Case 2:12-Cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 1 of 135
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Case 2:12-cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 1 of 135 EXHIBIT R Case 2:12-cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 2 of 135 Vol. 80 TMR DELAY IN FILING PRELIMINARY INJUNCTION MOTIONS: HOW LONG IS TOO LONG? By Robert Lloyd Raskopf* and Sandra Edelman** The preparation of a preliminary injunction motion typ- ically requires an enormous expenditure of time and re- sources. Plaintiffs counsel must gather the facts relevant to the alleged infringement, obtain and assemble the necessary exhibits and interview knowledgeable witnesses in order to present the case. This effort may be wasted if the court finds that the plaintiff has waited too long before taking action. Responding to a preliminary injunction motion can be equally daunting. While plaintiffs counsel may be able to prepare and time the motion with surgical precision, the defendant is often caught off-guard, and is usually hampered by time constraints in fashioning an opposition. Given an appropriate factual context, however, a defendant can neu- tralize the plaintiffs momentum if plaintiff has delayed in seeking preliminary relief. Particularly where the question of infringement is debatable, inexcusable delay by the plain- tiff can tip the scales from success to failure on the motion. This article will explore the subject of delay in the con- text of the preliminary injunction motion. Part I of the article will explain how the concept of delay fits into the analytical framework used by the federal courts in ruling on prelimi- nary injunction motions. Part II will discuss how delay is measured and offer some general guidelines about excessive delay. Part III will examine what constitutes excusable delay, with particular emphasis on settlement negotiations and changes in the scope of the alleged infringement. In an Ap- pendix, we present a survey of cases, arranged by federal * Partner in the firm of Townley & Updike, New York, N.Y., Associate Member of USTA; Domestic Articles Editor of The Trademark Reporter®. * * Associate at the firm of Townley & Updike, Associate Member of USTA; member of the Editorial Board of The Trademark Reporter®. HeinOnline -- 80 Trademark Rep. 36 1990 Case 2:12-cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 3 of 135 Vol. 80 TMR circuit, showing the periods of time which have been held to constitute excusable and excessive delay in moving for a preliminary injunction. I. DELAY AS A FACTOR IN DETERMINING PRELIMINARY INJUNCTION MOTIONS IN TRADEMARK AND UNFAIR COMPETITION CASES A preliminary injunction is an extraordinary and drastic remedy,' designed to preserve the status quo pending a final determination of the claims at trial.2 While such relief may be sought in any federal action,3 it is a frequently-used weapon in trademark infringement litigation because of the unique function and fragility of a trademark in representing the intangible assets of good will and reputation.4 In order to prevent irreparable damage to this good will and repu- tation pending the final outcome of litigation, trademark owners often seek expedited relief in the form of a prelimi- nary injunction. Although preliminary injunctions are temporary in na- ture, many trademark infringement actions are resolved by the court's decision at the preliminary injunction hearing. "As a practical matter, a defendant forced to change his newly adopted mark will rarely want to re-introduce it a year or two later if he succeeds at trial or on appeal, espe- 1. Calvin Klein Cosmetics Corp. v. Parfums de Coeur, Ltd., 824 F2d 665, 667, 3 USPQ2d 1498, 1500 (CA 8 1987); Citibank, N.A. v. Citytrust, 756 F2d 273, 275, 225 USPQ 708, 710 (CA 2 1985); GTE Corp. v. Williams, 731 F2d 676, 678, 222 USPQ 803, 804 (CA 10 1984); Dymo Industries Inc. v. Tapeprinter, Inc., 326 F2d 141, 143, 140 USPQ 154, 155 (CA 9 1964). 2. Penn v. San Juan Hospital, Inc., 528 F2d 1181, 1185 (CA 10 1975); Hamilton Watch Co. v. Benrus Watch Co., 206 F2d 738, 742 (CA 2 1953); see generally 11 C. Wright and A. Miller, Federal Practice & Procedure §2947 (1973). 3. Federal Rules of Civil Procedure (FRCP) 65. 4. Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 486 F Supp 414, 429, 206 USPQ 70, 83 (SDNY 1980); see also Salt Water Sportsman Inc. v. B.A.S.S. Inc., 685 F Supp 12, 4 USPQ2d 1407, 1411 (D Mass 1987), as amended 5 USPQ2d 1620 (D Mass 1987). HeinOnline -- 80 Trademark Rep. 37 1990 Case 2:12-cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 4 of 135 Vol. 80 TMR cially if an alternate mark used during this period has achieved consumer recognition."' In addition to the financial expense of changing a product's name, packaging and ad- vertising materials, a defendant's business and good will may be damaged by perceived instability in a product's trademark or trade dress.' On the other hand, a plaintiff that fails to obtain a preliminary injunction will usually reassess the strength of its case and may choose to settle for less than it originally contemplated. Because of the drastic and summary nature of the pre- liminary injunction remedy and its potential destructive im- pact on the defendant's business, the federal courts apply a stringent standard to determine whether a preliminary in- junction is appropriate. In the Second Circuit, for example, the movant must demonstrate (1) irreparable harm and (2) either (a) a probability of success on the merits or (b) suffi- ciently serious questions going to the merits to make them a fair ground for litigation and a balance of the hardships tipping decidedly in the moving party's favor.7 Similar stan- dards have been enunciated in other jurisdictions,8 with many of the federal circuits specifically requiring the addi- tional showing that preliminary injunctive relief will be in the public interest.9 The movant's haste in seeking relief is one of the factors considered by the federal courts in determining whether the 5. la J. Gilson, Trademark Protection and Practice §8.0711] at 8-134 (1989). 6. Ibid. 7. Church of Scientology International v. Elmira Mission of the Church of Scientology, 794 F2d 38, 41, 230 USPQ 325, 327 (CA 2 1986); Joseph Scott Co. v. Scott Swimming Pools, Inc., 764 F2d 62, 66, 226 USPQ 496, 500 (CA 2 1985). 8. See, eg, Miss World (UK), Ltd. v. Mrs. America Pageants, Inc., 856 F2d 1445, 1448, 8 USPQ2d 1237, 1239 (CA 9 1988); Frisch's Restaurants, Inc. v. Elby's Big Boy of Steubenville Inc., 670 F2d 642, 651, 214 USPQ 15, 22 (CA 6 1982), affg in part and revg in part 514 F Supp 704, 213 USPQ 559 (SD Ohio 1981), cert denied 459 US 916 (1982). 9. See, eg, Mutual of Omaha Insurance Co. v. Novak, 775 F2d 247, 248, 227 USPQ 801, 802 (CA 8 1985); SI Handling Systems, Inc. v. Heisley, 753 F2d 1244, 1254, 225 USPQ 441, 446 (CA 3 1985); GTE Corp. v. Williams, supra note 1 at 677, 222 USPQ at 803; Wesley-Jessen Division of Schering Corp. v. Bausch & Lomb, Inc., 698 F2d 862, 864, 217 USPQ 153, 154 (CA 7 1983). HeinOnline -- 80 Trademark Rep. 38 1990 Case 2:12-cv-01514-LRH-GWF Document 19-7 Filed 11/30/12 Page 5 of 135 Vol. 80 TMR "irreparable harm" element of the preliminary injunction standard has been satisfied. Delay "undercuts the sense of urgency that ordinarily accompanies a motion for prelimi- nary relief and suggests that there is, in fact, no irreparable injury."' ° The movant's delay, however, is only one factor in the irreparable harm analysis. Because of the immeasurable value of trademark rights, most courts have held that a showing of a likelihood of success on the merits (usually consisting of proof of likely confusion) gives rise to a pre- sumption of irreparable injury." A defendant can rebut this presumption by demonstrating that a plaintiff has unrea- sonably delayed in seeking preliminary injunctive relief.'2 In 10. Le Sportsac, Inc. v. Dockside Research, Inc., 478 F Supp 602, 609, 205 USPQ 1055, 1062 (SDNY 1979); see also GTE Corp. v. Williams, supra note 1 at 678, 222 USPQ at 804; Kusan, Inc. v. Alpha Distributors, Inc., 693 F Supp 1372, 1374, 7 USPQ2d 1211, 1213 (D Conn 1988) ("[I]f an aggrieved party rests on his rights, it is incongruous for him to ask a court to act swiftly and issue an injunction without which irreparable harm will result"); Gear, Inc. v. L.A. Gear California, Inc., 637 F Supp 1323, 1332, 229 USPQ 980, 987 (SDNY 1986) (where plaintiffs are dilatory in seeking preliminary relief, courts have "looked askance at their assertion that the claimed injury is irreparable"). 11. See General Mills, Inc. v. Kellogg Co., 824 F2d 622, 625, 3 USPQ2d 1442, 1444 (CA 8 1987); Rodeo Collection, Ltd. v. West Seventh, 812 F2d 1215, 1220, 2 USPQ2d 1204, 1208 (CA 9 1987); Camel Hair & Cashmere Institute of America, Inc. v. Associated Dry Goods Corp., 799 F2d 6, 14, 231 USPQ 39, 44 (CA 1 1986); Joseph Scott C. v. Scott Swimming Pools, Inc., supra note 7 at 66, 226 USPQ at 500; Wesley-Jessen Division of Schering Corp. v. Bausch & Lomb Inc., supra note 9 at 867, 217 USPQ at 156; Horizon Financial, F.A. v. Horizon Bancorp., 2 USPQ2d 1696, 1704 (ED Pa 1987); National Yellow Pages Service Assn. v. O'Connor Agency, Inc., 9 USPQ2d 1516, 1521 (CD Calif 1988); Tootsie Roll Industries, Inc. v. Sathers, Inc., 666 F Supp 655, 660, 2 USPQ2d 1520, 1522 (D Del 1987); Original Appalachian Artworks, Inc.