775 F.3d 1118 (9th Cir. 2014), 14-55253, Pom Wonderful LLC v. Hubbard

Docket Nº:14-55253
Citation:775 F.3d 1118, 113 U.S.P.Q.2d 1369
Party Name:POM WONDERFUL LLC, a Delaware limited liability company, Plaintiff-Appellant, v. ROBERT G. HUBBARD, JR., DBA Portland Bottling Company, DBA Pur Beverages, Defendant-Appellee
Attorney:Joseph Scott Klapach (argued), Klapach & Klapach, Beverly Hills, California; Daniel Beck, Roll Law Group P.C., Los Angeles, California; Douglas N. Masters, Loeb & Loeb LLP, Chicago, Illinois, for Plaintiff-Appellant. Heather Lynn McCloskey (argued) and James J.S. Holmes, Sedgwick, LLP, Los Angele...
Judge Panel:Before: David M. Ebel,[*] Andrew J. Kleinfeld, and Susan P. Graber, Circuit Judges. Opinion by Judge Ebel.
Case Date:December 30, 2014
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
SUMMARY

Pom Wonderful, owner of the "POM" standard character mark, filed a trademark infringement claim against Pur to stop Pur from using the word "pom" on its pomegranate-flavored energy drink. On appeal, Pom Wonderful challenged the district court's order of its motion for a preliminary injunction. The court reversed, holding that the district court abused its discretion in finding that Pom Wonderful... (see full summary)

 
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775 F.3d 1118 (9th Cir. 2014)

113 U.S.P.Q.2d 1369

POM WONDERFUL LLC, a Delaware limited liability company, Plaintiff-Appellant,

v.

ROBERT G. HUBBARD, JR., DBA Portland Bottling Company, DBA Pur Beverages, Defendant-Appellee

No. 14-55253

United States Court of Appeals, Ninth Circuit

December 30, 2014

Argued and Submitted, Pasadena, California October 6, 2014.

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Central District of California. D.C. No. 2:13-cv-06917-MMM-CW. Margaret M. Morrow, District Judge, Presiding.

SUMMARY[**]

Trademark / Preliminary Injunction

The panel reversed the district court's order denying a motion for a preliminary injunction in a trademark infringement action under the Lanham Act.

The panel held that the district court abused its discretion in finding that Pom Wonderful, owner of the " POM" standard character mark, was unlikely to demonstrate a likelihood of consumer confusion and therefore was unlikely to succeed on the merits of its claim regarding defendants' use of the word " pŏ m" on their pomegranate-flavored drink.

The panel remanded with instructions that the district court consider whether, in light of the panel's decision, Pom Wonderful met its burden of proving the other elements for a preliminary injunction.

Joseph Scott Klapach (argued), Klapach & Klapach, Beverly Hills, California; Daniel Beck, Roll Law Group P.C., Los Angeles, California; Douglas N. Masters, Loeb & Loeb LLP, Chicago, Illinois, for Plaintiff-Appellant.

Heather Lynn McCloskey (argued) and James J.S. Holmes, Sedgwick, LLP, Los Angeles, California, for Defendant-Appellee.

Before: David M. Ebel,[*] Andrew J. Kleinfeld, and Susan P. Graber, Circuit Judges. Opinion by Judge Ebel.

OPINION

Page 1121

EBEL, Circuit Judge:

This appeal arises from the district court's order denying Plaintiff-Appellant Pom Wonderful's motion for a preliminary injunction. Pom Wonderful--the owner of the " POM" standard character mark--brought a trademark infringement claim against Defendant-Appellee Robert G. Hubbard, Jr., d/b/a Portland Bottling Company and Pur Beverages (" Pur" ) to stop Pur from using the word " pŏ m" on its pomegranate-flavored energy drink. The district court denied Pom Wonderful's motion, finding that Pom Wonderful is unlikely to demonstrate a likelihood of consumer confusion and therefore is unlikely to succeed on the merits of its trademark infringement claim.

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Exercising our jurisdiction under 28 U.S.C. § 1292(a)(1), we hold that the district court abused its discretion in finding that Pom Wonderful is unlikely to succeed on the merits of its claim and, accordingly, we reverse. Because the district court's decision to deny Pom Wonderful's motion for a preliminary injunction was tainted by its mistaken likelihood-of-success determination, we remand with instructions that the district court consider whether, in light of our decision today, Pom Wonderful meets its burden of proving the other elements for a preliminary injunction: that it is likely to suffer irreparable harm in the absence of preliminary relief; that the balance of equities tips in its favor; and that a preliminary injunction is in the public interest.

I. Background1

Pom Wonderful owns numerous trademark registrations that together comprise the " POM" brand family of trademarks. These trademarks are used in connection with various goods, including pomegranate juice beverages. In addition to producing its own " POM" brand goods, Pom Wonderful also sells its pomegranate ingredients to other companies in the food and beverage industry. On occasion, Pom Wonderful licenses the use of its " POM" brand trademarks to these other companies.

Before 2002, when Pom Wonderful first began using the " POM" brand trademarks in connection with beverages, no one in the industry was known to have used the term " pom" in any way. Since 2002, Pom Wonderful has sold more than 190 million bottles of pomegranate juice, making it the leading seller of 100% pomegranate juice in supermarkets throughout the United States. Pom Wonderful's annual supermarket sales exceed $60 million.

Pom Wonderful has devoted a great deal of time--and spent millions of dollars--marketing and selling its " POM" brand products. In 2011 and 2012 alone, Pom Wonderful spent $24 million promoting its pomegranate juice beverages. To protect its investment, and the rights of companies that license its " POM" brand trademarks, Pom Wonderful actively polices third-party uses that may infringe on its trademark rights.

Through these policing efforts, Pom Wonderful discovered that Pur was selling a pomegranate-flavored energy drink labeled " pŏ m" and informed Pur of Pom Wonderful's ownership interest in the " POM" brand trademarks. When Pur refused to change its packaging, Pom Wonderful filed suit, alleging that Pur's use of the word " pŏ m" violated Pom Wonderful's trademark rights under the Lanham Act.2 See 15 U.S.C. § § 1114, 1125(a). Shortly after filing its first amended complaint, Pom Wonderful moved for a preliminary injunction to enjoin Pur from selling or marketing its " pŏ m" beverage.

The district court denied the motion. Specifically, after considering the eight Sleekcraft factors,3 the district court

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found that Pom Wonderful is unlikely to demonstrate a likelihood of consumer confusion as to the source of Pur's " pŏ m" beverage. Absent a likelihood of confusion, the district court concluded that Pom Wonderful is unlikely both to succeed on the merits of its trademark claim and to meet its burden of proving the other Winter 4 factors for issuance of a preliminary injunction: that a preliminary injunction is necessary to prevent irreparable harm to Pom Wonderful; that a balancing of the equities favors a preliminary injunction; and that a preliminary injunction is necessary to protect the public interest. The district court accordingly denied the motion for a preliminary injunction, and Pom Wonderful filed a timely notice of appeal.

II. Standard of Review

We review for abuse of discretion the district court's order denying Pom Wonderful's motion for a preliminary injunction. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). This case implicates two of the ways in which a district court might abuse its discretion. See id. First, a district court abuses its discretion if the court rests its decision on an erroneous legal standard. Id. To determine whether a district court abused its discretion in this way, we review legal conclusions de novo. Id. Second, a district court abuses its discretion if the court rests its decision on a clearly erroneous finding of fact. Id. To determine whether a district court abused its discretion in this way, we review factual findings for clear error. Id. Clear error results " from a factual finding that was illogical, implausible, or without support in inferences that may be drawn from the facts in the record." M.R. v. Dreyfus, 697 F.3d 706, 725 (9th Cir. 2012) (internal quotation marks omitted). In other words, we defer to a district court's factual findings unless, " based on the entire evidence," we are left with " a definite and firm conviction that a mistake has been committed." Lahoti v. Vericheck, Inc., 586 F.3d 1190, 1196 (9th Cir. 2009) (internal quotation marks omitted).

Because de novo review is more stringent than clear error review, it is important to determine which standard applies before considering whether the district court abused its discretion in this case. Pom Wonderful argues that de novo review applies because the district court's decision to deny injunctive relief was grounded in a number of asserted legal errors that the district court committed in applying the Sleekcraft factors. We disagree. Although legal standards certainly inform a district court's application of the Sleekcraft factors, Ninth Circuit precedent requires us to review the district court's Sleekcraft -factor findings for clear error.

In Levi Strauss & Co. v. Blue Bell, Inc., we held unequivocally that " the clearly erroneous standard should be applied in reviewing a trial court's determination concerning likelihood of confusion." 778 F.2d 1352, 1355 (9th Cir. 1985) (en banc). Since Levi Strauss, we have further clarified that a district court's individual Sleekcraft -factor findings--which guide the ultimate likelihood-of-confusion determination--also should be reviewed for clear error. Pac. Telesis Grp. v. Int'l Telesis Commc'ns, 994 F.2d 1364, 1367 (9th Cir. 1993); Reno Air Racing Ass'n. v. McCord, 452 F.3d 1126, 1136 (9th Cir. 2006).

We are bound by that precedent. Accordingly, in reviewing the district

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court's preliminary-injunction decision for an abuse of discretion, we consider whether the district court clearly erred in finding that Pom Wonderful is unlikely to demonstrate a likelihood of consumer confusion.

III. Analysis

We now turn our attention to the issue on appeal: whether the district court abused its discretion in denying Pom Wonderful's motion for a preliminary injunction. " A preliminary injunction is an extraordinary and drastic remedy . . . ." Munaf v. Geren, 553 U.S. 674, 689, 128 S.Ct. 2207, 171 L.Ed.2d 1 (2008) (citation and internal quotation marks omitted). In Winter v. Natural Resources Defense Council, Inc., the Supreme Court announced a four-part test that a party seeking a preliminary injunction must satisfy. 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). Under the Winter test, the moving party must establish that: (1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm in the...

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