Court Opinion

ID: 4311364
Source: CourtListenerOpinion
Date Created: 2018-09-11 20:00:38.411037+00
Date Added: 2024-06-11T13:27:21.873106
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        SEP 11 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

AECOM ENERGY AND                                No.    17-56513
CONSTRUCTION, INC., an Ohio
corporation,                                    D.C. No.
                                                2:17-cv-05398-RSWL-SS
                Plaintiff-Appellee,

 v.                                             MEMORANDUM*

MORRISON KNUDSEN CORPORATION,
a Nevada corporation; MORRISON-
KNUDSEN COMPANY, INC., a Nevada
corporation; MORRISON-KNUDSEN
SERVICES, INC., a Nevada corporation;
MORRISON-KNUDSEN
INTERNATIONAL, INC., a Nevada
corporation; GARY TOPOLEWSKI,

                Defendants-Appellants,

and

JOHN RIPLEY; TODD HALE; HENRY
BLUM; BUD ZUKALOFF,

                Defendants.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                    Appeal from the United States District Court
                       for the Central District of California
                    Ronald S.W. Lew, District Judge, Presiding

                             Submitted August 27, 2018**
                                Pasadena, California

Before: GOULD and BYBEE, Circuit Judges, and HERNANDEZ,*** District
Judge.

      Morrison Knudsen Corporation, Morrison-Knudsen Company, Inc.,

Morrison-Knudsen Services, Inc., Morrison-Knudsen International, Inc., and Gary

Topolewski (“Defendants”) appeal the district court’s grant of a preliminary

injunction in favor of Plaintiff AECOM Energy and Construction, Inc. We have

jurisdiction under 28 U.S.C. § 1292(a)(1), and we affirm.

      To obtain a preliminary injunction, AECOM “must establish that [it] is

likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the

absence of preliminary relief, that the balance of equities tips in [its] favor, and that

an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555

U.S. 7, 20 (2008). In its July 21, 2017 complaint, AECOM alleged seven claims:

(1) false association in violation of 15 U.S.C. § 1125(a)(1)(A); (2) false advertising

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
              The Honorable Marco A. Hernandez, United States District Judge for
the District of Oregon, sitting by designation.

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in violation of 15 U.S.C. § 1125(a)(1)(B); (3) cyberpiracy in violation of 15 U.S.C.

§ 1125(d); (4) California common law unfair competition; (5) California statutory

unfair competition; (6) California statutory false advertising; and (7) petition for a

cancellation of a registered mark. The district court concluded that AECOM was

likely to succeed on the merits of its false association, false advertising, and

cyberpiracy claims.1 It also concluded that AECOM had made a sufficient

showing as to each of the other Winter factors to justify granting a preliminary

injunction. We review for an abuse of discretion. Wells Fargo & Co. v. ABD Ins.

& Fin. Servs., Inc., 758 F.3d 1069, 1071 (9th Cir. 2014), as amended (Mar. 11,

2014).

      1.     To succeed on its false association claim under 15 U.S.C.

§ 1125(a)(1)(A), AECOM must prove that Defendants “(1) use[d] in commerce (2)

any word, false designation of origin, false or misleading description, or

representation of fact, which (3) is likely to cause confusion or misrepresents the

characteristics of [its] goods or services.” Freecycle Network, Inc. v. Oey, 505

F.3d 898, 902 (9th Cir. 2007). Here, Defendants displayed the MK marks and

Morrison Knudsen’s history on their public website, which constitutes use in

1
  The district court also concluded, and the parties do not dispute, that AECOM’s
state-law claims are substantially congruent with its federal-law claims.
Accordingly, the district court did not independently address those claims, except
by reference to its federal-law analysis. We take the same approach. See Cleary v.
News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994).

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commerce. United States v. Sutcliffe, 505 F.3d 944, 952–53 (9th Cir. 2007).

Further, AECOM has shown a likelihood of confusion. Defendants have

appropriated the same MK marks and Morrison Knudsen corporate history that

AECOM uses, and Defendants have used these marks and history in the same

market—the construction market—in which AECOM operates. See Lindy Pen

Co., Inc. v. Bic Pen Corp., 796 F.2d 254, 256–57 (9th Cir. 1986). We reject

Defendant’s abandonment defense—to the extent it is available as a defense to

claims brought under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)—

because AECOM continues to use the MK marks in promotional materials. See

Wells Fargo, 758 F.3d at 1072. The district court did not abuse its discretion in

concluding that AECOM has shown a likelihood of success on the merits of its

false association claim.

      2.     To succeed on its false advertising claim under 15 U.S.C.

§ 1125(a)(1)(B),2 AECOM must prove:

      (1) a false statement of fact by the defendant in a commercial
      advertisement about its own or another’s product; (2) the statement
      actually deceived or has the tendency to deceive a substantial segment
      of its audience; (3) the deception is material, in that it is likely to
      influence the purchasing decision; (4) the defendant caused its false
      statement to enter interstate commerce; and (5) the plaintiff has been or
      is likely to be injured as a result of the false statement, either by direct

2
 As an initial matter, AECOM has standing to pursue its false advertising claim
because it alleges harm to its business reputation proximately caused by
Defendants’ misrepresentations. Lexmark Int’l, Inc. v. Static Control Components,
Inc., 572 U.S. 118, 140 (2014).

                                           4
      diversion of sales from itself to defendant or by lessening of the
      goodwill associated with its products.

Wells Fargo, 758 F.3d at 1071 (quoting Southland Sod Farms v. Stover Seed Co.,

108 F.3d 1134, 1139 (9th Cir. 1997)).

      Here, Defendants have held themselves out to the public as Morrison

Knudsen through use of the MK marks and Morrison Knudsen’s corporate history.

Such statements are literally false; Defendants are neither the original Morrison

Knudsen nor its successor. See Southland Sod Farms, 108 F.3d at 1139. Because

they are literally false, we need not consider the impact on the buying public. Hall

v. Bed Bath & Beyond, Inc., 705 F.3d 1357, 1367 (Fed. Cir. 2013). As to

materiality, a former AECOM employee confused Defendants’ business for the

real Morrison Knudsen and steered business to Defendants, likely satisfying this

element. See Skydive Ariz., Inc. v. Quattrochi, 673 F.3d 1105, 1111 (9th Cir.

2012). Finally, Defendants do not dispute that they caused the false statements to

enter commerce, nor could they, and AECOM has put forth declarations explaining

how Defendants’ activities undermine AECOM’s control of the Morrison Knudsen

brand and lessen the goodwill associated with it. We reject Defendants’

abandonment defense for the reason already articulated. The district court did not

abuse its discretion in concluding that AECOM has shown a likelihood of success

on the merits of its false advertising claim.

      3.     With respect to AECOM’s cyberpiracy claim, “[a] person shall be

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liable in a civil action by the owner of a mark . . . if, without regard to the goods or

services of the parties, that person (i) has a bad faith intent to profit from that mark

. . .; and (ii) registers, traffics in, or uses a domain name [that is confusingly similar

to another’s mark or dilutes another’s famous mark].” Bosley Med. Inst., Inc. v.

Kremer, 403 F.3d 672, 680 (9th Cir. 2005) (alterations in the original) (quoting 15

U.S.C. § 1125(d)(1)(A)). Here, Defendants have registered the domain name

“morrison-knudsen.com.” That name is identical to the Morrison Knudsen mark.

Moreover, Defendants’ “bad faith intent to profit” is clear from their conduct.

Defendants revived dissolved Morrison Knudsen entities without permission to do

so from that company’s successor, despite stating under penalty of perjury that

such authority existed. Defendants contacted the United States Patent and

Trademark Office (“USPTO”) and changed the mailing address associated with the

MK marks to their own address, with no authority to do so. Defendants transferred

one MK mark to themselves, again with no authority to do so. When the USPTO

cancelled registrations of the MK marks, Defendants filed an application to register

the mark “MORRISON KNUDSEN” as their own, falsely claiming to have owned

the mark since Morrison Knudsen’s founding in 1933. And Defendants, through

their website, have misappropriated Morrison Knudsen’s history as their own (it is

not). Defendants have repeatedly shown an intent to profit from an association

with the original Morrison Knudsen. We again reject Defendants’ abandonment

                                            6
defense. The district court did not abuse its discretion in concluding that AECOM

has shown a likelihood of success on the merits of its cyberpiracy claim.

        4.   Nor did the district court abuse its discretion in concluding that the

other Winter factors justify issuance of a preliminary junction in favor of AECOM.

AECOM has put forth evidence of its close control of the goodwill associated with

the MK marks and the harm caused by loss of control as a result of Defendants’

actions, demonstrating irreparable harm. See Adidas Am., Inc. v. Sketchers USA,

Inc., 890 F.3d 747, 756 (9th Cir. 2018); Disney Enters., Inc., v. VidAngel, Inc., 869

F.3d 848, 865–66 (9th Cir. 2017). We reject Defendants’ argument that AECOM’s

delay in filing suit after learning of Defendants’ use of the MK marks precludes a

finding of irreparable harm. The delay occurred while AECOM tried to stop

Defendants’ use of the MK marks without court intervention and while AECOM

undertook further investigation of Defendants’ activities. As to the balance of

equities, we agree that the balance favors AECOM. If an injunction issues,

Defendants will merely be required to cease their illegal activities; but if an

injunction does not issue, AECOM will lose control over the MK brand for which

it paid substantial consideration. Finally, we agree with the district court that an

injunction serves the public interest in preventing consumer confusion. An

injunction will discourage the deceptive practices in which Defendants engaged

here.

                                           7
      We hold that the district court did not abuse its discretion in issuing a

preliminary injunction in favor of Plaintiff AECOM.

      AFFIRMED.

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