The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge
PRELIMINARY INJUNCTION AND MOTION TO STRIKE ORDER DENYING MOTION FOR [Docket Numbers 14, 30.]
This case involves a dispute over the trademark "ACCUFUSER," under which medical infusion pumps are sold. Curlin Medical, Inc. has moved for a preliminary injunction forbidding Defendants Woo Young Medical Co., Inc. and WYM ITC USA, Inc. (collectively, "Woo Young") from using the trademark to sell medical infusion pumps in the U.S. Curlin doesn't dispute Woo Young's right to use the trademark outside the U.S. Woo Young moved to strike Curlin's reply to its opposition, because the reply is over-length and raises issues not raised in the opening brief. On January 18, the parties appeared through counsel at a hearing on both motions.
Under Winter v. Natural Resources Defense Council, [a] plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.
129 S.Ct. 365, 374 (2008). The briefing addressed all four factors. Under an alternate formulation of the test, the Court can grant a preliminary injunction if it finds "serious questions" going to the merits, if the balance of hardships tips sharply in the plaintiff's favor, and if the other two Winter factors are satisfied. Alliance for Wild Rockies v. Cottrell, 622F.3d 1045, 1052 (9th Cir. 2010).
As an initial matter, the Court finds it likely Curlin will ultimately succeed on the merits.
The parties agree that the parties' distributor agreement, amended several times over the course of their business relationship, determines who owns the trademark. But the interpretation urged by Woo Young appears to be unreasonable. Regardless of what the parties might have subjectively intended the contract to say, section 7 of the agreement, dealing with trademarks, actually reserves Woo Young's proprietary rights only in trademarks it has already registered in the territory. Curlin's predecessor had the right to any trademarks it registered after the agreement was entered into. After termination of the agreement, Curlin's predecessor was required to cease using Woo Young's trademarks. This agreement doesn't appear to protect the ACCUFUSER trademark here, because Woo Young didn't register the mark in the U.S. It also doesn't appear to require Curlin to transfer ownership of the mark to Woo Young.
The Court need not engage in a full merits analysis at this time, however, because it is apparent the injunction must be denied because Curlin hasn't shown either a likelihood of irreparable harm (as required under Winter) or that the balance of hardships tips sharply in its favor (as required under the alternate Cottrell formulation).
Curlin and Woo Young intend to use exactly the same mark on exactly the same products. In fact, the parties agree pumps sold under the mark were all manufactured by Woo Young, so there is no dispute they are identical in appearance and quality. The parties therefore agree there is a likelihood of confusion. Based on this, Curlin argues that the Court must find a likelihood of irreparable harm. At the hearing, Curlin's counsel cited Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873 (9th Cir. 2009) for the principle that a possibility of confusion was sufficient require a finding of irreparable harm in trademark cases. Marlyn doesn't compel a finding of irreparable harm in every case where a likelihood of confusion is shown; rather, it holds that a court may reasonably infer irreparable harm once a likelihood of confusion has been shown. Id. at 877. Marlyn also adheres to the Winter standard on the question of "possibility" as opposed to "likelihood" of harm. Id.
Curlin has suggested that even though the products are identical, customers might become confused about which distributor they are dealing with and, if they are dissatisfied with another distributor's service or support, Curlin's goodwill could erode. The pumps aren't sold directly to the public, but instead are marketed to physicians and other sophisticated purchasers. There is no evidence of the degree to which service and support matters to purchasers of infusion pumps. Woo Young hasn't yet begun selling the pumps in the U.S., so there's no evidence about how they would be sold.
More significantly, Woo Young isn't ready to sell the pumps in the U.S. and won't be ready for some time. Before beginning to sell the pumps here, Woo Young would first need to reach an agreement with a distributor. Up to now, its success in recruiting distributors has been hampered by the dispute so it doesn't seem likely this will happen soon. The parties also mentioned at the hearing that any new distributor would first need to obtain FDA approval before beginning to sell infusion pumps in the U.S. That series of requirements stands in the way of Woo Young's distribution the pumps in the U.S. Therefore, even though Curlin might be able to show a likelihood of harm if the injunction is denied and if events unfold as Woo Young envisions them, Curlin can't show it is "likely to suffer irreparable harm in the absence of preliminary relief . . . ." Winter, 129 S.Ct. at 374 (emphasis added).
For much the same reasons, Curlin can't show that the balance of hardships tips in its favor at present, much less that the balance tips "sharply" in its favor. Quite simply, there is little showing of any hardship to Curlin at this time. If Woo Young were to recruit a distributor and that distributor were to obtain FDA approval, Curlin might then begin to face some substantial hardships.
The motion for preliminary injunction is therefore DENIED WITHOUT PREJUDICE. If Woo Young's distribution of infusion pumps becomes imminent, Curlin is not foreclosed from renewing its motion at that time.
Woo Young's motion to strike the reply is DENIED AS MOOT. In future, the parties should know that the Court's general practice is to ignore arguments raised for the first time in a reply brief. See Mesa Grande Band of Mission ...