Wednesday, May 21, 2014

Water wars: lack of secondary meaning precludes injunction

Buzz Bee Toys, Inc. v. Swimways Corp., --- F.Supp.2d ---- (2014), 2014 WL 2006799, No. 14–1948 (D.N.J. May 15, 2014)
Here, the court found likely confusion predicated on the near identity between the parties’ product configurations, but denied a preliminary injunction for want of secondary meaning in the design of plaintiff’s water guns; there just wasn’t real evidence that people recognized the design as an indicator of source.  One oddity: the court found that intent weighed in plaintiff’s favor in the likely confusion analysis because of the intentional copying, but didn’t weigh in its favor in the secondary meaning analysis because intentional copying isn’t necessarily bad intent, especially in a product design case, in the absence of intent to pass off.  The latter is the correct rule but courts occasionally slip into the former; it’s just a bit odd to find both in the same case.
Buzz Bee's Avenger and Swimways' Storm

Buzz Bee's Kwik Grip and Swimways' Stryker

As the court commented, “[t]here are small differences between the products, but the overall similarity of the product lines is unmistakeable.”  (Another tidbit from the analysis: though the differences in packaging/house marks were much greater (and indeed the package often obscured significant features of the gun for the Swimways products), the court disregarded that because the target audience included children; though there wasn’t evidence of their level of discernment, the products were cheap and children couldn’t be considered the kind of sophisticated audience that would be protected from confusion by the packaging.)
Anyway, without secondary meaning, the likelihood of confusion was irrelevant.  Also, the court independently found that Buzz Bee hadn’t shown irreparable harm.  Buzz Bee argued that infringement was irreparable injury as a matter of law.  eBay precluded this argument, overruling prior Third Circuit precedent.  Buzz Bee argued that the trademark presumption didn’t fall afoul of eBay because it only extended to one of four factors and was rebuttable.  Nope.  Take it away, Salinger: “eBay’s central lesson is that, unless Congress intended a ‘major departure from the long tradition of equity practice,’ a court deciding whether to issue an injunction must not adopt ‘categorical’ or ‘general’ rules or presume that a party has met an element of the injunction standard.”  A possibility of irreparable harm wasn’t enough to justify the extraordinary remedy of a preliminary injunction without a showing of likely irreparable harm.
Here, Buzz Bee failed to show irreparable harm.  It made the usual quality control/reputational risk argument, but the court concluded that it hadn’t “shown that any consumers blame Buzz Bee for or associate Buzz Bee with Swimways’ product failures, if any.”  Buzz Bee alleged that now was the prime consumer purchase season, but that didn’t seem unredressable by money damages, and Buzz Bee’s relationship with Target (which sold the Swimways products) seemed damaged for good regardless.  Since Swimways offered its line exclusively through Target, it wouldn’t affect Buzz Bee’s relations with other retailers; Buzz Bee failed to provide any evidence that any retailer’s willingness to sell Buzz Bee products depended on exclusivity of design.
Buzz Bee argued that this copying would lead to other copying, destroying Buzz Bee’s goodwill. But it didn’t show that this sequence of events was likely without an injunction, as opposed to possible.
Swimways, for its part, argued that styles vary yearly, and styles from previous years may be difficult to sell, making it unable to sell its products in the future if an injunction issued. Buzz Bee pointed out that Swimways copied Buzz Bee products that had been on sale for many seasons.  So defendants’ arguments about harm to them were “not compelling,” but there was still no likely irreparable harm.
Nor did the public interest favor an injunction, since although consumers might not distinguish between the two product lines, Buzz Bee hadn’t shown confusion as to source.  The similarity of the products made the case “challenging” to the court, but ultimately lack of secondary meaning or irreparable harm precluded a preliminary injunction.  Buzz Bee was free to renew its motion if discovery remedied the deficiencies in its case.

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