Electropix v. Liberty Livewire Corp.

• Decision Date: 20 August 2001
• Docket Number: No. CV 01-4651 FMC (MCX).,CV 01-4651 FMC (MCX).
• Citation: 178 F.Supp.2d 1125
• Parties: ELECTROPIX, d/b/a Live Wire, Plaintiff, v. LIBERTY LIVEWIRE CORPORATION; Liberty Media Corporation; and Does 1-9, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

178 F.Supp.2d 1125

ELECTROPIX, d/b/a Live Wire, Plaintiff, v. LIBERTY LIVEWIRE CORPORATION; Liberty Media Corporation; and Does 1-9, inclusive, Defendants.

No. CV 01-4651 FMC (MCX).

United States District Court, C.D. California.

August 20, 2001.

Daniel M. Cislo, Robert J. Lauson, Cislo & Thomas, Santa Monica, CA, for Plaintiff.

Rod S. Berman, Jeffrey K. Riffer, Alan Leggett, Jeffer Mangels Butler & Marmaro, Los Angeles, CA, for Defendants.

ORDER RE: PRELIMINARY INJUNCTION

COOPER, District Judge.

I. Background

Plaintiff Electropix, Inc. is a California corporation doing business as Live Wire Productions or Live Wire ("Plaintiff"), with offices in Rancho Palos Verdes, County of Los Angeles, California. Plaintiff is in the business of feature film and television production, including digital, sound and design effects, animation, commercials, location-based attractions, simulations, and interactive media. (Comp., ¶ 4) After over ten (10) years of existence, Plaintiff remains a small company, with four (4) employees and up to sixteen (16) additional contract workers. (Kristen Dec., ¶ 5)

Defendant Liberty Livewire Corporation ("Liberty Livewire") is a Delaware corporation with offices in Santa Monica, County of Los Angeles, California. Liberty Livewire, including a company formerly known as Todd-AO Corporation and numerous other companies located in Los Angeles, is also in the business of feature film and television production, including post production services, digital effects, sound design, and animation. (Id. at ¶ 5)

Defendant Liberty Media Corporation ("Liberty Media") is a Delaware Corporation with offices in Englewood, Colorado. (Id. at ¶ 6) Liberty Livewire is a majority owned subsidiary of Liberty Media, which holds interests in a broad range of video programming, communications, technology, and Internet businesses in the United States, Europe, South America and Asia, See Liberty Livewire Corporation, at http: //www. libertylivewire.com/news/ 3Q2000 EarningsRelease.htm (last visited July 30, 2001).

Since August 30, 1990, Plaintiff has been using its trade name and trademark "Live Wire" in connection with its services. (Id. at ¶ 8, Ex. A) Recent work by Plaintiff includes commercial spots for the Disney Channel; ABC/Disney; a television pilot; a theme park attraction for Paramount/MGM; as well as many film and television projects. (Id. at ¶ 10) Plaintiff has been recognized for its high quality interactive programs. (Scott Dec., ¶ 3)

On July 6, 1999 Defendants filed an intent-to-use federal trademark application for the mark "Liberty Livewire" for goods and services, including production of television programming. That application is pending. (Id. at ¶ 11)

On June 12, 2000 Todd-AO Corporation announced it had changed its name to Liberty Livewire Corporation as part of a transaction with Liberty Media. The name change became effective June 9, 2001. (Id. at ¶ 12, Ex. B)

In early August, 2000 Plaintiff learned for the first time of Liberty Livewire's name change and of Liberty Media's trademark application. (Id. at ¶ 13)

On September 18, 2000 Plaintiff filed a federal trademark application to register its mark "Live Wire." The application is pending. (Id. at ¶ 14, Ex. C) Plaintiff also filed a California trademark application to register its service mark "Live Wire." That application was granted and the mark was registered in California on October 23, 2000. (Id. at ¶ 15)

On October 20, 2000 counsel for Plaintiff sent a letter to Defendants, asserting infringement of its mark "Live Wire." (Id. at ¶ 16, Ex. D) The parties exchanged correspondence, but no agreement was reached between them. (Id. at ¶ 17; Exs. E, F) In February of 2001, counsel for Plaintiff and Defendants exchanged another round of correspondence, but to no avail. (Id. at Ex. F; Opp., Schachter Dec., ¶¶ 8-11)

On March 15, 2001 the United States Patent and Trademark Office ("USPTO") issued an "Office Action" in Plaintiff's trademark application, noting that Plaintiff's application may be rejected in view of Defendants' pre-existing trademark application. (Id., Ex. G)

In May, 2001 Plaintiff became aware of Liberty Livewire's use of the mark "Livewire" alone, without "Liberty," in conjunction with its business. (Id. at ¶ 19, Ex. H; Kristen Dec., Exs. M, N)

There are currently forty-three (43) individual companies operating under Liberty Livewire Corporation. (Id. at Ex. I) Three of those companies, Hollywood Digital, Pop Studios, and Riot, provide visual effects in direct competition with Plaintiff. (Id. at ¶ 20)

On May 23, 2001 Plaintiff filed an action for: (1) infringement of an unregistered trademark in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (2) state trademark infringement, CAL. BUS. & PROF. CODE § 14320; (3) unfair competition, CAL. BUS, & PROF, CODE § 17200; (4) common law trademark infringement; and (5) opposition of trademark application. Plaintiff alleges that actual confusion exists between its mark "Live Wire" and Defendants' mark "Liberty Livewire." Plaintiff contends that said confusion has recently intensified due to Liberty Livewire's acquisition of additional companies and due to its use of "Livewire" alone, without "Liberty," in its advertising. Plaintiff requests the Court to enjoin Defendants from using the term "Live Wire" in connection with the offering of feature film, television and multimedia production services; from using the trade name and trademark "Liberty Livewire" or "Livewire" in connection with the advertising, offering for sale, and sale of feature film and television production services; and from using the mark and trade name "Live Wire" in any way in the conduct of their business, advertising, promotion, and when answering their telephones. (Id. at ¶ 1(a)(b), (e)). The injunction is sought for the County of Los Angeles. (Motion, 20:1-3; 20:28-21:1; Reply, 2:3-4)

After considering the parties' written and oral arguments, the Court issues the following decision:

II. Preliminary Injunction Standard

The Court will grant a preliminary injunction in a trademark case when the moving party "demonstrates either (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in [the moving party's] favor." GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir.2000) (internal quotations omitted). These alternatives "are not separate tests but the outer reaches of a single continuum." Int'l Jensen v. Metrosound U.S.A., 4 F.3d 819, 822 (9th Cir.1993). "Essentially, the trial court must balance the equities in the exercise of its discretion." Id.

III. Trademark Infringement Claim

"The core element of trademark infringement is the likelihood of confusion, i.e., whether the similarity of the marks is likely to confuse customers about the source of the products." Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1391 (9th Cir.1993) (quoting E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir.1992)) (quotation marks omitted). At the preliminary injunction stage, Plaintiff must establish that it is "likely to be able to show ... a likelihood of confusion" in Defendants' use of the mark. See GoTo. com, 202 F.3d at 1205 (citing Brookfield Communications, Inc. v. West Coast Entm't, 174 F.3d 1036, 1053 n. 15 (9th Cir.1999)). The Court's concern for confusion among "consumers" as opposed to the general public is grounded in the very purpose of trademark law.

[T]rademark law, by preventing others from copying a source-identifying mark, "reduce[s] the customer's costs of shopping and making purchasing decisions," for it quickly and easily assures a potential customer that this item — the item with this mark — is made by the same producer as other similarly marked items that he or she liked (or disliked) in the past. At the same time, the law helps assure a producer that it (and not an imitating competitor) will reap the financial, reputation-related rewards associated with a desirable product.

Qualitex Co. v. Jacobson Products Co. Inc., 514 U.S. 159, 163-64, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995) (citation omitted).

The Court looks to the eight factors set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979) (setting forth what are often referred to as "the Sleekcraft factors") to determine whether a likelihood of confusion exists: (1) strength of the mark; (2) proximity or relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) degree to which the marketing channels converge; (6) types of goods and degree of care consumers are likely to exercise when purchasing; (7) intent of defendants in selecting the infringing mark; and (8) likelihood that the parties will expand their product lines. Id. at 348-50; see also Official Airline Guides, 6 F.3d at 1391; Gallo, 967 F.2d at 1290. This list of factors is neither exhaustive nor exclusive and is intended to guide the Court in assessing the basic question of likelihood of consumer confusion.¹ See Gallo, 967 F.2d at 1290. Moreover, the factors are not to be applied in a mechanical manner. See Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir.1998). The eight-factor test is a "pliant" one in which "some factors are much more important than others." Brookfield, 174 F.3d at 1054.

(1) Strength of the Mark

A strong mark is inherently distinctive and will be provided broad protection. See Sleekcraft, 599 F.2d at 349. "The strength of a mark is determined by its placement on a continuum of increasing distinctiveness: (1) generic², (2) descriptive³, (3) suggestive⁴, (4) arbitrary⁵, and (5) fanciful."⁶ See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992); see also Gallo, 967 F.2d at 1290. The last three categories are deemed inherently distinctive and are...