Lulu Enterprises, Inc. v. N-F Newsite, LLC et al

Filing 85

Memorandum in Opposition re #8 MOTION for Preliminary Injunction filed by N-F Newsite, LLC. (Attachments: #1 Appendix A - Exhibit 1 of 9#2 Appendix A - Exhibit 2#3 Appendix A- Exhibit 3 of 9#4 Appendix A - Exhibit 4 of 9#5 Appendix A - Exhibit 5 of 9#6 Appendix A - Exhibit 6 of 9) (Cooke, Betsy)

Lulu Enterprises, Inc. v. N-F Newsite, LLC et al

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION NO. 5:07-cv-00347-D LULU ENTERPRISES, INC., Plaintiff, v. HULU, LLC (formerly N-F NEWSITE, LLC), and HULU TECH, INC., Defendants. Defendant Hulu, LLC1 ("Hulu") files this Memorandum of Law in Opposition to the Motion for a Preliminary Injunction filed by Plaintiff Lulu Enterprises, Inc. ("Lulu"). I. INTRODUCTION Plaintiff's request for a preliminary injunction represents an abstract overreaction to a name, which happens to rhyme with Plaintiff's name, but is used with very different services in a distinctly different business model. The relevant marketplace factors, as well as expert research,2 demonstrate the lack of any likelihood of confusion, such that Plaintiff cannot carry its burden of showing a likelihood of success on the merits, and no injunction is warranted. DEFENDANT'S MEMORANDUM IN OPPOSITION TO PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION

Fox and NBC Universal have been working on this collaborative venture since 2006. N-F Newsite, LLC, was formed in June 2007, and the "NewSite" name was used as a placeholder until the entity could be re-named. N-F Newsite, LLC now is named Hulu, LLC. See Declaration of Jason Kilar ("Kilar Dec.") ¶¶ 11-12. The other named defendant, Hulu Tech, Inc., is not affiliated with Hulu, LLC, and does not appear to be a proper party to this action. See Declaration of Dr. Erich Joachimstaler ("Joachimstaler Dec.") ¶ 38 ("all of the above factors overwhelm the similarity of the website names in the abstract, and thus ensure recognition of the difference between the two marks in the marketplace"); Declaration of Dr. Gerald Ford ("Ford Dec.") ¶ 26 ("the results of the surveys conducted in this matter clearly support a finding of no likelihood of confusion").
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The speculative, ill-defined harm Lulu alleges it might suffer in the absence of a preliminary injunction pales in comparison to the substantial, immediate and real injury that such an injunction would impose on Hulu. Hulu has been moving through development stages for many months. Having passed through a series of milestones prior to this suit being filed (including extensive agreements with third parties already in place), the damage to Hulu ­ monetary harm, the complete disruption of its business plan, and the reputational impact ­ caused by not moving forward promptly is overwhelming. Hulu would suffer millions (or even tens of millions) of dollars in costs and serious damage to its business relationships and goodwill. A trademark is not a "monopoly" and the rights of a prior user are limited.3 "To prevail in a trademark case of this sort, a plaintiff must show that `an appreciable number of reasonable consumers' would be confused as to the source of the services offered by the parties by reason of their respective marks." Sterling Acceptance Corp. v. Tommark, Inc., 227 F. Supp. 454, 465 (D. Md. 2002) (Sterling Associates not likely to be confused with Sterling Acceptance Corporation). Hulu's business is focused exclusively on premium content ­ television shows and films ­ via the internet, and it will do precisely that ­ and only that ­ on launch. Lulu, in contrast, offers user-generated content as the centerpiece of its self-publishing business. Because the term "lulu" is a common, laudatory term adopted by hundreds of businesses, it is conceptually weak. That conceptual weakness leads to commercial weakness, which is confirmed by the survey research of Dr. Gerald Ford showing essentially no recognition of Lulu.com or Lulu.tv. In any event, as explained by Dr. Joachimstaler's analysis, the reality of how consumers actually
The Supreme Court explained almost a century ago, it is a "fundamental error" to suppose that "a trade-mark right is a right in gross or at large, like a statutory copyright or a patent for an invention, to either of which, in truth, it has little or no analogy. There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed." United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918) (citations omitted).
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interact with these brands ­ specifically a high level of involvement fostered by specific associations and the internet environment ­ supports a finding of no likelihood of confusion. Plaintiff erroneously advocates a monopoly-like right by repeatedly ­ explicitly and implicitly ­ urging a side-by-side comparison of the parties' marks in the abstract. It is clear error to compare marks on a side-by-side basis when that is not how they appear in the marketplace. Trademarks must be considered in the manner in which they appear in the

marketplace. See, e.g., Anheuser-Busch, Inc. v. L&L Wings, Inc., 962 F.2d 316, 319 (4th Cir. 1992) ("The statutory standard for infringement does not depend on how closely a fragment of a given use duplicates the trademark, but on whether the use in its entirety creates a likelihood of confusion. In making that determination, we must examine the allegedly infringing use in the context in which it is seen by the ordinary consumer . . . as a whole as sold in the marketplace."). Although Plaintiff cites to purported third-party evidence of confusion, the material in fact supports a finding of no likelihood of confusion. For instance, Plaintiff cites commentator Paul La Monica as being among the confused, but he subsequently expanded on his comments4: Last week, when GE's (GE) NBC Universal unit and News Corp. (NWS)-owned Fox announced that they were going to call their online video joint venture Hulu, I made fun of the moniker, saying that in addition to being a terrible name, it also might confuse people since it sounded a lot like Lulu, an online custom book publisher. I was just joking . . . . So does Lulu really have a case? That's ultimately for the lawyers to argue about and a judge to decide but I'm not sure that too many Web users will really confuse Hulu, despite my sarcastic comments, with Lulu. Sure, both are technically online media companies. But there's a big difference between publishing books and posting online video from NBC and Fox. And if the litmus test for trademark infringement was rhyming, then that could open up the courts to scores of somewhat frivolous lawsuits.

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See Declaration of Lauren L. Sullins ("Sullins Dec."), Ex. E-1 (collecting various articles).

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Notwithstanding Plaintiff attempting to drum up publicity,5 commentators are skeptical of confusion.6 In terms of anecdotal evidence, a blog titled "Lulu's Hulubulu" sums up the sentiment: Lessee, can you sue a company over phonetics? I suppose you can sue anybody for anything. But, can you PREVAIL in a lawsuit over the phonetic similarity of a company's name? Coke - Koch? McDonald's - Macdonald's? Frye's - Frey's? Lulu's about as close to the online video business as my great grammy's website. I can SAY I'm going to get into the online video business with a gazillion different DBA's... doesn't mean jack. I suppose they'll sue little old Xulu.com next because they intended to get into interdimensional entertainment too. Nitwits!
Sullins Dec. ¶ 21, Ex. E-16. While not elegant, the entry fairly captures a host of significant

arguments: the third-party use of similar "ulu" marks and narrow rights of Lulu, the differences between the parties' goods and services, and the ability of the relevant universe to distinguish the parties' marks. In short, the absence of any likelihood of confusion, and, thus, the lack of entitlement to the extraordinary remedy of a preliminary injunction. II. STATEMENT OF FACTS

A.

Plaintiff Lulu Enterprises, Inc.
Lulu Enterprises is a primarily a self-publishing business. The core business of Lulu

Enterprises involves Lulu.com, which allows individuals who desire to obtain greater access for their work ­ whether writing, music or photography ­ to put that work on the internet.7
Plaintiff apparently initiated this lawsuit in part for publicity. See Appx. A, Ex. 1 ("But PR only works if we launch the suit. It is the suit that makes the story newsworthy.") Documents produced by Plaintiff celebrate the media attention generated by the story. See id, Ex. 2 ("Seems like this story has legs after all."); Id, Ex. 3 ("Legal activity garnered 110 US press hits since [the lawsuit] was released."); Id., Ex. 4 ("The good news is Dan [ZDNet reporter] does exactly what we were hoping, which is to seed the confusion story . . . "). See Sullins Dec. ¶¶ 5-20 (collecting press); id. ¶ 14, Ex. E-9 (quoting a professor at Syracuse University, as saying he "is not so sure consumers will be confused by the two names"); id. ¶ 10, Ex. E-5 ("But where does one draw the line? We've had FoolU.com around for ages. Can The Motley Fool get in on the action? Yahoo! is a phonetic cousin, twice removed, from Hulu. Does the search-engine star get a shot?").
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The most accurate descriptions of Lulu Enterprises, and the business of Lulu.com, are those that appeared before Plaintiff filed suit. According to a 2006 statement on Lulu.com: Founded in 2002, Lulu is the web's premier independent publishing marketplace for digital do-it-yourselfers. It's the only place on the web where you can publish, sell and buy any and all things digital -- books, music, comics, photographs, movies and well, you get the idea. We simply provide the tools that leave control of content in the hands of the people who created the content. You see, Lulu is a technology company, not a publisher. So you can use Lulu to publish and sell any kind of digital content, and no one here is going to ask you to change anything. Ever. Your vision is entirely YOURS. There is no set-up fee and no minimum order to publish and sell on Lulu. We manage the online business, including printing, delivery and customer service. You set your own royalty for each piece of content, and at the end of each quarter, we'll mail you a check for the royalties your content generates. Lulu makes a small percentage from each transaction, which means that we only make money if you succeed in selling your work. See Sullins Dec., Ex. H. The central tenet of Lulu.com is "user-generated content," i.e., works uploaded by the owner of the work, and the business model of Lulu.com depends on revenue from the sales of material on the site. Lulu does not have any meaningful third-party advertising. See Lulu Dep. at 108: 5-6 ("if we have any [advertising] it's still at the experimental stage").

B.

Defendant Hulu, LLC
1. Hulu's Business and Brand Hulu is entirely focused on one business: distributing, via the internet, "premium content

­ TV shows and feature films." Kilar Dec. ¶ 3. People interested in accessing well-known and highly publicized programs may access and search the site to identify, watch and review video programming. Id. ¶¶ 14, 15, 24. Hulu's videos consist of full length episodes of television programs and feature films, as well as short clips from the TV shows and movies. Id. ¶ 17. Hulu has a "show page" for each TV show, which may include clips or "internet-only content," such

See Appx. A, Ex. 9 ("Publishing on Lulu.com is quick and easy, allowing people to create inexpensively with high quality results on a simple-to-navigate Web site. Lulu.com gives creators total editorial control and allows them to profit from their creations as well.").

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as outtakes or "cut scenes" from some of the programming, cast interviews, and other TV or film-related professional content. Id.; see also Supplemental Declaration of Jason Kilar ("Supp. Kilar Dec.") ¶¶ 20-21 (lists of TV shows and movies). Hulu's video offerings consist exclusively of professional content from networks and studios, and will not include user-defined or user-generated content typically found on sites like YouTube (and Lulu.com and Lulu.tv). Id. ¶ 20. Hulu has no plan to offer user-generated videos, home movies, or the like, nor does Hulu presently intend that a user will be able to upload videos and post or embed them directly onto Hulu's website. Id. "Notwithstanding any early consideration or discussion to the contrary, the present business plan for Hulu contemplates only that Hulu will be a website offering first-class, universally recognizable premium video to broadband internet users. We have no intention that users will be able to upload their video content to Hulu.com." Id. ¶ 23. The look and feel of the Hulu.com website is described and shown in the Supplemental Declaration of Jason Kilar. See Supp. Kilar Dec. ¶¶ 22-25. The current "home page" at Hulu.com contains a sign up for people who wish to be part of a large, preliminary "beta test" of the service later this month. Kilar Dec. ¶ 30. Hulu has developed a "staging version," which reflects what the site will look like in the beta launch. Id. ¶ 32; Supp. Kilar Dec. ¶ 22. 8 In addition to Hulu.com, consumers will also be able to access Hulu's premium video content on the website of Hulu's five distribution partners: AOL, Yahoo, MySpace, Comcast, and MSN. Kilar Dec. ¶ 64. Hulu's distribution partners are well-established, leading internet companies. Id. Each distribution partner web site will have a specific web page carrying a video player branded with the "Hulu" name and offering the same premium content available on Hulu's own site. Id.

Attached to the Supplemental Declaration of Jason Kilar is a DVD recording containing a demonstration showing the view and navigation within the hulu.com website.

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Although Hulu has pending a broad intent-to-use application with the United States Patent and Trademark Office to register HULU as a trademark, "the description of goods and services in this application does not reflect what Hulu will offer upon launch or for the foreseeable future." Id. ¶ 36. Rather, the application simply suggests a number of potential uses of HULU as a mark. Id. Whether any specific use of the HULU mark--other than in connection with a premium content video site--develops is contingent on a number of unknowns, including, without limitation, the success of the initial launch, consumer response, advertiser response, marketplace research, and financial and manpower constraints. Id. Hulu has no plans to promote itself by doing any advertising. Id. ¶ 37. Hulu's service will be free to consumers. Id. ¶ 24. Viewers will see short commercials, or video players may contain other advertising information while the video plays. Id. The business model on launch will be to generate revenues from advertisers, which on launch will be from "some of the world's most prestigious companies." Id. 2. Selecting The Hulu Mark Selecting "Hulu" required about five months and hundreds of thousands of dollars to identify, screen and select the name. Id. ¶ 38. The effort "considered over 460 potential names before selecting the name `Hulu.'" Id. ¶ 40. After establishing "a workable list of names for further consideration," substantial time was spent "determining whether each name was available for use." Id. ¶ 41. In late July, Jason Kilar, Hulu's CEO, directed his team to focus on one name as the likely selection: "hulu." Id. ¶ 43. During that time, Hulu obtained additional information, including commercial trademark search reports. Id. Once "hulu" was identified, Hulu also proceeded to secure "hulu" domain names. Id. This was a difficult task. Id. Hulu.com was 7
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already owned by a third party, and obtaining rights to the domain name required negotiation. Id. Hulu ultimately purchased the Hulu.com domain name, and also acquired the rights to approximately 60 other "hulu" domain names through various owners and domain name registrars. Id. Then, after a month of "development time, and review of dozens of logo designs, shapes and colors, [Hulu chose] a distinctive logo which will be used upon launch and going forward." Id. ¶ 44; Supp. Kilar Dec. ¶ 8. Hulu did not choose "hulu" because of any similarity to the word "lulu," or in an attempt to siphon off consumers from Lulu Enterprises, Lulu.com or Lulu.tv. Id. ¶ 51. The name

"hulu" was conceived without any knowledge of Lulu Enterprises or Lulu.com whatsoever. Id. Throughout the process of generating possible names for use, Mr. Kilar was never aware of the Plaintiff or its use of Lulu or Lulu.com. Id. ¶ 52. By the time "hulu" was selected as the name, Mr. Kilar was aware of a variety of other marks with "lulu" or words with "ulu" formatives being used by a great many entities of one kind or another. Id. ¶ 51. Mr. Kilar first learned of Plaintiff's use of the Lulu mark at the same time that he learned of a laundry list of third-party uses of other LULU and ULU marks. Id. ¶ 52. Based on what obviously was extensive third-party use of LULU, he did not believe that the HULU mark was likely to be associated, much less confused, with any one of the LULU or ULU marks. Id. Although not specifically aware of Lulu Enterprises (or "Lulu.com" or "Lulu.tv"), he was aware that "lulu" was being used, including for selling or advertising goods on the internet, by a substantial number of persons or companies in a variety of ways. Id. ¶ 51. It never occurred to Mr. Kilar that Hulu could be mistaken or confused with any company named "lulu" (id. ¶ 52), nor was any confusion intended or desired.

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III.

Plaintiff Is Not Entitled to the Extraordinary Remedy of a Preliminary Injunction In the Fourth Circuit, the "hardship balancing test" outlines four factors to be decided in

connection with a preliminary injunction: (1) likelihood of irreparable harm to the plaintiff if relief is denied; (2) likelihood of harm to the defendant if the desired relief is granted; (3) the likelihood of the plaintiff's success on the merits; and (4) the public interest. Blackwelder Furniture Co. of Statesville, Inc. v. Seilig Mfg. Co., 550 F.2d 189, 196 (4th Cir. 1977). "[P]reliminary injunctions are extraordinary remedies involving the exercise of very farreaching power to be granted only sparingly and in limited circumstances . . . ." Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 816 (4th Cir. 1991) (reversing grant of preliminary injunction) (internal quotations omitted); see also Giant Brands, Inc. v. Giant Eagle, Inc., 228 F. Supp.2d 646, 650 (D. Md. 2002) (denying preliminary injunction in trademark case). Plaintiff "bears the burden of establishing that each of these factors supports the granting of the injunction" (Direx, 952 F.2d at 812), and that burden is "particularly heavy since the issuance of a preliminary injunction would in effect grant it a substantial part of the relief it would obtain after a trial on the merits." John Lemmon Films, Inc. v. Atlantic Releasing Corp., 617 F. Supp. 992, 995 (W.D.N.C. 1985) (denying injunction in trademark case); see Direx, 952 F.2d at 812. A. Plaintiff Cannot Show ­ By Clear and Convincing Evidence ­ That It Will Suffer Actual and Imminent Irreparable Harm in the Absence of an Injunction "To succeed, [Lulu] must show . . . some irreparable harm" in the absence of an injunction. Rum Creek Coal Sales v. Caperton, 926 F.2d 353, 360 (4th Cir. 1991). "Moreover, the required irreparable harm must be `neither remote nor speculative, but actual and imminent.'" Direx, 952 F.2d at 812 (quoting Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989)). Finally, the evidence must be "clear and convincing." Direx, 952 F.2d at 810 n.7, 812 ("clear showing of irreparable injury"). 9
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Plaintiff has presented no evidence of a single instance of actual consumer confusion, and no lost sales. Plaintiff's moving papers rely principally on weak, ill-defined references.

However, as the court observed in John Lemmon: Fear of confusion . . . is insufficient evidence that irreparable harm will be suffered. The issuance of an injunction is not justified by the mere fact that irreparable harm may possibly ensue if restraint is not imposed . . . . Injunctions will not be issued merely to allay the fears and apprehensions or to soothe the anxieties of the parties. 617 F. Supp. at 996 (citation omitted). In reality, Plaintiff faces no immediate threat of

irreparable harm because there is no likelihood of confusion between the parties' marks. Dan River, Inc. v. Icahn, 701 F.2d 278, 284 (4th Cir. 1983) (denying injunctive relief where plaintiff "face[d] no immediate threat of irreparable harm"). Lulu concedes it has not been harmed by the public announcement of Hulu, the attendant widespread publicity, or the beta site sign ups. See Lulu Dep. at 74:21-75:1 ("Lulu is growing . . . ." Q. Has that changed any since August 29th? A. Only to the good."); Lulu Dep. at 174:20-23 ("I do not know of any benefit or damage we've received to date from Hulu's announcement of the intention to use the Hulu.com name.") As for the potential harm to Plaintiff if an injunction is not granted, the lone evidence is "fear" that Hulu will become well-known and that confusion will occur with Plaintiff perceived as the second-comer. See Lulu Dep. at 170:8-19. That fear is expressly premised on the false assumption that Hulu intends to advertise in a way that would foster confusion: Q. Your concern about Hulu becoming well known, is that predicated on them being engaged in advertising? A. All of the above. That's predicated on them having a hundred million dollars to do everything that we currently do and that we would like to do to promote ourselves. But the biggest probable concern is -Q. I'm sorry if my question was unclear. Is it predicated on the idea that they will be doing advertising? [A]: Is it predicated on ­ not exclusively. Q. Is part of your assumption that they will be doing advertising? A. Yes. 10
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Lulu Dep. at 175:1-23. As noted above, Hulu in fact is not doing any such advertising to the public (Kilar Dec. ¶ 37), which severely undercuts Plaintiff's position. B. Hulu Will Suffer Substantial Harm If the Court Issues a Preliminary Injunction The grant of an injunction would harm Hulu significantly more than its denial would harm the Plaintiff. Since conceived almost a year ago, Hulu has taken extraordinary steps to reach the public stage of its launch. While the activity to date has been largely behind the scenes, the scope and breadth of activity is astounding. Any delay in launch also carries definite and extreme economic costs, which makes a preliminary injunction inappropriate.9 Hulu's embedded video player is scheduled to launch on its destination site, www.hulu.com, as well as on the websites of five Distribution Partners, in October, 2007. See Kilar Dec. ¶ 64. If forced to adopt another name, Hulu would experience significant delay ­ unknown months ­ and would lose almost all of its investment to date in the naming, marketing, and branding of the "Hulu" name and product as well as securing the Hulu.com domain name as well as approximately 60 other "Hulu" domain names around the world. Id. ¶ 61. A delayed launch not only would eliminate traffic to Hulu.com, it also would result in a reduction in traffic to the websites of Hulu distribution partners (id. ¶ 65), which would

jeopardize Hulu's standing (id. ¶ 66), and place Hulu at a "substantial disadvantage" vis-à-vis competitors. See id. ¶¶ 66-68.

See GFC Fin. Corp. v. GFC Capital Res. Group, Inc., 1994 WL 30432, at *3 (S.D.N.Y. Feb. 2, 1994) (denying preliminary injunction despite finding of likelihood of success for plaintiff on the grounds that "Defendants would be forced to give up their only service mark and would lose the considerable investment they have made in it over the past year"); see also John Lemmon, 617 F. Supp. at 997 ("If the Defendant were ordered to refrain from advertising and releasing its film with its present title, theaters contracted to show the film would be lost, prints of the film would have to be changed, and a new advertising campaign and strategy developed at considerable delay, expense, and embarrassment").

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If Hulu is enjoined and the launch delayed, it "will lose revenue and [its'] advertisers will lose the opportunity to have advertising on Hulu.com that integrates or ties into the advertising also occurring on network television promotions or elsewhere." Id. ¶ 70. Timing ­ with respect to TV and the 2007-08 broadcast season ­ is critical. To delay Hulu's launch would severely impact each of these advertisers' entire annual marketing plans. See id. ¶¶ 70-72. Hulu not only will lose significant revenue (see id. ¶¶ 75-77), but also "substantial credibility with the charter advertisers as well as any potential future advertisers." Id. ¶ 74. Any delay in the launch of the Hulu.com website or delivery of content to the distribution sites would cause Hulu to incur significant carrying costs for technology without generating any revenue or value. See id. ¶ 75. Because of how the relationships are structured, Hulu also would lose a significant amount of the goodwill and confidence Hulu has built with these vendors if Hulu does not launch as planned. See id. ¶ 76. Additionally, Hulu is incurring carrying costs for equipment and personnel. See Supp. Kilar Dec. ¶¶ 15-16, 18. A delayed launch also presents challenges to a $100 million private equity investment. See Kilar Dec. ¶¶ 77-79. If Hulu.com is not available, Hulu's relationships with beta sign-ups and the public will be harmed. Id. ¶ 82. No alternative or back-up site exists. Id. The company's reputation, and momentum, would be negatively and significantly impacted. See id. ¶¶ 80-82. In addition to the monetary harm, any delay in launch will cause substantial and difficultto-quantify injury to Hulu's reputation with its partners and in the marketplace. Borrowing from the opinion in Chairworks Taiwan ltd. v. Bannister, a "preliminary injunction would require [Hulu] to recreate the image it attempted to establish in the marketplace and cast a cloud on [its] reputation that may be unjustified upon final adjudication of this matter. 12
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preventing [Hulu] from using its mark would delay the delivery of goods, . . . wreak untold damage to the confidence of its customers," and require modification of the website, as well as advertising at significant expense. 13 U.S.P.Q.2d 2070, 2071 (M.D.N.C. 1989) (denying preliminary injunction against use of CHAIRMAN sought by owner of CHAIRWORKS, both used with leather reclining chairs); see also Tyco Indus. v. Tiny Love, Ltd., 914 F. Supp. 1068 (D.N.J. 1996) (denying preliminary injunction motion in part because, despite financial resources of defendant Tyco, it "would be somewhat harmed in its business relationships," including the perception of being "an unreliable business partner"). With Hulu well past launch with its commercial partners, and having built up a beta site for thousands of key users, the balance of hardships is clear. Where the harm to the defendant was much smaller, the court in Chairworks, supra, declined to grant a preliminary injunction on a rationale applicable here: Plaintiff's unquantifiable injury is measured against the quite real damage defendant would suffer if this court prevented it from using its chosen mark, Chairman. This court notes that the defendant has just recently introduced its line of goods into the United States. A preliminary injunction would require defendant to recreate the image it attempted to establish in the marketplace and cast a cloud on this company's reputation that may be unjustified upon final adjudication of this matter. An injunction preventing defendant from using its mark would delay the delivery of goods and wreak untold damage to the confidence of its customers who have ordered but yet to receive goods from it. According to the declaration . . . , the defendant received approximately 2,000 orders with a value of a quarter of a million dollars. In addition, the defendant estimates that it would cost about $40,000 to repackage its products to comply with the proposed injunction. All this is added to the significant investment defendants have made to the mark, Chairman. While the plaintiff has nearly a decade of goodwill and a federally registered trademark, the failure to issue a preliminary injunction in this instance would not result in irreparable harm. It is well within the province of the court to restore any damage to the plaintiff's mark if the trier of fact finds that it is warranted. All things considered, the balance of hardships tips against issuing an injunction. 13 U.S.P.Q.2d at 2070. In Citrus Group, Inc. v. Cadbury Beverages, Inc., 781 F. Supp. 386 (D. Md. 1991), the court noted plaintiff's general allegations of "irreparable injury," but found that:

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The likelihood of harm to the Defendants if the injunction should issue is both more distinct and more readily identifiable. If the injunction is granted, for example, Defendants would be required to discontinue use of their radio commercial, to forego additional print advertising, to withhold or refrain from distributing promotional items such as towels and t-shirts, and to refrain from using valuable point of sale and premium materials created for Cadbury's bottlers pending trial. They value this damage to the campaign at over $100,000. 781 F. Supp. At 389 (denying preliminary injunction involving MAIN SQUEEZE registration and use of YOUR MAIN SQUEEZE). The specific harm to Hulu would be many times higher. Plaintiff's own experience in naming its company confirms the hurdles, costs, and difficulty of the naming process: A few years later when we were starting the Lulu project we were looking for a good name. And when you're doing an internet company, as the guys at Hulu have discovered, the big challenge is to find a URL that you can build your brand around. And so we looked at a whole bunch of URL's around what we were trying to do in creating a content for digital content. And we couldn't find one that wasn't either 30 characters long, such as, a market for digital content dot com. That wouldn't work. But all the ones we did sort of want to consider were either not available to us or inappropriate in some way. Until I finally said, well, I do own this Lulu.com URL. Lulu Dep. at 167:12-168:1 (emphasis supplied). Thus, Plaintiff's suggestion that the risk of any harm to Hulu is slight is just wrong. It "would be inequitable to cause [a defendant] to lose much of its investment and suffer injury to its good will before a final decision on the merits without a stronger showing of irreparable harm by the Plaintiff." John Lemmon, 617 F. Supp. at 997 (refusing to enjoin use of STARCHASER in connection with a film, despite a registration of THE STAR CHASERS for same goods, even though defendant had notice of plaintiff's claim); see Virginia Tech Found., Inc. v. Family Group Ltd., 666 F. Supp. 856, 860 (W.D Va. 1987) (denying preliminary injunction in part because if granted plaintiff "would, in effect, have prevailed on the underlying lawsuit without having had to try it would be highly unlikely that the

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Defendant would or could change back to its original call letters once it had been forced to abandon them."). C. The Public Interest Favors Hulu Plaintiff seeks an injunction based on speculation and unsupported fears. It seeks an extraordinary remedy merely because it has a negative reaction to a distinct name (that happens to rhyme) for a very distinct service. Clearly this does not serve the public interest. FMC Corp. v. Cyprus Foote Mineral Co., 899 F. Supp. 1477, 1484 (W.D.N.C. 1995) ("An injunction [should] . . . not be issued merely to allay the fears and apprehensions or to soothe the anxieties of a party."). The public interest is instead served by allowing Hulu to launch. Allowing the launch generally supports "free competition in the marketplace." Direx, 952 F.2d at 814; see also Giant Brands, 228 F. Supp.2d at 658 ("public interest supports allowing [the defendant] to continue its business"). Expanding the availability of additional entertainment content for the public reinforces "the correlative interest of the public in enjoying the broadest possible choice of . . . programs,"10 and is also consistent with the property rights of the copyright holders.11 Finally, as explained elsewhere, a preliminary injunction would negatively impact the business of third parties, including Hulu's distribution partners, advertising partners and technology partners, which also mitigates against any such relief. See Major League Baseball Props., Inc. v. Pacific Trading Cards, Inc., 1998 WL 241904, *4 (S.D.N.Y. May 14, 1998) (citing right of third-party distributors and sellers as basis for denying preliminary injunction), vacated based on settlement, 150 F.3d 149 (2d Cir. 1998).

Booth Am. Co. v. Commonweath Comm. Svcs., 5 U.S.P.Q.2d 1745, 1748 (N.D. Ohio 1987) (denying preliminary injunction in part based on public interest in receiving radio programming); see also Pocket Books, Inc. v. Dell Publishing Co., 148 U.S.P.Q. 239, 242 (N.Y. Sup. Ct. 1966) (denying preliminary injunction and citing "the public interest in an unhampered flow of ...information").
11

10

See 17 U.S.C. § 106 (right to distribute copyright works).

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D.

Plaintiff Is Extremely Unlikely to Succeed on the Merits of its Claims At Trial To prevail on its infringement claim, Plaintiff must show that the Hulu brand and

Hulu.com domain are likely to cause confusion with Plaintiff's LULU mark. In the Fourth Circuit, courts use the following factors to determine the existence of a likelihood of confusion: (a) the strength or distinctiveness of the mark; (b) the similarity of the two marks; (c) the similarity of the goods/services the marks identify; (d) the similarity of the facilities used by the two parties use in their businesses; (e) the similarity of advertising used by the two parties; (f) the defendant's intent; and (g) actual confusion. Pizzeria Uno Corp. v . Temple, 747 F.2d 1522, 1527 (4th Cir. 1984). The "sophistication" or "expertise" of the "typical consumer in the relevant market" may also be taken into account. See, e.g., Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 467 (4th Cir. 1996). In this case, where the hardship balance "does not tip `decidedly' or `significantly' in favor of the Plaintiff," Lulu has the additional obligation to show a substantial likelihood of success on the merits of its case. Direx, 952 F.2d at 813; Microstrategy Inc. v. Motorola, Inc., 245 F.3d 335, 339 (4th Cir. 2001) ("When, as here, the balance of hardship `does not tilt decidedly in the plaintiff's favor' then a plaintiff must demonstrate a `strong showing of likelihood of success' or a `substantial likelihood of success' by `clear and convincing evidence' in order to obtain relief."); Md. Undercoatings Co. v. Payne, 603 F.2d 477, 481 (4th Cir. 1979) ("The need for plaintiff to show likelihood of success on the merits increases as the probability of irreparable injury to plaintiff without an injunction decreases."). As observed in Giant Brands: In trademark cases, the Fourth Circuit has held that a plaintiff's burden may be greater such that the plaintiff must prove the probability (not mere possibility) of success on the merits; in other words, the plaintiff must have a very clear and strong case. Thus, if there is any doubt as to the probability of plaintiff's ultimate success on the merits, the preliminary injunction must be denied.

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228 F. Supp.2d at 651 (internal quotations and citation omitted); see also Direx, 952 F.2d at 813 ("[T]he standard by which `likelihood of success' on the merits must be established . . . [is] `a probability (not mere possibility)' of success of the ultimate trial on the merits. Probability of success implies that the plaintiff must have a very clear and strong case.'") (quoting 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 30.16 (4th ed. 2003) ("McCarthy")). Plaintiff does not and cannot present the required "clear and strong case" of likelihood of confusion. The Pizzeria Uno factors are addressed in turn below, but the lack of a likelihood of confusion is empirically confirmed by the research of Dr. Gerald Ford, one of the foremost market researchers in the United States.12 As discussed below, he conducted "two surveys to address the issue of the degree of awareness of the LULU internet sites for self publishing (i.e.,LULU.COM) and video content (i.e., LULU.TV) among potential visitors to Defendant's internet site." Ford Dec., ¶ 2. The surveys ­ using both unaided and aided approaches ­ demonstrate no significant degree of awareness of LULU for self-publishing (i.e., 2 percent), and zero awareness for video content.13 Id. ¶¶ 3-4. If the universe of Hulu's customers is not aware of Plaintiff's services, confusion is not likely. As Dr. Ford concludes, "the results of the surveys conducted in this matter clearly
Dr. Ford outlines the Survey Background ­ including the sample selection and survey universe ­ in his Declaration. See Ford Dec. at ¶¶ 6-12. The results of the survey are described in his declaration, and the underlying data collected in Exhibit A to his declaration. "A properly conducted survey of the relevant class of prospective consumers of the goods or services at issue can be of use in deciding the likelihood of confusion." IDV North Am., Inc. v. S & M Brands, Inc., 26 F.Supp.2d 815, 829 (E.D. Va. 1998); see also McCarthy, § 32:195 ("As the use of surveys has become more common, judges have come to expect that a survey will be introduced to aid the court in determining customers' state of mind"). The Fourth Circuit has noted "that survey evidence clearly favors the defendant when it demonstrates a level of confusion much below ten percent." Sara Lee Corp., 81 F.3d at 467 n.15; see also CareFirst, 434 F.3d at 268 ("Assuming that all three of these respondents were confused, the survey only shows a confusion rate of 2 percent, hardly a sufficient showing of actual confusion.").
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support a finding of no likelihood of confusion, based upon the lack of awareness of either the LULU self publishing site or the LULU video content site, among the relevant users of potential visitors to Defendant's internet site." Ford Dec. at ¶ 5; see also id. at ¶ 26. 1. "Lulu" Is Used Extensively By Third Parties, and Thus Only A Weak Trademark and Entitled to Narrow Protection

As outlined in Pizzeria Uno, "distinctiveness or strength" is the "first and paramount factor." 747 F.2d at 1527. In the Fourth Circuit, the strength of a trademark "is evaluated in terms of its conceptual strength and commercial strength." CareFirst, 434 F.3d at 269. "Measuring a mark's conceptual or inherent strength focuses on the linguistic or graphical `peculiarity' of the mark." Id. As part of that analysis, "[c]onceptual strength is determined by placing the mark on the spectrum of generic, descriptive, suggestive and arbitrary." Sterling Acceptance Corp., 227 F. Supp. at 461. The court also must evaluate other meanings and/or laudatory connotations, as well as third-party use. Renassiance: A mark's conceptual strength is determined in part by its placement into one of the four categories of distinctiveness. [T]his categorization does not end a court's evaluation of a marks conceptual strength, however. A court must also consider other registrations for the mark, because "the strength of a commonly used mark decreases the number as the number of third-party registrations increases." 227 Fed. Appx. at 243 (quoting Pizzeria Uno, 747 F.2d at 1531). The word "lulu" is used extensively by third parties because it has a common, laudatory meaning. Rather than being coined or arbitrary, the term is at best suggestive. As noted by the Fourth Circuit, "[e]ven a mark held to be suggestive may be found weak under the first likelihood of confusion factor." Petro Stopping Ctrs. v. James River Petroleum, Inc., 130 F.3d 88, 93 (4th Cir. 1997) (finding no likelihood of confusion between PETRO STOPPING As explained in

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CENTER or PETRO TRAVEL PLAZA and PETRO CARD). Plaintiff's formerly admitted to that commonly understood meaning and descriptive connotation on its website:14 What's In a Name? For goodness sake, what is a lulu? Well it's not your grandmother's kitty, that's for sure. Ever hear the phrase "Boy, that's a real lulu"? Well, even if you haven't, we think of the word lulu as an old-fashioned term for a remarkable person, object or idea. And quite frankly, that's exactly what Lulu, the company, is. Think of us as an open marketplace for digital content. The web's version of a fresh air market. An on-demand publishing tool for books, e-books, music, images, movies and calendars. See Sullins Dec., Ex. H; see also Lulu Dep. at 23:15-19 ("common dictionary definition of the word "lulu" is "[a] remarkable person, object, or idea."). Even though not entirely descriptive, it is still a weak indicator of source. Bliss, Fabyan & Co. v. Aileen Mills, Inc., 25 F.2d 370, 371 (4th Cir. 1928) (holding that "neither the arbitrary and intentional use of the noun, nor the misspelling of the word, can alter or disguise the fact that the trade-mark [RIPPLETTE for ripple woven fabric] was adopted because it is descriptive of an outstanding characteristic of the merchandise."). "The frequency of prior use of a mark's text in other marks, particularly in the same field or merchandise, illustrates the mark's lack of conceptual strength." CareFirst, 434 F.3d at 270. Similarly, [t]he frequency with which a term is used in other trademark registrations is indeed relevant." Petro Stopping Ctrs., 130 F.3d at 93-94. Extensive third-party use of, and registration of the mark LULU, or the character string "ULU," illustrates that Plaintiff's mark is fairly weak. See U.S. Conference of Catholic Bishops v. Media Research Ctr., 432 F. Supp.2d 616, 626 (E.D. Va. 2006) (CNS used by secular news service not likely to be confused with CNS for religious news service, based in part on third-party use). Third-party use of LULU is extensive.15 "Lulu" appears in 926 third-party trade names, of which 583 are currently active. Marti Dec. ¶¶ 34-35. In fact, 12 company names have both

14

See Sullins Dec., Ex. H (archived version of 2006 Lulu.com website).

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terms "Lulu" and "Enterprises." Id. ¶ 33. In terms of trademark use of LULU, and variations thereof, searches reveal the following widespread uses: · The Lulu Search Report generated 804 pages of "hits" for third-party trademarks and other references for LULU formative marks, as well as variations thereof, such as LOULOU, LU+LU (Marti Dec. ¶ 7, Exh. 1); The same report discloses a total of two hundred nine (209) third-party federal registrations or applications for registration for LULU formative marks, or variations thereof, eighty-two (82) of which are federally registered, and fifty-two (52) are active and pending trademark applications (Marti Dec. ¶ 8, Exh. 1); Taking into account only the marks in which the letter combination L...U...L...U appears standing alone, without any other additional words ­ such as LULU, LU+LU, LU-LUS, LU-LU, and LULU'S ­ the Lulu Search Report discloses a total of forty-five (45) "hits" (not including Plaintiff's marks) spread across a total of thirty-five (35) different individuals and entities (Marti Dec. ¶ 9, Exh. 1); Taking into account only the marks in which the letter combination L...U...L...U appears in combination with additional letters and/or terms ­ such as, for example, LULU-B and LULU PRODUCTIONS ­ the Lulu Search Report reveals a total of one hundred twenty-eight (128) "hits" (not including Plaintiff's marks) spread across a total of ninety (90) different individuals and entities (Marti Dec. ¶ 10, Exh. 1); A second search report for trademark references comprising of a "ULU" letter combination, such as ULU, ZULU, and KULU (the "*ULU Search Report"), generated a total of 1,116 pages of "hits"(Marti Dec. ¶ 12, Exh. 2); The *ULU Search Report discloses a total of three hundred ninety-two (392) third-party federal registrations or applications for registration marks comprising an "*ULU" letter combination, one hundred thirty-two (132) of which are federally registered, and seventy (70) are pending applications "(Marti Dec. ¶ 13, Exh. 2); Taking into account only the marks in which the letter combination U...L...U appears with one additional, preceding letter ­ such as JULU, RULU, or SULU ­ the *ULU Search Report discloses a total of ninety-six (96) "hits" (not including Plaintiff's marks) spread across a total of seventy (70) different individuals and entities (Marti Dec. ¶ 14, Exh. 2).

·

·

·

·

·

·

The Declaration of Daniel H. Marti ("Marti Dec.") attaches all of the cited search reports and provides additional evidence from third-party sources regarding the actual use of these myriad of marks in the marketplace.

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See also Marti Dec. ¶¶ 36-295 (additional third-party evidence). Such evidence of third-party use has been routinely relied on by the Fourth Circuit in challenges made to the overall strength and distinctiveness of a plaintiff's mark. See, e.g., CareFirst, 434 F.3d at 270 (referring to Thomson & Thomson search, web page printouts and investigative business reports as probative of third-party use and overall weakness of plaintiff's mark); U.S. Search, LLC v. U.S. Search.com Inc., 300 F.3d 517, 525 (4th Cir. 2002) (finding a mark "generic, or at most, descriptive" based on web page print-outs, Thomson & Thomson trademark search reports, media references, and other evidence of common usage).16 Put simply, many entities own federal registrations of, or otherwise use, marks containing the term LULU or the character string "ULU" (or their phonetic equivalents) for a wide variety of goods or services. Evidence of such third-party use of a mark, even in unrelated markets, "indicates a mark's lack of conceptual strength." Renaissance, 227 Fed Appx. at 243. Thus, Lulu is not a distinctive designation, but instead a weak mark entitled to only narrow protection. Petro Stopping Ctrs., 130 F.3d at 93-94 ("[T]hird-party registrations are relevant to prove that some segment of the composite marks which both contesting parties use has a normally understood and well recognized descriptive or suggestive meaning, leading to the conclusion that that segment is relatively weak.").17

See also Petro Stopping Cts., 130 F.3d at 93 ("[Plaintiff] argues...that evidence of third-party registrations alone is insufficient to conclude that a mark is weak. The company maintains that only proof that third parties actually use the term PETRO would be relevant. We disagree. The frequency with which a term is used in other trademark registrations is indeed relevant to the distinctiveness inquiry under the first likelihood of confusion factor. This is especially true when the number of third-party registrations is great.") (internal citation omitted). In fact, Plaintiff already agreed that its LULU mark could co-exist without confusion with LOULOU for "providing on-line books, magazines and newsletters relating to shopping for consumer goods and fashion" and "printed publications, namely books, magazines and newsletters all relating to shopping for consumer goods and fashion." See Lulu Dep. at 176:18-177:3; Marti Dec. ¶¶ 75-78, Ex. 1 (p. 54), 36-38.
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In addition to being conceptually weak, the LULU mark also is commercially weak. As described in CareFirst, The commercial-strength inquiry . . . looks at the marketplace and asks if in fact a substantial number of present or prospective customers understand the designation when used in connection with a business to refer to a particular person or business enterprise. 434 F.3d at 269. In terms of relevant facts, commercial strength may be determined by considering "third party use . . . as well . . . as advertising expenditures, consumer awareness of the source of the mark, market share and unsolicited media coverage." Renaissance, 277 Fed Appx. at 243. Plaintiff has no survey or research as to the awareness of Lulu or Lulu.com. See Lulu Dep. at 141:1-4. As for market share, Plaintiff's papers claim 1.2 million registered users, but at least 50 percent ­ and probably many more ­ are outside of the US. See Lulu Dep. at 73:9-12 ("about 50 percent of them"); see also Sullins Dec. ¶ 22 (only 36% and 28% in US).18 Moreover, although they claim 100,000 unique visitors per day, nothing indicates how many are other than existing registered users. See Lulu Dep. at 73:16-18 (Q. How many of those visitors are not already registered users? A. I don't know that offhand."). Although Plaintiff repeatedly represents to this Court, and to users and advertisers that it is a "Top 2500" website, the reality is

The "law of trademarks rests upon territoriality"(3 Callmann on Unfair Comp., § 20:26 (4th Ed. 2007)), and the scope of protection accorded to a trademark is "determined by the law of the country in which protection is sought[.]" Id. "The use required under United States law as the foundation of trademark rights must be use in this country, and not abroad[.]" Id. (emphasis added). A trademark therefore properly "symbolize[s] the domestic goodwill of the domestic markholder so that the consuming public may rely with an expectation of consistency on the domestic reputation earned for the mark by its owner[.]" Osawa & Co. v. B & H Photo, 589 F. Supp. 1163, 1171-72 (S.D.N.Y.1984). Thus, the only issue is the purported trademark rights in the United States, and the alleged likelihood of confusion in the United States. Plaintiff's reliance on customers in "more than 80 countries" to populate its list of "1.2 million registered users" evidences that Plaintiff's mark and services simply are not well-known in the U.S. market. See, e.g., Scholastic, Inc. v. Macmillan, Inc., 650 F.Supp. 866, 873 n.6 (S.D.N.Y. 1987) ("[Plaintiff's] extensive use of the [mark] in Canada and Australia is, of course, of no relevance to its effort to create trademark rights in the United States"); CBS, Inc. v. Logical Games, 719 F.2d 1237, 1239 (4th Cir. 1983) ("[W]e accept the assertion by [defendant] that trade dress use in foreign countries does not create protectible trademark rights in the United States.").

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that Lulu.com is not in the Top 3000 (and it has been declining since mid-summer); Lulu.tv ranks outside of the Top 60,000. See Sullins Dec. ¶¶ 22-23 (rankings of 3,036, and 64,761). Although Plaintiff does modest advertising and has received media coverage, survey research confirms its marks are virtually unknown. Based on his two sets of market research, Dr. Ford concluded as follows: Additionally, it is my opinion that the results of the surveys conducted in this matter would also support a finding that both the LULU self publishing internet site mark and the LULU video content internet site mark are commercially weak marks among potential visitors to Defendant's internet site. Ford Dec. at ¶ 5; see also id. at ¶ 26. 2. Notwithstanding Sharing "ULU," Which is a Common Formative Shared by Many Other Marks, The Parties' Marks Are Markedly Different in Appearance, Sound, and Meaning

A comparison of the marks demonstrates their differences in appearance, sound, and meaning. The shared use of "ULU" as a character string "does not automatically mean that two marks are similar. Rather, in analyzing the similarities of sight, sound, and meaning between two marks, a court must look to the overall impression created by the marks and not merely compare individual features." Gen. Mills, Inc. v. Kellogg Co., 824 F.2d 622, 627 (8th Cir. 1987) (denying preliminary injunction where OATMEAL RAISIN CRIP not confusingly similar to APPLE RAISIN CRISP, both for breakfast cereal).19 As a starting place, Plaintiff concedes that the meanings of LULU and HULU are distinct. See Lulu Dep. at 165:18-20 ("Q. In your opinion, are the meanings of Hulu and Lulu at all similar? A. No."). This difference in meaning, combined with how the marks actually

See also Sports Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955, 962 (2d Cir. 1996) ("In deciding whether the marks are similar as used, we do not look just at the typewritten and aural similarity of the marks, but how they are presented in the marketplace.") (holding that fact questions precluded summary judgment on owner's trademark infringement claims).

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will be used, means that the HULU mark also presents a distinctly different commercial impression from Plaintiff's LULU mark. From the beginning, and long before this litigation

was commenced, Hulu's "key message" for its business consistently has been a "premium, active user experience." Kilar Dec. ¶ 14. The high-caliber content providers will "reinforce [Hulu's] brand image for premium content with the consuming public." Id. ¶ 16. Because Lulu has its own, distinct brand image "the Hulu.com and Lulu.com brands are markedly different." Joachimstaler Dec. ¶ 10. The associations, or more specifically the "identity-forming brand associations," are distinct. See id. ¶¶ 13-15. This impacts this case by reducing likely confusion in two ways: "Hulu and Lulu will be very different sites and to the extent that they develop as brands, they will invoke very significantly different brand associations. The roles of these brands and the extent to which they enmesh into our cultural contexts and daily behaviors are very different. Hence, they will create very distinct brand identities for their respective websites over time." Moreover, the "cognitive processes of memory around brands cause the two brands to be distinct in users' minds." Stated otherwise, "the perceptions, beliefs and experiences that users have . . . [will] cause the two brands to be distinct in the users' minds." Id. ¶¶ 10, 16, 24. The visual differences between the parties' marks are readily apparent. In addition to the different stylization and design elements, the "H" is a distinctly different portion of HULU. See Standard Brands, Inc. v. E. Shore Canning Co., 172 F.2d 144, 146 (4th Cir. 1949) (refusing to enjoin defendants for lack of a likelihood of confusion between V-8 and VA, both for vegetable juices, noting the "marked difference in the appearance of the labels and trademarks used by the respective parties, including their background, their coloring, and the arrangement of the printed matter"). Plaintiff uses a specific blue or orange logo (with black as an alternative if color will not work), and the mark is used with a "halo" logo. See Lulu Dep. at 143:4-25 (See Appx. A, 24
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Ex. 8). According to Plaintiff, its distinctive name, logo and brand are readily identified by their own consumers.20 In terms of considering the marks as they appear in the marketplace, "Lulu Studio" is included in connection with these promotions. See Lulu Dep. at 102:2-4. The term "creating" also is prominently featured, which further defines Lulu's business to the public. See Lulu Dep. at 103:4-13. By contrast, Hulu will consistently use the stylized "hulu" logo in a green color palate. The mark only will appear in connection with specific premium content, which Plaintiff admits is not on its site. See Lulu Dep. at 147. The significant differences in the visual depiction of the parties' respective marks reinforces that confusion is highly unlikely. In IDV North America, for example, the court held that the BAILEY'S mark for cigarettes was not likely to be confused with the well-known BAILEYS liquor, and the discussion of the differences between the appearance of those marks is applicable here: It is correct, as IDV argues, that the letters which comprise the two marks here at issue are the same and that those letters appear in the same sequence in each mark. In that aspect, the only difference is that the senior mark has no apostrophe between the letter "Y" and the letter "S" and the junior mark has an apostrophe between those letters. The actual letters employed aside, there are significant differences in the visual depiction of the respective marks. For example, the BAILEYS mark is depicted in all uppercase letters in a non-stylized font; in contrast, the Bailey's mark is depicted in a stylized script font with an upper case initial letter followed by lowercase letters. In any event, the similarity of marks alone is not dispositive because it is necessary to assess similarity and differences in the marks, not in a vacuum, but in the actual use of the marks in the commercial context. When assessed, as used, and in perspective of the entirely different types of product with which they are used, the marks at issue here are not strongly similar, notwithstanding that they are comprised of the same letters in the same order. An examination of the advertising, the packaging and promotional materials illustrates the actual use of the marks and how they are not likely to be confused.

Lulu Dep. at 76:15-23 ("In the field that we are in, we have a logo that we promote very broadly and we have a brand around Lulu and Lulu.com in the digital content marketplace space that causes anyone who's paying any attention to these things to, you know, understand who Lulu is and what we do. Q. So from your standpoint in your marketplace Lulu would be very recognizable? A. That's right."); see also Lulu Dep. at 76:25-77:9 (Lulu name and logo "distinctive to a Lulu customer").

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26 F. Supp. At 824-25 (emphasis supplied; citations omitted).21 The sounds of HULU and LULU, while they rhyme, are distinct.22 The fact that

Hulu.com and Lulu.com share the common formative "ulu" is not unique for internet domain names. Sullins Dec. ¶¶ 2-4. In fact, other "_ulu.com" domains exist for 20 of the 26 letters in the alphabet. Six of those are active sites. Id. ¶ 2, Ex. A. Dozens of sites with 4 letters share the consonant-vowel-consonant-vowel sequence. Id. ¶ 3, Ex. B. Moreover, a significant number of top internet sites coexist with domain names that rhyme. Id., Ex. D. 3. Although Media-Related, the Services In Fact Are Distinct and Unrelated

In trademark infringement actions, instead of focusing on the general identification of goods and/or services listed in a pending trademark application goods and services that may be generally deleted, limited or otherwise clarified by the applicant during the registration process (see 37 C.F.R. §§ 2.71(a) and 2.77) the issue before this Court is whether the actual use of the trademark is likely to cause confusion. As held by the Fourth Circuit, a court must "look to how the two parties actually use their marks in the marketplace to determine whether the defendant's use is likely to cause confusion." CareFirst, 434 F.3d at 267 (emphasis added). In CareFirst, the Court expressly rejected the plaintiff's claim that the broad services listed in a filing with Trademark Office should control the likelihood of confusion analysis, noting that "[b]ecause the
See Scholastic, Inc. v. Escolastica.Com, 100 Fed. Appx. 152 (4th Cir. 2004) (affirming summary judgment that "escolastica.com" and "escolatica.net" not likely to be confused with "scholastic.com" due to "substantial differences between the websites operated by the two companies" such that "no ordinary consumer is likely to stumble upon Escolastica's websites while searching for Scholastic.com or, even if they happen to do so, to believe that they have accessed a website affiliated with Scholastic"). Hulu's stylized mark and Lulu's mark with a design element are important components supporting no likelihood of confusion. See also In re Electrolyte Labs., 929 F.2d 645, 647 (Fed. Cir. 1990) (holding marks K+ (and design) and K+EFF for competitive dietary supplements not likely to be confused). Consequently, not only are the design portions of marks properly given weight in the likelihood of confusion analysis, they often are considered determinative. See, e.g., Mr. Hero Sandwich Sys., Inc. v. Roman Meal Co., 781 F.2d 884, 888 (Fed. Cir. 1986) (reversing Board and holding that ROMAN and Design not likely to be confused with ROMANBURGER). 22 See Sullins Dec., ¶ 5, Ex. E.
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marketplace provides the relevant forum for comparing services, there is no merit to [plaintiff's] claim that we should conduct this analysis using the services enumerated in [plaintiff's] federal registrations." Id. at n. 6. To avoid any speculative and remote allegations of harm, this Court must compare the services now offered by Plaintiff under the LULU mark with those services that Hulu will have on launch. See Kilar Dec. ¶¶ 14-24; see, e.g., Direx, 952 F.2d at 812 (irreparable harm "must be neither remote nor speculative, but actual and imminent"). As a result, Plaintiff cannot base its pending motion for injunctive relief on unsupported and/or speculative uses of the HULU mark on some unknown, future date.23 Plaintiff's position depends explicitly on the assumption that Hulu will launch with the full range of potential goods and services listed in its intent-to-use application. See Lulu Dep., at 24:24-25:2 ("where the services that Hulu proposes to offer as per your -- as per Hulu's trademark filings are going to cause massive confusion in the marketplace." (Emphasis

supplied)).24 Thus, Plaintiff's likelihood of confusion case depends substantially on facts that are fundamentally incorrect, namely that Hulu will be a site with user-generated content: Q. So as you sit here today, you believe there's going to be confusion based on the fact that Hulu is going to have user-generated content; correct? A. That is correct, as that term is commonly understood in the marketplace, yes.

If the alleged future expansion plans are not "actual and imminent," this Court should "not speculate as to how that likelihood [of confusion] could change in the future." Tyco Healthcare Group LP v. Kimberly-Clark Corp., 463 F. Supp. 2d 127, 135, n.35 (D. Mass. 2006); Fairway Foods v. Fairway Markets, 227 F.2d 193, 198 (9th Cir. 1955) (noting that if or when a party chooses to expand, the facts may be "sufficiently different...as to commerce and otherwise, and as to the validity of the claimed trademark, as to present additional and different issues."). Lulu Dep. at 33:14-21 ("When Hulu is out there promoting their great user-generated content, mashup video services, print-on-demand books, their DVD download services, create your own DVDs, when Hulu starts offering, according to your trademark application, all of products and services that Lulu is offering, you and I . . . will be confused")
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Q. And you believe there will be confusion because Hulu is going to do print on demand; correct? A. I have no idea what Hulu is going to do. As I say, I was asked to leave during that part of the discussions. But according to Hulu's trademark application, where Hulu talks about books and talks about things that read to me like user-generated content where users can go in and modify content, th