Chemlawn Services Corp. v. GNC Pumps, Inc.
| Decision Date | 02 July 1987 |
| Citation | 3 USPQ2d 1313,823 F.2d 515 |
| Parties | CHEMLAWN SERVICES CORPORATION and CL Licensing Corporation, Plaintiffs-Appellees, v. GNC PUMPS, INC. and Gary R. Palmer, Defendants-Appellants. 87-1093. |
| Court | U.S. Court of Appeals — Federal Circuit |
Donald H. Fidler, Fidler and Associates, P.C., Houston, Tex., argued for defendants-appellants.
Thomas W. Flynn, Biebel, French & Nauman, Dayton, Ohio, argued for plaintiffs-appellees. Also on the brief was Stephen H. Cagle, Arnold, White & Durkee, Houston, Tex.
Before FRIEDMAN and DAVIS, Circuit Judges, and NICHOLS, Senior Circuit Judge.
This is an appeal from an order of the United States District Court for the Southern District of Texas, Houston Division (Bue, J.), granting Chemlawn Services Corporation's and CL Licensing Corporation's (Chemlawn's or appellees') motion for a preliminary injunction prohibiting GNC Pumps, Inc. and Gary R. Palmer (GNC or appellants) from selling or otherwise distributing appellants' Mag-P spray guns. We reverse the preliminary injunction on the grounds that it was not properly supported by findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a), and that it failed to require a security bond as required by Fed.R.Civ.P. 65(c).
The relevant facts are uncontroverted for the purposes of this appeal. Chemlawn and GNC have been engaged in the manufacture and distribution of plastic spray guns used in the lawn care and gardening industry. On April 24, 1986, Chemlawn filed a complaint against GNC alleging infringement of its U.S. Letters Patent 4,083,497 and U.S. Design Patent 238,671; unfair competition in violation of Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a); and common law unfair competition. Chemlawn sought damages and injunctive relief against appellant GNC for distributing GNC's Mag-P plastic spray gun which allegedly violated the protected product configuration of Chemlawn's own spray gun. 1 On June 4, 1986, Chemlawn moved for a preliminary injunction against GNC, pursuant to Sec. 43(a) of the Lanham Act, and a hearing was held on October 9, 1986. At the conclusion of the hearing, the District Court orally granted Chemlawn's request for injunctive relief and instructed the parties to submit proposed findings of fact and conclusions of law to the court by October 24, 1986. Both parties complied with this request: Chemlawn proffered proposed findings of fact and conclusions of law on October 17, 1986 and GNC made a response to Chemlawn's submission on October 24, 1986. On November 14, 1986, the court granted Chemlawn's request for a temporary restraining order (TRO) pursuant to alleged violations by GNC of the October 9, 1986 preliminary injunction issued from the bench. In issuing the TRO, the District Court stated that its October 9, 1986 grant of a preliminary injunction remained in full force and effect and prohibited GNC from further "offering or selling or otherwise distributing a spray gun identified as [GNC's] Mag-P spray gun." No findings of fact and conclusions of law were issued at that time, nor was a security bond required as mandated by Rule 65(c) of the Federal Rules of Civil Procedure.
On November 18, 1986, GNC filed a notice of appeal to the Court of Appeals for the Federal Circuit. Also in November, 1986, GNC petitioned this court pursuant to Fed.R.App.P. 8(a) for a stay of the District Court's preliminary injunction. At that time this court advised GNC that, under Rule 8(a), a motion for stay should properly be made first in the District Court. GNC then petitioned the District Court for a stay of the preliminary injunction on November 20, 1986.
On December 11, 1986, the District Court issued an order requiring Chemlawn and GNC to submit additional findings of fact and conclusions of law within ten days. The court stated that the parties had inadequately addressed the propriety of granting Chemlawn's motion for preliminary injunction and had failed to address satisfactorily the issues of distinctiveness and secondary meaning within the context of trade dress infringement. It was not until February 3, 1987, some two-and-one-half months after the written TRO and preliminary injunction issued and two-and-one-half months after GNC filed a notice of appeal with this court, that the District Court finally issued its findings of fact and conclusions of law purportedly supporting its October 9, 1986 oral preliminary injunction and its November 14, 1986 TRO/preliminary injunction. 652 F.Supp. 1382, 2 USPQ2d 1416 (S.D.Tex 1987). The judge also directed Chemlawn to post a security bond as required by Fed.R.Civ.P. 65(c).
On February 5, 1987, GNC once again petitioned this court for a stay of the preliminary injunction under Rule 8(a) on the basis that the District Court had taken appellants' motion "under advisement" since November 20, 1986 and it was no longer practicable to pursue relief in the District Court.
In an unpublished order filed March 11, 1987, this court recognized that it was no longer practicable for GNC to seek relief from the District Court in light of the two-and-one-half month delay on appellants' District Court motion for stay. In addition, we acknowledged GNC's likelihood of success on appeal in view of the District Court's procedural deficiencies and we therefore granted GNC's motion for stay of the preliminary injunction. See, e.g., Atlas Powder Co. v. Ireco Chems., 773 F.2d 1230, 1233-34, 227 USPQ 289, 291-93 (Fed.Cir.1985) (). This court recognized that the District Court's findings of fact had been belatedly entered but left to the merits panel to determine whether those findings should be reviewed on appeal.
The District Court's actions in this case are flawed in two respects. First, the court failed to issue findings of fact and conclusions of law with its preliminary injunction as required by Rule 52(a). Second, the court attempted to cure that error at a time when it no longer had jurisdiction over the case because GNC had already filed an appeal to this court.
Rule 52(a) 2 expressly requires that a preliminary injunction be accompanied by findings of fact and conclusions of law. In this instance, the judge failed to enter such findings of fact and conclusions of law until February 3, 1987, some five months after his initial grant (from the bench) of a preliminary injunction in favor of Chemlawn and two-and-one-half months after he issued a written preliminary injunction and TRO.
The issues of law before us are procedural and we therefore defer to the law of the Fifth Circuit regarding preliminary injunctions. Panduit Corp. v. All States Plastic Mfg. Co., Inc., 744 F.2d 1564, 1572-75, 223 USPQ 465, 469-72 (Fed.Cir.1984); Power Controls Corp. v. Hybrinetics, Inc., 806 F.2d 234, 237, 231 USPQ 774, 776 (Fed.Cir.1986). In Davis v. United States, 422 F.2d 1139 (5th Cir.1970), that court of appeals was faced with the proper adjudication in a case involving a preliminary injunction entered by the District Court but unsupported by findings of fact and conclusions of law. The court adopted the language of Mayo v. Lakeland Highlands Canning Co., 309 U.S. 310, 60 S.Ct. 517, 84 L.Ed. 774 (1940), stating that "full and fair compliance with Rule 52(a) 'is of the highest importance to a proper review of the action of a court in granting or refusing a preliminary injunction.' " Davis, supra, 422 F.2d at 1141 (quoting Mayo, supra, 309 U.S. at 316, 60 S.Ct. at 520). In Davis, the court went on to say that, in the absence of findings of fact, a circuit court, on appeal, normally will vacate the District Court's preliminary injunction and remand the case for appropriate findings. Davis, supra, 422 F.2d at 1141. 3
That the District Court eventually and belatedly entered findings of fact and conclusions of law on February 3, 1987 4 did not cure the defect of failing to do so at the time the preliminary injunction first issued and cannot retroactively legitimate that injunction. In Beliz v. W.H. McLeod & Sons Packing Co., 765 F.2d 1317 (5th Cir.1985), for example, a District Court's order supplementing judgment was held void by the Fifth Circuit after being entered 79 days beyond final judgment.
The Fifth Circuit approach is completely consistent with this court's decision in Digital Equip. v. Emulex Corp., 805 F.2d 380, 231 USPQ 779 (...
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