Opinion ID: 661455
Heading Depth: 3
Heading Rank: 2

Heading: Other challenges to the injunction

Text: 57 Some of the provisions of the injunction with primarily domestic effects are also defective and must be struck or reformed. 58 A. Provisions prohibiting law and contract violations. The District Court began its order of injunction in paragraphs 1(a) through 1(d) by enjoining Bayer AG from violating the particular laws and contracts upon which Sterling had based its action. 10 In the context of this litigation, where both parties have some rights to the mark at issue, these provisions of the injunction run afoul of Rule 65(d)'s mandate that orders granting injunctions shall be specific in terms [and] shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained. Fed.R.Civ.P. 65(d). See Islip v. Eastern Air Lines, Inc., 793 F.2d 79, 84 (2d Cir.1986) (holding decree that banned violation of contract unenforceable); Sanders v. Air Line Pilots Ass'n, Int'l, 473 F.2d 244, 247 (2d Cir.1972) (affirming District Court refusal to grant order requiring defendants to obey statutory duty of fair representation). 59 Sterling defends paragraphs 1(a) through 1(d) of the injunction against Rule 65(d) objections on the ground that we have upheld other injunctions that trace the language of the law at issue. See Taylor Wine Co. v. Bully Hill Vineyards, Inc., 590 F.2d 701, 703 (2d Cir.1978) (per curiam); SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1103 (2d Cir.1972). Though an injunction that follows the language of the statute at issue may be appropriate in some cases where the context clarifies the scope of the injunction, we do not think that the instant setting provides the necessary illumination to sustain these otherwise vague injunctive provisions. In this case, where the parties share rights to the Bayer mark, both internationally and in the United States, requiring Bayer AG to guess--on pain of contempt--at what conduct the Lanham Act proscribes is too onerous a burden. See International Longshoremen's Ass'n v. Philadelphia Marine Trade Ass'n, 389 U.S. 64, 76, 88 S.Ct. 201, 208, 19 L.Ed.2d 236 (1967); Fonar Corp. v. Deccaid Services, Inc., 983 F.2d 427, 429-30 (2d Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 309, 126 L.Ed.2d 256 (1993). 60 The decree that the District Court devises on remand need not be so precise as to predict exactly what Bayer AG will think of next, Brief for Appellee at 35, in using the Bayer mark. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 193, 69 S.Ct. 497, 500, 93 L.Ed. 599 (1949) (noting necessity of decrees that are not so narrow as to invite easy evasion). But neither can it be so broad as to prohibit generally all unlawful activity. 11 Paragraphs 1(a) through 1(d) cannot stand in their present form under Rule 65(d). 61 B. Provision regarding medical symposia. The District Court broadly banned Bayer AG from using the Bayer mark in connection with any medical symposium, conference or seminar within the United States. Judgment of Permanent Injunction p 1(g)(vii). Bayer AG challenges this restriction as interfering with the free flow of scientific knowledge. Sterling responds that the free flow of scientific information does not justify trademark infringement or breach of contract. 62 We conclude that the medical symposia provision sweeps too broadly. This provision impairs Bayer AG's ability to participate in U.S. medical symposia more than necessary to protect Sterling's trademark or contract rights. First, barring Bayer AG researchers from identifying their corporate affiliation in scientific settings serves no legitimate interest in protecting Sterling's trademark. Second, the parties' contracts do not go so far as to prohibit Bayer AG employees from mentioning the Bayer name at medical conferences. Under the 1986 Agreement, Bayer AG is barred from using the mark in promotions to the pharmaceutical industry or consumers in general. 1986 Agreement p 2. Nevertheless, Bayer AG scientists working in Leverkusen, Germany, should be allowed to present their discoveries at a U.S. medical conference and to identify their affiliation in doing so. Any promotional value of such identification would be purely incidental, and would not justify a ban that impaired other scientists' ability to assess the work. 12 If Bayer AG intends to go beyond participation in U.S. medical symposia and wishes to use its name in sponsoring such symposia, it should be required to make clear that it has no connection with the U.S. manufacturer of Bayer Aspirin. A disclaimer should normally suffice. 63 C. Provision barring Bayer AG from using Bayer mark in the United States. Paragraph 1(e) of the injunction prohibits Bayer AG from identifying itself by using the Bayer mark in the United States, subject to only a few limited exceptions. Bayer AG urges us to vacate this provision as unnecessary to achieve the goals of the Lanham Act or to vindicate Sterling's contract rights. Bayer AG apprehends that this provision would proscribe a host of ordinary business activities: 64 Literal compliance with this remarkable provision would, for example, bar an executive of Bayer AG from identifying his business affiliation in a telephone call to a Miles employee, to a government official or to another company's executive during a business trip. Defendants could not register securities or make acquisitions in the U.S., since doing so would require identifying Bayer AG as the ultimate parent of the U.S. subsidiaries in a variety of legally required communications, including disclosures under U.S. securities laws. Defendants could not deal with U.S. banks, investment advisors or insurers, or access the U.S. capital markets--all of which require complete information about the corporate structure and finances of a customer's or borrower's affiliates. Indeed, if enforced to its absurd literal limits, paragraph 1(e) would make the filing of this brief--and the retention of U.S. counsel and their work on Bayer's behalf--punishable as a contempt of court. 65 Brief for Appellants at 31-32 (footnote omitted). If Bayer AG had been a domestic corporation without any rights to the Bayer mark, an injunction barring the above conduct might have been justifiable. See, e.g., Communications Satellite Corp. v. Comcet, Inc., 429 F.2d 1245, 1253 (4th Cir.), cert. denied, 400 U.S. 942, 91 S.Ct. 240, 27 L.Ed.2d 245 (1970). But because Bayer AG is a German corporation with a valid trademark in the Bayer mark under German law, its legitimate interests in normal corporate activities such as raising capital and communicating with subsidiaries deserve some accommodation in the United States. Bayer AG points out that U.S. investors own almost one-half billion dollars in Bayer AG shares, and that U.S. newspapers have long listed Bayer AG's price on the Frankfurt stock exchange. We see no reason to prohibit such listings or to make it more difficult for American investors to learn about Bayer AG. Nor should Bayer AG be prevented from using its name in purely internal communications with its U.S. subsidiaries. We caution that Bayer AG should not be given unlimited license to promote its name to the American consuming public under the guise of soliciting investment. Furthermore, the District Court may require an appropriate disclaimer. As long as Bayer AG confines its use within appropriate bounds, any incidental adverse impact on Sterling's trademark would be too insignificant to justify preventing Bayer AG from raising capital in the United States and communicating with its shareholders under its own name. 66 The Lanham Act does not require a total ban on the use of a mark by an infringing junior user. To the contrary, the Lanham Act demands that injunctive relief be  'no broader than necessary to cure the effects of the harm caused.'  George Basch Co., 968 F.2d at 1542 (quoting Soltex Polymer Corp., 832 F.2d at 1329). A near total ban on Bayer AG's use of the mark is not necessary to protect Sterling's trademark. Nor do we find any provision in the parties' agreements that requires Bayer AG to refrain from using the mark in communicating with investors or subsidiaries. The District Court should redraw this provision of the injunction to accommodate Bayer AG's global business interest's in raising capital and communicating with its subsidiaries. 67 D. Provision barring naming any entity Bayer USA Inc. Paragraph 1(f) of the injunction bars Bayer AG from naming any entity in the United States Bayer USA Inc. The Court enjoined Bayer AG from 68 using the name Bayer USA Inc. or any other name containing the word Bayer as the name of any company, corporation or other entity operating, incorporated or existing within the United States.... 69 Judgment of Permanent Injunction p 1(f). This provision effectively rescinds Bayer's express contract right to use Bayer USA Inc. as the name of Bayer AG's U.S. holding company. Sterling's 1986 agreement with Bayer AG had provided: 70 Sterling will not object ... to the ... use of Bayer (USA) Inc. as a new corporate name of Rhinechem Corporation so long as it is a non-operating holding company, i.e., [a company] not trading in goods.... 71 1986 Agreement p 1. 72 Sterling urges that Bayer AG's right to the Bayer USA name was conditioned upon Bayer AG's using the name for a holding company that did little more than keep the books, and that it lost that right when Bayer USA engaged in a public relations campaign. Brief for Appellee at 34. This argument is unavailing. First, the District Court did not find that Bayer USA ever violated the terms of the 1986 Agreement by trading in goods. Second, even if Bayer USA had trad[ed] in goods, the Court could have required only that it either cease trading in goods or discontinue using the Bayer name. An order banning Bayer AG from operating Bayer USA under that name under any circumstances would improperly rescind one of the rights for which Bayer AG had paid $25 million under the 1986 Agreement. Sterling alternatively argues that Bayer AG's activities entitled the Court to issue a broad injunction that would fence in Bayer AG. We see no reason to believe that Bayer AG will not abide by the terms of the 1986 Agreement in using the Bayer USA name for its holding company in the United States. Accordingly, no fencing in is necessary.