Thursday, November 07, 2013

Maxim suffers from max delay

Alpha Media Group, Inc. v. Corad Healthcare, Inc., No. 13 Civ. 5438, 2013 WL 5912227 (S.D.N.Y. Nov. 4, 2013)

AMG, which publishes Maxim magazine, sought to enjoin Corad from marketing a Maxim antiperspirant.  Maxim is the core of a “lifestyle” brand featuring travel and entertainment. The mark has been licensed for a number of “lifestyle goods” such as playing cards, restaurants and bars, nightclubs, beauty contests, beer mugs, and bottle openers.  Maxim most commonly displays its name in red, capital letters; AMG has seven MAXIM trademark registrations.

Corad’s antiperspirants treat hyperhidrosis (excessive sweating).   It’s used the Maxim mark since 2001, registered for unscented antiperspirants in 2003.  Since 2003, it’s sold unscented roll-on and wipes in blue boxes with MAXIM in white, capital letters and a photo of a man and a woman, along with a caduceus and notes that it is “prescription strength” and “doctor recommended.” Since 2006, it’s sold unscented wipes for regular skin in a black box with MAXIM in red, capital letters. This box includes four pictograms “denoting travel, golf, exercise, and gym.”  (I.e., activities one might want to do without sweating excessively.)  Corel’s scented wipes are sold in a package with an ® marking, even though that product is outside the registration; Corel agreed to move that marking.

AMG intended to license MAXIM for body sprays, perfumes, and colognes. Though it was aware of Corad’s use of the Maxim mark, it only learned of Corad’s current packaging when it prepared to launch its own line of scented products, and also only recently learned that Corad was marketing a scented Maxim antiperspirant. 

AMG argued that Corad’s packaging “no longer reflects a medical product, but instead is impermissibly evocative of Maxim magazine’s lifestyle brand by using red letters on a black background, a photo of a couple, and the pictograms.”  It also argued that use of the ® constituted false advertising.  Ten weeks after learning about Corad’s packaging and scented product, it sued.
The court declined to grant a preliminary injunction, for want of irreparable harm.  After eBay and Salinger, a court can’t simply adopt categorical rules or presume that a party has met an element of the injunction standard, revising the previous law that preliminary injunctions should usually issue when the court finds likely confusion.  AMG’s assertion that Corad’s products cause consumer confusion and cause AMG to lose control of its reputation was “bare bones and conclusory,” and insufficient under Salinger.  It’s still true that likely success often foretells a finding of irreparable harm, but AMG provided “no reason to believe irreparable harm will in fact occur.”

And there was good reason to believe the contrary.  “Corad does very little marketing and directs its products at a small consumer segment. There can be no irreparable harm when very few consumers are likely to encounter Corad’s products, even assuming they do create a likelihood of confusion as to their origin.”  AMG itself, with its “strong interest” in tracking the use of “Maxim,” didn’t learn about the packaging for years after its first use. AMG itself argued that Corad didn’t conduct any advertising that AMG would have reason to see and didn’t have much in the way of sales or distribution.  “While these arguments may help negate a laches defense, they also diminish any possible inference of irreparable harm.”

AMG also itself told the PTO in its application to register the mark for scented products that  Corad’s product “is not a perfume but a product which is sold to a small group of people who have an excess sweating condition” and that “Corad’s products are sold almost exclusively through websites that it owns or operates.”  AMG argued that its plans to license a fragranced product now produced irreparable harm.  “But AMG’s own plans will not increase the visibility of Corad’s non-prescription medical products, marketed to a niche group of consumers.”

Corad’s multi-year use also negated any presumption of irreparable harm because “any harm caused by Corad’s packaging has likely already been inflicted.”  The elements of which AMG complained had been in use since 2003 for sensitive skin and 2006 for regular skin.  So far, AMG still had control of its reputation, and there was no reason to believe they’d caused confusion.  “It is difficult to see how AMG would now suffer irreparable harm if they remain on the market for the comparatively short time it will take to resolve this matter.”

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