Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC

Citation115 U.S.P.Q.2d 1726,793 F.3d 313
Decision Date16 July 2015
Docket NumberNo. 14–3063.,14–3063.
PartiesARROWPOINT CAPITAL CORP., Appellant v. ARROWPOINT ASSET MANAGEMENT, LLC ; Arrowpoint Partners GP, LLC; Arrowpoint Partners GP2, LLC; Arrowpoint Fundamental Opportunity Fund, LP ; Arrowpoint Structured Opportunity Fund, LP.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Corby C. Anderson, (Argued), Matthew S. DeAntonio, Nexsen Pruet, Charlotte, NC, Michael W. Arrington, Parkowski, Guerke & Swayze, Wilmington, DE, for Appellant.

Todd Anthony Coomes, Robert W. Whetzel, Richards, Layton & Finger, Wilmington, DE, Jaclyn H. Grodin, Lewis D. Prutzman, (Argued), Tannenbaum, Helpern, Syracuse & Hirschtritt, New York, NJ, for Appellees.

Before: SMITH, JORDAN, and SLOVITER, Circuit Judges.

OPINION OF THE COURT

JORDAN, Circuit Judge.

Arrowpoint Capital Corp. (Capital) appeals an order of the United States District Court for the District of Delaware denying a preliminary injunction in this action for trademark infringement and unfair competition. Invoking the Lanham Act and Delaware state law, Capital sought to enjoin Arrowpoint Asset Management, LLC; Arrowpoint Partners GP, LLC; Arrowpoint Partners GP2, LLC; Arrowpoint Fundamental Opportunity Fund, LP; and Arrowpoint Structured Opportunity Fund, LP (collectively “AAM”) from using a logo or word mark employing the name “Arrowpoint” in connection with any investment-related products and services. Because the District Court's ruling rests on an overly narrow interpretation of the kind of confusion that is actionable under the Lanham Act, we will vacate and remand.

I. Background
A. Factual Background 1

Capital is a Delaware holding company, whose subsidiaries, Arrowood Indemnity Company and Arrowood Surplus Lines Insurance Company, provide insurance and investment-related financial services throughout the United States under the Arrowpoint Capital name. Capital says that it began managing and investing assets derived from insurance policy premiums in 2007 and that its “primary source of income is the investment of its reserves in fixed income securities.” (Opening Br. at 5.) According to Capital, it earned more than one million dollars from investment-related services provided to third-party clients for whom it had executed nearly 1,000 trades between 2007 and 2011. Capital claims to manage about two billion dollars in assets, at least as of 2011, and to have executed over 1,200 trades for its own portfolio between 2007 and 2011. Currently, Capital owns six trademarks registered with the United States Patent & Trademark Office for insurance, investment, and consulting services, all of which feature the words “Arrowpoint Capital” or the logo2

It also has a pending registration for investment management services, as to which AAM has filed an opposition.3 Capital says that it markets its investment services through presentations, sponsorships, speaking engagements, and attendance at industry conferences, and it expended approximately $390,000 between 2007 and 2011 doing so.

The AAM entities, which use the logo

include an investment management company, two private investment funds, commonly called “hedge funds,” and the hedge funds' general partners—all of which are limited liability companies or limited liability partnerships organized under the laws of Delaware with their principle places of business in Denver, Colorado. The AAM entities were formed between December 2007, when AAM first began using the mark “Arrowpoint,” and April 2009. They provide investment-related services, including individual investment management services and administration services for hedge funds. AAM claims to manage over $1.5 billion in assets and to serve “high net worth individuals, companies operating primarily for the benefit of wealthy individuals, family foundations, or trusts.” (App. at 6.)

B. Procedural History

On February 26, 2010, Capital filed a complaint in the District Court, asserting four claims: (1) trademark infringement under Section 32 of the Lanham Act, 15 U.S.C. § 1114 ; (2) unfair competition and false advertising under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ;4 (3) trademark infringement and misappropriation under Delaware common law; and (4) violation of the Delaware Deceptive Trade Practices Act, Del.Code Ann. tit. 6 § 2532. That same day, Capital filed a motion for a preliminary and permanent injunction to prevent AAM “from using the ‘Arrowpoint’ name in any form or the [AAM] logo as a trade name, trademark, or domain name in the advertising, marketing, promotion, sale, offering for sale, or distribution of [AAM's] products and services.” (App. at 113–114.)

The parties engaged in discovery for several months until, on August 6, 2010, Capital moved for a scheduling order and a scheduling conference, which AAM opposed for reasons that are unclear. Two months later, the District Court issued a scheduling order allowing for limited additional discovery and setting a briefing schedule for the injunction motion. In March 2011, Capital notified the District Court that briefing was complete and requested a hearing on its injunction motion.

Over seventeen months later, on August 20, 2012, Capital filed its first motion to supplement the record, seeking to submit affidavits describing nine additional alleged instances of alleged actual confusion that took place after the parties had completed briefing on the injunction motion. Capital filed a second motion to supplement the record on April 15, 2013, seeking to submit evidence—again in the form of affidavits—of seven more instances of alleged actual confusion that had occurred since the first motion to supplement had been filed.

About four months later, on August 13, 2013, Capital submitted a letter to the District Court inquiring about the status of its pending motions. The District Court then issued an order, on September 18, 2013, denying the first motion to supplement, and another on March 25, 2014, denying the second motion to supplement. On May 20, 2014, more than four years after Capital moved for a preliminary injunction, the District Court denied Capital's motion without an evidentiary hearing. This appeal followed.

II. Discussion 5

Capital argues that the District Court erred in denying its motion for a preliminary injunction and the related motions to supplement the record, and it further asserts that, based on the time taken to consider its preliminary injunction motion, the case should be reassigned to a different judge on remand. We address those arguments in turn.

A. Motion for a Preliminary Injunction 6

Preliminary injunctive relief is “an extraordinary remedy” and “should be granted only in limited circumstances.” Am. Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1426–27 (3d Cir.1994) (internal quotation marks omitted). [O]ne of the goals of the preliminary injunction analysis is to maintain the status quo, defined as the last, peaceable, noncontested status of the parties.” Opticians Ass'n of Am. v. Indep. Opticians of Am., 920 F.2d 187, 197 (3d Cir.1990) (internal citations and quotation marks omitted). The test for such relief is familiar. “A party seeking a preliminary injunction must show: (1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief.” Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir.2004). The “failure to establish any element [of that test] renders a preliminary injunction inappropriate.” NutraSweet Co. v. Vit–Mar Enters., Inc., 176 F.3d 151, 153 (3d Cir.1999).

Typically, then, the first step in the analysis is to consider whether the party seeking the preliminary injunction is likely to succeed on its underlying legal claims, which, in this case, center on trademark infringement.7 “To prevail on a claim for trademark infringement or unfair competition under the Lanham Act, the owner of a valid and legally protectable mark ... must show that a defendant's use of a similar mark for its goods ‘causes a likelihood of confusion.’ Kos, 369 F.3d at 708–09 (quoting A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir.2000) ).8 In determining whether there is a likelihood of confusion, we have adopted a non-exhaustive list of factors, commonly referred to within our Circuit as the Lapp factors,” based on an early case in which they were set forth. Id. at 709 ; see also Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir.1983). Because some of the Lapp factors as initially stated were “not apposite for directly competing goods,” we later “adapted [them] to make them applicable whether the products directly compete or not.” A & H, 237 F.3d at 212–13. As adapted, the factors are as follows: (1) the degree of similarity between the owner's mark and the allegedly infringing mark; (2) the strength of the owner's mark; (3) the price of the goods and other factors indicating the care and attention one expects would be given when making a purchase; (4) the length of time the alleged infringer has used the mark without evidence of actual confusion arising; (5) the intent of the alleged infringer in adopting the mark; (6) the evidence of actual confusion; (7) whether the goods are marketed through the same channels; (8) the extent to which the target markets are the same; (9) the perceived relationship of the goods, whether because of their near-identity, similarity of function, or other factors; and (10) other facts suggesting that the prior owner might be expected to expand into the alleged infringer's market. Id. at 215. While the Lapp factors originally referred to competing products, it is clear that, because the Lanham Act protects against the use of marks which cause confusion as to “goods, services, or commercial activities, 15 U.S.C. 1125(a)(...

To continue reading

Request your trial
91 cases
  • ADT, LLC v. Capital Connect, Inc.
    • United States
    • U.S. District Court — Northern District of Texas
    • October 28, 2015
    ...four customer declarations as proof of actual confusion on a motion for summary judgment. See Arrowpoint Capital Corporation v. Arrowpoint Asset Management, LLC, 793 F.3d 313, 325 (3d Cir.2015).Capital Connect argues that it has also called into question the credibility of roughly thirteen ......
  • Eaton Corp. v. Geisenberger
    • United States
    • U.S. District Court — District of Delaware
    • September 15, 2020
    ...particularly either of the first two, renders preliminary injunctive relief "inappropriate." See Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC , 793 F.3d 313, 319 (3d Cir. 2015) (quoting NutraSweet Co. v. Vit-Mar Enters., Inc. , 176 F.3d 151, 153 (3d Cir. 1999) ).B. Irreparable Ha......
  • United States v. Shulick
    • United States
    • U.S. Court of Appeals — Third Circuit
    • November 15, 2021
    ...We review the District Court's decision to supplement the record for an abuse of discretion. Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC , 793 F.3d 313, 327 n.16 (3d Cir. 2015). A district court may supplement the record if "anything material to either party is omitted from or m......
  • United States v. Shulick
    • United States
    • U.S. Court of Appeals — Third Circuit
    • April 13, 2021
    ...We review the District Court's decision to supplement the record for an abuse of discretion. Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC , 793 F.3d 313, 327 n.16 (3d Cir. 2015). A district court may supplement the record if "anything material to either party is omitted from or m......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT