245 F.3d 335 | 4th Cir. | 2001
Lead Opinion
In this interlocutory appeal, we agreed to review on an expedited basis the denial of a preliminary injunction to MicroStrate-gy, Incorporated, which seeks to enjoin Motorola, Incorporated, from use of a purported MieroStrategy 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 “in-telligenceeverywhere.com” with Network Solutions, Inc. in Herndon, Virginia.
On January 8, 2001, MicroStrategy,
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 cy-bersquatting. 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 plaintiffs 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.
When, as here, the balance of hardship “does not tilt decidedly in plaintiffs 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 plaintiffs 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 plaintiffs 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 MicroStrate-gy 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 15 U.S.C. § 1114(1) (1994 & Supp. V 1999). With respect to MieroS-
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, 15 U.S.C. § 1125 (1994 & Supp. V 1999) ] protects qualifying unregistered trademarks.” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). But § 43(a) of the Lanham Act, like Virginia common law,
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: MicroStrate-gy 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, 1980 WL 30167 (T.T.A.B.1980); Ex parte
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, 1969 WL 8396 (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, 1980 WL 30167; See also Ex parte Nat’l Geogr. Soc., 83 U.S.P.Q. at 260-61, 1949 WL 3854. 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,”
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, 1980 WL 30167; see also In re Int’l Paper Co., 142 U.S.P.Q. 503, 505, 1964 WL 8038 (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, Mi-croStrategy 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.
. Although not as large as Motorola, MicroS-trategy employs 2,000 people and has approximately $225 million in annual sales.
. MicroStrategy does not appeal the denial of a preliminary injunction with respect to its trademark dilution and cybersquatting claims. Brief of Appellant at 20 n.7.
. Although MicroStrategy makes only the general argument noted in text with respect to irreparable harm, Motorola has offered evidence detailing the particulars of the harm it would suffer if a preliminary injunction was granted. For example, Motorola has submitted affidavits explaining that it has previewed the "Intelligence Everywhere" mark to its "key customers,” and has told those customers that the mark would be the basis of a "joint co-marketing and advertising campaign with Motorola," to be launched the week of March 19, 2001 to coincide with three inter
. Section 43(a) of the Lanham Act “tracks classic principles of state law of unfair competition.” 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 27:18 (4th ed.2000); see also Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922, 929 n. 10 (4th Cir.1995).
. Only infrequently has MicroStrategy designated "Intelligence Everywhere” with a TM (just five times in pre-2001 documents, see A. 109, A. 116, A. 324 (duplicated at A. 447), A. 327 (duplicated at A. 443 with TM and at A. 348 and A. 344 without TM); A. 354), while it has consistently designated other phrases with the "TM.” Moreover, although on eight documents presented to us MicroStrategy has included lists of its trademarks, the company omits "Intelligence Everywhere" from its lists of trademarks about as often as it includes the phrase. Compare A. 130, A. 158, A. 325 (duplicated at A. 447) (all listing "Intelligence Everywhere”) with A. 99, A. 102, A. 221, A. 454 (all omitting "Intelligence Everywhere”) and A. 329, 346, 350, 445 (duplications of same press release listing phrase on A. 329 but omitting phrase on A. 346 and A. 350 and omitting entire list on A. 445). Notably, although the company lists 18 trademarks in its handsomely printed 64-page 1999 annual report, it does not include "Intelligence Everywhere” among them. See A. 221.
. Examination of the excerpt of the administrator guide presented to us reveals a similar story. The excerpt is eight pages; it mentions “MicroStrategy Broadcaster” six times, A. 100-107. Again "Intelligence Everywhere” appears but once. A. 100. That single appearance is on the cover, to be sure, but it is in the smallest print on the cover, more than halfway down the page, not near, let alone "right next to the name Broadcaster,” as Mi-croStrategy, claims. Furthermore, again in the administrator guide, MicroStrategy lists its trademarks including "MicroStrategy Broadcaster” and fourteen others, but omits any mention of "Intelligence Everywhere.” A. 102.
. Given our resolution of this appeal, we need not, and do not, reach the district court’s holding on the likelihood of confusion between MicroStrategy’s and Motorola’s use of the phrase "Intelligence Everywhere.” We do note some skepticism, however, as to the district court’s conclusions that "Intelligence Everywhere” is a descriptive mark, that the "MicroStrategy and Motorola marks are not similar,” and that MicroStrategy and Motorola "offer different goods and services which serve different unrelated purposes.”
Dissenting Opinion
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 MicroS-trategy, 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 MicroStrate-gy has a valid, senior interest in the mark.
The majority, in weighing the first two Blaclcwelder
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.
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.
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 Mi-croStrategy’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 MicroStrate-gy’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 MicroStrate-gy 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 infonnation 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 Mi-croStrategy 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.
. Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir.1977).
. Indeed, the record contains no evidence regarding when Motorola began the design of its annual report to include the "Intelligence Everywhere” mark. It may be that even that decision was made subsequent to its being put on notice of MicroStrategy’s claim to the mark.
. That the district judge and two members of this court have been impressed by the amount spent on a trademark by a potential infringer, a theoretically irrelevant factor, would seem to indicate that companies wishing to escape infringement liability will best be served by heeding the advice of Martin Luther, that if you sin, "sin boldly” (pecca fortiter). Letter from Luther to Melanchthon (1521), in Epistolae (1556).
The majority’s suggestion, albeit ambiguous, that “bad faith” infringement can only be proved in a case where a claim to a mark is "not only valid, but clearly valid," supra, at 339 n. 3, is simply an inaccurate statement of what is required to recover profits, actual damages, and attorney fees under 15 U.S.C. § 1117(a). See Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger, U.S.A., Inc., 80 F.3d 749, 754 (2d Cir.1996) (discussing the relevance of continued infringement to an assessment of "bad faith” after the infringer was put on notice of the claimed trademark by its being sued for infringement); cf. Nalpac, Ltd. v. Corning Glass Works, 784 F.2d 752, 755-56 (6th Cir.1986) (affirming finding of good faith based in part on the infringer’s cessation of infringing activities after acquiring knowledge of another’s claim to the trademark, but before a final adjudication). However risky, a party can decide to "bet[ ] on the fact that [the claimant] w[ill] not prevail in its suit,” but, if it loses that bet, the infringer "should not escape the consequences of its conduct.” Int'l Star Class Yacht Racing Ass'n, 80 F.3d at 754.
. The majority irrelevantly cites to non-use in contexts other than "Broadcaster,” which says nothing about its adoption of the mark in connection with this specific product.