Preliminary Injunctions for Trademark Infringement
Preliminary Injunctions – When you accuse someone of infringing your valuable trademark, what actually happens? In American Rena International Corp v. Sis-Joyce International the United States Court of Appeals for the Ninth Circuit issued a ruling that very clearly articulated the standards for what is known as preliminary injunctions.
Preliminary Injunctions, Generally
Imagine a dispute between two parties. Party P, the plaintiff, accuses party D, the defendant, of doing something wrong – let’s hypothetically say that D has taken to shooting a shotgun into the air in his own backyard which is next door to P’s duck pond. Let’s further hypothetically say that P is in the business of raising and selling ducks in his pond, and every time D shoots off his gun a bunch of ducks get scared and fly away, never to return – harming P economically. When P sues D, theoretically D could continue shooting his gun into his air (‘taking the disputed action’) until P gets a verdict in his favor. The mechanism of preliminary injunctions seeks to make the situation between P and D fairer. If P can show certain things, the court will issue an order to D, telling D to stop shooting guns off until the case is resolved. One of the major factors in the decision to issue this type of order (AKA preliminary injunction) is whether P could potentially suffer some kind of ongoing or irreparable harm if D continued to shoot his gun all throughout trial (remember that a case may be pending in the court system for years, go through trial, and then remain pending for more years as layers of appeals become available.)
Background of the Case
American Rena holds the trademark “Rena” and uses it as a brand name for various skin care and other cosmetic type products. Defendant Sis-Joyce makes a similar line of cosmetic products under the brand name “ARëna.” Interestingly both lines of products even use similar packaging, similar sized bottles, and appeal largely to the same or similar customer base. The risks of trademark infringement and harm are thus, very real.
American Rena sued Sis-Joyce, and the district court issued a preliminary injunction against Sis-Joyce, and in American Rena’s favor – meaning that Sis-Joyce would have to stop using the ARëna brand until the trial was resolved – thus the power of preliminary injunctions… Sis-Joyce immediately appealed – asking the 9th Circuit Court of Appeals to overturn the injunction before the trial on the merits even occurred.
The court basically agreed with the district court that much of Sis-Joyce’s business was premised on allegedly infringing the Rena trademark. For this reason, the court was not swayed by Sis-Joyce’s argument that any preliminary injunctions would force them out of business. However, the court gave a clear articulation of the standard for the grant of a preliminary injunction.
A plaintiff who wants a preliminary injunction has the burden to show:
(1) that he is likely to succeed on the merits (i.e. more likely than not to succeed)
(2) that he is likely to suffer irreparable harm in the absence of preliminary [injunction] (3) that the balance of equities tips in his favor, and
(4) and that an injunction is in the public interest.” Toyo Tire Holdings of Ams. Inc. v. Cont’l Tire N. Am., Inc., 609 F.3d 975, 982 (9th Cir. 2010) (citing Winter v. NRDC, Inc., 129 S. Ct. 365, 374 (2005)).
Here on factor (1) there was little evidence in Sis-Joyce’s favor and a good deal in plaintiff’s favor.
On factor (2) the court found that American Rena was suffering damage to its reputation and ongoing loss of goodwill due to the alleged infringement.
On factor (3) the court unsympathetically stated that since Sis-Joyce’s business was based on trademark infringement, the fact that the injunction would drive them out of business did not weigh in their favor.
Finally on factor (4) the court found that an injunction would reduce the public’s confusion about the trademark, which was in the public interest.
The Plaintiff won on all four factors, thus the injunction was appropriate and upheld on appeal.