245 F.3d 335 (4th Cir. 2001), 01-1289, Microstrategy Incorp. v. Motorola

Docket Nº:01-1289
Citation:245 F.3d 335
Party Name:MICROSTRATEGY INCORPORATED, Plaintiff Appellant, vs. MOTOROLA, INCORPORATED,Defendant Appellee.
Case Date:March 28, 2001
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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245 F.3d 335 (4th Cir. 2001)




No. 01-1289

United States Court of Appeals, Fourth Circuit

March 28, 2001

Argued: March 15, 2001

Amended April 3, 2001

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge.


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[Copyrighted Material Omitted]

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ARGUED: Carter G. Phillips, SIDLEY & AUSTIN, Washington, D.C., for Appellant. Edward W. Warren, KIRKLAND & ELLIS, Washington, D.C., for Appellee. ON BRIEF: Daniel Meron, Amanda L. Tyler, Benjamin Gruenstein, SIDLEY & AUSTIN, Washington, D.C.; Jonathan Klein, MICROSTRATEGY, INCORPORATED, Vienna, Virginia, for Appellant. C. Torrance Armstrong, MCGUIRE WOODS, L.L.P., McLean, Virginia; Brian D. Sieve, KIRKLAND & ELLIS, Chicago, Illinois; Jerome Gilson, BRINKS, HOFER, GILSON & LIONE, Chicago, Illinois, for Appellee.

Before NIEMEYER, MOTZ, and GREGORY, Circuit Judges.

Affirmed by published opinion. Judge Motz wrote the majority opinion, in which Judge Gregory joined. Judge Niemeyer wrote a dissenting opinion.


In this interlocutory appeal, we agreed to review on an expedited basis the denial of a preliminary injunction to MicroStrategy, Incorporated, which seeks to enjoin Motorola, Incorporated, from use of a purported MicroStrategy trademark. For the reasons that follow, we affirm.


Motorola, a global communications and electronics company, produces electronic hardware. In June 2000, Motorola held a business summit of its marketing officers to determine how to market more effectively its services and products on a worldwide basis. The company decided to develop a new brand, which would cut across its various business interests, to establish

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a more cohesive corporate identity. In early July, Motorola contacted three advertising agencies, inviting each to compete in creating this new brand. The company met with all three agencies during the week of August 7, 2000. One agency, Ogilvey & Mather, suggested the use of "Intelligence Everywhere" as a trademark and global brand for Motorola products. Ogilvey & Mather also represented that its attorneys had conducted a trademark search for "Intelligence Everywhere," which revealed no conflicting use of the phrase as a trademark.

Motorola selected Ogilvey & Mather as its agency and began its normal procedures for clearing "Intelligence Everywhere" as a trademark. In-house trademark counsel for Motorola performed and commissioned various trademark searches for "Intelligence Everywhere" and turned up no conflicting trademark uses of the phrase. On October 5, 2000, in-house counsel informed Motorola management that no conflicting marks had been found and that the phrase was available for use as a mark in the United States and throughout the world. However, in-house counsel also informed Motorola management that a Canadian company, Cel Corporation, had registered the domain name "intelligenceeverywhere.com" and further investigation revealed that Cel might be using the name as a trademark on some products. A month later, Motorola obtained Cel's rights to "Intelligence Everywhere."

On October 19, 2000, Motorola filed an intent-to-use application with the United States Patent and Trademark Office for the registration of the trademark "Intelligence Everywhere," indicating its intent to use this mark on a vast array of its products and services. On December 10, 2000, Motorola registered the domain name "intelligenceeverywhere.com" with Network Solutions, Inc. in Herndon, Virginia.

On January 8, 2001, MicroStrategy,1 a producer of communication software, notified Motorola that MicroStategy had been using "Intelligence Everywhere" as a trademark since "at least as early as 1998." A. 461. MicroStrategy further stated that the mark had obtained common law protection, and that Motorola's intended use of the mark would constitute unlawful infringement. Motorola responded by expressing its belief that its use of the mark would not violate state or federal law and its intent to continue using the mark. MicroStrategy then submitted its own application to the United States Patent and Trademark Office seeking to register the trademark, "Intelligence Everywhere."

On February 13, 2001, MicroStategy filed this action in the United States District Court for the Eastern District of Virginia, raising claims of trademark infringement, trademark dilution, and cybersquatting. MicroStrategy moved the court for a preliminary injunction to prevent Motorola's intended use of the mark. Such an injunction would have prevented Motorola from launching its planned global advertising campaign around the "Intelligence Everywhere" mark, otherwise scheduled to begin the week of March 19, 2001. On February 23, 2001, the district court heard oral argument and denied the motion for a preliminary injunction, explaining its rationale from the bench; the court issued a written opinion five days later, on February 28, 2001.

After noting an interlocutory appeal on its trademark infringement claim, MicroStrategy

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then moved this court for expedited consideration of that appeal.2 We granted the request and, after receiving briefs from the parties, heard oral argument on the matter on March 15, 2001. Immediately following argument, we issued a written order, which affirmed the district court's judgment denying the injunction. We explain here our reasons for that order.


We review the grant or denial of a preliminary injunction for abuse of discretion, recognizing that "preliminary injunctions are extraordinary remedies involving the exercise of very far-reaching power to be granted only sparingly and in limited circumstances." Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 816 (4th Cir. 1992) (internal quotation marks omitted).

As the district court noted, in order to obtain a preliminary injunction a plaintiff must satisfy the familiar four-factor test established in Blackwelder Furniture Co. v. Selig Mfg. Co., 550 F.2d 189 (4th Cir. 1977). A court must consider (1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied; (2) the likelihood of harm to the defendant if the request is granted; (3) the likelihood that the plaintiff will succeed on the merits; and (4) the public interest. Id. at 195-97; Direx, 952 F.2d at 812.

"[T]he first step . . . is for the court to balance the 'likelihood' of irreparable harm to the plaintiff against the 'likelihood' of harm to the defendant; and if a decided imbalance of hardship should appear in plaintiff's favor, then . . . [i]t will ordinarily be enough that the plaintiff has raised questions going to the merits so serious, substantial, difficult, and doubtful, as to make them fair ground for litigation." Blackwelder, 550 F.2d at 195 (emphasis added). But "if 'the plight of the defendant [is] not substantially different from that of the plaintiffs,' that is, if there is no imbalance of hardship in favor of the plaintiff, then 'the probability of success begins to assume real significance,' and interim relief is more likely to require a clear showing of a likelihood of success." Direx, 952 F.2d at 808 (quoting Blackwelder, 550 F.2d at 195 n.3).

In this case, the grant of an injunction would cause at least as much harm to the defendant, Motorola, as its denial would to the plaintiff, MicroStrategy. Indeed, to some extent, the parties' arguments on irreparable harm present two sides of the same coin. Each maintains that it has superior rights to the use of "Intelligence Everywhere" as a trademark and that the grant, or denial, of injunctive relief will cause irreparable harm to its use of the mark. Thus, we can only conclude that a "decided imbalance of hardship" does not weigh in MicroStrategy's favor. Blackwelder, 550 F.2d at 195. In fact, it well may be that Motorola has demonstrated that it will suffer more from a grant of an injunction than MicroStrategy will from its denial.3 At the very least, "there is no

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imbalance of hardship"; accordingly, we turn to the question of likelihood of success on the merits. Direx, 952 F.2d at 808.

When, as here, the balance of hardship "does not tilt decidedly in plaintiff's favor" then a plaintiff must demonstrate a "strong showing of likelihood of success" or a "substantial likelihood of success" by "clear and convincing evidence" in order to obtain relief. Id. at 818 (internal quotation marks and citations omitted). In trademark cases, a plaintiff's burden may be even greater. As we noted in Direx, the foremost trademark authority has stated that "when the hardship balance does not tip 'decidedly' or 'significantly' in favor of the plaintiff," then the plaintiff must prove the "'probability (not mere possibility)'" of success on the merits; in other words, the plaintiff must have "a very clear and strong case." Direx, 952 F.2d at 813 (quoting 2 J. Thomas McCarthy on Trademarks and Unfair Competition S 30.16 (2d ed. 1980)). "'[T]o doubt is to deny'"; thus, "if there is doubt as to the probability of plaintiff's ultimate success on the merits, the preliminary injunction must be denied." Id.

With this standard in mind, we turn to the question of whether MicroStrategy has demonstrated substantial likelihood of success on the merits in its trademark infringement claim. For a plaintiff to prevail on a claim of trademark infringement, the plaintiff must first and most fundamentally prove that it has a valid and protectable mark. See Petro Stopping Ctrs. v. James River Petroleum, 130 F.3d 88, 91 (4th Cir. 1997).

The district court held that...

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