The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court
MEMORANDUM DECISION GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
Plaintiff Aqua Logic, Inc. ("Plaintiff") filed its complaint against Defendants Aquatic Logic, Inc. and Domenic Vitro ("Defendants") on August 17, 2009. (Doc. No. 1.) Plaintiff filed a motion for preliminary injunction on August 31, 2009. (Doc. No. 4.) Defendants filed their opposition on September 29, 2009, (Doc. No. 18.), and Plaintiff submitted its reply on October 6, 2009. (Doc. No. 25.) The Court held a hearing on October 13, 2009 at 10:30 a.m. in courtroom 13. Cindy A. Brand and Ross G. Simmons appeared on behalf of Plaintiff and Benjamin Davidson appeared on behalf of Defendants. For the following reasons, the Court grants Plaintiff's motion for preliminary injunction.
Plaintiff is a corporation of the State of California. (Doc. No. 1 ¶ 5.) Plaintiff alleges that it is a large aquarium, aquarium products, pond and pond products provider in the Untied States. (Id. ¶ 11.) Plaintiff is the owner of United States Trademark Registration No. 2,353,216 for "fish tanks, namely aquariums" and "fish tank cooling, heating, and recirculation systems comprised of water chillers, heat pumps, and electronic temperature controllers." (Id. ¶ 13.) Plaintiff has used the "Aqua Logic" mark and trade name for almost twenty years by prominently displaying it on products, containers, advertisements, displays, and other associated materials. (Id. ¶ 19.) In addition to marketing its products through trade magazines, Plaintiff advertises its products on its website: "www.aqualogicinc.com." (Id. ¶ 11; Doc. No. 30 ¶ 4.)
Defendant Aquatic Logic is a corporation of the State of Illinois. (Id. ¶ 6.) Defendant Domenic Vitro is the founder and president of Aquatic Logic, Inc. (Doc. No. 20 ¶ 2.) Defendant Vitro alleges that he began Aquatic Logic as a sole proprietorship in September 2008 to market water treatment products that are specifically designed for outdoor ponds. (Id. ¶ 5.) Defendant Vitro trademarked the name "Aquatic Logic" on September 10, 2008, and incorporated under the same name on April 27, 2009. (Id. ¶¶ 5,7.) In or around September 2008, Defendant Vitro alleges that he launched the website "www.aquaticlogic.com" to provide information regarding his company and the products it provides. (Id. ¶ 8.) Plaintiff alleges that Defendant Vitro currently operates the website located at www.aquticlogic.com. (Doc. No. 1 ¶ 7.) Defendants allege that they primarily sell their products to distributors in the lawn and garden industry and that they advertise in publications that cater to that industry. (Doc. No. 20 ¶ 15.)
Plaintiff alleges that it became aware of Defendants in December 2008 upon seeing an advertisement in a trade journal titled PondBiz. (Doc. No. 4-2 ¶ 14.) Plaintiff also alleges that it became aware of Defendants' website in December 2008. (Id. ¶ 18.)
On or about January 5, 2009, Plaintiff sent a letter to Defendants requesting that they cease and desist from all current and future uses of the term "Aquatic Logic" and the domain names "www.aquaticlogic.com," "www.aquaticlogic.net," and "www.auaticlogic.org." (Doc. No. 1 ¶ 33.) Plaintiff sent another letter with the same request on or about March 13, 2009. (Id. ¶ 34) Plaintiff did not receive a response to either letter. (Id. ¶¶ 33-34.)
On or about April 8, 2009, Plaintiff alleges that it was contacted by the National Sales Manager for a trade magazine titled Water Garden News and that the Manager was interested in knowing why payments had not been made on Plaintiff's account. (Id. ¶ 31.) After further research, the Manager informed Plaintiff that there had been a mistake and the Vice President of Plaintiff was led to believe the debt was owed by Defendants and not Plaintiff. (Id.)
Plaintiff also alleges that it received a check from Sea Life Designs, Inc., one of Plaintiff's customers, on or about May 10, 2009. (Id. ¶ 30.) One of Plaintiff's employees contacted the company upon realizing there was no outstanding balance. (Id.) Plaintiff alleges that its employee was informed that the check was sent to Plaintiff in error and should have been sent to Defendants. (Id.)
In early August, 2009, Plaintiff allegedly realized that Defendants had expanded their line from one product to include fifteen additional products. (Doc. No. 4-2 ¶ 18.) Defendants allege that they have not expanded their product line since September 2008, but have merely changed the size of the containers in which their products are sold. (Doc. No. 20 ¶ 18.)
I. Preliminary Injunction -- Legal Standard
"A plaintiff is entitled to a preliminary injunction in a trademark case when he demonstrates either (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in his favor." Sardi's Restaurant Corp. v. Sardie, 755 F.2d 719, 723 (9th Cir. 1985) (emphasis omitted); see Grocery Outlet Inc. v. Albertson's Inc., 497 F.3d 949, 951 (9th Cir. 2007). The factors "represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases." A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001) (quoting Prudential Real Estates Affiliates, Inc. v. PPP Realty, Inc., 204 F.3d 867, 874 (9th Cir. 2000)). Moreover, the two formulations are "not separate tests but 'the outer reaches of a single continuum.'" Grocery Outlet, 497 F.3d at 951 (quoting Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1201 (9th Cir. 1980).
In a trademark case, the likelihood of success on the merits hinges on plaintiff's ability to show that defendant is using a mark confusingly similar to its own. See GoTo.com. Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000). So central is the issue of confusion that upon a showing of likelihood of success on the merits, the Court may presume irreparable injury. Brookfield Commc'ns, Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1066 (9th Cir. 1999).
II. Probable Success on the Merits - Likelihood of Confusion
To determine the likelihood of confusion, courts look to eight factors announced by the Ninth Circuit in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). The Sleekcraft factors are: (1) the similarity of the marks; (2) the relatedness of the two companies' services; (3) the marketing channel used; (4) the strength of the mark; (5) Defendant's intent in selecting its mark; (6) evidence of actual confusion; (7) the likelihood of expansion into other markets; and (8) the degree of care likely to be exercised by purchasers. GoTo.com., 202 F.3d at 1205 (citing Sleekcraft, 599 F.2d at 348-49).
This eight factor test is "pliant"--some factors are "much more important than others, and the relative importance of each individual factor will be case-specific." Brookfield Commc'ns, 174 F.3d at 1054. "In the context of the Web in particular, the three most important Sleekcraft factors are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as a marketing channel." GoTo.com, 202 F.3d at 1205 (quotation marks and citations omitted). After assessing these important factors, it is often possible to reach a conclusion regarding confusion without considering every factor. See Brookfield Commc'ns, 174 F.3d at 1054 (citing Dreamworks Prod. Group v. SKG Studio, 142 F.3d 1127, 1130-32 (9th Cir. 1998)).
A factory-by-factor analysis leads this Court to believe that, based on the evidence presented by the Parties, the likelihood of confusion between ...