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Dec. 3 --The issuance of a preliminary injunction barring one party from using the contested “Platters” mark must be reversed because the irreparable harm finding upon which the injunction relied was made pursuant to a “cursory and conclusory” analysis, the U.S. Court of Appeals for the Ninth Circuit held Dec. 2 (Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc., 9th Cir., No. 12-16868, 12/2/13).
The court overturned an injunction that had been issued in the latest of a number of lawsuits contesting the right to use the Platters mark among former members of that musical group.
The district court correctly recognized that the Supreme Court has made clear that a preliminary injunction cannot issue unless a plaintiff establishes that it will actually suffer irreparable harm absent the injunction, the appeals court said. However, after reciting the appropriate standard, the district court then issued a preliminary injunction without first making any factual findings. This was an abuse of discretion because it had “the practical effect” of revising “the now rejected presumption of irreparable harm based solely on a strong case of trademark infringement,” the Ninth Circuit said. It thus reversed and remanded.
The Platters were a Los Angeles-based popular doo-wop music group that first performed under that name in 1953 with members Cornell Gunter, Herb Reed, Alex Hodge, Joe Jefferson and David Lynch. By the time they began achieving success, the lineup comprised Reed, Lynch, Paul Robi, Zola Taylor,and Tony Williams.
Their early recording hits included 1955's “Only You (And You Alone)” and “The Great Pretender,” both composed by Samuel “Buck” Ram. In 1956, Ram, who also acted as producer and manager, incorporated Five Platters Inc., and the group members assigned their rights in “The Platters” mark in exchange for shares in the corporation.
Starting in 1960, there began a churning of membership of the group's lineup and by 1969, Reed was the sole remaining original member and he left by 1970, setting out with his own Platters group. After Robi left the group in 1965, he also assembled his own group, which also performed under the Platters name.
In 1972, Five Platters Inc. sued Robi in California state court and the court ruled in favor of Robi, finding that the corporation that Ram had established “was a sham used by Mr. Ram to obtain ownership of the name 'Platters.' ” The state court also found the stock exchange to be in violation of the state's corporate securities laws.
Since then, the question of who holds rights in the Platters name has been repeatedly litigated as several of the former members continued to use the name with their own groups, such as the Buck Ram Platters, Herb Reed's Platters, Monroe Powell and the Platters, and Sonny Turner former Lead Singer of the Platters.
For example, a 1984 lawsuit by Five Platters against Reed resulted in a 1987 agreement allowing Reed to use names such as “Herb Reed and the Platters” and “Herb [or Herbert] Reed of the Original Platters.”
Robi v. Five Platters Inc., 838 F.2d 318, 5 U.S.P.Q.2d 1709 (9th Cir. 1988), held that the 1974 California state court ruling precluded Five Platters Inc. from seeking to prevent Robi from using the name. On remand, a federal district court cancelled the corporation's trademark registration and the Ninth Circuit affirmed. Robi v. Five Platters Inc., 918 F.2d 1439, 16 U.S.P.Q.2d 2015 (9th Cir. 1990).
Robi then assigned his rights in the mark to his wife and she later sued Reed--who at that time had performed continuously with the Platters since 1953--resulting in a decision that gave Reed the exclusive rights in a mark on the basis that “members of a group do not retain rights to use the group's name when they leave the group.” Robi v. Reed, 173 F.3d 736, 50 U.S.P.Q.2d 1315 (9th Cir. 1999).
In 1970, Monroe Powell had become the lead singer for the group, but in 1995, he left to form his own Platters group. Five Platters Inc. sued Powell and this litigation resulted in an agreement allowing Powell to use names such as the “Monroe Powell Platters,” “The Platters Featuring Monroe Powell,” “The Platters Featuring the Legendary Monroe Powell,” and “Monroe Powell and the Platters,” so long as any promotional material prominently featured Powell's name.
Further disputes were addressed in cases such as Five Platters Inc. v. Williams, 4 U.S.P.Q.2d 1296 (N.Y. Sup. Ct. 1987), and Reed v. Bennett, No. 2:10-CV-01981-JCM-RJJ (D. Nev. May 16, 2011).
The 1987 agreement between Reed and Five Platters Inc. played a part in a more recent ruling. In that proceeding, both parties had stipulated dismissal with prejudice of all the possible claims and counterclaims.
It also included an “escape clause,” which said that if any court were to definitively rule that Five Platters Inc. did not have rights in the Platters name, then “nothing contained herein shall be construed to limit Herbert Reed's rights in the name “The Platters” and this agreement shall not inure to any party other than The Five Platters, Inc., and its success and assigns or Herbert Reed.”
Marshak v. Reed, No. 96-CV-2292-NGMLO (E.D.N.Y. Feb. 12, 2001), interpreted this escape clause to bar Reed from claiming rights in the Platters against either Five Platters Inc. or against someone “claiming through” the corporation. Marshak barred Reed from “interfering” with Five Platters Inc.'s use of the name, barred him from using the Platters name, and cancelled his trademark registration.
A concurrent decision, Five Platters Inc. v. Powell, 7 F. App'x 794 (9th Cir. 2001), found that Five Platters Inc. was using the Platters name with intent to mislead the public, and the Second Circuit directed the Marshak court to take this ruling into consideration. The district court found that there was no impact, because the Ninth Circuit had not ruled that Five Platters Inc. had no right in the Platters name. Marshak v. Reed, 229 F. Supp. 2d 179 (E.D.N.Y. 2002); aff'd by Marshak v. Reed, 87 F. App'x 208 (2d Cir. 2004).
In 2010, Reed brought a claim in the District of Nevada against Jean Bennett, Five Platters Inc., and Personality Productions Inc., which resulted in a default judgment and an injunction, which stated that Five Platters Inc. had “never used the mark 'The Platters' in a manner that [was] not false and misleading and thus never acquired common law rights to the mark.” The default judgment also ruled that Reed had superior rights in the mark, based on his first use in commerce in 1953 and continuous use since then.
In 2011, Herb Reed Enterprises initiated another action against Powell, alleging trademark infringement, trademark dilution, and unfair competition. HRE moved for a preliminary injunction. Judge Philip M. Pro of the District of Nevada granted the injunction, finding that HRE had proffered sufficient evidence to establish his prior rights in the mark. Herb Reed Enters., Inc. v. Monroe Powell's Platters, LLC, 842 F. Supp. 2d 1282, 2012 BL 62350, 103 U.S.P.Q.2d 1081 (D. Nev. 2012)(25 PTD, 2/8/12).
The instant action stems from yet another trademark infringement lawsuit that HRE filed against Marshak in 2012. HRE sought a preliminary injunction against Marshak's continued use of the Platters mark.
Judge Miranda Du of the District of Nevada granted the preliminary injunction, finding that HRE was likely to prevail on his trademark infringement claim and that HRE would suffer irreparable harm if Marshak were allowed to continue to use the mark. Marshak appealed.
Two Supreme Court decisions in the past six years have drastically altered the standards for when a preliminary injunction can issue in cases in which a plaintiff is alleging that its intellectual property is being infringed.
IneBay Inc v. MercExchange, LLC, 547 U.S. 388, 78 U.S.P.Q.2d 1577 (2006) (94 PTD, 5/16/06), the court criticized the Federal Circuit for its failure to “fairly” apply the traditional four-part equitable test for whether an injunction should issue upon a judgment of patent infringement. Subsequent toeBay, courts must weigh all equitable factors before issuing an injunction.
Two years later the high court, in its review of a case unrelated to IP, rejected the Ninth Circuit's view that a district court need only find “a possibility of irreparable harm” to issue an injunction and instead referred to its “frequently reiterated standard” that requires a finding “that irreparable injury is likely in the absence of an injunction.”Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 2008 BL 253375 (2008).
In 2011, the Ninth Circuit applied Winter to find that a likelihood of success on the merits in a copyright infringement case does not create a presumption of irreparable harm for purposes of a preliminary injunction determination. Flexible Lifeline Sys. v. Precision Lift, Inc., 654 F.3d 989, 2011 BL 216209, 99 U.S.P.Q.2d 1837 (9th Cir. 2011) (166 PTD, 8/26/11).
“We now join other circuits in holding that the eBayprinciple--that a plaintiff must establish irreparable harm--applies to a preliminary injunction in a trademark infringement case,” the Ninth Circuit said here.
But, the appeals court noted that the district court in fact “anticipated” this holding and accordingly instructed HRE that in order to show irreparable harm it must “establish that remedies available at law, such as monetary damages, are inadequate to compensate” HRE for the injury it is suffering by Marshak's continued infringement.
The problem, the Ninth Circuit said, is that despite recognizing the correct standard, “The district court's analysis of irreparable harm is cursory and conclusory, rather than being grounded in any evidence or showing offered by HRE.”
For instance, the appeals court noted that the district court began by stating that it “cannot condone trademark infringement simply because it has been occurring for a long time and may continue to occur.” The district court then noted that condoning such infringement in this case would damage the goodwill and reputation associated with the Platters mark, which would constitute irreparable harm. The appeals court agreed that loss of goodwill and reputation could constitute irreparable harm.
Here, however, the court's pronouncements are grounded in platitudes rather than evidence, and relate neither to whether “irreparable injury is likely in the absence of an injunction,” Winter, 555 U.S. at 22, nor to whether legal remedies, such as money damages, are inadequate in this case. It may be that HRE could establish the likelihood of irreparable harm. But missing from this record is any such evidence.
The Ninth Circuit also criticized the lower court for citing the similar but unconnected--to this litigation at least--preliminary injunction that was issued in 2012 by Judge Pro as justification for its own issuance of a preliminary injunction.
“As with its speculation on future harm, citation to a different case with a different record does not meet the standard of showing 'likely' irreparable harm,” the court said. It reversed the preliminary injunction and remanded.
Judge Sandra S. Ikuta joined the opinion.
Judge J. Clifford Wallace concurred with the reversal of the preliminary injunction. “However, I write separately to emphasize that we are solely reviewing a preliminaryinjunction, and that we thus can express no view on issues arising after a trial dealing with a permanent injunction,” Wallace said in his one-paragraph concurrence.
HRE was represented by Eric Miller Sommers, Porstmouth, N.H., and John L. Krieger of Lewis Roca Rothgerber LLP, Las Vegas. Marshak was represented by Joseph S. Kistler of Gordon and Silver LTD, Las Vegas, and Cameron Sean Reuber of Leason Ellis LLP, White Plains, N.Y.
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