Court Opinion

ID: 9493908
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:23:08.804322+00
Date Added: 2024-06-11T17:56:06.009454
License: Public Domain

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 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 Blaclcwelder1 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 plaintiffs 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 *345already made presentations to key customers in which it previewed the trademark and announced a March roll-out date, West does not indicate whether these presentations occurred before or after Motorola was given notice that the planned advertising blitz well might infringe a MicroStrategy trademark. Indeed, it is telling that Motorola’s “evidence detailing the particulars” of its potential injuries asserts specific dates for several outlays prior to January, e.g., to Ogilvey & Mather in September 2000 and to the Cel Corporation in November 2000, but then steers carefully away from asserting the dates on which it spent the bulk of the $24 million.
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 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.
*346First, while MicroStrategy has not consistently used the mark in all of its corporate documents, the record certainly does reflect that MicroStrategy has used the mark consistently as a trademark with respect to its “Broadcaster” software.4 On the cover of the software user’s manual, which is distributed with the software, the mark is set out in prominent, highlighted text. See generally In re Post Props., Inc., 227 U.S.P.Q. 334, 334-35, 1985 WL 71924 (T.T.A.B.1985) (listing distinctive or different print style and prominent position on a label or advertising copy as a common indicator that a word, phrase, or picture is being used as a trademark). Moreover, every MicroStrategy business card features the mark, set off with quotation marks, in initial capital letters, with the TM signal next to it. Either of these consistent uses alone could be enough to establish the adoption of “Intelligence Everywhere” as a mark, and together, they provide MicroStrategy with considerable evidence to present at trial on the first element of its infringement claim.
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*347torola — a classic case of “reverse confusion.” See A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 228 (3d Cir.2000) (“[Rjeverse confusion occurs when the junior user saturates the market with a similar trademark and overwhelms the senior user” (citations and internal quotation marks omitted)).
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.