Thursday, October 16, 2014

likely confusion is irreparable after eBay

CFE Racing Products, Inc. v. BMF Wheels, Inc., 2 F. Supp. 3d 1029 (E.D. Mich. 2014)

The jury found trademark infringement but no damages and no intentional infringement.  What should happen with requested injunctive relief?  Here, the court finds irreparable harm due to likely confusion, while citing eBay.  OK, then.

BMF used BMF Wheels as its mark for aluminum wheels for trucks and SUVs, and registered BMF Wheels as a word mark for same.  CFE has a senior registered word mark for BMF on auto cylinder heads and clothing, and senior rights in an unregistered logo for black block letters that are slanted to the right, outlined in white and red on a black field. 

BMF learned of CFE’s BMF brand in 2008, when business associates told him that another company was “ripping off” his logo.  CFE’s president learned of BMF Wheels in 2011 when a friend saw a truck with BMF wheels at a race in California; the truck’s owner spoke to a racer CFE sponsored and told him, upon noticing the “BMF” logo on Panela’s car, that he had wheels made by the same company.  (The chance of this coincidence is probably reduced by the colloquial meaning of “BMF,” the utility of the red-white-black color scheme in macho automotive endeavors, and the common use of tilting letters to convey an impression of speed.  The result, however unintentional, was great similarity.)  No vendor features both parties’ products, but BMF Wheels are sometimes sold or advertised in the same places as cylinder heads by other makers.  

After eBay, what constitutes irreparable harm when a jury has found no damages?  The court acknowledged that the jury found that the likely confusion didn’t lead to monetary loss, and thus CFE didn’t suffer “a loss of goodwill or injury to its general business reputation, or need to spend money on the cost of future corrective advertising.” But that didn’t mean there was no injury.  “The plaintiff produced evidence that the confusion deprived it of the right to control its own business reputation. The value of a company’s reputation cannot be measured in damages; only an order to cease the infringing conduct can remedy that harm. The plaintiff has shown both irreparable harm and an inadequate remedy at law.”

RT: Of course, this reasoning functions identically to supposedly discarded presumptions of irreparable harm and of inadequate remedy at law.  It is not “evidence”; it is syllogism.  One could investigate the idea of “reputation” more closely.  Are there kinds of likely confusion that don’t deprive the trademark owner of control over its reputation, even assuming that's always irreparable harm?  Yes: exactly the kinds of “confusion” trademark scholars have been decrying for years—initial interest confusion, permission/authorization confusion, a lot of association confusion: Irrelevant confusion.  There are other things to be said about control over reputation (like: nobody wholly controls their own reputation; truthful comparative advertising can change a product’s reputation, suggesting that reputation in itself isn’t what we’re protecting, etc.) but even casual examination should show that this rationale can’t justify finding irreparable harm in every case that the doctrine allows a finding of likely confusion.

The court then dealt with the scope of the resulting injunction.  Since the infringement wasn’t willful and didn’t result in financial harm, and the parties weren’t direct competitors, the court entered a limited  injunction.  Among other things, it barred BMF from using confusing logos; from using “BMF” except in the phrase “BMF Wheels” and then accompanied by a disclaimer of affiliation with BMF cylinder heads, CFE Racing, or any of CFE’s product lines; barred BMF from using the letters “BMF” on any product except wheels and rims; and barred BMF from using any websites, domain names, or social media that contain the letters “BMF” within the domain name or website address unless the letters were included in the phrase “BMF Wheels” and accompanied by the disclaimer. 

The court declined to cancel BMF’s registration for BMF Wheels.  Though the court said the registration had to be “limited,” its order appeared rather to limit BMF’s use of its registered mark to avoid the style, font and colors used by CFE, and to prevent its use except in connection with car wheels and rims, accompanied by a disclaimer.

Without intentional infringement, there was no basis for an attorney’s fee award under the Lanham Act, and the relevant state law required a plaintiff to “suffer[] loss” in order to get fees; the jury’s damages finding prevented that too.

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