Preliminary Injunction

E.B.N. Enters., Inc. v. C.L. Creative Images, Inc., No. 09 C 6279, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)
Judge Coleman granted in part plaintiff’s (“Fantastic Sams”) preliminary injunction motion in this case involving a non-compete agreement related to a terminated Fantastic Sams hair salon franchise. The Court granted a preliminary injunction regarding Fantastic Sams’ operations manual which defendants were contractually required to return to Fantastic Sams. The Court denied the remainder of the requested injunction. Fantastic Sams alleged that defendant’s decision to operate a new salon at the same location breached the two-year requirement that defendants not operate a salon within five miles of the prior Fantastic Sams location. Fantastic Sams made an uncontested showing that defendants breached that agreement. But Fantastic Sams did not sufficiently show irreparable harm. There is no question of irreparable harm from breach of a non-compete agreement. Fantastic Sams did not ever show that another franchise wanted defendants’ territory. Finally, there was no evidence that defendants’ customers continued using defendants because of features unique to Fantastic Sams.

Continue Reading No Presumption of Irreparable Harm From Breach of a Non-Compete

Kastaris v. Eggstacy LLC, No. 10 C 35614917, Slip Op. (N.D. Ill. Oct. 20, 2010) (Gilbert, Mag. J.).
Judge Gilbert denied plaintiff’s motion for preliminary injunction in this Lanham Act matter. Plaintiffs claimed infringement of its Yolk trademark for a breakfast restaurant by defendants’ New Yolk New Yolk (“NYNY”) breakfast restaurant. Yolk was not generic when used to describe restaurants, although it was generic for the center of an egg.
Plaintiff did not show a likelihood of success on the merits. First, the marks were dissimilar both visually and aurally. While both marks use “Yolk”, NYNY is intended to invoke New York, New York.
Second, the area and manner of use is not concurrent. Yolk is in downtown Chicago, while NYNY is in the western suburbs of Chicago. Third, based upon strong reviews for both sets of restaurants, consumer were likely to exercise reasonable care in choosing to dine at either restaurant. Fourth, plaintiff had established a Chicago-area reputation for Yolk, giving the trademark some weight. Fifth, plaintiff alleged evidence of actual confusion was not supported by sufficient evidence. Sixth, defendant knew about Yolk before opening NYNY, but there was no evidence showing passing off. NYNY’s theme was clearly New York City, and Yolk’s was not.
Balancing the factor, the Court held that plaintiffs did not have greater than negligible chances of showing likelihood of confusion. Plaintiffs were, therefore, required to show a proportionally larger irreparable harm, the presumption of irreparable harm in Lanham Act cases was not alone sufficient. Because of the significant harm to defendant in changing its name, a preliminary injunction was not appropriate.

Continue Reading Presumed Harm Not Enough for Injunction Where Plaintiff shows Little Likelihood of Success

Bernina of Am., Inc. v. Imageline, Inc., No. 10 C 44917, Slip Op. (N.D. Ill. Aug. 18, 2010) (Shadur, Sen. J.).
Judge Shadur sua sponte issued an order in response to defendant’s response to plaintiff’s motion for a temporary restraining order and a preliminary injunction. The Court cautioned that even though individual defendant Riddick was the sole officer and employee of each co-defendant, the corporate defendants required representation because a corporation cannot represent itself pro se.
The Court gave defendants time to identify whether Riddick was a lawyer and to find new counsel, if not. Until that time, the corporate defendants were treated as non-responding parties to plaintiff’s injunction motions.

Continue Reading Individual Defendant May Not Appear Pro Se on Behalf of His Related Party Co-Defendants

Viskase Cos., Inc. v. World Pac Int’l. AG, No. 09 C 5022, Slip Op. (N.D. Ill. Aug. 9, 2010) (Bucklo, J.).
Judge Bucklo denied defendants’ motion for preliminary injunction based upon World Pac’s patent infringement counterclaim regarding impermeable sausage casings. Viskase’s research and design documents referenced “World Pac knock-off[s],” “World Pac replacement[s]” and “World Pac me-too” products. The key infringement issue was whether Viskase’s accused casings were “impermeable” as that term was construed by the Court. The parties set up a “classic battle of the experts” with competing testing disputing whether the accused sausage casing allowed a measurable weight loss, and therefore was permeable. While a jury would ultimately have to weigh the evidence, Viskase presented “more than insubstantial evidence” that the accused casings lost measurable weight. And Viskase’s testing was done outside of litigation, lending it additional credibility. World Pac also failed to present sufficient evidence regarding loss of flavor and taste, the other “impermeable” characteristics. Viskase, therefore, raised a substantial noninfringement question. Furthermore, World Pac did not put forth sufficient evidence to warrant a preliminary injunction. Because Viskase raised a substantial question regarding noninfringement, the Court declined to examine Viskase’s other defenses or the other element of a preliminary injunction.

Continue Reading Preliminary Injunction Denied Because of Noninfringement Evidence

Lettuce Entertain You Enters., Inc. v. Leila Sophie AR, LLC, No. 09 CV 2582, Slip. Op. (N.D. Ill. Feb. 26, 2010), (Lefkow, J.).
Judge Lefkow granted plaintiff Lettuce Entertain You (“LEYE”) a preliminary injunction against defendants’ use of the name “Lettuce Mix” in their salad bar restaurant in Lincoln Park. LEYE argued that the defendants’ “Lettuce Mix” name would infringe its family of “Lettuce” marks for use in restaurant services.
Likelihood of Success
LEYE’s Lettuce marks were not generic as used for restaurant services. While some of LEYE’s meals included lettuce, LEYE was not in the business of lettuce sales. And defendant’s intent to use its Lettuce Mix name was sufficient for use in commerce.
The Court held there was a likelihood of confusion. Both parties marks focus upon “lettuce” and use it as a pun for “let us.” This is true even though LEYE’s logo, which includes a waiter opening a covered a dish was different from defendant’s logo. Additionally the parties’ services in the restaurant industry were similar.
Both parties used the marks in the same area and manner. They directly compete for restaurant customers, and at least one of LEYE’S 70 restaurants is within one mile of Lettuce Mix. To the extent both parties cater to patrons seeking inexpensive, casual meals, the patrons are assumed to use a lesser degree of care, even though some of LEYE’s restaurants are more expensive.
LEYE’s family of Lettuce markers was strong, and defendants’ argument to the contrary was their genericness argument that the Court previously denied.
LEYE, however, did not provide evidence of actual confusion, although actual confusion is not required. And there was no evidence that defendants intended to pass themselves off as affiliated with LEYE. Finally, defendants’ was not a fair use because lettuce was not descriptive of their service.
Irreparable Harm
Trademark infringements are presumed to result in irreparable harm. LEYE would, therefore, have been irreparably harmed by any trademark infringement from defendants.
Balancing Harm
Defendants would not suffer significant harm from the injunction given that they had already stopped using the allegedly infringing name. And any loss of defendants’ goodwill would be attributable to their own actions.
Public Interest
The public interest would not be harmed by the preliminary injunction. Enforcement of trademarks serves the public good, and LEYE had shown a “substantial” likelihood of confusion.

Continue Reading Court Enters Preliminary Injunction as to Plaintiff’s “Lettuce” Marks

Scala’s Original Beef & Sausage Co., LLC v. Alvarez d/b/a Michaelangelo Foods, No. 09 C 7353 (N.D. Ill. Dec. 22, 2009 (Dow, J).
Judge Dow denied plaintiff Scala’s motion for a temporary restraining order (“TRO”) in this Lanham Act case regarding Scala’s and Scala’s Preferred marks for giardiniera.
Likelihood of Success
Scala’s made a “fairly strong showing” that defendants’ (collectively “Michaelangelo Foods”) labels using the marks were likely to cause consumer confusion. Scala’s also met its burden to show some likelihood of success that its trademark license to Michaelangelo Foods was terminable at will, even though the license lacked a termination provision. Finally, Scala’s showed some likelihood of success as to its argument that licensee estoppel barred Michaelangelo Foods’ challenges to Scala’s marks. The Court noted, however, that at the early stages of the litigation it appeared that Michaelangelo Foods might be able to overcome licensee estoppel upon equitable grounds.
Irreparable Harm
Irreparable harm is presumed in trademark cases, and Michaelangelo Foods did not challenge the presumption. Instead, Michaelangelo Foods argued that Scala’s harm was not sufficiently immediate because Scala’s was not selling competing products. But the fact that Scala’s did not make a product, did not eliminate the harm. Scala’s was harmed by not being able to control Michaelangelo Foods’ quality. Additionally, Scala’s was using the marks with other products.
But the Court noted that the facts of this case mitigated the strength of Scala’s irreparable harm. In particular, Scala’s licensed the marks at least in part because Scala’s was unable to consistently pay suppliers or deliver products to its customers. And Michaelangelo Foods took substantial steps to fix those relationships, thereby enhancing the marks’ value.
Balance of Harm
The Court held that Michaelangelo Foods would be harmed by a TRO. A TRO would allow the sale of existing inventory, but individual defendant invested a significant portion of his savings into the business and the business had relatively low profits. A TRO would, therefore, likely do substantial damage to Michaelangelo Foods’ finances. This financial harm combined with Michaelangelo Foods’ efforts to rebuild the marks and the business tipped the balance of harm in Michaelangelo Foods’ favor.
Conclusion
While it was a close call, the Court denied a TRO. In view of the importance of a decision to both parties, the Court set an expedited discovery, briefing and hearing schedule for Scala’s preliminary injunction motion.

Continue Reading Close Balance of Harms Prevents TRO, but Expedited Discovery Granted

Aguila Records, Inc. v. Nueva Generacion Music Group, Inc., No. 07 C 3399, Slip Op. (N.D. Ill. Nov. 4, 2009) (Der-Yeghiayan, J.).
Judge Zagel granted in part and denied in part plaintiffs’, collectively “Aguila Records”) motion for a preliminary injunction in this trademark and copyright infringement dispute. Aguila Records, a music management and recording agency, was in a dispute with defendants’ musical group Alacranes Musical (“Alacranes”). Based upon that dispute, Aguila Records sought a preliminary injunction preventing defendants’ use of the Alacranes word mark and scorpion logo.
Likelihood of Success
Because the parties agreed that the Alacranes marks were protectable and that there was a likelihood of confusion if two groups used the marks, the only likelihood of success issue was whether Aguila Records owned the marks. The Court held that the proof of ownership was at best “in conflict” and that the agreements were contradictory.
Irreparable Harm
The Court held that a preliminary injunction against performing using the Alacranes Musical mark would irreparably harm defendants who would be forced to negotiate with Aguila Records for rights to use the name or change their name, but it was undisputed that the band’s success was intertwined with its name. Alternatively, if the Court did not grant an injunction defendants would continue performing using the name and would likely continue to grow in popularity and earn additional income, which would be lost to Aguila Records. But that harm would not be irreparable because it could be repaid financially.
Conclusion
While Aguila Records did not demonstrate a strong likelihood of success, it did demonstrate a “greater than negligible chance of winning.” The Court, therefore, enjoined defendants from using the marks on compact disks, other recording media and merchandise such as t-shirts and hats, all uses for which Aguila Records had trademark registrations. But the Court did not enjoin the use of the marks for live performances because Aguila Records did not have registered marks for live performances and the balance of harms tipped in defendants’ favor for live performances.

Continue Reading Greater than Negligible Likelihood of Success Sufficient for Preliminary Injunction

Bajer Design & Marketing, Inc. v. Whitney Design,, Inc., No. 09 C 1815, Slip Op. (N.D. Ill. Jun. 26, 2009) (Zagel, J.).
Judge Zagel denied defendant Whitney Design’s (“Whitney”) Section 1404(a) motion to transfer plaintiff Bajer Design & Marketing’s (“Bajer”) patent infringement case to the Eastern District of Missouri, where Whitney filed a declaratory judgment case after being served with Bajer’s complaint. Although Bajer was not a Chicago-based company, its choice of forum still deserved significant deference because the alleged injury occurred in Chicago. Bajer filed the complaint after identifying the accused infringement at the International Housewares Show in Chicago. Whitney argued that the accused infringement occurred in the St. Louis area where Whitney researched and designed the accused clothes hampers. But the Court held that the point of sale, Chicago, was the situs of the injury.
Whitney also argued that convenience of the parties weighed in favor of transfer because all of its documents and people were in the St. Louis area. But the Court held convenience weighed against transfer because the parties could transfer documents electronically and, in any event, the documents would have to be sent to the parties’ counsel across the midwest. And the convenience of third parties also weighed against transfer. The only third party, the inventor, lived in Iowa almost equidistant from Chicago and St. Louis.
Finally, the interests of justice did not weigh in favor of transfer. Whitney argued that time to trial in the Eastern District of Missouri was significantly faster than in the Northern District of Illinois. But the Court held that those statistics were irrelevant because they were for all cases, not split up by case types.
The Court denied Bajer’s preliminary injunction motion seeking to enjoin the Eastern District of Missouri case. Because that court stayed its case pending the Northern District of Illinois’s decision on the transfer motion, there was no need to enjoin a stayed case.

Continue Reading Point of Sale was Situs of Injury in Motion to Transfer Analysis

Miyano Machinery USA, Inc. v. MiyanoHitec Mach., Inc., No. 08 C 526, Slip Op. (N.D. Ill. Sep. 5, 2008) (Kendall, J.)
Judge Kendall granted a preliminary injunction against defendants’ (collectively “MiyanoHitec”) continued use of plaintiff Miyano Machinery’s (“MMU”) MIYANO trademarks. MMU proved a sufficient likelihood of success on its trademark infringement claims. Despite the fact that Miyano was the surname of the individual defendants, it was protectible. While personal names are not generally protectible, MMU’s Miyano marks had acquired secondary meaning, making them protectible. And individual defendants originally consented to MMU registering the marks.
MMU’s “Winged M” mark was not abandoned when MMU changed the font of the Miyano name in the mark. And MMU showed a likelihood of confusion. MMU’s and MiyanoHitec’s marks were very similar and were used on similar products – lathes – that were to be sold in similar channels. MMU also offered evidence of a few acts of actual confusion. And the evidence showed that MiyanoHitec likely intended to benefit from the likely consumer confusion.
The Court also found that MMU would be irreparably harmed without an injunction because trademark infringement is presumed to create irreparable harm. In contrast, the injunction would cause MiyanoHitec minimal or no harm. MiyanoHitec had not sold any product yet, had previously used a different name, and was aware of MMU’s trademark claim before choosing its marks.
Finally, the public interest was served by preventing trademark infringement and the resulting consumer confusion. The Court, therefore, granted MMU a preliminary injunction against MiyanoHitec.

Continue Reading Trademark Preliminary Injunction Granted

Square D Co. v. Elec. Soln’s, Inc., No. 07 C 6294, Slip Op. (N.D. Ill., Jul. 22, 2008) (Moran, Sen. J.).
Judge Moran granted plaintiffs’ motion to reopen discovery and compel production of certain documents, but tabled plaintiff’s motion for sanctions. Plaintiffs alleged that defendants were selling counterfeit electrical products using plaintiffs’ trademarks. The parties entered an agreed preliminary injunction pursuant to which defendant agreed not to sell any products with plaintiffs’ trademarks, and to plaintiffs’ inspection of defendants’ inventory on or before February 29, 2008, unless the parties agreed to a later date.
When plaintiffs performed their inspection in April 2008, defendants had almost no inventory, had continued to sell trademarked products, and had few sales records. Defendants countered that they believed they were free to continue selling after February 29 because no injunctions had occurred as of that date. The Court ordered production of sales and other documents, and withheld judgment on sanctions for any violation of the preliminary injunction.
Practice Tip: When agreeing to an injunction, or any joint document, make sure the language is clear as to the parties’ obligations and that the parties agree on them.

Continue Reading Court Compels Discovery and Withholds Judgment on Sanctions