Court Opinion

ID: 2731504
Source: CourtListenerOpinion
Date Created: 2014-09-10 05:00:36.974197+00
Date Added: 2024-06-11T10:01:25.080935
License: Public Domain

Case: 14-40030      Document: 00512761334         Page: 1    Date Filed: 09/09/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                      No. 14-40030
                                                                                FILED
                                                                         September 9, 2014
                                                                           Lyle W. Cayce
DAVID ESCAMILLA,                                                                Clerk

                                                 Plaintiff-Appellant,
v.

M2 TECHNOLOGY, INC.; DOES 1-20,

                                                 Defendants-Appellees.

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                             USDC No. 4:12-CV-634

Before DAVIS, DENNIS, and COSTA, Circuit Judges.
PER CURIAM: *
       Plaintiff-Appellant David Escamilla, owner of a trademark for M2 under
exclusive license to M2 Software, Inc. (“M2 Software”), appeals the district
court’s denial of his motion for preliminary injunction against Defendant-
Appellee M2 Technology, Inc. (“M2 Technology”) for trademark infringement
and related claims, including unfair competition and state law claims. For the
reasons set out below, we AFFIRM.
       Escamilla claims that he has used the M2 trademark for more than 20
years in the information technology industry and that M2 Technology

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 14-40030     Document: 00512761334      Page: 2    Date Filed: 09/09/2014

                                  No. 14-40030
wrongfully adopted the M2 mark for some of the same services provided by M2
Software. Escamilla sought to enjoin M2 Technology from:
            (a) advertising, marketing, selling or rendering any
            product or service or otherwise using the M2®
            trademark or trade name in any form . . . ;
            (b) representing to any person or entity that they have
            authority or license to use the M2® trademark symbol;
            (c) representing to any other person or entity that
            Defendants and/or their products and services are in
            any manner associated with, connected to, or affiliated
            with Plaintiff; and
            (d) using any URL’s incorporating the M2® term. 1

      The district court referred Escamilla’s motion for preliminary injunction
to the magistrate judge, who issued a report and recommendation which found
in favor of M2 Technology on every relevant issue and therefore recommending
that the motion be denied. The district court, following de novo review of the
objections filed by Escamilla and the response by M2 Technology, concluded
that the magistrate judge was correct. The district court fully adopted the
report and recommendation and denied Escamilla’s motion for preliminary
injunction. Escamilla appealed. We review under the following standards:
            A preliminary injunction is an extraordinary equitable
            remedy that may be granted only if the plaintiff
            establishes four elements: (1) a substantial likelihood
            of success on the merits; (2) a substantial threat that
            the movant will suffer irreparable injury if the
            injunction is denied; (3) that the threatened injury
            outweighs any damage that the injunction might
            cause the defendant; and (4) that the injunction will
            not disserve the public interest. These four elements
            are mixed questions of law and fact. Accordingly, we
            review the factual findings of the district court only for

1 Escamilla’s Proposed Order submitted in connection with his Motion for Preliminary
Injunction.

                                         2
       Case: 14-40030       Document: 00512761334         Page: 3    Date Filed: 09/09/2014

                                        No. 14-40030
                clear error, but we review its legal conclusions de novo.
                Likewise, although the ultimate decision whether to
                grant or deny a preliminary injunction is reviewed
                only for abuse of discretion, a decision based on
                erroneous legal principles is reviewed de novo. 2

         The magistrate judge concluded that Escamilla had failed to carry his
burden in showing a likelihood of success on the merits of the infringement
claim, which requires Escamilla to show: (1) that he possesses a valid mark,
and (2) that M2 Technology’s use of the trademark “creates a likelihood of
confusion as to source, affiliation, or sponsorship.” 3 To determine whether
such a likelihood of confusion exists, courts look to the following “digits of
confusion,” though no single factor is dispositive:
                (1) the type of trademark allegedly infringed,
                (2) the similarity between the two marks,
                (3) the similarity of the products or services,
                (4) the identity of the retail outlets and purchasers,
                (5) the identity of the advertising media used,
                (6) the defendant’s intent, . . .
                (7) any evidence of actual confusion[, and]
                (8) the degree of care exercised by potential
                purchasers. 4

         The magistrate judge found that Escamilla had failed to show any
likelihood of confusion for a number of reasons. M2 Software is a small
company that is focused almost exclusively on the media field and has little
ongoing business, while M2 Technology is a larger company that is focused on

2Hoover v. Morales, 164 F.3d 221, 224 (5th Cir. 1998) (quoting Sunbeam Products, Inc. v.
West Bend Co., 123 F.3d 246, 250 (5th Cir. 1997)).
3   Nat'l Bus. Forms & Printing, Inc. v. Ford Motor Co., 671 F.3d 526, 532 (5th Cir. 2012).
4Id. at 532 (citing Elvis Presley Enterprises, Inc. v. Capece, 141 F.3d 188, 194 (5th Cir. 1998)
and quoting Bd. of Supervisors for Louisiana State Univ. Agric. & Mech. Coll. v. Smack
Apparel Co., 550 F.3d 465, 478 (5th Cir. 2008)) (internal quotation marks omitted).

                                               3
    Case: 14-40030     Document: 00512761334     Page: 4   Date Filed: 09/09/2014

                                  No. 14-40030
national defense projects, primarily supplies to government contractors, and
requires personnel with security access. M2 Technology sells no products
under the M2 mark but only through third-party manufacturers, and M2
Technology’s services are typically provided through those third party
manufacturers or through M2 Technology’s employees with security clearance,
all in contrast to M2 Software’s business model. M2 Technology, as a
government supplier, is required to register in certain government databases
in which M2 Software is not registered.
      For these and other reasons, the magistrate judge found that the
businesses occupy very different markets. Just as important, the magistrate
judge found that Escamilla had showed no evidence that he suffered damages
as a result of M2 Technology’ existence, that he suffered any other harm (e.g.,
loss of control, loss of goodwill), or that M2 Technology had engaged in any bad
faith behavior. From these findings of fact, the magistrate judge concluded that
Escamilla had failed to show a probable likelihood of confusion as to the use of
the M2 mark; that Escamilla had failed to show any harm (irreparable or
otherwise) caused by M2 Technology; that the issuance of an injunction would
damage M2 Technology; and that an injunction would not serve the public
interest.
      In sum, the magistrate judge—and thus the district court, by adopting
the report and recommendation—found that Escamilla failed to make any of
his required showings under the law to secure a preliminary injunction. We
find no clear error in any of the magistrate judge’s findings of facts, nor, under
de novo review, any legal error. Accordingly, we cannot say that the district
court abused its discretion in denying the motion for preliminary injunction.
      For the reasons set out above, we AFFIRM.

                                        4