute of whether the officer had granted
continued use of the mark after termination of employment. The court found that first, the
presumption of irreparable harm was not applicable because Total Control did not assert its
rights in the mark with the cease and desist letter until over a year later. Second, the settlement
agreement between the officer and DMD after termination was an implicit assurance that Total
Control would not assert its right to the mark against DMD, even though the agreement did not
explicitly mention rights to the mark. Therefore, Total Control had acquiesced in their use of the
mark. Finally, the court was unclear as to the actual relationship between the parties in order to
decide on the issue of likelihood of success on the merits. If Total Control granted ongoing
permission to use the mark, then it failed to establish this element. If DMD was a licensee of the
mark, then the cease and desist letter put defendants on notice that the license was being revoked.
On the other hand, if the relationship between the parties were more akin to a join vventure, then
Total Control was not entitled to injunctive relief in the case where products bearing its mark
were sold in the same manners before Total Control entered the joint venture.

3.    Christopher Norman Chocolates, Ltd. v. Schokinag Chocolates N. Am., Inc., 270
S.D.N.Y. 2003

In 2000, CNC, a New York based chocolate confection company that produces “high-end”
products, and Schokinag, a California based company that sells chocolate in bulk, entered into a
joint venture to develop a line of chocolate baking products. Working together, the parties
produced, advertised, and marketed these items with both parties’ trademarks appearing on the
packaging. Disagreements arose in 2002 and led to the termination letters for the Joint Venture



                                                                                                14
Agreement, and eventually to the motion for a preliminary injunction filed by CNC. The court
found there was no irreparable harm done to CNC. The court noted that the presumption of
irreparable harm stemming from a sufficient showing of confusion would be inapplicable in this
case due to the relationship of the parties. They were neither competitors in the marketplace nor
participants in a trademark licensing agreement. Instead, CNC contended that the harm arose
from the association of CNC’s trademark with co-developed and co-branded items in the event
that the quality of the products proved inferior; or alternatively, the defendant’s packaging may
harm CNC’s trademark in the nature of something akin to tarnishment. CNC did not show any
loss of quality, since it offered no evidence to dispute the defendant’s contention that the co-
branded products now on the market were being produced and packaged in the same way prior to
the issue of the first termination letter. In addition, the court could not decide on CNC’s second
basis for harm since it failed to produce particularized presentation of differences in the
packaging and inserts. Lastly, the court noted that CNC’s eight to nine months delay in seeking
injunctive relief after terminating the joint venture independently rebuts any presumption of
irreparable harm. The court also distinguished this case from another case that prevented a
licensee from selling off its remaining inventory following the termination of a licensing
agreement. The court noted that the defendant is not a licensee, but rather a joint venture partner
of CNC. Also, the Joint Venture Agreement did not contain a termination date.

4.    Dunkin’ Donuts Inc. v. Nat’l Donut Rests. of N.Y., Inc., 291 F. Supp. 2d 149 (E.D.N.Y.
2003)

Defendants have been a franchisee of Dunkin’ Donuts (DD) since 1985. In 2002, DD inspectors
visited the defendants’ stores and found alleged numerous violations of health and cleanliness
standards. In addition, DD also alleges that the defendants were selling their doughnuts to a
competitor, which is also a violation of the agreement. Since the preliminary injunction against
the defendants would drastically change the character of the stores, DD must meet a high
standard of clear and substantial likelihood of success at trial, which DD failed to establish.
Since DD did not produce any evidence of continued violations of the health and safety
standards after the initial inspection in 2002 that would cast a negative light on the brand as a
whole, the court declined to find irreparable harm. Furthermore, much of the evidence offered
by DD concerning violations of the franchise agreement was rebutted by the evidence submitted
by the Defendants. Thus, the court found that DD had not demonstrated that it had a clear or
substantial likelihood of success at trial.

5.     Caterpillar Inc. v. Walt Disney Co., 287 F. Supp. 2d 913 (C.D. Ill. 2003)

Caterpillar is engaged in the design, manufacturing and marketing of earth moving, construction
and materials handling machinery and engines for worldwide sales. Disney planned to release
2.2 million copies of “George of the Jungle 2,” the sequel to George of the Jungle, for sale at
various outlets. The movie contained roughly eight minutes of Caterpillar’s products with its
mark visible and operated by the villain’s minions. Caterpillar contended that the unauthorized
use of its mark in the movie is likely to confuse consumers into believing that George 2 is
somehow sponsored by, associated with, or otherwise affiliated with Caterpillar. The court
humorously noted that the application of the likelihood of confusion factors would be difficult
since there are no competing trademarks, no dispute as to the authenticity of the products and



                                                                                                15
marks, no competition between Caterpillar bulldozers and George 2 videos and DVDs, and
finally, no intent to get a free ride on the fame of Caterpillar’s trademarks that would spur the
sales and awareness for the George 2 movie. Consumers would not be more likely to buy or
watch George 2 because of any mistaken belief that Caterpillar sponsored this movie. Since
Caterpillar’s likelihood of success on the merits is small, there is a higher requirement for
irreparable harm, which the court also found to be minimal. It was hard for the court to imagine
a consumer’s decision to purchase the plaintiff’s primary product line of heavy machinery,
costing substantial amounts of money, being influenced by watching this film. Conversely, if a
TRO were to be imposed on the release of the movie, Disney would lose the benefits of its
ongoing nationwide marketing campaign, in which it had invested significant sums of money in
promoting the release date.

6.     Halo Magmt., LLC v. Interland, Inc., 308 F. Supp. 2d 1019 (N.D. Cal. 2003)

Halo Management (HM) is a small private corporation focusing on Internet-related services such
as e-mail, web search, and web hosting. Interland is a publicly-traded corporation that also
provides various internet-based services to subscribers and customers. Interland utilizes
blueHalo as its symbol and website to redirect visitors to its home website. HM has owned the
federal registration for the mark Halo since 2002 for internet services. Interland attempted to
register a mark for “blueHALO Architecture” and later “blueHALO and Design,” but both
applications were rejected due to similarities with HM’s mark. Interland continued to use
“blueHALO” despite the PTO’s rejections. The court did not arrive at the substance of HM’s
claims, concluding that HM does not retain a protectable trademark interest in the mark. HM has
effectively abandoned its trademark rights through naked licensing with Planet Halo, Inc. The
contract simply stated that Planet Halo agree to employ reasonable commercial efforts to
maintain the positive business value of the HALO mark. The agreement did not contain an
express contractual right to inspect and to supervise Planet Halo’s efforts. Furthermore, HM’s
extra-contractual conduct confirms that it relinquished quality control. HM’s evidence of
ongoing quality monitoring consisted of a couple of e-mails over a six month period, after the
execution of the agreement, seeking reassurances from Planet Halo regarding its license
obligations and asking to review samples of Planet Halo’s relevant products. These e-mails
showed that HM did not forsake its quality monitoring efforts completely, but on the other hand,
they were not sufficient to prove that HM’s license was a non-“naked” one.

Clean Hand Doctrine

1.     First Global Commc’ns v. Bond, 413 F. Supp. 2d 1150 (W.D. Wash. 2006)

Plaintiff’s “World Sex Guide” website provided information about prostitution services in the
United States and worldwide. It also obtained a federal registration of the trademark “World Sex
Guide” in 2000. Defendant was an individual who allegedly set up another website called
“Wsgforum.com” to divert users from plaintiff’s site to his own site. In light of the nature of the
plaintiff’s website and its use of the mark, the court issued an order for the plaintiff to show
cause why the court should not deny the injunction under the clean hand doctrine. The court was
not convinced by the plaintiff’s argument that none of the site’s content was contrary to




                                                                                                16
Washington law. Thus, it concluded that granting an injunctive relief would have the effect of
encouraging illegal activity, and would serve an unconscionable purpose.

2.     Big Time Worldwide Concert & Sport Club At Town Center, LLC v. Marriott Int’l, Inc.,
236 F. Supp. 2d 791 (E. D. Mich. 2003)

Plaintiff is a ticket “broker” that sells sporting event and concert tickets for a “service charge,”
which fluctuates dramatically between each sale in attempt to circumvent the Michigan Penal
Code which bars and punishes ticket scalping. In 2000, the plaintiff began doing business as Big
Time Worldwide, and uses “bigtimeworldwide.com” as its website. The defendant’s subsidiary
began using the mark Big Time Tickets in connection with ticket sales for theatrical shows and
entertainment events performed in the Branson, Missouri area. In addition, the defendant used
the domain name “bigtimetickets.com,” but did not offer sales of the tickets through the internet
or mail. Furthermore, the defendant had obtained registration from the USPTO for the mark Big
Time Tickets in 2002. Instead of filing an opposition to the defendant’s mark, the plaintiff filed
suit against the defendant and a motion to requesting an injunction to stop the use of the mark
Big Time Tickets during the pendencing litigation. The court found that the plaintiff did not
have a strong likelihood of success on the merits for several reasons. First, since the plaintiff did
not have a federally registered mark, its common law rights are geographically limited to
Michigan, where the plaintiff’s services are provided. Second, none of the eight factors in the
likelihood of confusion test favored the plaintiff. Lastly, the court emphasized that the plaintiff
has unclean hands, being an apparent ticket scalper and is conscious of its unconscionable
conduct. Therefore, to grant a preliminary injunction would facilitate and ratify the plaintiff’s
unconscionable acts of apparent scalping.

Used Goods

1.     Nitro Leisure Prods., L.L.C. v. Acushnet Co., 341 F.3d 1356 (Fed. Cir. 2003)

Nitro sells “refurbished” golf balls at discount prices. Refurbished balls have their paints
removed and are repainted with the original logo reaffixed , in addition to a legend indicating
that these balls are used and refurbished. Acushnet’s trademark claim was that Nitro’s
refurbishing process altered the condition of the balls significantly, and it would be a misnomer
to reaffix Acushnet’s logos back on the refurbished balls without its consent. In denying the
preliminary injunctive relief, the district court concluded that Acushnet failed to show a
likelihood of success on the merits. The Federal Circuit Court of Appeals affirmed the decision,
and found that there was no likelihood of confusion under the Eleventh Circuit law. The court
analyzed Champion, a seminal Supreme Court case that allows the use of trademarks on used
goods “[w]hen it is used in a way that does not deceive the public”, and Davidoff, an Eleventh
Circuit case that introduces the “material difference” test because consumers of new goods have
a different expectation than consumers of used goods, where any variation – “material
differences” – even as modest as removal of a name or batch number, may indicate irregularities
or falsify that can affect a customer’s purchase decision. While recognizing that both Champion
and Davidoff define the boundaries of when the use of a trademark on genuine trademarked
goods is no longer permitted, the court distinguished Davidoff in that it involved an altered new
product made from the original. Therefore, the district court properly relied on Champion and



                                                                                                  17
not Davidoff. The court clarified that Davidoff did not apply in all cases involving genuine
trademarked goods, new and used; such an interpretation would result in the “material
differences test” replacing the “likelihood of confusion” test.




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