Preliminary injunctions for trademark infringement continue to encounter steep hurdles

In Pom Wonderful LLC v Hubbard (No 2:13-cv-06917 (CD Cal 2013), Pom Wonderful sued Hubbard and brought a motion for preliminary injunction for Hubbard’s use of 'pŏm' on the label of fruit-flavoured energy drinks. After the district court denied a preliminary injunction, Pom Wonderful appealed to the Ninth Circuit. 

On December 30 2014, in Pom Wonderful LLC v Hubbard (No 14-55253), the Ninth Circuit reversed the district court’s denial of a preliminary injunction based on the determination that the district court had applied a “mistaken likelihood of success determination”, but otherwise remanded the determination for preliminary injunction to the district court for further consideration of additional factors evidencing actual irreparable injury. 

Relying on the Supreme Court’s decision in Winter v Natural Resources Defense Council Inc, the Ninth Circuit as a threshold matter recognised that the moving party for a preliminary injunction must establish that: “(1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in its favour; and (4) an injunction is in the public interest.” Applying these principles to the undisputed factual allegations, the Ninth Circuit held that the district court had abused its discretion and committed clear error in finding that Pom Wonderful was unlikely to demonstrate a likelihood of consumer confusion.

In finding the necessary abuse of discretion by the district court to warrant a reversal, the Ninth Circuit relied on the parties’ undisputed facts of record. These facts included:

• that Pom Wonderful owns multiple trademarks registrations that comprise the POM brand family of trademarks;
• that Pom Wonderful sells it own POM brand goods, sells pomegranate ingredients to other companies and licenses occasionally the use of its POM trademarks to other companies;
• before Pom Wonderful’s use of the POM trademark, no one used POM in the beverage industry;
• since it began its use in 2002, Pom Wonderful has sold more than 190 million bottles of its fruit-based beverages under the POM brand; and
• in 2011 and 2012 alone, Pom Wonderful spent over $24 million promoting its POM beverages.

Noting that it is well-accepted that registration of a mark constitutes prima facie evidence of its validity, the registrant’s ownership and the registrant’s exclusive right to use the mark in connection with the specified goods, the Ninth Circuit recognised as well that the registrant’s remedies are not limited to these same goods or services. In other words, Pom Wonderful did not have to demonstrate that the allegedly confusing use involved the same goods or services listed in the registration. Moreover, the Ninth Circuit noted that, as a word mark registration, the POM registration covers “all types of depictions”, not any specific depiction including the one currently used on the label.

As to the likelihood of confusion analysis, the Ninth Circuit agreed with the district court that the mark was suggestive, but enjoyed sufficient marketplace recognition to render it strong based in particular on its established nationwide sales and extensive marketing. The Ninth Circuit and the district court also agreed as to the relatedness of the goods of the two entities, finding that fruit juice beverages and fruit-flavoured energy drinks are sufficiently complementary that a reasonable consumer could connect them. Further, the Ninth Circuit and the district court both agreed that consumers are not likely to use a high degree of care in their purchases of these products.  

The Ninth Circuit and the district court diverged, however, on other key factors. The district court focused on the visual dissimilarities of the marks in the market place while the Ninth Circuit also looked at the sound and meaning of the marks, holding that the marks are pronounced in precisely the same manner and reference a pomegranate flavouring or ingredient. Indeed, the marks’ sameness in terms of meaning represented a key element for the Ninth Circuit, since similarity in meaning alone can “substantiate a claim of similarity of trademarks”. Moreover, the Ninth Circuit held that the district court had erred in finding that the marketing channels differed. Both companies sell products through supermarkets in many of the same states. Further, actual confusion, intent and expansion factors at best were neutral factors, not factors that weighed against Pom Wonderful as the district court had held. Therefore, considering the totality of the factors, the Ninth Circuit held that the district court’s likelihood of confusion determination represented clear error. 

Nonetheless, the Ninth Circuit remanded to the district court to reassess the remaining factors of irreparable injury, balance of the equities and the public interest, specifically noting the need to establish irreparable harm by evidence, not speculation or conclusions, as the Ninth Circuit held in Herb Reed Enterprises LLC v Florida Entertainment Management Inc (736 F3d 1239 (2013)).

Thus, while Pom Wonderful successfully persuaded the Ninth Circuit of material errors in the district court decision, Pom Wonderful continues to have a steep hurdle to overcome to secure a preliminary injunction. As recent case law has established, there is a need for a concrete showing of actual irreparable harm.

Rochelle D Alpert, Morgan Lewis & Bockius LLP, San Francisco