AFL Telecommunications LLC v. Incorporated et al

Filing 48

ORDER denying 39 Motion for Reconsideration. Signed by Judge David G Campbell on 11/15/2011.(NVO)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 AFL Telecommunications LLC, Plaintiff, 10 11 12 No. CV11-1086-PHX-DGC ORDER vs., Inc., Tech Sales, LLC, and Daniel Parsons and Jane Doe Parsons, 13 Defendants. 14 15 Plaintiff, AFL Telecommunications LLC (“AFL”) filed a motion seeking to enjoin 16 Defendants from advertising and selling the Fujikura brand of fusion splicers in 17 competition with AFL, pending resolution of AFL’s unfair competition, false 18 advertisement, and copyright infringement claims. Doc. 6. This action was originally 19 assigned to Judge Frederick J. Martone. Judge Martone denied the motion on the basis 20 that Plaintiff had not shown “irreparable harm.” Doc. 32 at 6. This action has since been 21 transferred to this Court, where AFL is involved in another action alleging similar claims 22 against Defendants Fiberoptic Hardware, LLC and George Kyrias. See Doc. 34 at 16. 23 AFL has now filed a motion for reconsideration of Judge Martone’s order denying 24 its motion for a preliminary injunction. Doc. 39. Defendants have filed a response. 25 Doc. 44. For the reasons set forth below, the Court will deny Plaintiff’s motion to 26 reconsider. 27 I. 28 Legal Standard. Motions for reconsideration are disfavored and should be granted only in rare 1 circumstances. 2 3348522, at *1 (D. Ariz. Oct. 15, 2009). A motion for reconsideration will be denied 3 Aabsent a showing of manifest error or a showing of new facts or legal authority that 4 could not have been brought to [the Court=s] attention earlier with reasonable diligence.@ 5 LRCiv 7.2(g)(1); see Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003). Mere 6 disagreement with an order is an insufficient basis for reconsideration. See Ross v. 7 Arpaio, No. CV 05-4177-PHX-MHM, 2008 WL 1776502, at *2 (D. Ariz. 2008). Nor 8 should reconsideration be used to ask the Court to rethink its analysis. Id.; see N.W. 9 Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir. 1988). 10 II. See Stetter v. Blackpool, No. CV 09-1071-PHX-DGC, 2009 WL Discussion. 11 AFL is a wholly-owned subsidiary of Fujikura Ltd. and is the exclusive licensed 12 distributer of the Fujikura fusion splicer (a machine used to fuse together separate lengths 13 of fiber-optic cables) and its accompanying copyrighted software in North America. This 14 action arises from AFL’s allegations that Defendants have engaged in unfair competition, 15 false advertising, and copyright infringement by importing Fujikura fusion splicers 16 manufactured for sale outside the United States – and containing foreign software – and 17 selling altered versions of them to domestic consumers on the Internet. Plaintiff sought 18 to preliminarily enjoin Defendants from advertising and selling the Fujikura brand of 19 fusion splicers pending resolution of these claims. 20 To obtain preliminary injunctive relief, Plaintiff must show that it is likely to 21 succeed on the merits, that it is likely to suffer irreparable harm in the absence of 22 preliminary relief, that the balance of equities tips in its favor, and that an injunction is in 23 the public interest. Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008). 24 The Court denied Plaintiff’s motion for a preliminary injunction because it found 25 that the Ninth Circuit’s presumption of irreparable harm no longer applies to trademark 26 cases. Doc. 32 at 6. The Court also found that Plaintiff had not alleged sufficient facts to 27 make a claim of irreparable harm absent the presumption. Id. Plaintiff alleges legal 28 -2- 1 error: “Specifically, the Court failed to follow Ninth Circuit law recognizing a 2 presumption of irreparable harm where the plaintiff shows a likelihood of success on [a 3 trademark claim].” Doc. 39 at 1-2. 4 The Court, citing to Flexible Lifeline Systems Inc. v. Precision Lift, Inc., 654 F. 3d 5 989, 995 (9th Cir. 2011), stated that “[i]rreparable harm is no longer presumed in a 6 trademark or copyright case upon a showing of a likelihood of success on the merits.” 7 Doc. 32 at 6. Plaintiff argues that Flexible Lifeline was a copyright case and that it did 8 not deal with the presumption of irreparable harm in a trademark case. Doc. 39 at 3. 9 Plaintiff also states that Flexible Lifeline did not overrule El Pollo Loco, Inc. v. Hashim, 10 316 F. 3d 1032, 1038 (9th Cir. 2003), or Marlyn Nutraceuticals Inc. v. Mucos Pharma 11 GmbH & Co., 571 F. 3d 873, 877 (9th Cir. 2009), both of which Plaintiff cited as 12 supporting the Ninth Circuit’s presumption of irreparable harm in a trademark 13 infringement action. Doc. 39 at 4; see Doc. 6 at 13. 14 Plaintiff is technically correct. In Flexible Lifeline, the Ninth Circuit based its 15 holding on the Supreme Court holding in eBay Inc. v. Mercexchange, L.L.C., 547 U.S. 16 388 (2006), which found a presumption of irreparable harm invalid in patent 17 infringement cases. 654 F. 3d at 995-96. The Court in eBay drew parallels between the 18 equitable analyses required for issuing injunctions in the Patent Act and the Copyright 19 Act, leading the Ninth Circuit to conclude that “under eBay, a presumption of irreparable 20 harm is equally improper in a case based on copyright infringement as it is in a case 21 based on patent infringement.” 22 overruled Elvis Presley Ents., Inc. v. Passport Video, 349 F. 3d 622 (9th Cir. 2003), 23 stating that “the ‘King’ [the Elvis Presley case] is dead . . . to the extent that it supported 24 the use of presumption of irreparable harm in issuing injunctive relief.” 653 F. 3d at 995 25 (cited in Judge Martone’s order, Doc. 32 at 6). Flexible Lifeline’s precise holding, 26 however, was limited to overruling the presumption of irreparable harm in the copyright 27 context: “we hold that even in a copyright infringement case, the plaintiff must 654 F. 3d at 996. 28 -3- Accordingly, the Ninth Circuit 1 demonstrate a likelihood of irreparable harm as a prerequisite for injunctive relief, 2 whether preliminary or permanent.” 654 F. 3d at 998. 3 The Ninth Circuit’s analysis in Flexible Lifeline, as well as the Supreme Court 4 cases on which Flexible Lifeline relied, however, suggests a lack of favor with any 5 presumption of irreparable harm when issuing preliminary or permanent injunctions. In 6 eBay, the Supreme Court rejected taking a categorical approach to injunctive relief and 7 reaffirmed the practice of applying “traditional equitable considerations.” 547 U.S. at 8 393-94. The adherence to equitable considerations that the Court noted in the language 9 of both the Copyright Act and the Patent Act (547 U.S. at 392-93 (quoting 35 U.S.C. § 10 283, 17 U.S.C. § 502(a))) is consistent with the Lanham Act’s provisions regarding 11 injunctive relief in the trademark context. See 15 U.S.C. §§ 1116(a) (stating that “[t]he 12 several courts . . . shall have power to grant injunctions according to the principles of 13 equity and upon such terms as the court may deem reasonable”), 1125(c)(1) (referring to 14 the issuance of injunctive relief “subject to the principles of equity”), 1125 (c)(5) (same). 15 On the basis of this analysis, Flexible Lifeline’s extension of eBay’s rejection of 16 presumptions in a patent case to a rejection of presumptions in a copyright case supports 17 a like extension to the trademark context. 18 In Flexible Lifeline, the Ninth Circuit also discussed the Supreme Court’s ruling in 19 Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008). 654 F. 3d at 20 996-97. This analysis also suggests that Flexible Lifeline’s rejection of presumptions of 21 irreparable harm applies broadly to all actions for injunctive relief. In Winter, the Court 22 found that the Ninth Circuit’s use of a “possibility” of irreparable harm standard was “too 23 lenient” and that a plaintiff must show that irreparable harm is “likely.” 654 F. 3d at 996 24 (citing to Winter, 555 U.S. at 22). The court opined that “[i]f our past standard, which 25 required a plaintiff to demonstrate at least a possibility of irreparable harm, is ‘too 26 lenient,’ then surely a standard which presumes irreparable harm without requiring any 27 showing at all is also ‘too lenient’” 654 F. 3d at 997. 28 -4- 1 Flexible Lifeline’s discussion of Marlyn, a post-Winter Ninth Circuit case upon 2 which AFL relies, is not to the contrary. In Marlyn, the Ninth Circuit upheld the district 3 court’s presumption of irreparable harm in a trademark infringement case in which “the 4 [district] court cited Ninth Circuit law holding that ‘[i]n a trademark infringement claim, 5 irreparable injury may be presumed from a showing of likelihood of success on the 6 merits.’” 571 F. 3d at 877 (citing El Pollo Loco, Inc. v. Hashim, 316 F. 3d 1032, 1038 7 (9th Cir. 2003) (quoting Inc. v. Walt Disney Co., 202 F. 3d 1199, 1205 n. 4 8 (9th Cir. 2000) (internal quotation marks omitted). Flexible Lifeline concluded, however, 9 that Marlyn did not constitute an affirmation of the continued use of this presumption 10 because it gave only a summary treatment of it and it did not address its applicability in 11 light of eBay and Winter. 654 F. 3d. at 997 (“The panel’s summary treatment of the 12 presumption without consideration of the effect of eBay and Winter does not . . . 13 constitute an affirmation of the presumption’s continued vitality.”). 14 In light of Flexible Lifeline’s discussion of eBay, which reaffirmed applying 15 principles of equity as opposed to categorical rules when issuing injunctive relief, and 16 Winter, which held that a finding of irreparable harm requires not just a “possibility” of 17 harm, but a showing that irreparable harm is “likely,” the Court does not find that Judge 18 Martone’s order rejecting a presumption of irreparable harm in this case constituted 19 manifest error.1 20 IT IS ORDERED that Plaintiff’s motion to reconsider (Doc. 39) is denied. 21 Dated this 15th day of November, 2011. 22 23 24 25 26 27 28 1 Plaintiff also argues that the Court’s order in this case is inconsistent with its order issuing a preliminary injunction in AFL Telecommunications LLC v. Fiberoptic Hardware, LLC, 11-cv-1081-PHX-DGC. Doc. 39 at 2. This argument is not persuasive because in Fiberoptic Hardware the Court based its finding of irreparable harm to the Fujikura trademark on a specific showing of customer dissatisfaction with a Fujikura fusion splicer sold by the defendant. Doc. 34 at 15. -5-

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