The opinion of the court was delivered by: Dolly M. Gee United States District Judge
ORDER GRANTING PRELIMINARY INJUNCTION
This matter is before the Court on Plaintiff's Ex Parte Application for Temporary Restraining Order ("TRO") and Order to Show Cause re Preliminary Injunction ("Ex Parte Application"). For the reasons set forth below, the Motion for Preliminary Injunction is GRANTED.
On September 24, 2010, Plaintiff Interplay Entertainment ("Interplay") filed a complaint against Defendant TopWare Interactive, Inc. ("TopWare") and Doe defendants 1 through 10, asserting causes of action for trademark infringement under the Lanham Act, 15 U.S.C. § 1114, and unfair competition under California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. Interplay filed the Ex Parte Application on October 4, 2010. On October 7, 2010, the Court granted Interplay's Ex Parte Application and issued the TRO, which became effective upon Interplay's posting a corporate security bond in the amount of $15,000. Interplay served TopWare with the TRO on October 8, 2010. Interplay obtained the required bond and filed it on October 13, 2010.
On October 21, 2010, the Court held a hearing on its Order to Show Cause Why a Preliminary Injunction should not issue. TopWare did not file a written opposition and did not appear at the hearing. Following discussions with Plaintiff's counsel, who attended the hearing, the Court grants the Preliminary Injunction for the same reasons set forth in its Order re TRO, as set forth more fully herein.
For more than 25 years, Interplay has developed and published video game software for personal computers and gaming consoles. Interplay is responsible for many successful video game series, including Fallout, Earthworm Jim, Baldur's Gate, Clayfighter, Descent, and, at issue here, Battle Chess. TopWare is also a video game developer and publisher and is an affiliate or subsidiary of Zuxxez Entertainment AG. Both TopWare and Zuxxez are Interplay's competitors. (Caen Decl. ¶ 2.)
The Battle Chess series of video games is an original property that Interplay developed. The original Battle Chess, released in 1988, is a computerized chess game with a fantasy theme. Its basic concept is to have computer animated chess pieces carry out a player's moves by stalking across the chess board to engage in animated combat. Interplay has published two sequels, Battle Chess: Chinese Chess and Battle Chess: 4000, as well as several multi-game collections using various combinations of the titles. Interplay's successful development and promotion of Battle Chess video games for more than two decades has caused Battle Chess to become a valuable property. Interplay has sold Battle Chess through both online and traditional brick-and-mortar retailers. Interplay is currently developing an updated version of Battle Chess, which it expects to release in 2011. (Id. ¶ 3.)
Interplay has registered the trademark Battle Chess with the United States Patent and Trade Office, which has assigned the mark registration number 3,519,455. (Id., Ex. 1.) Interplay has continuously sold Battle Chess and its sequels and compilations and has not abandoned the Battle Chess mark. Interplay has sold thousands of copies of Battle Chess games. The purchasing public has come to associate the Battle Chess mark with Interplay. (Id. ¶ 4.)
On or around June 8, 2010, Interplay learned that TopWare had launched a website promoting a chess video game that TopWare was developing called Battle v. Chess. The website's address is www.battlevschess.com. (Id. ¶ 5, Ex. 2.) Based on announcements and promotional material released by TopWare, its parent company, and its distributors, Interplay believes that TopWare's chess video game will have a nearly identical concept as Interplay's Battle Chess, featuring fantasy-themed animated chess pieces battling to capture squares on a chess board. Interplay believes that TopWare will sell Battle v. Chess to the same target customers-video gamers, particularly strategy game and chess enthusiasts- through the same distribution channels as Battle Chess. (Id. ¶ 7.)
After learning of Battle v. Chess, Interplay wrote to TopWare on June 9, 2010 to express its concerns regarding the Battle v. Chess title. (Id. ¶ 8, Ex. 4.) Interplay alerted TopWare to the existence of the protected Battle Chess mark and requested that TopWare discontinue use of the Battle v. Chess trademark in association with its fantasy chess video games. (Id. ¶ 8.)
TopWare, through its managing director, responded that it would continue to use the Battle v. Chess mark but wished to "discuss" the issue. Interplay believes that TopWare has licensed third parties, including SouthPeak Interactive Corporation, to publish and distribute Battle v. Chess in the United States market. TopWare also lists its video game for pre-order sales through major retailers, including Target, Best Buy, GameStop, and others. (Id. ¶ 9, Ex. 5.)
TopWare has changed its release date at least four times. (Id. ¶ 12.) On September 2, 2010, SouthPeak, issued a press release announcing that Battle v. Chess would be released commercially on September 28, 2010. (Id. ¶ 10.) On September 3, 2010, Interplay again wrote to TopWare demanding that it cease and desist its use of the Battle v. Chess mark. (Id. ¶ 11, Ex. 6.) Throughout August and September 2010, the parties negotiated over use of the Battle Chess mark. At one point, Interplay believed that it had reached an agreement with TopWare to end the dispute. This agreement, however, was never consummated. (Id. ¶ 11.) As of October 4, 2010, the ship date for Battle v. Chess listed on various retailers' websites is October 26, 2010. (Id. ¶ 12, Ex. 7.) Video game companies typically manufacture physical copies of video game discs and packaging approximately two weeks prior to the release date. (Id. ¶ 13.)
Fantasy-themed chess games are a niche market. Consumers buying Battle v. Chess will likely be diverted from buying Interplay's original Battle Chess games or soon-to-be-released Battle Chess sequel. TopWare's Battle v. Chess is currently listed for sale between $20 and $40. The "retro" versions of Interplay's Battle Chess lineup generally sell for around $6. Interplay has not yet set the price for its forthcoming Battle Chess game. (Id. ¶ 14.)
Interplay has no control over the content or quality of Battle v. Chess. TopWare does not have a license to use Interplay's Battle Chess mark and has never sought approval to use any game design, artwork, software code, ...