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POSTX CORP. v. DOCSPACE CO.

August 5, 1999

POSTX CORPORATION, A CALIFORNIA CORPORATION, PLAINTIFF,
v.
THE DOCSPACE COMPANY, INC., A CANADIAN CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Whyte, District Judge.

                         ORDER DENYING PLAINTIFF'S
                           MOTION FOR PRELIMINARY
                                 INJUNCTION

The motion of plaintiff PostX Corporation ("plaintiff" or "PostX") for preliminary injunction pursuant to Federal Rule of Civil Procedure 65(a) was heard on July 30, 1999. The court has read the moving and responding papers and heard the argument of counsel. For the reasons set forth below, the court denies plaintiffs motion.

I. BACKGROUND

Plaintiffs logo (the "PostX logo") consists of a stylized line drawing of the back of an envelope, with a black keyhole design on the back flap of the envelope and the word "POSTX" appearing below the flap. See Exh. A to Plaintiffs Motion for Preliminary Injunction. The envelope is drawn in blue as it appears on the recipient's screen. Declaration of M. Michael Serbinis ("Serbinis Decl.") Exh. Decl. Exh. 7 at 5. Plaintiff has marketed its services and software to its customers and the public using the PostX logo since September, 1996. Thomas Decl. ¶ 8. Plaintiff' has placed the PostX logo on all of its marketing materials, computer software labels, manuals and documentation, packaging, promotional and advertising materials and on its Web site. Thomas Decl. ¶ 10. Plaintiff has also displayed its logo at numerous trade shows. ¶ 11. Plaintiff asserts that it has expended over $1.7 million in connection with promotion of the PostX logo. Id. ¶ 13.

Defendant The docSpace Company ("defendant" or "docSpace"), founded in 1997, offers Web-based services for delivering, storing, managing and collaborating on information securely over the Internet. Declaration of Evan V. Chrapko ("Chrapko Decl.") ¶ 2. The two principal services that defendant currently markets are "docSpace Express" and "docSpace Drive." Serbinis Decl. ¶ 25.

DocSpace Express allows registered users of the service to send secure email documents to email recipients. The docSpace Express customer user registers by submitting identifying information and choosing a user ID and password at defendant's Web site. The user then logs into docSpace Express, and clicks on "Send" to access a document send page. At the send page, the user types in the email address for each recipient as well as a subject for delivery and a short message. The user chooses the documents which he or she wants to be delivered to the recipient by entering the filenames of the documents or by using a Windows file management browser. Id. ¶¶ 26, 28-31, Exh. 1.

After filling out the send page, the user clicks on "Send," and the document is uploaded to the docSpace server in Virginia. That server then sends each intended recipient an email notification that a document is available on the server. See Id. Exh. 1 Figs. 5, 6. A recipient who is a registered docSpace user then types in his or her user ID. and password and logs in to his or her docSpace Express account. A non-registered user is presented with a "welcome" page which introduces him or her to docSpace and invites the recipient to register. Then, the user is sent to his or her docSpace "in-box," which lists the document or documents that have been sent to the recipient via docSpace Express. The recipient then clicks on the document he or she wishes to see and is taken to a page where he or she can read the message, view the list of documents associated with that delivery, and download the documents. Id. ¶¶ 33-35. Other than the email delivery notification, all Web pages encountered by the sender or recipient bear the docSpace logo in the upper left hand corner of the page. Id. ¶ 39, Exh. 1.

Defendant's other service, docSpace Drive, is a Web-based document storage service that allows people to access documents stored in one centralized, secure location. Id. ¶ 40. DoeSpace Drive allows users to back up document files, organize files in directory structures and perform other file management operations. Id. ¶ 40. All Web pages that the docSpace Drive user encounters include the docSpace logo in the upper left corner of the page.

Defendant's logo (the "docSpace logo") is a black outline drawing of a rectangular file folder with a black keyhole design at the center and graduated horizontal lines extending from the left edge. See Serbinis Decl. Exh. 5. The word "docSPACE" appears directly below the graphic, with "doc" in lower case bold and "SPACE" in upper case outlined letters. Id. Michael Serbinis, co-founder of defendant and creator of the logo, does not believe that he was aware of the PostX logo when he designed the docSpace logo in January and February of 1998. Serbinis Decl. ¶¶ 2, 42, 45, 49. DocSpace has spent close to $600,000 in connection with the marketing of the docSpace logo through design of its graphics and Internet Web site, publications, advertising, promotions, mailings, public relations and trade shows. Chrapko Decl. ¶ 41.

Plaintiff filed a complaint for injunctive relief and damages against defendant on March 22, 1999, alleging trademark infringement and false designation of origin, trademark dilution and unfair competition.*fn1 On the present motion for a preliminary injunction, plaintiff states that it "is not requesting that docSpace cease use of its logo," but is rather "merely requesting that docSpace cease from using the keyhole picture in its mark." Plaintiffs Reply in Support of Motion for Preliminary Injunction ("Reply") at 14:13-14.*fn2

II. ANALYSIS

A court may issue a preliminary injunction where the moving party has shown (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) that serious questions are raised and the balance of hardships tips sharply in its favor. Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987). "These are not two distinct tests, but rather the opposite ends of a single `continuum in which the required showing of harm varies inversely with the required showing of meritoriousness.'" Id., quoting San Diego Comm. Against Registration & Draft v. Governing Rd. of Grossmont Union High Sch. Dist., 790 F.2d 1471, 1473 n. 3 (9th Cir. 1986).

A. Likelihood of Success on the Merits — Trademark Claim

In order to succeed on its federal trademark claim, plaintiff must establish both (1) that it has a protected interest (or trademark right) in the service allegedly infringed by defendant's service and (2) that defendant's service usage is likely to cause consumer confusion and thus infringe upon that interest. Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1354 (9th Cir. 1985).

1. Protected Interest

Plaintiff has been using its trademark logo since 1996. Inherently distinctive trademarks and suggestive trademarks are protected without evidence of secondary meaning. See AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979). Defendant does not argue that plaintiffs mark ...


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