MICROSTRATEGY INCORPORATED, Plaintiff-Appellant, v. MOTOROLA, INCORPORATED, Defendant-Appellee.
No. 01-1289.
United States Court of Appeals, Fourth Circuit.
Argued March 15, 2001. Decided March 28, 2001.
245 F.3d 335
AFFIRMED AND REMANDED FOR FURTHER PROCEEDINGS
Before NIEMEYER, DIANA GRIBBON MOTZ, and GREGORY, Circuit Judges.
DIANA GRIBBON MOTZ, Circuit Judge:
In this interlocutory appeal, we agreed to review on an expedited basis the denial of a preliminary injunction to MicroStrategy, Incorporated, which seeks to enjoin Motorola, Incorporated, from use of a purported MicroStrategy trademark. For the reasons that follow, we affirm.
I.
Motorola, a global communications and electronics company, produces electronic hardware. In June 2000, Motorola held a business summit of its marketing officers to determine how to market more effectively its services and products on a worldwide basis. The company decided to develop a new brand, which would cut across its various business interests, to establish
Motorola selected Ogilvey & Mather as its agency and began its normal procedures for clearing “Intelligence Everywhere” as a trademark. In-house trademark counsel for Motorola performed and commissioned various trademark searches for “Intelligence Everywhere” and turned up no conflicting trademark uses of the phrase. On October 5, 2000, in-house counsel informed Motorola management that no conflicting marks had been found and that the phrase was available for use as a mark in the United States and throughout the world. However, in-house counsel also informed Motorola management that a Canadian company, Cel Corporation, had registered the domain name “intelligenceeverywhere.com” and further investigation revealed that Cel might be using the name as a trademark on some products. A month later, Motorola obtained Cel‘s rights to “Intelligence Everywhere.”
On October 19, 2000, Motorola filed an intent-to-use application with the United States Patent and Trademark Office for the registration of the trademark “Intelligence Everywhere,” indicating its intent to use this mark on a vast array of its products and services. On December 10, 2000, Motorola registered the domain name “intelligenceeverywhere.com” with Network Solutions, Inc. in Herndon, Virginia.
On January 8, 2001, MicroStrategy,1 a producer of communication software, notified Motorola that MicroStrategy had been using “Intelligence Everywhere” as a trademark since “at least as early as 1998.” A. 461. MicroStrategy further stated that the mark had obtained common law protection, and that Motorola‘s intended use of the mark would constitute unlawful infringement. Motorola responded by expressing its belief that its use of the mark would not violate state or federal law and its intent to continue using the mark. MicroStrategy then submitted its own application to the United States Patent and Trademark Office seeking to register the trademark, “Intelligence Everywhere.”
On February 13, 2001, MicroStrategy filed this action in the United States District Court for the Eastern District of Virginia, raising claims of trademark infringement, trademark dilution, and cybersquatting. MicroStrategy moved the court for a preliminary injunction to prevent Motorola‘s intended use of the mark. Such an injunction would have prevented Motorola from launching its planned global advertising campaign around the “Intelligence Everywhere” mark, otherwise scheduled to begin the week of March 19, 2001. On February 23, 2001, the district court heard oral argument and denied the motion for a preliminary injunction, explaining its rationale from the bench; the court issued a written opinion five days later, on February 28, 2001.
After noting an interlocutory appeal on its trademark infringement claim, MicroS
II.
We review the grant or denial of a preliminary injunction for abuse of discretion, recognizing that “preliminary injunctions are extraordinary remedies involving the exercise of very far-reaching power to be granted only sparingly and in limited circumstances.” Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 816 (4th Cir.1991) (internal quotation marks omitted).
As the district court noted, in order to obtain a preliminary injunction a plaintiff must satisfy the familiar four-factor test established in Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir.1977). A court must consider (1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied; (2) the likelihood of harm to the defendant if the request is granted; (3) the likelihood that the plaintiff will succeed on the merits; and (4) the public interest. Id. at 195-97; Direx, 952 F.2d at 812.
“[T]he first step ... is for the court to balance the ‘likelihood’ of irreparable harm to the plaintiff against the ‘likelihood’ of harm to the defendant; and if a decided imbalance of hardship should appear in plaintiff‘s favor, then ... [i]t will ordinarily be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult, and doubtful, as to make them fair ground for litigation.” Blackwelder, 550 F.2d at 195 (emphasis added). But “if ‘the plight of the defendant [is] not substantially different from that of the plaintiffs,’ that is, if there is no imbalance of hardship in favor of the plaintiff, then ‘the probability of success begins to assume real significance,’ and interim relief is more likely to require a clear showing of a likelihood of success.” Direx, 952 F.2d at 808 (quoting Blackwelder, 550 F.2d at 195 n. 3).
In this case, the grant of an injunction would cause at least as much harm to the defendant, Motorola, as its denial would to the plaintiff, MicroStrategy. Indeed, to some extent, the parties’ arguments on irreparable harm present two sides of the same coin. Each maintains that it has superior rights to the use of “Intelligence Everywhere” as a trademark and that the grant, or denial, of injunctive relief will cause irreparable harm to its use of the mark. Thus, we can only conclude that a “decided imbalance of hardship” does not weigh in MicroStrategy‘s favor. Blackwelder, 550 F.2d at 195. In fact, it well may be that Motorola has demonstrated that it will suffer more from a grant of an injunction than MicroStrategy will from its denial.3 At the very least, “there is no
When, as here, the balance of hardship “does not tilt decidedly in plaintiff‘s favor” then a plaintiff must demonstrate a “strong showing of likelihood of success” or a “substantial likelihood of success” by “clear and convincing evidence” in order to obtain relief. Id. at 818 (internal quotation marks and citations omitted). In trademark cases, a plaintiff‘s burden may be even greater. As we noted in Direx, the foremost trademark authority has stated that “when the hardship balance does not tip ‘decidedly’ or ‘significantly’ in favor of the plaintiff,” then the plaintiff must prove the “‘probability (not mere possibility)‘” of success on the merits; in other words, the plaintiff must have “a very clear and strong case.” Direx, 952 F.2d at 813 (quoting 2 J. Thomas McCarthy on Trademarks and Unfair Competition § 30.16 (2d ed.1980)). “[T]o doubt is to deny“; thus, “if there is doubt as to the probability of plaintiff‘s ultimate success on the merits, the preliminary injunction must be denied.” Id.
With this standard in mind, we turn to the question of whether MicroStrategy has demonstrated substantial likelihood of success on the merits in its trademark infringement claim. For a plaintiff to prevail on a claim of trademark infringement, the plaintiff must first and most fundamentally prove that it has a valid and protectable mark. See Petro Stopping Ctrs. v. James River Petroleum, 130 F.3d 88, 91 (4th Cir.1997).
The district court held that MicroStrategy had failed to show a likelihood of success on this critical, initial burden. The court reasoned that although the record demonstrated that MicroStrategy had registered approximately 50 marks, it failed to register “Intelligence Everywhere” as a mark and, therefore, did not qualify for protection under
Of course, as MicroStrategy points out, a mark need not be registered to garner federal trademark protection. Rather, “it is common ground that § 43(a) [of the Lanham Act,
After careful examination of the 252 pages of MicroStrategy documents that the company has submitted in support of its motion for preliminary injunction, we agree with the district court: MicroStrategy has failed to demonstrate that it has likely used “Intelligence Everywhere” to identify MicroStrategy as the source of its goods or services.
MicroStrategy has offered 24 documents (not including duplicates of press releases), dating from March 1999 through early 2001, in which it has used the term “Intelligence Everywhere.” These include two annual reports, several press releases, brochures, sales presentations, a product manual, a business card, and newspaper articles. Although most of these documents contain several pages of densely printed material and some are quite lengthy, see A. 374 (39 pages), A. 159 (64 pages), A. 413 (30 pages), A. 131 (28 pages), A. 352 (22 pages), and A. 115 (16 pages), typically each refers only once to “Intelligence Everywhere,” and that reference follows no particular design or sequence, i.e., sometimes its on the cover, sometimes not, most often “Intelligence Everywhere” appears in the midst of text. Use of a trademark to identify goods and services and distinguish them from those of others “does not contemplate that the public will be required or expected to browse through a group of words, or scan an entire page in order to decide that a particular word, separated from its context, may or may not be intended, or may or may not serve to identify the product.” In re Morganroth, 208 U.S.P.Q. 284, 288 (T.T.A.B.1980); Ex parte Nat‘l Geog. Soc., 83 U.S.P.Q. 260, 1949 WL 3854 (Comm‘n Pat.1949). Yet that is precisely the sort of examination one is forced to employ even to find the term “Intelligence Everywhere” in many of MicroStrategy‘s materials.
Moreover, MicroStrategy has not used any “constant pattern” or design to highlight “Intelligence Everywhere.” Cf. Textron Inc. v. Cardinal Eng‘g Corp., 164 U.S.P.Q. 397, 399 (T.T.A.B. 1969) (mark found because, “since its inception,” it had been used by the company in a “constant pattern“; it was “always set off” in some manner). A trademark need not be “particularly large in size or ... appear in any particular position on the goods, but it must be used in such a manner that its nature and function are readily apparent and recognizable without extended analysis or research and certainly without legal opinion.” In re Morganroth, 208 U.S.P.Q. at 288; See also Ex parte Nat‘l Geogr. Soc., 83 U.S.P.Q. at 260-61. Unlike certain MicroStrategy trademarks, e.g., “Intelligent E-Business,” MicroStrategy has not consistently placed “Intelligence Everywhere” on a particular part of the page, or in a particular type, or labeled it with “TM,”5 or consistently used a distinctive font, color, typeset or any other method that makes “its nature and function readily apparent and recognizable without extended analysis.” Id. “[A] designation is not likely to be perceived as a mark of origin unless it is repetitively used, as opposed to only an occasional or isolated use.” 1 McCarthy § 3.3.
On its business card and elsewhere, MicroStrategy characterizes “Intelligence Everywhere” as the company “mission,” see A. 224, A. 453, A. 109, A. 162, A. 116, A. 314, A. 450, A. 320, A. 354, A. 386, “vision,” see A. 327; A. 344, A. 348, A. 443, A. 453, “effort,” see A. 324, A. 447, “motto” A. 315, or “dream,” A. 313. Although in the proper context, a mission statement, like a slogan, can serve as a trademark, a company mission statement or slogan is certainly not by definition a trademark. Rather, mission statements, like “[s]logans often appear in such a context that they do not identify and distinguish the source of goods or services. In such cases, they are neither protectable nor registrable as trademarks.” See 1 McCarthy § 7:20 (emphasis added). So it is here. MicroStrategy has not demonstrated that it has used the mission statement to identify and distinguish the source of its products or services. If anything, the phrase has been used to advertise MicroStrategy‘s goods, without identifying the source of those goods. Unless used in a context whereby they take on a dual function, advertisements are not trademarks.
Moreover, the record does not bear out MicroStrategy‘s claim that the company “for years has used the mark consistently in widely distributed sales brochures [and]
What appears to have eluded MicroStrategy is that “[e]ven though a word, name, symbol, device, or a combination of words [a slogan] may be used in the sale or advertising of services or on or in connection with goods” it is not protectable as a trademark “unless it is used as a mark.” In re Morganroth, 208 U.S.P.Q. at 287; see also In re Int‘l Paper Co., 142 U.S.P.Q. 503, 505 (T.T.A.B.1964) (noting that the “question here is not whether a slogan can perform the function of a trademark” but whether it does perform this function, i.e., “identify and distinguish” the owner‘s goods from those of others). “Intelligence Everywhere” could function as a trademark, but MicroStrategy has not clearly demonstrated that it has, in fact, used the phrase as a mark.
For these reasons, MicroStrategy has at this juncture utterly failed to provide a basis for a court to find the probability of its trademark usage, let alone trademark infringement by Motorola. Rather, MicroStrategy has presented a record of limited, sporadic, and inconsistent use of the phrase “Intelligence Everywhere.” Obviously, this does not constitute “a clear and strong case” of likelihood of success on the merits. Of course, MicroStrategy may yet prevail on its infringement claim at trial. But the company has not demonstrated that this is likely, let alone that the district court abused its discretion in refusing to grant the requested preliminary injunc
AFFIRMED.
NIEMEYER, Circuit Judge, dissenting:
To deny MicroStrategy a preliminary injunction at this stage of the proceedings, when no trial has yet been held, ensures that any rights MicroStrategy may have in the mark “Intelligence Everywhere” will be seriously undermined, if not permanently destroyed, by Motorola‘s planned advertising campaign promoting its identical mark in a contiguous, complementary product market. Because the outcome on the nature and scope of MicroStrategy‘s alleged senior mark is not a foregone conclusion at this time, likelihood of success on the merits is not a determinative factor on the appropriateness of entering a preliminary injunction. But, because the balance of hardships so clearly favors MicroStrategy, the principles of equity suggest that we enter a preliminary injunction to prohibit Motorola‘s use of its junior mark “Intelligence Everywhere” until a trial can be held to determine whether MicroStrategy has a valid, senior interest in the mark.
The majority, in weighing the first two Blackwelder factors—the relative likelihood of irreparable harms to the parties—gives too much weight to Motorola‘s professed hardships in reaching the conclusion that the balance does not “tilt decidedly in plaintiff‘s favor.” Supra, at 340. The majority relies specifically on Motorola‘s allegations regarding the potential harm it will suffer from an injunction, namely that (1) its reputation and good will in the industry will be harmed because it has previewed the mark to various customers; (2) it will lose its financial investment in print and television advertisements featuring the “Intelligence Everywhere” mark; and (3) its financial investment in developing the mark, which to date exceeds $24 million, will be lost or, at least, adversely impacted. See id. at 339 n. 3. But even if these harms are relevant, the evidence shows that their primary cause is Motorola‘s decision to continue its own marketing strategy, even after being put on notice of MicroStrategy‘s claim in January 2001.
For example, Motorola‘s Director of Corporate Identity, James Winski, admits that the printing of its annual report—a potential loss in excess of one million dollars—was not scheduled to commence until late February 2001, well over a month after Motorola was first put on notice that MicroStrategy claimed the “Intelligence Everywhere” slogan as its mark.2 Likewise, Motorola Vice President Sandra West admits in her affidavit that television commercials featuring the “Intelligence Everywhere” mark were scheduled to be shot at the end of February, and thus could have been canceled or postponed. Moreover, although West asserts that Motorola‘s goodwill and reputation in the industry will be undermined because it has
Of course, even without the January notice, these expenditures are irrelevant to MicroStrategy‘s right to enjoin Motorola‘s use of the mark. And the majority‘s error in relying on these expenditures is made all the more glaring by the fact that Motorola‘s decision to spend money on the planned advertising campaign after it was on notice weighs in favor of MicroStrategy because it demonstrates Motorola‘s bad faith.3 Thus, these expenditures should have been taken to tip the balance in favor of MicroStrategy rather than against it.
But weighing most heavily in favor of MicroStrategy is the certainty that Motorola‘s widespread use of the identical mark in a complementary product market will effectively and permanently destroy MicroStrategy‘s mark if an injunction is not entered. Motorola‘s resources far exceed those of MicroStrategy‘s, and Motorola‘s proposed use of the mark will be nearly universal. Thus, considering only the relative harms, I believe that the harm from delay of Motorola‘s introduction of “Intelligence Everywhere“—a delay that does not necessarily entail the loss of development expenses—is outweighed by the irreparable injury that will occur to MicroStrategy‘s mark, even if it is able to prevail on the merits.
Even on the merits, MicroStrategy‘s chances of prevailing at trial are quite good and certainly are nowhere as bleak as the majority suggests. Any doubt about MicroStrategy‘s eventual success, as the majority observes, would come from questions about how consistently MicroStrategy has been in using the “Intelligence Everywhere” slogan as a trademark. Yet, even as to this, the closest question on the merits, there is a good deal of evidence in the record in MicroStrategy‘s favor.
If it is able to establish this element, MicroStrategy is almost certain to prevail on the other elements of its infringement claim. Despite the district court‘s contrary conclusion, it cannot seriously be contended that MicroStrategy‘s use of “Intelligence Everywhere” is descriptive rather than suggestive. The phrase does not impart information about MicroStrategy or its products directly—the hallmark of a descriptive mark—but instead “requires some operation of the imagination to connect” the meaning of the phrase to MicroStrategy and its products, the very definition of a suggestive mark. Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1527 (4th Cir.1984) (quoting Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 379 (7th Cir.1976) (internal quotation marks omitted)). A potential customer faced solely with the slogan would be unable to describe precisely what product or services were offered by MicroStrategy, unlike in the cases of marks held to be descriptive, e.g., “After Tan post-tanning lotion, 5 Minute glue, King Size men‘s clothing, and the Yellow Pages telephone directory.” Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 464 (4th Cir.1996) (citing 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 11.08 (3d ed.1995)).
Further, MicroStrategy should have little difficulty in establishing a “likelihood of confusion” under the Lanham Act in this case. See id. at 463 (setting forth the factors considered in the “likelihood of confusion” analysis). We need not discuss each of the factors at length here, because it is simply a matter of common sense that MicroStrategy‘s “Broadcaster” product—which bears the “Intelligence Everywhere” mark and is sold to customers who not only use Motorola products, but may use them to run “Broadcaster” itself—will become associated by its customers with Motorola after that company‘s expensive media blitz. Where senior and junior users of identical marks operate in contiguous product markets that involve complementary products, confusion can almost be presumed. And in this case, the probability of confusion is enhanced, not lessened, by Motorola‘s plan to link its hallmark “M” with the “Intelligence Everywhere” slogan. As discussed above, “Broadcaster” customers are likely to be Motorola customers—the targets of the advertising blitz—and thus are inherently likely to begin associating the slogan with Motorola and naturally to assume that MicroStrategy products bearing the slogan are associated with Mo
Because the district court applied the controlling legal standards improperly and, in addition, considered irrelevant factors in determining the relative harms to the parties, I would reverse its ruling and remand for entry of a preliminary injunction pending trial. I would also direct the district court to conduct that trial expeditiously so as to minimize any harm that might be caused by further delay. For these reasons, I respectfully dissent.