GTE Corp. v. Williams, 83-1545

• Decision Date: 06 April 1984
• Docket Number: No. 83-1545,83-1545
• Citation: 222 USPQ 803,731 F.2d 676
• Parties: GTE CORPORATION, Plaintiff-Appellee, v. David R. WILLIAMS, d/b/a General Telephone, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 676

731 F.2d 676

222 U.S.P.Q. 803

GTE CORPORATION, Plaintiff-Appellee, v. David R. WILLIAMS, d/b/a General Telephone, Defendant-Appellant.

No. 83-1545.

United States Court of Appeals, Tenth Circuit.

April 6, 1984.

Robert S. Campbell, Jr., Salt Lake City, Utah (E. Barney Gesas, also of Watkiss & Campbell, and Anthony L. Rampton of Fabian & Clendenin, Salt Lake City, Utah, with him on the brief), for defendant-appellant.

Jeffrey A. Schwab, New York City (Lawrence E. Abelman, also of Abelman, Frayne & Rezac, New York City, Philip Mallinckrodt and Robert Mallinckrodt of Mallinckrodt, Mallinckrodt, Russell & Osborne, Salt Lake City, Utah, with him on the brief), for plaintiff-appellee.

Before BARRETT, McKAY and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

Defendant David R. Williams appeals from an order granting plaintiff GTE Corporation's motion for a preliminary injunction. The principal issue on appeal is the relevance of delay in seeking relief from trademark infringement as a factor in determining whether to grant a preliminary injunction pendente lite.

In December 1982 GTE brought suit seeking damages and injunctive relief against Williams for trademark infringement under the Lanham Act, 15 U.S.C. Secs. 1051-1127, and for common law trademark infringement under pendent jurisdiction. GTE claimed that Williams had infringed its rights in the trademark "General Telephone" by using that name to market mobile telephone equipment and services in the Wasatch Front area of Utah. A little over a month later GTE moved for a preliminary injunction.

The hearing on the motion for a preliminary injunction took place in March 1983. In memoranda filed before the hearing both parties acknowledged that a party seeking a preliminary injunction must establish: (1) that it has a substantial likelihood of success on the merits; (2) that the movant will suffer irreparable injury if the preliminary injunction is not granted; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) that the injunction will not be adverse to the public interest. Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir.1980). After the hearing and after reviewing the memoranda and documents filed in the case, the trial court granted GTE's motion for a preliminary injunction.

From 1935 to 1959 "General Telephone" was the name of the corporation that is now GTE Corporation. It then became "General Telephone and Electronics Corporation," and in 1982 it became "GTE Corporation." Most of GTE's regional subsidiaries have names that begin with the words "General Telephone Company of." The corporation applied for a federal registration for the trademark "General Telephone" in 1981 and received it in 1982. GTE, through subsidiaries, provides mobile telephone equipment and services, but does not provide such equipment and services in Utah.

Williams has been in the mobile telephone business since 1954 and has been using the name "General Telephone" since approximately 1974. Williams uses "General Telephone" only for marketing; for other purposes he uses the name "Industrial Communications." Because Williams claimed his lack of knowledge would prevent GTE from succeeding on the merits, both parties agreed to focus on whether Williams had knowledge of GTE's use of the mark "General Telephone" when he began doing business under that name.

The court found that the name "General Telephone" was well known nationally in the late 1960s and early 1970s. It found that Williams knew of a company using the name "General Telephone and Electronics" before he began using the name "General Telephone," but made no finding on Williams' denial of knowledge of GTE's use of "General Telephone" as a name and trademark. The trial court also found that GTE had known about Williams' use of the mark "General Telephone" since 1979. As conclusions of law, the trial court set out the four factors necessary to support a preliminary injunction. It found that there was a "substantial likelihood" GTE would succeed on the merits. The court concluded that GTE would suffer irreparable harm if it did not order the preliminary injunction but did not explain the basis for its conclusion. Subsequently, upon consideration of Williams' motion for a stay pending appeal, the court expressed doubt about the adequacy of the record to support a preliminary injunction and, therefore, granted the stay.

On appeal Williams contends that the trial court did not properly consider whether denial of a preliminary injunction would irreparably harm GTE and whether the balance of hardships tipped in GTE's favor. Specifically, Williams contends that the trial court did not accord appropriate weight to GTE's delay in bringing suit.

A preliminary injunction is an extraordinary remedy; it is the exception rather than the rule. United States v. Lambert, 695 F.2d 536, 539 (11th Cir.1983). In determining whether a preliminary injunction is warranted, a court must be guided by normal equitable principles and must weigh the practicalities of the situation. Consumers Union of United States, Inc. v. Theodore Hamm Brewing Co., 314 F.Supp. 697, 699-700 (D.Conn.1970).

The key to proving trademark infringement is showing a likelihood of confusion as to the source of the product or service. 15 U.S.C. Sec. 1114. GTE suggests that the trial court's finding of a "substantial likelihood" that GTE would succeed on the merits diminishes the importance of a showing of irreparable injury. The likelihood of success, though, is only one factor to be considered on a motion for a preliminary injunction. Irreparable injury is equally important. American Radio Association v. Mobile Steamship Association, 483 F.2d 1, 4 (5th Cir.1973). The apparent weakness of Williams' case does not obviate GTE's burden of showing irreparable harm.

Some cases suggest that a preliminary showing of likelihood of confusion alone is a sufficient showing of irreparable injury to support a preliminary injunction. Paco Rabanne Parfums v. Norco Enterprises, Inc., 680 F.2d 891, 894 (2d Cir.1982) (likelihood of damage to good will and reputation caused by confusing similarity entitles a plaintiff to a preliminary injunction); P. Daussa Corp. v. Sutton Cosmetics (P.R.) Inc., 462 F.2d 134, 136 (2d Cir.1972) (confusing similarity is itself sufficient injury to support a preliminary injunction); Wesley-Jessen Division of Schering Corp. v. Bausch & Lomb Inc., 698 F.2d 862, 867 (7th Cir.1983) (a trademark owner's inability to control the quality of the infringing party's product is irreparable injury). Presumably the trial court was relying on such cases when it stated at the beginning of the hearing that it did not think the showing of irreparable harm had to be great in a trademark case. However, we do not read those cases as saying that irreparable harm is an insignificant factor in considering motions for preliminary injunctions in trademark cases; rather, they stand for the proposition that infringement alone can...