Innospan Corp v. Intuit et al

Filing 74

ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR LEAVE TO FILE SUPPLEMENTAL REQUEST FOR JUDICIAL NOTICE by Judge Alsup finding as moot 62 Motion for Leave to File; denying 26 Ex Parte Application (whalc1, COURT STAFF) (Filed on 12/3/2010)

Innospan Corp v. Intuit et al

Doc. 74

1 2 3 4 5 6 7 8 9 10 INNOSPAN CORP., Plaintiff, v. INTUIT, INC., MINT SOFTWARE, INC., SHASTA VENTURES GP, LLC, and DOES 1­20, Defendants. / INTRODUCTION In this trademark infringement action, plaintiff Innospan Corp. moves for a preliminary injunction. For the reasons stated below, the motion is DENIED. STATEMENT On September 20, 2010, Innospan filed its complaint in the Santa Clara County Superior Court, reciting seven causes of action: (1) conversion and misappropriation (against Intuit, Inc.; Mint Software, Inc.; and Shasta Ventures GP, LLC); (2) infringement of unregistered mark (against Intuit and Mint); (3) common law misappropriation and unfair competition (against Intuit and Mint); (4) state and common law misappropriation and unfair competition (against Shasta); (5) state statutory unfair competition (against Intuit, Mint, and Shasta); (6) declaratory relief (against Intuit and Mint); and (7) unjust enrichment (against Mint and Shasta). Intuit and Mint removed the action to federal court on September 30, 2010. ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR LEAVE TO FILE SUPPLEMENTAL REQUEST FOR JUDICIAL NOTICE No. C 10-04422 WHA IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

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On October 27, 2010, Innospan filed an ex parte application for a temporary restraining order. The next day, an order issued determining that defendants should have a full and fair opportunity to respond to this request, which would be treated as a motion for preliminary injunction. Defendants opposed this motion and also have filed motions to dismiss that are addressed in a companion order. This order follows full briefing and a hearing on the motion. Innospan's alleged facts include the following. Innospan and its related companies have been using a "mint" mark continuously since July 2005. These companies have done business in the fields of "high speed Internet solution, IT consulting service, movable printer sales & service, and social networking site" (Br. 2). Defendants Intuit and Mint are in the business of providing free online personal financial services, and they have used several mint marks in connection with this business. Innospan's allegations regarding the use of these marks are summarized in the table below: Entity or Entities Using Mark Innospan and related companies Mint

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Mark

Period of Use

"continuously since July, 2005"

"after March, 2006 until March, 2007"

"from April to August, 2007"

Mint

"from September, 2007 to November, 2008"

Mint

December 2008 to date (Mint) November 2009 to date (Intuit)

Mint and Intuit

2

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(Br. 2). Due to Mint and Intuit's use of these marks, Innospan "suffered losses stemming from actual confusion by its potential business partner" (Br. 2). In the early months of 2006, Shasta considered investing in Innospan, and Innospan sent Shasta several business plans displaying the Innospan mint mark. Shasta declined to invest in Innospan in or about May 2006, and about a year later (in or about March 2007), Shasta invested in Mint (Br. 2­3). Based on its factual allegations, Innospan infers that "it is very likely" that Mint produced its second mint mark "by converting" Innospan's mint mark with Shasta's help (Br. 2). ANALYSIS "A preliminary injunction is a drastic and extraordinary remedy that is not to be routinely granted." Nat'l Steel Car, Ltd. v. Canadian Pac. Ry., Ltd., 357 F.3d 1319, 1324 (Fed. Cir. 2004) (internal quotation omitted). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of the equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008). Regarding the second element, the Supreme Court requires plaintiffs to demonstrate that irreparable injury is likely in the absence of an injunction, not merely "possible." Iibid. at 375. "Issuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Id. at 375­76. This order finds that Innospan has not established that it is likely to suffer irreparable harm in the absence of preliminary relief, and that a preliminary injunction therefore is not appropriate. Because Innospan's failure to establish this element is sufficient grounds to deny its motion, this order does not reach the question of whether Innospan established any of the other Winter elements. With respect to Shasta, there simply is no ongoing conduct to enjoin. All of the harm Innospan claims to suffer results from Mint and Intuit's use of mint marks. Any role Shasta may have played in enabling Mint and Innospan to use these marks ended years ago -- when Shasta 3

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allegedly helped Mint "convert" Innospan's mark "in or about March, 2007" (Br. 2). Innospan does not accuse Shasta of using mint marks itself or of engaging in any other ongoing conduct that causes harm to Innospan. As such, Innospan has failed to establish that it is likely to suffer any harm in the absence of a preliminary injunction against Shasta. This failure alone is sufficient to deny Innospan's motion as to Shasta. With respect to Intuit and Mint, the bulk of the alleged harm caused by their conduct already has occurred. Innospan alleges that Mint has been using infringing marks since April 2007, but Innospan did not file this action until September 2010 (over three years later) and did not request preliminary relief until over a month after filing suit. As was the case with another recent trademark infringement plaintiff requesting a preliminary injunction, "[t]he undisputed fact that plaintiff did not timely act to prevent [defendant's mark] from inundating the market is alone sufficient to deny the instant motion." Edge Games, Inc. v. Elec. Arts, Inc., No. C 10-02614 WHA, 2010 WL 3895533, at *13 (N.D. Cal. Oct. 1, 2010) (Alsup, J.). In Edge Games, the plaintiff waited more than three years after the accused product name was announced and 21 months after the product was publicly offered for sale before seeking a preliminary injunction. Because of that delay, the bulk of the alleged harm to the asserted marks had already been done, and Edge Games "ha[d] not shown why issuing a preliminary injunction now would prevent any irreparable harm to its marks beyond the `harm' that ha[d] already occurred." Ibid. So too here. Innospan makes excuses for its delay (over three years since the alleged infringement began and over a month since filing suit), but those excuses are beside the point (see Reply Br. to Intuit's Opp. 12­13). In its allegations regarding the likelihood of irreparable harm absent a preliminary injunction, Innospan claims to have suffered loss of control over the mint mark, loss of goodwill, and loss of trade (Br. 22­24). But Innospan does not establish that further losses are imminent -- or, indeed, that it has anything left to lose. Innospan waited to request preliminary relief until after it already had suffered the bulk of its alleged harm, and Innospan has not shown why issuing a preliminary injunction now would prevent any irreparable harm beyond the damage already done. As in Edge Games, these failures are sufficient to deny Innospan's motion. 4

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Innospan makes two arguments as to why it has established that it is likely to suffer irreparable harm in the absence of preliminary relief. Neither argument is persuasive. First, Innospan asserts that "[i]t is ordinarily presumed that a plaintiff who has shown likelihood of confusion will suffer irreparable injury absent injunctive relief" (Br. 22). Innospan cites a 1987 decision from the Ninth Circuit to support this proposition. Following the Supreme Court's 2008 decision in Winter, however, irreparable harm cannot be presumed -- even for trademark actions. Edge Games, 2010 WL 3895533, at *12. Thus, even if Innospan had shown likelihood of confusion (a question this order need not reach), that alone would not carry the burden of establishing a likelihood of irreparable harm absent preliminary relief. Second, Innospan argues that "a plaintiff's loss of control over their business reputation, loss of trade and loss of goodwill" typically constitute irreparable harm in trademark cases (Br. 22). Regarding loss of control, Innospan cites two examples of "evidence that Plaintiff lost control over the use of" its mark: (1) "the fact that Defendants were able to create three derivative logos based on" Innospan's mark; and (2) that "their irresponsible use coupled with intense campaign to promote their mark created many opportunities for others to create and misuse similar marks" (ibid. at 23). Beyond this narrative of how Innospan "lost control" of the mint mark, Innospan does not allege that it maintains any modicum of control over the mark that would be jeopardized without a preliminary injunction. Regarding loss of trade and goodwill, Innospan alleges that it lost a valuable business opportunity when a repeat customer found Mint's website, thought it was Innospan's website, erroneously inferred that Innospan had ceased the high-speed internet business, and took his business offer elsewhere (id. at 22). Innospan speculates that "even now, there may be another similarly confused business customer deciding to turn another business opportunity to some other company" (id. at 22­23 n.15). These statements do not establish a likelihood of irreparable harm absent preliminary relief. Financial losses typically do not constitute irreparable harm, because they can be adequately compensated in the course of litigation. Cal. Pharmacists Ass'n v. Maxwell-Jolly, 563 F.3d 847, 851­52 (9th Cir. 2009). Moreover, Innospan's isolated example of an alleged past loss combined with speculation about the future may establish that further losses 5

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are possible, but Innospan has not satisfied the Supreme Court's requirement of showing that such losses are likely. See Winter, 129 S. Ct. at 375­76. CONCLUSION For the foregoing reasons, plaintiff's motion for a preliminary injunction is DENIED. Defendants Intuit and Mint's administrative motion for leave to file a supplemental request for judicial notice is DENIED AS MOOT.

IT IS SO ORDERED.

Dated: December 3, 2010.

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WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

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