SunEarth Inc. et al v. Sun Earth Solar Power Co., Ltd. et al

Filing 63

ORDER Granting 25 Plaintiffs' MOTION for Preliminary Injunction. Signed by Judge Claudia Wilken on 2/3/2012. (cwlc2, COURT STAFF) (Filed on 2/3/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SUNEARTH, INC.; THE SOLARAY
CORPORATION,

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v.
SUN EARTH SOLAR POWER CO., LTD.;
NBSOLAR USA, INC.; and DOES 1-10,

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United States District Court
For the Northern District of California

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ORDER GRANTING
PLAINTIFFS‟ MOTION
FOR A PRELIMINARY
INJUNCTION
(Docket No. 25)

Plaintiffs,

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No. C 11-4991 CW

Defendants.
________________________________/

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Plaintiffs SunEarth, Inc. and The Soloray Corporation seek a

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preliminary injunction enjoining Defendants Sun-Earth Solar Power

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Co., Ltd. and NBSolar USA, Inc. from using the “Sun Earth” name

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and mark within the United States during the pendency of this

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action.

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the papers submitted by both parties and their oral arguments, the

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Court GRANTS Plaintiffs‟ motion.

Defendants oppose Plaintiffs‟ motion.

BACKGROUND

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Having considered

Plaintiff SunEarth, Inc. was created and incorporated in the

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state of California in 1978.

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Solaray Corporation acquired SunEarth, Inc. on July 1, 1992, and

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has independently operated SunEarth, Inc. as a subsidiary under

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its original name since that date.

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SunEarth, Inc. name, Plaintiffs manufacture and sell solar thermal

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collectors and related components.

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registered and began using the domain name www.sunearthinc.com in

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1990.

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Id. at ¶ 11.

Reed Decl. ¶ 3.

Plaintiff The

Id. at ¶¶ 4-6.

Through the

Id. at ¶¶ 55, 57.

Plaintiffs

Solar thermal collectors are a type of solar energy

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technology, which collect the heat of the sun and transfer that

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heat to a liquid.

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collectors is to heat water for home or industrial use.

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¶ 56.

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heating, and are sometimes used to boil water used for larger-

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scale power production.

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Id. at ¶ 55. The most common use of solar
Id. at

They can also be used to heat swimming pools or for space

Id.

Another type of solar energy technology is photovoltaic, in
which photovoltaic cells covert energy from the sun directly into

United States District Court
For the Northern District of California

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electricity.

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more expensive than solar collectors, but have a wider variety of

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uses.

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that they obtain from photovoltaics to a utility company.

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Decl. ¶ 7.

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Reed Decl. ¶ 58; Xie Decl. ¶ 3.

Reed Decl. ¶ 58.

Photovoltaics are

Consumers can sell excess electricity
Xie

Solar technology consumers generally choose to use either a

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solar thermal collector, a photovoltaic system or some combination

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of the two.

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contain a comparison of the efficiency and cost of their solar

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collectors to that of photovoltaic systems.

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Reed Decl. ¶ 61.

Some of Plaintiffs‟ advertisements

Id. at ¶¶ 59-60.

While Plaintiffs do not currently manufacture photovoltaic

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cells or modules, Plaintiffs have developed a hybrid product that

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combines both technologies into a single unit.

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at 14.

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June 2000 in an article in which SunEarth, Inc. was described as

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“one of the largest producers of solar collectors in the United

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States.”

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began selling rail mounting systems for generic photovoltaic

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modules under the product name SunEarth CompRail.

Id. at ¶ 61; Mot.

This product was recognized by Popular Science magazine in

Id. at ¶¶ 61, 84, Ex. 17.

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In June 2003, Plaintiffs also

Reed Decl.

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¶¶ 8, 89, Ex. 22.

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attention after their solar collectors were installed on the White

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House.

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In that same year, they received media

Reed Decl. ¶¶ 9, 72, Ex. 3.

Plaintiffs continue to enjoy success and recognition in their

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field.

Plaintiffs have submitted a declaration by the company

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president, Richard Reed, stating that, under the trade name

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SunEarth, they have sold more than $80 million worth of solar

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collectors and related products since 2000 in forty-nine states,

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including California and Texas, about $14 million of which was in

United States District Court
For the Northern District of California

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California alone.

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$6.8 million of the sales in California took place between 2000

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and 2007 (about $5 million between 2000 and 2006), and sales

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figures have been increasing since 2000.

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(containing sales figures by year).

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a 2008 magazine article recognizing that they sold thirty-nine

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percent of all solar thermal collectors sold in the United States

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during 2007, a figure corroborated by Reed.

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Ex. 40.

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Energy Leaders Today.

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website receives over 3,400 visitors per month and they spend

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approximately $66,000 per year in advertising and marketing costs.

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Reed Decl. ¶ 64.

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Reed Decl. ¶ 5; Reed Reply Decl. ¶ 8.

About

Reed Reply Decl. ¶ 9

Plaintiffs have also provided

Reed Reply at ¶ 10,

The company was profiled in the Winter 2010 issue of
Reed Decl. ¶ 78, Ex. 11.

Plaintiffs‟

Defendant Sun-Earth Solar Power Co., Ltd. (SESP) was first

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established in 1966 as Ningbo Solar Electric Company, a

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state-owned company in Ningbo, China.

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1978, the company began selling solar products to the public in

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China under the brand name Sun Earth.

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company was known as Ningbo Solar Electric Power Co., Ltd. from
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Xie Depo. 61:4-19.

Id. at 61:22-63:2.

In

The

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1999 through 2010, when its name was changed to SESP.

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¶ 26; Reed Decl. ¶ 77, Ex. 10.

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USA, Inc. was formed as a California corporation affiliated with

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SESP.

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Answer

In January 2010, Defendant NBSolar

Answer ¶ 4; Xie Decl. ¶ 16.
On October 14, 1996, Ningbo Solar obtained a trademark in

China for the following mark:

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United States District Court
For the Northern District of California

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Xie Depo. 63:6-64:18.

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into English” as “the sun and the earth.”

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The Chinese characters translate “verbatim
Id.

Ningbo Solar (now, SESP), still based in China, currently

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sells photovoltaic systems only.

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Plaintiffs‟ CompRail product can be used to mount Defendants‟

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photovoltaic modules.

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their photovoltaic panels outside of China in 2004.

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64:19-23.

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comes from international utility markets, with about 80% of their

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business in Europe, about 15% in China and about 1% in the United

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States.

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Xie Decl. ¶ 4; Answer ¶ 3.

Reed Decl. ¶ 8.

Defendants began marketing
Xie Depo.

Currently, the vast majority of Defendants‟ business

Xie Decl. ¶ 12.

Starting in 2004, Ningbo Solar applied for, and obtained,

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trademark protection in several countries, including Germany,

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Australia, and China, for a mark that consisted of a circle above

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a horizontal line above the words “Sun-Earth” (hereinafter,

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Defendants‟ mark), as follows:

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4

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4
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Rutt Decl. ¶¶ 5-6, Exs. D-F; Xie Decl. ¶¶ 14-15.
Ningbo Solar entered the United States photovoltaics market

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in 2004.

Xie Decl. ¶ 14.

In their supplemental reply, Defendants

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argue for the first time that Ningbo Solar began making sales in

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the United States as early as 2007.

Defs.‟ Suppl. Brief 7.

United States District Court
For the Northern District of California

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Defendants provide four invoices from 2007 showing shipments to

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buyers within the United States from the company‟s address in

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Ningbo, China; the earliest such invoice has a date of April 27,

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2007.

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Defendants‟ Sun-Earth mark.

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Foster Decl. ¶¶ P, Exs. S-V.

The invoices contain

Id.1

On July 5, 2006, Ningbo Solar filed an application with the

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United States Patent and Trademark Office (USPTO) to trademark its

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Sun-Earth mark.

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USPTO issued a letter regarding the application, warning, “You

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filed the trademark application identified below based upon a bona

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fide intention to use the mark in commerce.

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in commerce and file a State of Use . . . before the USPTO will

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register the mark.”

Reed Decl., Ex. 12 at 1.

Id. at 7.

On October 2, 2007, the

You must use the mark

USPTO deemed the application

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Defendants also submit new evidence that they state shows
that Ningbo Solar‟s sales in the United States were $1.5 million
in 2007, $7.4 million in 2008, $2.8 million in 2009, $12.6 million
in 2010, and $8.3 million in 2011. Defs.‟ Suppl. Brief 7.
However, the documents to which they cite are not authenticated
and consist of lists of years and amounts of money, with no
explanation. Further, there is no evidence provided that these
purported sales were done in conjunction with the Sun-Earth mark.
1

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abandoned on April 3, 2008, after Ningbo Solar failed to file a

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statement of use.

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Id. at 5.

In September 2007, Plaintiffs and Defendants attended a trade

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show in Long Beach, California.

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official program as “Ningbo Solar Electric Power.”

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Decl. ¶ 4, Ex. 42, at 47.

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Inc.”

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Plaintiffs‟ company name was the same as the name on Ningbo‟s mark

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and visited Plaintiffs‟ booth, where he exchanged business cards

Id. at 53.

Defendants were listed in the
Reed Third

Plaintiffs were listed as “SunEarth,

A Ningbo representative noticed that

United States District Court
For the Northern District of California

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with Plaintiffs.

Xie Depo. 75:19-76:7.

Defendants were a

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“Megawatt” sponsor of the show and their “nbsolar” mark, depicted

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below, appeared in the official printed program that was

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distributed at the show:

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Reed Third Decl. ¶ 4, Ex. 42, at 18.2

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appeared on the website for the show in the list of sponsors for a

Defendants‟ Sun-Earth mark

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Defendants assert in their supplemental brief that their
Sun-Earth mark appeared in the official program for the 2007 show
and that Plaintiffs‟ witness, Richard Reed, had admitted this
during the deposition. Defs.‟ Suppl. Brief 1-2. However, the
deposition testimony to which they cite does not support that Reed
made such an admission.
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(cont.)
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period of time, until the nbsolar mark was substituted for the

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Sun-Earth mark several months before the conference took place.

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Proffitt Decl. ¶¶ 3-11, Exs. 47-51.

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On December 12, 2008, Ningbo Solar filed a second application

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to trademark the Sun-Earth mark with the USPTO, alleging as its

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filing basis that it had a bona fide intention of using the mark

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in commerce pursuant to 15 U.S.C. § 1051(b).

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13 at 3, 53.

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Id. at 3.

Reed Decl. ¶ 80, Ex.

This application was assigned Serial No. 77632347.

In August 2010, Ningbo Solar filed a declaration

United States District Court
For the Northern District of California

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attesting that the Sun-Earth mark was first used in commerce in

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the United States “at least as early as 07/02/2010.”

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Reed Decl. ¶ 80, Ex. 13 at 17-20.

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granted Ningbo Solar‟s application and issued it Trademark

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Registration No. 3,886,941 for the Sun-Earth mark.

Answer ¶ 25;

On December 7, 2010, the USPTO

Id.3

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Defendants offer Exhibit N, which they claim is the official
program of the show. Plaintiffs object to this evidence.
Defendants have not authenticated this exhibit in any way.
Further, Plaintiffs also offer evidence that Exhibit N is in fact
not the official program and is instead a print-out of an early
version of the sponsor list from the show‟s website and that
Defendants‟ symbol was changed to the nbsolar mark by May 2007,
four months before the show. Plaintiffs also submit a copy of the
official printed program from the 2007, authenticated by Reed who
received it at the show. This program contains the nbsolar mark,
not the Sun-Earth mark. Reed Third Decl. ¶ 4, Ex. 42, at 18

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Accordingly, the Court SUSTAINS Plaintiffs‟ objection to
Defendants‟ Exhibit N.
Plaintiffs request that the Court take judicial notice of
certain documents from the USPTO‟s files related to this
application. Because Defendants do not oppose Plaintiffs‟ request
and the existence of this application and documents are “capable
of accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned,” the Court GRANTS
Plaintiffs‟ request.
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In January 2010, Defendant NBSolar USA Inc. was formed as a

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California corporation.

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describe NBSolar as affiliated with SESP but deny that NBSolar is

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a wholly-owned subsidiary of SESP.

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The President of the North American Sales Unit for SESP also

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serves as the President of NBSolar and worked at SESP prior to the

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incorporation of NBSolar.

Defendants

Answer ¶ 4; Xie Decl. ¶ 17-18.

Xie Decl. ¶¶ 1-2.

Defendants own several domain names containing SunEarth.

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Answer ¶ 4; Xie Decl. ¶ 16.

Defendants registered the domain name sun-earth.com in 2004.

Xie

United States District Court
For the Northern District of California

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Decl. ¶ 15; Answer ¶ 29.

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domain names SunEarthPower.com and SunEarthPower.net.

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¶ 29.

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SunEarth.us.

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indicates that “„Sun-Earth‟ is known as „Nbsolar‟ in the United

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States.

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Earth Solar Power Co., Ltd. (formerly Ningbo Solar Electric Co.,

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Ltd.) with headquarter [sic] located in Ningbo.”

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¶ 6; Reed Decl. ¶ 77, Ex. 10.

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In 2010, Defendants registered the
Answer

At some point, Defendants also registered the domain name
Compl. ¶ 29; Answer ¶ 29.

Defendants‟ website

Both [b]rands are belonged [sic] to the same company Sun

Urbalejo Decl.

On December 24, 2009, Plaintiffs filed an application with

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the USPTO seeking to trademark SUNEARTH.

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77900886, File Entry No. 3.4

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trademark application was “suspended pending the disposition of

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. . . Application Serial No(s). 77632347.”

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77900886, File Entry No. 5.

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Because the application and documents filed in USPTO
Application Serial Nos. 77900886 are “capable of accurate and
ready determination by resort to sources whose accuracy cannot
reasonably be questioned,” the Court takes judicial notice of
them.

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USPTO Serial No.

On March 23, 2010, Plaintiffs‟

USPTO Serial No.

At the time, Plaintiffs‟ president

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understood the suspension to be because “the office was analyzing

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another pending application with a similar name.”

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104:3-12.

Reed Depo.

Defendants used the nbsolar mark within the United States

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until late 2010.

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changed its name to Sun Earth Solar Power Co., Ltd., (SESP) and

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subsequently assigned the U.S. trademark for the Sun-Earth mark to

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SESP.

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prominently using the Sun-Earth mark within the United States.

United States District Court
For the Northern District of California

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Xie Decl. ¶ 16.

Answer ¶ 26.

Sometime in 2010, Ningbo Solar

Starting in late 2010, Defendants began

Xie Decl. ¶ 17.
On January 18, 2011, an organizer for a solar power trade

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show in Colorado sent Plaintiffs an email asking what logo they

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wanted used for SunEarth in the conference program, suggesting

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Plaintiffs‟ logo or Defendants‟ Sun-Earth mark.

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20; Bliss Decl. ¶ 4.

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asked Plaintiffs‟ employee, “which SunEarth are you?”

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¶ 66.

Id. at ¶ 87, Ex.

On July 6, 2011, a trade show organizer
Id. at

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Defendants registered for the Intersolar North America

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Conference held in San Francisco, California in July 2011 as “Sun

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Earth Solar Power/Nbsolar USA.”

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Defendants‟ booth, the Sun-Earth mark was prominently displayed in

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a number of places in large print.

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conference, at least seven actual or potential customers

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“indicated confusion . . . in words or substance” to Plaintiffs‟

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company president, Richard Reed, regarding whether Plaintiffs were

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affiliated with Defendants‟ company.

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current or potential customers also expressed similar sentiments

Answer ¶ 30; Reed Decl. ¶ 16.

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9

Id. at ¶ 88, Ex. 21.

Id. at ¶ 66.

At

At this

Several

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to another of Plaintiffs‟ employees, with one stating, “I thought

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you guys had changed your logo.”

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Bliss Decl. ¶ 6.

Defendants registered for the Solar Power International

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conference in Dallas, Texas in October 2011 under the Sun-Earth

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mark.

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At the Dallas conference, this symbol was displayed prominently at

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Defendants‟ booth.

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Answer ¶ 31; Reed Decl. ¶ 17; Urbalejo Decl. ¶ 4, Ex. 33.

Reed Decl. ¶ 94, Ex. 27.

On April 1, 2011, Plaintiffs filed a Petition with the
USPTO‟s Trademark Trial and Appeal Board (TTAB), seeking

United States District Court
For the Northern District of California

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cancellation of the registration of Defendants‟ trademark of the

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Sun-Earth mark.

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Solar Power Co., Ltd., Proceeding No. 92053829 (T.T.A.B.), Docket

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No. 1.5

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Reed Decl. ¶ 14; Sunearth, Inc. v. Sun Earth

On June 13, 2011, Plaintiffs sent Defendants a demand letter

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asking them immediately to cease using the Sun-Earth mark in their

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business operations within the United States.

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Ex. 28.

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standstill agreement covering both the pending case before the

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TTAB and potential civil litigation for the time period between

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June 13, 2011 through October 10, 2011, in order to allow for

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settlement negotiations to take place.

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29, 31.

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connection with any subsequent motion for a preliminary or

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permanent injunction by Plaintiffs, Defendants would not assert or

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On November 10, 2011, the TTAB, with consent of the
parties, suspended the proceedings before it pending the final
disposition of the case before this Court. See Sunearth, Inc. v.
Sun Earth Solar Power Co., Ltd., Proceeding No. 92053829
(T.T.A.B.), Docket No. 13.

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Mosier Decl. ¶ 3,

The parties subsequently entered into a litigation

Mosier Decl. ¶¶ 4, 6, Exs.

Among other items, the agreement provided that, in

5

10

1

rely upon that time period to argue that delay or prejudice had

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occurred.

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this Court on January 26, 2012, the parties state that they “agree

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that the time period of the standstill agreement, from June 13,

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2011 to October 10, 2011 should not count towards any period of

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delay.”

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Id.

In their case management statement, submitted to

Docket No. 55, at 7.

The parties did not reach an agreement during their

8

litigation standstill and Plaintiffs initiated this trade name and

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trademark infringement action on October 11, 2011, the day after

United States District Court
For the Northern District of California

10

the expiration of the standstill agreement.

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Decl. ¶ 6, Ex. 31.

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misappropriated and infringed upon Plaintiffs‟ “Sun Earth”

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trademark, service mark and trade name.

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Defendants for trade name infringement, unfair competition,

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cybersquatting and cancellation of trademark registration under

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sections 37 and 43 of the Lanham Act, 15 U.S.C. §§ 1119, 1125,

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trade name infringement in violation of California Business and

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Professions Code §§ 14415 and 14402, and common law unfair

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competition and trademark infringement.

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instant motion for a preliminary injunction on November 30, 2011.

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See Docket No. 25.

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23

Docket No. 1; Mosier

Plaintiffs allege that Defendants have

They bring claims against

Plaintiffs filed the

LEGAL STANDARD
“A plaintiff seeking a preliminary injunction must establish

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that he is likely to succeed on the merits, that he is likely to

25

suffer irreparable harm in the absence of preliminary relief, that

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the balance of equities tips in his favor, and that an injunction

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is in the public interest.”

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Inc., 129 S. Ct. 365, 374 (2008).

Winter v. Natural Res. Def. Council,

11

Alternatively, “a preliminary injunction could issue where

1
2

the likelihood of success is such that serious questions going to

3

the merits were raised and the balance of hardships tips sharply

4

in plaintiff‟s favor,” so long as the plaintiff demonstrates

5

irreparable harm and shows that the injunction is in the public

6

interest.

7

1127, 1131 (9th Cir. 2011) (citation and internal quotation and

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editing marks omitted).

Alliance for the Wild Rockies v. Cottrell, 632 F.3d

A court employs a sliding scale when considering a

9

United States District Court
For the Northern District of California

10

plaintiff‟s showing as to the likelihood of success on the merits

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and the likelihood of irreparable harm.

12

approach, the elements of the preliminary injunction test are

13

balanced, so that a stronger showing of one element may offset a

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weaker showing of another.”

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“Under this

Id.
DISCUSSION

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16

Id.

I.

Chance of Success on the Merits
To prevail on a claim of trademark or trade name infringement

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under the Lanham Act or common law, a plaintiff “must prove:

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(1) that it has a protectible ownership interest in the mark; and

20

(2) that the defendant‟s use of the mark is likely to cause

21

consumer confusion.”

22

Concepts, 638 F.3d 1137, 1144 (9th Cir. 2011) (quoting Dep‟t of

23

Parks & Rec. v. Bazaar Del Mundo, Inc., 448 F.3d 1118, 1124 (9th

24

Cir. 2006)).

Network Automation, Inc. v. Advanced Sys.

25
26
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28
12

1

While “[t]rademarks and trade names are technically

2

distinct,”6 they are accorded “the same broad level of protection”

3

and infringement of both is analyzed under practically

4

indistinguishable standards.

5

Accuride Corp., 871 F.2d 1531, 1534-1536 (9th Cir. 1989).

6

Similarly, “service marks and trademarks are governed by identical

7

standards and thus like with trademarks, common law rights are

8

acquired in a service mark by adopting and using the mark in

9

connection with services rendered.”

Accuride International, Inc. v.

Chance v. Pac-Tel Teletrac,

United States District Court
For the Northern District of California

10

Inc., 242 F.3d 1151, 1156 (9th Cir. 2001) (citations omitted).

11

See also American Steel Foundries v. Robertson, 269 U.S. 372, 380

12

(1926) (“Whether the name of a corporation is to be regarded as a

13

trade-mark, a trade name, or both, is not entirely clear under the

14

decisions.

15

precise difference is not often material, since the law affords

16

protection against its appropriation in either view upon the same

17

fundamental principles.”) (citations omitted).

18
19

To some extent, the two terms overlap. . . . But the

A. Protectible ownership interest
Both registered and unregistered trade names and trademarks

20

are protected under the Lanham Act.

21

Sanderson Sales and Mktg., 547 F.3d 1213, 1225-26 (9th Cir. 2008);

22

see also GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205

23

n.3 (9th Cir. 2000) (noting that “the same standard” applies to

24

infringement claims, irrespective of whether the marks or names

25

are registered).

26
27
28

Halicki Films, LLC v.

Under the Lanham Act, trademarks refer to the words or
symbols used to identify and distinguish particular goods; service
marks refer to those used for services; and trade names refer to
those used for a business or enterprise. See 15. U.S.C. § 1127.
6

13

1

“It is axiomatic in trademark law that the standard test of

2

ownership is priority of use.”

Sengoku Works v. RMC Int‟l, 96

3

F.3d 1217, 1219 (9th Cir. 1996).

4

“[f]ederal registration of a trademark „constitutes prima facie

5

evidence of the validity of the registered mark and of [the

6

registrant‟s] exclusive right to use the mark‟ in commerce.”

7

Quiksilver, Inc. v. Kymsta Corp., 466 F.3d 749, 755 (9th Cir.

8

2006) (quoting Brookfield Commc‟ns, Inc. v. W. Coast Entm‟t Corp.,

9

174 F.3d 1036, 1047 (9th Cir. 1999)).

When proving ownership,

Defendants registered their

United States District Court
For the Northern District of California

10

Sun-Earth mark with the USPTO through an application filed on

11

December 12, 2008, and are therefore entitled to a presumption of

12

ownership for this date.

13

registrant is granted a presumption of ownership, dating to the

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filing date of the application for federal registration”);

15

Rolley, Inc. v. Younghusband, 204 F.2d 209, 211 (9th Cir. 1953)

16

(“Upon registration the presumption as to date of first use by the

17

registrant has been held to extend back to the filing date”).7

See Sengoku Works, 96 F.3d at 1219 (“the

18
19
Defendants state that they “first applied for” registration
of the trademark “in 2006.” Opp. at 4. However, while they filed
their first application on July 5, 2006, they abandoned that
application, Reed Decl., Ex. 12, and are not entitled to a
presumption of ownership dating to the date of filing of that
application.
7

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25
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27
28

Further, though Defendants repeatedly point to 2003 as the
earliest time that they used the Sun-Earth mark outside of the
United States, see, e.g., Opp. at 3, this is irrelevant to their
ownership interest in the mark within the United States. See J.
McCarthy, Trademarks and Unfair Competition, § 26:5 n.1 (stating
that “first use outside the United States does not count,” and
explaining, “The concept of territoriality is basic to trademark
law. Rights accrue in each nation only by use or fame of the mark
in that nation.”).
14

1

However, “the non-registrant can rebut this presumption by

2

showing that . . . he used the mark in commerce first.”

Sengoku

3

Works, 96 F.3d at 1220.

4

SunEarth as a trademark, trade name and service mark in the United

5

States since 1978.

Plaintiffs argue that they have used

Mot. at 10.

6

Defendants concede that Plaintiffs have shown they used

7

SunEarth as a trade name, see Opp. at 12, but do not address

8

whether Plaintiffs used it as a service mark and dispute whether

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Plaintiffs used it as a trademark.

Given that Plaintiffs have

United States District Court
For the Northern District of California

10

asserted causes of action based on infringement of all three,

11

Defendants‟ explicit concession supports at least one basis of

12

liability.

13

Defendants‟ trademark.

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authority to reject trademark registrations that “[c]onsist[] of

15

or comprise[] mark[s] which so resemble[] . . .

16

name previously used in the United States by another and not

17

abandoned, as to be likely, when used on or in connection with the

18

goods of the applicant, to cause confusion, or to cause mistake,

19

or to deceive”) (emphasis added).

20

Further, this concession could support cancellation of
See 15 U.S.C. § 1052(d) (providing

a mark or trade

Plaintiffs argue that they in fact used SunEarth as both a

21

trade name, referring to the company, and a trademark, referring

22

to particular products, prior to 2007.

23

1534 (“Trade names often function as trademarks or service marks

24

as well.”).

25

SunEarth as a housemark in selling the “SunEarth Empire” since

26

1987, the “SunEarth Copperheart” since 1992, the “SunEarth

27

SunSiphon” since 1994, and the “SunEarth CompRail” since 2003.

28

Reed Decl. ¶ 8.

See Accuride, 871 F.2d at

Among other things, Plaintiffs state that they used

15

Although Defendants argue that Plaintiffs‟ use of SunEarth

1
2

alongside other product marks means that SunEarth is only a trade

3

name, “it is well established that a product can bear more than

4

one trademark, that each trademark may perform a different

5

function for consumers and recipients of the product.”

6

Mutual Insurance Company v. R. H. Cosmetics Corp., 204 U.S.P.Q.

7

155, 161 (T.T.A.B. 1979).

8

uses “a house mark which normally serves to identify the source of

9

the product, per se, and a product mark which serves to identify a

Amica

This frequently occurs when a company

United States District Court
For the Northern District of California

10

particular product within a line of merchandise normally

11

associated with and distinguished by the house mark.”

Id.

The determination of whether a trade name is also used as a

12
13

service mark or trademark “is frequently not easy to make” and “is

14

highly fact specific.”

J. McCarthy, Trademarks and Unfair

15

Competition § 9:14-15.

It “is determined from the manner in which

16

the name is used and the probable impact thereof upon purchasers

17

and prospective customers.”

18

1865, 1866 (T.T.A.B. 1991).

In re Univar Corp., 20 U.S.P.Q.2d

19

Plaintiffs have demonstrated that they are likely to succeed

20

in establishing that they used SunEarth as a protected house mark

21

prior to 2007, based on their specification brochure for the

22

SunEarth CopperHeart series dating to June 2002.

23

Ex. 7.

24

to simply identify the company in its corporate form as the

25

creator of the product; in that instance, “SunEarth, Inc.”

26

immediately follows the words “Manufactured by” and is followed by

27

the company‟s address and other contact information.

28

2.

Reed Decl. ¶ 74,

One of the three uses of SunEarth in the brochure appears

See id. at

However, the other two instances are not accompanied by such
16

1

information, and appear to be used to do “more than merely convey

2

information about a corporate relationship.”

3

20 U.S.P.Q.2d at 1869.

4

designator, such as “Inc.,” can indicate solely trade name use,

5

see J. McCarthy, Trademarks and Unfair Competition § 9:15, this is

6

not necessarily determinative, especially where, as here, the

7

designator appears in a much smaller font than the mark.

8

e.g., In re Brand Advertising, Inc., 175 U.S.P.Q. 720 (T.T.A.B.

9

1972) (“Brand Advertising” depicted above and in much larger

In re Univar Corp.,

While the inclusion of a corporate

See,

United States District Court
For the Northern District of California

10

letters than “inc” and “ROCKEFELLER BLDG./CLEVELAND, OHIO

11

44113/[phone])); see also Book Craft, Inc. v. BookCrafters

12

USA, Inc., 222 USPQ 724 (T.T.A.B. 1984) (“BookCrafters” found to

13

be a mark where it appeared in conjunction with the “Inc.”

14

corporate designator).

15

distinctively larger, more stylized and bolder characters than the

16

remainder of the document and, as such, appears to have a greater

17

impact upon potential purchasers than simply conveying the

18

corporate name.

19

In the brochure, “SunEarth” is depicted in

Defendants also challenge whether Plaintiffs will be able to

20

prove that they have legally sufficient market penetration to

21

assert rights over their trade name and mark.

22

senior user of a mark is entitled to assert trademark rights in

23

all areas in which it has legally sufficient market penetration.

24

This is determined by examining the trademark user‟s volume of

25

sales and growth trends, the number of persons buying the

26

trademarked product in relation to the number of potential

27

purchasers, and the amount of advertising.”

28

252 F. Supp. 2d 962, 983 (C.D. Cal. 2002).
17

“Generally, the

Glow Indus. v. Lopez,
“Where the trademark

1

user has acquired a national reputation associated with its mark,

2

it may assert trademark rights even in areas where it has no

3

sales.”

4

Club, 78 F.3d 1111, 1124 (6th Cir. 1996); Golden Door, Inc. v.

5

Odisho, 437 F. Supp. 956, 962 (N.D. Cal. 1977)).

6

Id. at 983 (citing Champions Golf Club v. Champions Golf

Plaintiffs are likely to be able to establish legally

7

sufficient market penetration over their trade name and mark prior

8

to 2007.

9

Defendants rely, Plaintiffs have provided sufficiently specific

Unlike in Glow Industries, the case upon which

United States District Court
For the Northern District of California

10

information to “assist the court in quantifying market

11

penetration, sales levels, growth trends, or the number of people

12

who purchased the company‟s products in relation to the number of

13

potential customers,” Glow Indus., 252 F. Supp. 2d at 984-85,

14

through the declarations of the company president, Richard Reed,

15

and corroborating evidence thereof, including news articles.

16

Based on this information, the Court concludes that Plaintiffs

17

have a reasonable likelihood of success in making a sufficient

18

showing on the merits.

19

Accordingly, the Court finds that Plaintiffs are likely to be

20

able to prove a protectible ownership interest in the trade name

21

and mark that is senior to that of Defendants.

22
23

B. Likelihood of confusion
In determining whether there is a likelihood of confusion, a

24

court is to weigh the following factors: 1) the strength of the

25

mark; 2) proximity of the goods; 3) similarity of the marks;

26

4) evidence of actual confusion; 5) marketing channels used;

27

6) type of goods and the degree of care likely to be exercised by

28

the purchaser; 7) the defendant‟s intent in selecting the mark;
18

1

and 8) likelihood of expansion of the product lines.

2

v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979).

3

similarity of the marks, proximity of the goods and marketing

4

channels used constitute “the controlling troika in the Sleekcraft

5

analysis.”

6

not to be considered in a mechanical fashion, and instead the

7

importance of each Sleekcraft factor will vary in each particular

8

case.

GoTo.com, 202 F.3d at 1205.

See AMF Inc.
The

However, the analysis is

Brookfield Communs., 174 F.3d at 1055 n.16.

Many of Defendants‟ arguments in their briefs are aimed at

10
United States District Court
For the Northern District of California

9

dispelling a notion of a possibility of product confusion, that

11

is, that a potential buyer would mistakenly purchase Defendants‟

12

product, believing it to be made by Plaintiffs.

13

confusion is not the kind of confusion that is at issue in the

14

usual trademark case,” especially where, as here, the products

15

manufactured by the parties are alleged to be in related, though

16

not identical, product areas.

J. McCarthy, Trademarks and Unfair

17

Competition § 23:5, at 42-43.

Instead, the relevant inquiry is

18

into source confusion.

19

v. Maier Brewing Co., 314 F.2d 149, 151-52 (9th Cir. 1963)

20

(finding that the relevant question was not whether there was

21

product confusion, but rather “whether the use by [the defendants]

22

of the name „Black & White‟ on their beer is likely to cause

23

confusion or mistake or to deceive purchasers as to the source of

24

origin of such goods or services”) (internal quotation marks

25

omitted).

26

Id.

However, “product

See also Fleischmann Distilling Corp.

Upon consideration of the Sleekcraft factors, the Court finds

27

that Plaintiffs have demonstrated that they are likely to be able

28

establish a likelihood of confusion.
19

See Brookfield Communs., 174

1

F.3d at 1053 (“more precisely, because we are at the preliminary

2

injunction stage, [Plaintiffs] must establish that it is likely to

3

be able to show . . . a likelihood of confusion”).

4
5

1. Proximity of the goods
This factor concerns the proximity or relatedness of the good

6

or services represented by the potentially infringing marks.

“For

7

related goods, the danger presented is that the public will

8

mistakenly assume there is an association between the producers of

9

the related goods, though no such association exists.”

United States District Court
For the Northern District of California

10

Sleekcraft, 599 F.2d at 341.

11

by whether the products are: (1) complementary; (2) sold to the

12

same class of purchasers; and (3) similar in use and function. Id.

13

at 350.

14

The proximity of goods is measured

Defendants argue that, because they sell photovoltaic

15

products, which collect electricity that can be sold to the grid,

16

and Plaintiffs do not sell photovoltaic products and instead sell

17

solar collectors, the parties‟ products are dissimilar, precluding

18

a finding of confusion.

19

identity of products, taking too narrow a view of relatedness.

20

Palantir Techs. Inc. v. Palantir.net, Inc., 2008 U.S. Dist. LEXIS

21

6448, at *14-15 (N.D. Cal.) (use of identical marks likely to

22

cause confusion where plaintiff‟s and defendant‟s goods and

23

services were related generally to the computer software industry,

24

even though their “lines of business” were “not identical”).

25

However, Defendants focus on exact

Plaintiffs have offered evidence that at least one of their

26

products, the SunEarth CompRail, may be used directly in

27

conjunction with Defendants‟ products, as a mounting system for

28

the latter.

Reed Decl. ¶¶ 8, 89, Ex. 22.
20

The SunEarth Solaray

water heating system is available with a pump that may be used

2

with an AC current source or with a photovoltaic-powered pump.

3

Id. at ¶ 54.

4

types of products to lower their energy bills with solar

5

technology or may choose to use both types of products.

6

Decl. ¶¶ 54-62.

7

commercial, industrial and home settings; though Defendants do not

8

target home consumers themselves and their primary customers are

9

utility companies, they sell products to installation companies

10
United States District Court
For the Northern District of California

1

that do and they advertise on their website that their products

11

are used in home systems.

12

Ex. 10 at 2.

13

installed by the same contractors.

14

832.46 (defining, for licensing purposes, a “solar contractor” as

15

one who “installs, modifies, maintains, and repairs thermal and

16

photovoltaic solar energy systems”).

17

submitted evidence from the USPTO online trademark database that

18

there are at least fifty-one currently registered marks used to

19

brand both solar panels used to generate heat, like Plaintiffs‟

20

solar collectors, and solar panels used to generate electricity,

21

like Defendants‟ products.

22
23
24

Further, some customers may choose between the two

Reed

Both create products that are installed in

Xie Decl. ¶ 13; Reed Decl. ¶ 57, 77,

Within California, both types of products are
See Cal. Code Regs. tit. 16, §

Plaintiffs have also

Ballard Decl. ¶ 3, Ex. 2.

Accordingly, this factor weighs in favor of Plaintiffs.
2. Similarity of the marks
The greater the similarity between the two marks at issue,

25

the greater the likelihood of confusion.

26

v. Smith, 279 F.3d 1135, 1144 (9th Cir. 2002).

27

between the marks will suffice when the goods are complementary,

28

. . . the products are sold to the same class of purchasers, . . .
21

Entrepreneur Media, Inc.
“[L]ess similarity

1

or the goods are similar in use and function.”

2

F.2d at 341.

3

This factor also favors Plaintiffs.

Sleekcraft, 599

Plaintiffs have accused

4

Defendants‟ Sun-Earth trademark, a combination of a picture design

5

and words, of infringing upon Plaintiffs‟ trade name (SunEarth,

6

Inc.) and trademark and service mark (SunEarth), which consists of

7

words.

8

and a design, then the word is normally accorded greater weight,

9

because it would be used by purchasers to request the goods.”

“[I]t is well settled that if a mark comprises both a word

United States District Court
For the Northern District of California

10

L.C. Licensing, Inc. v. Cary Berman, 86 U.S.P.Q.2d 1883, 2008 WL

11

835278, at *3 (T.T.A.B. 2008).

12

Books, 308 F.3d 1156, 1165 (Fed. Cir. 2002) (“The words dominate

13

the design feature.”).

14

different in appearance, the sound, meaning and appearance of the

15

text are identical.

16

similar capitalizations within the lettering, though Defendants

17

use a hyphen and Plaintiffs do not, and both words sound identical

18

when spoken aloud.

19
20

See also Herbko Int'l v. Kappa

While Defendants‟ mark is somewhat

Further, within the text, both marks have

3. Strength of the mark
“The strength of the trademark is evaluated in terms of its

21

conceptual strength and commercial strength.”

22

Registration Sys. v. Brosnan, 2009 U.S. Dist. LEXIS 87596, at *13

23

(N.D. Cal.) (citing Brookfield Communs., 174 F.3d at 1058).

24

GoTo.com, 202 F.3d at 1207 (“„strength‟ of the trademark is

25

evaluated in terms of its conceptual strength and commercial

26

strength”).

27
28

Mortgage Elec.

In terms of conceptual strength, “[m]arks are often
classified in one of five categories of increasing
22

See

1

distinctiveness: (1) generic, (2) descriptive, (3) suggestive,

2

(4) arbitrary, or (5) fanciful.”

3

E. & J. Gallo Winery, 150 F.3d 1042, 1047 (9th Cir. 1998).

4

latter three characterizations are inherently more distinctive

5

and, hence, are associated with stronger marks.”

6

Registration Sys., 2009 U.S. Dist. LEXIS 87596, at *13 (citing

7

Kendall-Jackson Winery, 150 F.3d at 1047).

8

generic or descriptive of a product are not inherently distinctive

9

and must have acquired distinctiveness to warrant protection.”

Kendall-Jackson Winery, Ltd. v.
“The

Mortgage Elec.

“Marks that are merely

United States District Court
For the Northern District of California

10

Metro Publ'g, Inc. v. Surfmet, Inc., 2002 U.S. Dist. LEXIS 26232,

11

at *25 (N.D. Cal.).

12

Plaintiffs‟ mark is at least suggestive and is therefore

13

inherently distinctive.

14

1058, n.19 (“A suggestive mark conveys an impression of a good but

15

requires the exercise of some imagination and perception to reach

16

a conclusion as to the product's nature.”).

17

descriptive, because it does not “define qualities or

18

characteristics of a product in a straightforward way that

19

requires no exercise of the imagination to be understood.”

20

Kendall-Jackson Winery, 150 F.3d at 1047, n.8.

21

See Brookfield Communs., 174 F.3d at

It is more than

Further, Plaintiffs‟ trade name and mark have been used for

22

over thirty years to identify their business, and under that name

23

and mark, Plaintiffs have gained national recognition as leaders

24

in their field, which has led to, among other things, their

25

products being installed on the White House.

26

trade name and mark are fairly strong.

27

1536 (“extensive advertising, length of exclusive use, [and]

28
23

Thus, Plaintiffs‟

See Accuride, 871 F.2d at

1

public recognition” among factors that may strengthen a suggestive

2

mark).

3

Defendants‟ argument that the solar market is crowded with

4

names that include the word “Sun” is unavailing and relies on a

5

distorted depiction of the meaning of a crowded market in this

6

context.

7

Defendants cite, the parties have names that share one word or

8

phrase in common and are otherwise different.

9

where that shared word is a common one in the industry, the

As Plaintiffs point out, in all of the cases that

In those cases,

United States District Court
For the Northern District of California

10

plaintiff is not permitted to claim right to all variants on it.

11

That is factually distinct from the present case, where the

12

disputed words are identical.

13

showing that the field is crowded with many “SunEarths.”

14

Defendants were correct in their characterization of a crowded

15

field, Wal-Mart, for example, would not be able to prevent another

16

company from adopting the name Wal-Mart as well, because the

17

retail industry is crowded with stores that have the word “Mart”

18

in their names.

19

Defendants make no argument or
If

4. Evidence of actual confusion

20

“Evidence that use of a mark or name has already caused

21

actual confusion as to the source of a product or service is

22

„persuasive proof that future confusion is likely.‟”

23

v. Rearden Commerce, Inc., 597 F. Supp. 2d 1006, 1023 (N.D. Cal.

24

2009) (quoting Sleekcraft, 599 F.2d at 352).

25

confusion with respect to the source of a product or service.”

26

Groupion, LLC. v. Groupon, Inc., 2011 WL 5913992, at *5 (N.D.

27

Cal.) (quoting Rearden, 597 F. Supp. 2d at 1023).

28

Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1151 (9th Cir.
24

Rearden LLC

“The focus is

See also

1

2002).

“However, actual confusion is hard to prove, so the

2

absence of such evidence is generally not noteworthy.”

3

597 F. Supp. 2d at 1023 (citing Brookfield Communs., 174 F.3d at

4

1050).

5

preliminary injunction stage of the proceedings.”

6

Automation, 638 F.3d at 1151.

Rearden,

Thus, the importance of this factor “is diminished at the
Network

7

Plaintiffs argue that actual confusion has already occurred.

8

“The critical determination for finding a likelihood of confusion

9

is whether prospective purchasers are likely to be deceived,

United States District Court
For the Northern District of California

10

regardless of the experiences of vendors, industry insiders, and

11

job-seekers.”

12

that, while courts outside of the Ninth Circuit may consider

13

confusion by others relevant, the Ninth Circuit‟s “precedents

14

clearly hold that the key inquiry is confusion of prospective

15

purchasers”).

16

trade show organizers, Plaintiffs have proffered more than ten

17

examples of actual customer confusion, though there is little

18

detail as to what the prospective or actual customers did or said

19

to evidence confusion.

20

evidence at this early stage of the proceedings, this factor

21

favors them.

22
23

Rearden, 597 F. Supp. 2d at 1023, 1023 n.9 (stating

In addition to several instances of confusion by

Because Plaintiffs have proffered some

5. Marketing channels used
“„Convergent marketing channels increase the likelihood of

24

confusion.‟”

25

1394 (9th Cir. 1993) (quoting Nutri/System, Inc. v. Con-Stan

26

Indus., Inc., 809 F.2d 601, 606 (9th Cir. 1987)).

27
28

Official Airline Guides, Inc., v. Goss, 6 F.3d 1385,

Here, Plaintiffs present evidence that the parties sell their
products in niche marketplaces including solar products shows,
25

1

specialty retailers and trade magazines, and that the parties have

2

recently attended several of the same trade conventions.

3

18.

4

favors Plaintiffs.

5

Defendants do not dispute this.

Mot. at

Accordingly, this factor

6

6. Type of goods and the degree of care likely to be
exercised by the purchaser

7

“Low consumer care . . . increases the likelihood of

8

confusion.”

9

354 F.3d 1020, 1028 (9th Cir. 2004).

Playboy Enterprises, Inc. v. Netscape Communs. Corp.,
“In assessing the likelihood

United States District Court
For the Northern District of California

10

of confusion to the public, the standard used by the courts is the

11

typical buyer exercising ordinary caution . . .

12

has expertise in the field, a higher standard is proper though it

13

will not preclude a finding that confusion is likely.

14

when the goods are expensive, the buyer can be expected to

15

exercise greater care in his purchases; again, though, confusion

16

may still be likely.”

17

omitted).

18

When the buyer

Similarly,

Sleekcraft, 599 F.2d at 353 (citations

Plaintiffs acknowledge that both parties sell to

19

“wholesalers, contractors, builders and other solar integrators.”

20

Mot. at 18.

21

relatively high.

22

goods at issue are expensive.

23

weighs in favor of Defendants.

24
25

Thus, the level of expertise of purchasers is
Further, Plaintiffs acknowledge that that the
Id.

Accordingly, this factor

7. Defendants‟ intent in selecting the mark
“This factor favors the plaintiff where the alleged infringer

26

adopted his mark with knowledge, actual or constructive, that it

27

was another's trademark.”

Brookfield Communs., 174 F.3d at 1059

28
26

1

(citing Official Airline Guides, 6 F.3d at 1394 (“When an alleged

2

infringer knowingly adopts a mark similar to another's, courts

3

will presume an intent to deceive the public.”); Fleischmann

4

Distilling, 314 F.2d 149 at 157).

5

In their opposition, Defendants argue that Plaintiffs are

6

unable to establish that Defendants intended to deceive when

7

selecting the Sun-Earth mark because Plaintiffs are “unable to

8

offer any evidence that [Defendants] knew of [Plaintiffs] or its

9

use of the SUNEARTH mark or name at the time the mark was selected

United States District Court
For the Northern District of California

10

for international use in 2004.”

11

supplemental brief, Defendants further argue that they had used

12

the trademark Sun-Earth since 1978 in China, had registered the

13

Chinese version of the mark in China in 1996 and had used the

14

Sun-Earth mark on several invoices sent to customers within the

15

United States in 2007.

16

Opp. at 21.

In their

Defs. Suppl. Brief at 7.

However, the appropriate inquiry is not what Defendants knew

17

at the time that they selected the mark for use in China or

18

internationally in countries other than the United States.

19

McCarthy, Trademarks and Unfair Competition, § 26:5, n.1.

20

Defendants entered the United States market, they consciously and

21

deliberately chose to establish a separate mark using the word

22

nbsolar within the United States, instead of the mark that they

23

were using elsewhere in the world, and abandoning any sporadic and

24

isolated use of the mark in which they had engaged in 2007.

25

Indeed, they continue to state on their webpage that “„Sun Earth‟

26

is known as „NB Solar‟ in the USA.”

27
28

See J.
When

Instead, the appropriate inquiry is into Defendants‟ intent
in switching from the use of the nbsolar mark to the use of the
27

1

Sun-Earth mark, which their representative admits happened in

2

2010.

3

knowledge of Plaintiffs‟ existence and their use of the Sun Earth

4

mark and name, as demonstrated by Defendants‟ testimony of their

5

observations and interaction at the 2007 trade show.

6

Accordingly, this factor favors Plaintiffs.

7
8
9

Xie Decl. ¶ 17.

Before they did so, Defendants had actual

8. Likelihood of expansion of the product lines
“Inasmuch as a trademark owner is afforded greater protection
against competing goods, a „strong possibility‟ that either party

United States District Court
For the Northern District of California

10

may expand his business to compete with the other will weigh in

11

favor of finding that the present use is infringing.”

12

599 F.2d at 354.

13

is likely to result in direct competition.”

14

Sleekcraft,

“When goods are closely related, any expansion
Id.

Here, Plaintiffs have submitted evidence that they have

15

engaged in some expansion into the photovoltaic market.

16

they are not currently selling photovoltaics, Plaintiffs have

17

developed a hybrid photovoltaic thermal array that combines both

18

technologies into the same unit.

19

at ¶ 84, Ex. 17 (article in Popular Science magazine describing

20

the development and discussing the advantages of Plaintiffs‟

21

hybrid unit).

Reed Decl. ¶ 61.

While

See also id.

22

Defendants have not directly addressed this factor, though

23

they do state that there is virtually no overlap in the skills,

24

methods or materials used to manufacture the two types of products

25

and that the manufacture of photovoltaics require “rare

26

technological know-how.”

27

Plaintiffs have already provided evidence that they do have the

Opp. at 5.

28
28

However, as discussed,

1

skills, methods and technical knowledge to enter the photovoltaics

2

market and that they have in fact been innovative in it.

3
4
5

Accordingly, this factor favors Plaintiffs.
C. Defendants‟ Laches Defense
Defendants bear the burden of showing that an affirmative

6

defense is likely to succeed.

7

Mucos Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir. 2009)

8

(“[O]nce the moving party has carried its burden of showing a

9

likelihood of success on the merits, the burden shifts to the

See Marlyn Nutraceuticals, Inc. v.

United States District Court
For the Northern District of California

10

nonmoving party to show a likelihood that its affirmative defense

11

will succeed.”)(quoting Perfect 10, Inc. v. Amazon.com, Inc., 508

12

F.3d 1146, 1158 (9th Cir. 2007); Gonzales v. O Centro Espirita

13

Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006)).

14

“Laches is an equitable defense to Lanham Act claims.”

15

Internet Specialties West, Inc. v. Milon-Digiorgio Enters., 559

16

F.3d 985, 989 (9th Cir. 2009) (citing GoTo.com, 202 F.3d at 1209).

17

“This defense embodies the principle that a plaintiff cannot sit

18

on the knowledge that another company is using its trademark, and

19

then later come forward and seek to enforce its rights.”

20

989-90 (citing Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d

21

1088, 1102-03 (9th Cir. 2004)).

22

Id. at

“The test for laches is two-fold: first, was the plaintiff's

23

delay in bringing suit unreasonable? Second, was the defendant

24

prejudiced by the delay?”

25

Inc. v. Nutrition Now, Inc., 304 F.3d 829, 838 (9th Cir. 2002);

26

Tillamook Country Smoker, Inc. v. Tillamook County Creamery

27

Association, 465 F.3d 1102, 1108 (9th Cir. 2006)).

28

if plaintiffs have acted diligently, a court must determine if

Id. at 990 (citing Jarrow Formulas,

29

To determine

1

they filed suit within the applicable statute of limitations

2

period, “thereby creating a presumption against laches,” or if

3

they filed suit outside of the limitations period, creating a

4

presumption that “laches is applicable.”

5

F.3d at 835-36).

6

laches starts from the time that the plaintiff knew or should have

7

known about its potential cause of action.”

8
9

Id. (citing Jarrow, 304

In a trademark case, “the limitations period for

Id. at 986.

Because “[t]he Lanham Act contains no explicit statute of
limitations,” a court borrows the statute of limitations from an

United States District Court
For the Northern District of California

10

analogous state law.

11

that the “presumption of laches for trademark infringement in

12

California applies after [a] four-year delay.”

13

See Internet Specialties West, 559 F.3d at 990 n.2 (“Neither party

14

disputes the imputation of the four-year limitations period from

15

California trademark infringement law, and we agree that this was

16

the correct period to use.”).

17

Jarrow, 304 F.3d at 836.

Defendants concede

Opp. at 9, 9 n.3.

Because the standstill agreement began on June 13, 2011, the

18

first question is whether Plaintiffs had reason to know of

19

Defendants‟ use of their name and mark prior to June 13, 2007,

20

giving rise to a presumption of laches.

21

that Defendants make is that Plaintiffs had notice because

22

Defendants registered the domain name sun-earth.com.

23

is currently uncontested that Defendants legitimately engage in

24

business outside of the United States under the Sun-Earth mark.

25

Accordingly, mere registration of a domain name that can be used

26

for international business does not provide Plaintiffs with clear

27

notice that Defendants are illegitimately infringing on their mark

28

or name within the United States.
30

Here, the only argument

However, it

Further, there is evidence in

1

the record that Defendants state on their homepage that they in

2

fact do not do business within the United States under the Sun-

3

Earth name, and that they instead go by NBSolar within the United

4

States.

5

Plaintiffs that Defendants used their name and mark within the

6

United States.

7

mere registration of a domain name may be too minimal an

8

encroachment to support a finding of laches, where the defendant

9

did not engage in infringing activity using the domain name for a

Thus, Defendants‟ website does not give warning to

Finally, the Ninth Circuit has recognized that

United States District Court
For the Northern District of California

10

period of time after registration.

11

F.3d at 990.

12

allegation that they have used the webpage in an encroaching

13

manner since 2004 and only argue that they registered it at that

14

time.

15

See Brookfield Communs., 174

Here, Defendants have offered no evidence or

Further, “[a]ll courts are very reluctant to deny injunctive

16

relief because of plaintiff‟s delay when it appears that defendant

17

knowingly and deliberately adopted the mark charged as an

18

infringement.”

19

§ 31:9.

20

Cir. 2001) (“Laches does not bar a suit against a deliberate

21

infringer.

22

maxim that „he who comes into equity must come with clean

23

hands[.]‟”).

24

likely to be able to prove that Defendants adopted their name and

25

mark within the United States knowing of Plaintiffs‟ prior claims

26

and because it is likely that there will be a presumption against

27

laches in this case, Defendants are unlikely to be able to raise a

28

defense of laches successfully.

J. McCarthy, Trademarks and Unfair Competition

See also Danjaq LLC v. Sony Corp., 263 F.3d 942, 956 (9th

This principle appears to be based on the equitable

Because Plaintiffs have established that they are

31

1
2

II.

Likelihood of Irreparable Harm
While Defendants argue that Plaintiffs have not proven that

3

they will suffer economic harm or harm to their reputation,

4

Defendants cite only cases in which the plaintiffs had not

5

established a likelihood of success on the merits, or to

6

non-trademark infringement cases.

7

v. Estee Lauder Companies, Inc., 2010 WL 3910178, at *6 (N.D.

8

Cal.) (plaintiffs failed to establish a likelihood of success on

9

the merits); Jupiter Housing, Inc. v. Jupitermedia Corp., 2004 WL

See, e.g., Rodan & Fields, LLC

United States District Court
For the Northern District of California

10

3543299, at *6 (N.D. Cal.) (same); Givemepower Corp. v. Pace

11

Compumetrics, Inc., 2007 WL 951350 (S.D. Cal.) (no claim for

12

trademark infringement in the operative complaint).

13

Defendants argue that, in light of the Supreme Court‟s

14

decision in Winter v. Natural Res. Def. Council, Inc., 129 S. Ct.

15

365 (2008), Plaintiffs must make an affirmative showing of

16

irreparable harm in trademark infringement cases.

17

Inc. v. Elec. Arts, Inc., 745 F. Supp. 2d 1101, 1117 (N.D. Cal.

18

2010).

See Edge Games,

19

Previously, a plaintiff in a trademark case was entitled to a

20

presumption of irreparable harm upon showing a probable success on

21

the merits.

22

continuing vitality of this presumption in trademark infringement

23

cases is not clear.

24

Circuit has upheld a district court‟s application of its prior

25

precedent that, “[i]n a trademark infringement claim, „irreparable

26

injury may be presumed from a showing of likelihood of success on

27

the merits.‟”

28

(quoting El Pollo Loco, Inc. v. Hashim, 316 F.3d 1032, 1038 (9th

See GoTo.com, 202 F.3d at 1204-05.

However, the

After Winter, in at least one case, the Ninth

Marlyn Nutraceuticals, Inc., 571 F.3d at 877

32

1

Cir. 2003); GoTo.com, 202 F.3d at 1205 n.4) (formatting in

2

original).

3

another Ninth Circuit panel has said that “the summary treatment

4

of the presumption” in Maryln Nutraceuticals “does not . . .

5

constitute an affirmation of the presumption‟s continued

6

vitality.”

7

U.S. App. LEXIS 17462, at *998 (9th Cir. 2011).

8

Circuit has not yet directly addressed the effect of Winter upon

9

the presumption of irreparable harm in the trademark infringement

However, in an analogous copyright infringement case,

Flexible Lifeline Sys. v. Precision Lift, Inc., 2011
While the Ninth

United States District Court
For the Northern District of California

10

context, it has found that the analogous presumption in the

11

copyright infringement context has effectively been overturned in

12

light of Winter and eBay Inc. v. MercExchange, L.L.C., 547 U.S.

13

388 (2006).

14

653 F.3d 976, 978-981 (9th Cir. 2011).

15

See id. at *999; Perfect 10, Inc. v. Google, Inc.,

Regardless of whether they are also entitled to a presumption

16

of irreparable harm, Plaintiffs have made an affirmative showing

17

that they are likely to suffer irreparable harm in the absence of

18

an injunction.

19

and others have evidenced actual confusion between the marks and

20

names of the two companies.

21

Plaintiffs have no control over Defendants‟ products and the

22

quality thereof.

23

potential loss of good will or the loss of the ability to control

24

one‟s reputation may constitute irreparable harm for purposes of

25

preliminary injunctive relief.”

26

v. Brosnan, 2009 U.S. Dist. LEXIS 87596, at *24 (N.D. Cal.)

27

(citing Stuhlbarg Intern. Sales Co., Inc. v. John D. Brush and

28

Co., Inc., 240 F.3d 832, 841 (9th Cir. 2001); Apple Computer, Inc.

Plaintiffs have introduced evidence that customers

Further, Defendants admit that

“The Ninth Circuit has recognized that the

Mortgage Elec. Registration Sys.

33

1

v. Formula Int‟l Inc., 725 F.2d 521, 526 (9th Cir. 1984)).

As

2

previously discussed, the record supports that Plaintiffs have

3

invested significant time in building up a strong reputation over

4

the course of several decades.

5

poses a serious threat to this goodwill and reputation.

The potential misidentification

6

Defendants argue that, because Plaintiffs were willing to

7

engage in settlement negotiations with them and to discuss the

8

possibility of a monetary settlement, money damages would be

9

adequate to compensate them for any harm.

However, the fact that

United States District Court
For the Northern District of California

10

Plaintiffs were willing to discuss settlement to avoid litigation

11

does not by itself demonstrate the adequacy of monetary damages.

12

Defendants also argue that Plaintiffs delayed unreasonably in

13

bringing this action and in filing a motion for a preliminary

14

injunction after initiating the action.

15

the record suggests Plaintiffs learned of Defendants‟ claim to the

16

Sun-Earth mark was the date of the letter sent by the USPTO on

17

March 23, 2010.

18

initiated cancellation procedures in the USPTO on April 1, 2011

19

and sent Defendants a letter demanding that they cease using the

20

Sun-Earth mark on June 13, 2011.

21

The earliest time that

The record also supports that Plaintiffs

As previously stated, unreasonable delay in a trademark

22

infringement case is measured from when the plaintiff knew or

23

should have known about its potential cause of action.

24

Cellularm, Inc. v. Bay Alarm Co., 20 U.S.P.Q.2d 1340, 1346 (N.D.

25

Cal. 1991) (the period of time should begin running when the party

26

had or should have had “reliable information establishing the

27

basis for a claim,” because “[a] party may not bring a claim based

28

only on speculation and rumor”).

See also

Plaintiffs could not have
34

1

brought this action until they knew that Defendants had used their

2

mark, not based upon the possibility that Defendants might do so.

3

Further, a party is charged with constructive notice of a mark

4

when it is placed on the principal register, see 15 U.S.C. § 1072,

5

not when the application for a trademark is filed.

6

Defendants argue that Plaintiffs delayed unreasonably by not
filing suit after they were notified by the USPTO about

8

Defendants‟ pending application in March 2010.

9

Plaintiffs state, Defendants filed that application on the basis

10
United States District Court
For the Northern District of California

7

that they intended to use the mark in commerce within the United

11

States pursuant to 15 U.S.C. § 1051(b), not that they had used it

12

in commerce pursuant to 15 U.S.C. § 1051(a), and Defendants did

13

not file a statement claiming they had actually used the mark in

14

commerce until August 2010.

15

Plaintiffs would have or should have received notice of

16

Defendants‟ use of their mark at the time of the notice.

17

Accordingly, the delay began when the mark was granted and

18

published in the primary register on December 7, 2010.

19

The period of delay does not appear unreasonable.

However, as

Thus, there is no evidence that

On April

20

1, 2011, Plaintiffs initiated the USPTO cancellation proceedings

21

and shortly after sent a cease-and-desist letter to Defendants, in

22

an attempt to avoid resort to judicial intervention.

23

entered into a stop-litigation agreement shortly thereafter.

24

Especially in light of the intervening settlement negotiations,

25

this amount of time is not sufficiently unreasonable to preclude a

26

preliminary injunction, especially given Defendants‟ knowing

27

infringement of Plaintiffs‟ mark.

28
35

The parties

1

III. Balance of Equities

2

Balancing of the equities in this case favors Plaintiffs.

3

Defendants knowingly used the mark in the United States only

4

after learning of Plaintiffs‟ prior use.

5

v. Avant! Corp., 125 F.3d 824, 829 (9th Cir. 1997) (“a defendant

6

who knowingly infringes another‟s copyright cannot complain of the

7

harm that will befall it when properly forced to desist from its

8

infringing activities”) (internal quotations omitted).

9

See Cadence Design Sys.

Defendants speculate that an injunction would make it

United States District Court
For the Northern District of California

10

difficult for them to develop future business in the United States

11

with utilities companies; however, they admit that they do not

12

already have these relationships.

13

status quo that a preliminary injunction in a trademark

14

infringement case seeks to protect is “the last uncontested status

15

which preceded the pending controversy,” which in this case was

16

before Defendants began using their allegedly infringing

17

trademark.

18

prevented from developing relationships with the utilities

19

companies using their nbsolar mark; instead, they are only

20

prevented from doing so under Plaintiffs‟ name and mark.

21

As Plaintiffs point out, the

GoTo.com, 202 F.3d at 1210.

Defendants are not

Defendants also argue that Plaintiffs should not be allowed

22

to enjoin their participation in upcoming international trade show

23

conferences, because “[a]ny large player in the international

24

market needs to exhibit [at these conferences], or else it risks

25

substantial harm to its business.”

26

However, Defendants mischaracterize Plaintiffs‟ motion.

27

Plaintiffs do not seek to prevent them from exhibiting at any

28

conference within this country.

Defs.‟ Suppl. Brief, at 8.

Instead, as stated above,
36

1

Plaintiffs seek to prevent them from doing so under Plaintiffs‟

2

name and mark.

3

IV.

4

Public Interest
Plaintiffs argue that a preliminary injunction would protect

5

the public interest by preventing confusion of customers through

6

the use of a confusingly similar mark.

7

Edriver Inc., 653 F.3d 820, 827 (9th Cir. 2011) (“the Lanham Act

8

is at heart a consumer protection statute”) (citing, among others,

9

Alex Kozinski, Trademarks Unplugged, 68 N.Y.U. L.Rev. 960, 964

See Trafficschool.com v.

United States District Court
For the Northern District of California

10

(1993) (“The great evil the Lanham Act seeks to prevent is that of

11

consumers being duped into buying a watch they later discover was

12

made by someone other than Rolex.”)).

13

At the hearing, Defendants acknowledged that preventing

14

customer confusion serves the public interest, and in their

15

papers, Defendants argue only that the public interest would not

16

be served because Plaintiffs have not established a likelihood of

17

confusion.

18

arguments regarding a likelihood of confusion unpersuasive, this

19

argument is equally unavailing.

20

V.

Because the Court has already found Defendants‟

Bond
Plaintiffs propose a bond of $5,000, which Defendants do not

21
22

oppose.

23

sufficient and appropriate.

24

VI.

25

Accordingly, the Court finds a bond of this amount to be

Additional Terms for the Preliminary Injunction
The parties are directed to attempt to reach an agreement

26

regarding: (1) reasonable terms for an exception to the current

27

preliminary injunction to allow Defendants to explain within the

28

United States, including at trade shows and conferences, their
37

1

affiliation with their Sun-Earth name and mark used outside of the

2

United States, without creating confusion; and (2) reasonable

3

terms to add to the current preliminary injunction to provide

4

referrals for users from the Sun-earth.com, SunEarthpower.com, and

5

SunEarthpower.net domain names to Defendants‟ non-infringing

6

websites, without creating confusion.

7

Within two weeks of the date of this order, the parties shall

8

file a stipulation setting forth the agreed-upon terms to be added

9

to the preliminary injunction.

If the parties are unable to agree

United States District Court
For the Northern District of California

10

upon reasonable terms, the Court will entertain a single motion by

11

Defendants proposing language to modify the current injunction to

12

accomplish this.

13

Any motion Defendants make for this purpose shall be filed

14

within three weeks of the date of this order, shall be limited to

15

ten pages or less, and may not contain proposed modifications

16

beyond those specified above.

17

Plaintiffs may file an opposition and alternatives to Defendants‟

18

proposed modifications within a week thereafter; any such

19

opposition shall be limited to ten pages or less.

20

file a reply to Plaintiffs‟ opposition, if any, within three days

21

thereafter; any such reply shall be limited to three pages or

22

less.

If Defendants file such a motion,

23
24
25
26
27
28
38

Defendants may

CONCLUSION

1
2

For the reasons set forth above, the Court GRANTS Plaintiffs‟

3

motion for a preliminary injunction (Docket No. 25).

4

preliminary injunction has been entered as a separate document.

5

See Docket No. 60.

6

A

IT IS SO ORDERED.

7
8
9

Dated: February 3, 2012

CLAUDIA WILKEN
United States District Judge

United States District Court
For the Northern District of California

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