N OTE : This disposition is nonprecedential. 

# United States **Court of Appeals**  **for the Federal Circuit**

______________________ UATP IP, LLC, UATP MANAGEMENT, LLC, Plaintiffs

- Appellees

v.

KANGAROO, LLC, Defendant

- Appellant

AIR ENTERTAINMENT GROUP, LLC, HAI CHANH QUACH, DAN TRINH, RAYMON HUNG, EDGAR ALEJANDRO GUERRERO, ALAN TRINH, TINA LUU, GOLDEN STAR GROUP, LTD., Defendants

______________________

2022

- 2047

______________________ Appeal from the United States District Court for the Southern District of Texas in No. 4:21

- cv

- 02478, Judge Drew B. Tipton.

______________________
Decided: February 16, 2024

______________________
C HRIS P AUL H ANSLIK , BoyarMiller, Houston, TX, argued for plaintiffs

- appellees.

S TEVEN J ON K NIGHT , Chamberlain Hrdlicka, Houston, Case: 22-2047 Document: 67 Page: 1 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 2

TX, argued for defendant

- appellant. Also represented by A MBER A LI , A J F OREMAN , D AVID M IGUEL M EDINA

.

______________________
Before R EYNA , T ARANTO , and C HEN , Circuit Judges

. C HEN , Circuit Judge

. This interlocutory appeal arises from a motion for a preliminary injunction filed below by Appellees UATP IP, LLC and UATP Management, LLC ( collectively, UATP) based on alleged patent and trade dress infringement by Kangaroo , LLC (Kangaroo) . The United States DistrictCourt for the Southern District of Texas granted the preliminary injunction, enjoining Kangaroo from operating the “Adventure Hub” in its trampoline park, using certain colors, and using UATP ’s confidential information. UATP IP, LLC v. Kangaroo, LLC , 2022 WL 2898951, at *2 (S.D. Tex. June 28, 2022) ( Order ). After full briefing and argument, we conclude the district court abused its discretion by failing to make the requisite findings to support its grant of the preliminary injunction. Further, we find that UATP failed to prove in its briefing below that it was likely to succeed on the merits of its patent infringement claim. Accordingly, we reverse the district court’s grant of the preliminary injunction as to the patent infringement claim, and vacate and remand as to the trade dress infringement claim.

B ACKGROUND UATP and Kang aroo are operators of “adventure parks”

— indoor play facilities that include trampolines, ziplines , ropes course s , and other attractions. UATP operates at least 160 facilities (known as Urban Air A dventure P arks) throughout the country, primarily through franchisees. Kangaroo operates a single play park in Laredo, Texas that is located in the same building, and uses much of the same equipment, as a previously existing Urban Air Adventure Park franchise. Case: 22-2047 Document: 67 Page: 2 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 3

UATP sued Kangaroo on July 30, 2021 on several ground s, including patent and trade dress infringement. In its operative complaint, UATP alleges that Kangaroo infringes U.S. Patent No. 10,702,729 (’729 patent), entitled

“ Multi

- level Play Equipment .” UATP also alleges that Kangaroo infringes its trade dress, which UATP describe s in its motion for preliminary injunction as “includ[ing] the neon orange, yellow, Urban Air Lime Green, and Cosmic Dust Blue color scheme prevalent throughout Urban Air franchises, Attractions and equipment and the layout and placemen t of the same, signage (content, lettering, and coloring), white ball pit, redundancy trampolines, no hold netting, configuration of the safety harnesses and attachment of same to the equipment, and one way directional tracking of the zip coaster

. . . .” App

. 614 (footnotes omitted)

. UATP filed its motion for preliminary injunction onJune 9, 2022, over ten months after it filed its original complaint. The district court granted the motion on the grounds that UATP was likely to succeed on the merits of b oth its patent and trade dress infringement claims, andthat UATP was entitled to a rebuttable presumption of irreparable harm that Kangaroo failed to rebut. Order , 2022 WL 2898951, at *1

– 2.

D ISCUSSION
This c ourt generally reviews preliminary injunctions according to the law of the regional circuit (here, the FifthCircuit), but “gives dominant effect to Federal Circuit precedent insofar as it reflects considerations specific to patent issues,” such as likelihood of success on the merits. Tinnus Enters

. , LLC v. Telebrands Corp

. , 846 F.3d 1190, 1202

– 03 (Fed. Cir. 2017). Both the Federal Circuit and the FifthCircuit review preliminary injunctions for an abuse of discretion. Id. at 1203. A party may establish an a buse of discretion “by showing that the court made a clear error ofjudgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous Case: 22-2047 Document: 67 Page: 3 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 4

factual findings.” Abbott Lab ’y s v. Andrx Pharm s ., Inc.

, 452 F.3d 1331, 1 335 (Fed. Cir. 2006) (quoting Polymer Techs., Inc. v. Bridwell , 103 F.3d 970, 973 (Fed. Cir. 1996)).

“ A preliminary injunction is an extraordinary remedy never awarded as of right .” Winter v. Nat. Res. Def. Council, Inc. , 555 U.S. 7, 24 (2008)

. A party s eeking a preliminary injunction must establish “a reasonable likelihood of success on the merits, irreparable harm in the absence of a preliminary injunction, a balance of hardships tipping inits favor, and the injunction’s favorable impact on the public interest.” Murata Mach. USA v. Daifuku Co. , 830 F.3d 1357, 1363 (Fed. Cir. 2016) (quoting Nat’l Steel Car, Ltd. v. Canadian Pac. Ry. , 357 F.3d 1319, 1324

– 25 (Fed. Cir. 2004)) . Under Federal Rule of Civil Procedure 52(a)(2), a district court must offer findings of fact and conclusions oflaw to justify the grant or denial of a preliminary injunction motion. Id. (citing Ali v. Quarterman , 607 F.3d 1046, 1048 (5th Cir. 2010)).

I We turn first to UATP’s patent infringement claim.For a preliminary injunction motion, “[t]he burden is always on the movant to show that it is likely to succeed on the merits.” BlephEx, LLC v. Myco Industries, Inc. , 24 F.4th 1391, 1398 (Fed. Cir. 202 2). To establish a likelihoodof success on the merits, “the patentee seeking a preliminary injunction in a patent infringement suit must show that it will likely prove infringement, and that it will likely withstand challenges, if any, to the validity of the patent.” Titan Tire Corp. v. Case New Holland, Inc.

, 566 F.3d 1372, 1376 (Fed. Cir. 2009). We find that UATP’s showing was legally insufficient
to demonstrate likelihood of success on the merits of its patent infringement claim. “[W]hether perform ed at the preliminary injunction stage or at some later stage in thecourse of a particular case, infringement and validity analyses must be performed on a claim

- by

- claim basis.” Case: 22-2047 Document: 67 Page: 4 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 5

Amazon.com, Inc. v. Barnesandnoble.com, Inc. , 239 F.3d 1343, 1351 (Fed. Cir. 2001). But neither UATP’s motion for preliminary injunction nor the Order ever identified any claim of the ’ 7 29 patent that Kangaroo allegedly infringe s. Instead of comparing Kangaroo’s allegedly infringing equipment to any of the claims of the ’729 pat ent, UATPand the district court appear to have assumed that Kangaroo’s equipment infringe s the patent because it was previously used in an Urban Air Adventure P ark. But the district court never determined that Urban Air Adventure P arks practice a specific claim of the ’729 patent. By assuming that similarities between Kangaroo’s equipment and the equipment in an Urban Air Adventure Park constitute infringement without any discussion of the claims

, the district court erred in finding a likelihood of succe ss on the merits. The district court likewise erred in failing to make any findings on irreparable harm, balance of the equities, or thepublic interest in its analysis relating to UATP’s patent infringement claim. See Fed. R. Ci v. P. 52(a)(2) (“I n granting or refusing an interlocutory injunction, the court must []
stat e the findings and conclusions that support its action. ”).

II We turn next to UATP’s trade dress infringement claim. In the Fifth Circuit, to establish likelihood of success on the merits of a trade dress infringement claim, the plaintiff “must prove that : (1) its trade dress qualifies for protection; and (2) the trade dress has been infringed bydemonstrating a likelihood of confusion in the minds of potential consumers.” Beatriz Ball, LLC v. Barbagallo Co. LLC , 40 F.4th 308, 31 7 (5th Cir. 2022). To qua lify for protection, a trade dress must be (a) non

- functional, and (b) distinctive, either inherently or through acquired Case: 22-2047 Document: 67 Page: 5 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 6

secondary meaning

. 1 Wal

- Mart Stores, Inc. v. Samara Bros., Inc. , 529 U.S. 205, 210

– 11 (2000).

U nlike UATP’s failure to present an adequate patent infringement case, UATP briefed all the necessary elements of its trade dress infringement claim in the proceedings below

. However, t he district court failed to make any findings on whether UATP’s alleged trade dress was non

functional, inherently distinctive, or had acquired secondary meaning. Instead, the district court found that UATP’s “trade dress claim against Kangaroo is likely to succeed onthe merits, because it has shown that Kangaroo substantially imitated Urban Air’s total image by using the same colors, attraction structures, and park layout.” Order , 2022 WL 2898951, at *1. Th e district court’s failure to explain how it a rrived at this finding in view of the relevant trade dress likelihood of confusion factors

, see Xtreme Lashes, LLC v. Xtended Beauty, Inc. , 576 F.3d 221, 227 (5th Cir. 2009)

, and failure to address the non

- functionality or distinctiveness of UATP’s alleged trade dress

, render its analysis too conclusory to permit meaningful appellate review.

1 The parties dispute wh ether UATP must show that its alleged trade dress has acquired secondary meaning, or whether a showing of inherent distinctiveness suffices. See UATP’s Response Brief at 23; Kangaroo’s Reply Brief at 10

– 11 . Which showing is required depends on whether UATP’s alleged trade dress is product packaging or product design. While product

- packaging trade dress may be shown to be inherently distinctive, product

- design tradedress can never be inherently distinctive and therefore cannot be protected without a showing of secondary meaning. Wal

- Mart Stores, Inc. v. Samara Bros., Inc. , 529 U.S. 205, 214

– 15 (2000)

. We do not reach the issue of whether UATP’s alleged trade dress is product packaging or product design here, but provide this framing for the benefit of the parties and the district court upon remand. Case: 22-2047 Document: 67 Page: 6 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 7

See, e.g.

, Gechter v. Davidson , 116 F.3d 1454, 1458 (Fed. Cir. 1997) ( “ A district court therefore may not merely state its findings in conclusory terms, but must provi de sufficient detail to elucidate the reasoning by which the courtreached its ultimate finding on an issue of fact or conclusion on an issue of law; otherwise, the appellate court is unable to carry out its appellate review function. ” ). The district court’s findings relating to irreparable harm are also deficient. First, the district court erred in failing to address UATP’s ten- month delay in moving for a preliminary injunction

. See Hybritech Inc. v. Abbott Lab ’ys

, 849 F.2d 1446, 1457 (Fed. Cir. 1988) (“ The period of delayexercised by a party prior to seeking a preliminary injunction in a case involving intellectual property is [] one factorto be considered by a district court in its analysis of irreparable harm .” ). Second, the district court e rred in finding that UATP was entitled to a rebuttable presumption of irreparable harm under 15 U.S.C. § 1116(a)

. Section 1116(a) entitles a p laintiff seeking a preliminary injunction under 15 U.S.C . § 1125 t o a rebuttable presumption of irreparable harm “upon a finding of likelihood of success on the merits for a violation .” Because the district court’s analysis was premised on a flawed likelihood of success finding, the court’s application of the presumption cannot stand. By failing to address UATP’s delay in filing its preliminary injunction request, and by improperly applying the statutory presumption , the district court erred.
Finally, as with its analysis relating to the patent infringement claim, the district court’s analysis relat ing to the trade dress infringement claim failed to make sufficient findings on the balance of the equities or the public interest. Because the district court failed to “ state the findings and conclusions that support its action ” in granting the prelimina ry injunction, as required by Federal Rule of Civil Procedure 52(a)(2), the court erred

. Case: 22-2047 Document: 67 Page: 7 Filed: 02/16/2024UATP IP , LLC v. KANGAROO , LLC 8

C ONCLUSION We find that the district court abused its discretion by fail ing to make the requisite findings to support its grant of the preliminary injunction . Further , we find that therewas a failure of proof in UATP’s briefing below on the likelihood of success on the merits of its patent infringement claim. Accordingly, we reverse the district court’s grant of the preliminary injunction as to the patent infringement claim

. We vacate and remand as to the trade dress infringement claim.

REVERSED

- IN

- PART , VACATED

- IN

- PART , AND REMANDED

C OSTS
Costs to Kangaroo. Case: 22-2047 Document: 67 Page: 8 Filed: 02/16/2024