Fifth Circuit holds that notice alone is sufficient for preliminary injunction
In Whirlpool Corp v Shenzhen Sanlida Elec Tech Co Ltd (Case Number 22/40376, August 25 2023, Barksdale, Southwick, Higginson), the US Court of Appeals for the Fifth Circuit concluded that only a notice of a preliminary injunction (PI) motion, and not a perfected formal service, is needed to issue an injunction.
Shenzhen Sanlida sells stand mixers in the United States, primarily through online sales. Whirlpool filed a complaint for trademark infringement and dilution against Sanlida, arguing that its product was too close in appearance to Whirlpool’s iconic KitchenAid stand mixer. Shortly after filing its complaint, Whirlpool requested a PI hearing. In its request, Whirlpool provided evidence that Sanlida had been given actual notice of the pending hearing. The district court granted the request and scheduled a hearing.
Counsel for both companies attended. Sanlida argued that it had never been properly served under the Hague Convention and thus, without service, the district court could not assert personal jurisdiction over it. The court disagreed and granted the PI. Sanlida filed an emergency motion to stay the order, but the court rejected the request. Sanlida appealed, arguing that the district court had abused its discretion in awarding the injunction. The Fifth Circuit found no error or abuse and affirmed the court’s decision.
The Fifth Circuit explained that service is not a prerequisite for issuing a PI. Citing Rule 65 in the Federal Rules of Civil Procedure, the court clarified that the only requirement for issuing a PI is notice to the adverse party. Since it was undisputed that Sanlida had notice of the PI hearing, the Fifth Circuit found that the district court had the power to issue the PI. In doing so, the court distinguished this case - in which there was no dispute that the district court would have personal jurisdiction over Sanlida after the process was perfected - from cases where personal jurisdiction was a live question at the PI hearing.
Merits of the preliminary injunction
The Fifth Circuit addressed the four factors that the district court had to consider before issuing the injunction: likelihood of success on the merits, threat of irreparable injury, balance of harms and public interest.
On the likelihood of success, the Fifth Circuit found that the district court made no clear error. On both components of the analysis, validity and the likelihood of confusion, the Fifth Circuit upheld the district court’s finding. While Sanlida argued that Whirlpool’s trademark was invalid because it covered functional elements, the court found insufficient factual support for that argument. Nothing in the record showed that the shape of Whirlpool’s mixer had any effect on the cost or quality of the product. Nor did Sanlida point to any evidence showing that the housing shape would put competitors at a “significant non-reputation-related disadvantage”. Without evidence on either component, Sanlida failed to rebut the presumption of validity. It also failed to show that the district court’s likelihood of confusion findings were clearly in error. While the court agreed that some evidence might support Sanlida’s argument that customers were unlikely to be confused, the presence of similar slopes and geometries between the two mixers was sufficient to support the district court’s determination.
On the final three factors, the Fifth Circuit similarly found no abuse of discretion, explaining that Sanlida failed to provide any evidence to rebut the Lanham Act’s presumption of irreparable harm. With regard to the balance of harms, the only harms Sanlida pointed to were pecuniary, which also favoured granting a PI. Finally, the court explained that there was public interest in the effective enforcement of trademark law in this case.
Since all four factors weighed in favour of an injunction, and because the district court did in fact have jurisdiction to issue an injunction, the Fifth Circuit affirmed.
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