Halo Management, LLC v. Interland, Inc.

• Decision Date: 17 November 2003
• Docket Number: No. C-03-1106 MHP.,C-03-1106 MHP.
• Citation: 308 F.Supp.2d 1019
• Court: U.S. District Court — Northern District of California
• Parties: HALO MANAGEMENT, LLC, Plaintiff, v. INTERLAND, INC., Defendants.

308 F.Supp.2d 1019

HALO MANAGEMENT, LLC, Plaintiff, v. INTERLAND, INC., Defendants.

No. C-03-1106 MHP.

United States District Court, N.D. California.

November 17, 2003.

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Howard A. Janssen, Esq., Janssen Doyle, LLP, Lafayette, CA, Richard Proctor Doyle, Jr., Crosby, Heafey, Roach & May, San Francisco, CA, Mitchell Scott Rosenfeld, Capstone Law Group LLP, San Mateo, CA, for Plaintiff.

C. Celeste Creswell, Joseph D. Wargo, Wargo & French LLP, Atlanta, GA, Carla B. Oakley, Morgan, Lewis & Bockius LLP, Eric J. Sinrod, Duane Morris LLP, San Francisco, CA, for Defendant.

MEMORANDUM AND ORDER

Motion for Preliminary Injunction

PATEL, Chief Judge.

In March 2003, plaintiff Halo Management, LLC ("HM") brought this civil action against defendant Interland, Inc., seeking monetary and injunctive relief for alleged violations of federal trademark law, see 15 U.S.C. §§ 1114, 1125, and of California's Business and Professional Code. See Cal. Bus. & Prof.Code § 17203. At the heart of HM's complaint is Interland's use — in a variety of contexts — of the word mark "HALO," a mark for which plaintiff holds a registered United States trademark.

Before the court is HM's motion for a preliminary injunction. HM has asked the court to prohibit Interland from using the "HALO" mark, as well as any variation thereof, in its business enterprise. The court has considered fully the parties' arguments, and for the reasons set forth below, the court rules as follows.

BACKGROUND¹

Founded as a sole proprietorship, HM is a small, privately-held limited liability corporation based in Los Altos, California. Focusing on internet-related services, HM offers email, web-search functions, and web-hosting to its list of subscribers and customers.² Interland, Inc. is a publiclytraded corporation, attracting customers through, inter alia, its listing on the NASDAQ stock exchange. Like HM, Interland offers an array of internet-based services to its subscribers and customers. As a part of its business practices, Interland employs the web address "bluehalo.com," often redirecting visitors to the "bluehalo.com" site to Interland's corporate home-page ("interland.com"). Interland also displays the symbol "blueHALO" prominently throughout its corporate, sales, and marketing materials, often — if not uniformly — casting the mark in the color blue.

I. History of the Relevant Trademark

In late 1999, HM filed a United States trademark application for the word mark "HALO,"³ By June 25, 2002, HM had registered the "HALO" mark,⁴ see Ashby Dec., Exh. 3, identifying two classes of internet- and computer-focused goods and services in this registration:

CLASS 038 — Electronic communication and commerce services, namely, electronic transmission of voice, video, and data via computer terminals, electronic mail services, providing on-line chat rooms for transmission of messages among computer users in the field of business, legal, and intellectual asset management, and providing multi-user access to a global computer network. CLASS 042 — Providing a search engine for online searching and retrieving of information on a global computer network; hosting the web sites of others on a computer server for a global computer network; on-line, non-downloadable electronic newsletters in the field of business, legal, and intellectual asset management; and intellectual property consultation.

Id.

After HM filed its 1999 trademark application for "HALO,"⁵ Interland filed an intent-to-use⁶ trademark application for the mark "blueHALO Architecture." See Ashby Dec., Exh. 5 (dated June 13, 2002).⁷ Interland's trademark application identified web-hosting as the service targeted by the mark, drawing Interland's desired mark into close linguistic and subject affinity with HM's existing "HALO" mark. The Patent & Trademark Office ("PTO") rejected Interland's "blueHALO Architecture" application on March 7, 2003. See Ashby Dec., Exh. 6. Citing 15 U.S.C. section 1052(d) of the Lanham Act, the PTO found Interland's proposed mark too likely to cause confusion, too likely to cause mistake, or too likely to deceive in light of HM's existing mark to merit trademark registration. Id. Because the two marks were visually and phonetically comparable,⁸ and because the services Interland and HM offered were, in this instance, closely related, the PTO rejected Interland's application. Id. (adding that any doubt regarding the likelihood of confusion was to be resolved in favor of HM's existing mark) (citing In re Hyper Shoppes (Ohio), Inc., 837 F.2d 463 (Fed.Cir.1988)).

Interland filed a second trademark application a short time later. In this second application, Interland substituted the phrase "and Design" for "Architecture," seeking to register the mark "blueHALO and Design." See Ashby Dec., Exh. 7 (noting that the mark was "lined" for the color blue). Again citing 15 U.S.C. section 1052(d), the PTO refused Interland's second application, once again noting the likelihood of confusion and the close affinity between the goods and services offered by the parties. Interland's mark, the PTO concluded, was sufficiently likely to spur confusion that Interland's application must be refused. See Ashby Dec., Exh. 8.

II. The Parties' Relationship

Though the PTO rejected Interland's two efforts to register a "blueHALO"-based mark, Interland continued to employ the "blueHALO" moniker in its business ventures. See, e.g., Ashby Dec., Exh. 9 (Transcript of Fair Disclosure Financial Network Interview) ("... new products such as blueHALO are raising the bar ..."). HM learned of Interland's ongoing use in January 2003, promptly asking Interland to alter the mark used in Interland's web-hosting services in order to dissipate any potential confusion. See Ashby Dec., Exh. 10 at 1. Interland confirmed receipt of HM's initial query, but Interland did not respond to HM's demand.

In a second, similarly-worded letter, HM reiterated its name-change request. Id. at 2. On February 18, 2003, Interland formally responded to — and refused — HM's demand. Disputing the contention that confusion was likely to grow from Interland's use of the "blueHALO" mark, Interland offered a catalog of reasons supporting its continued use of the "blueHALO" mark: One, the parties' marks were visually and phonetically distinguishable; two, the addition of a "blue" prefix and of an "and Design" suffix adequately distinguished HM's unadorned "HALO" mark; three, the uses to which the parties' marks were put were sufficiently distinct; four, the "blueHALO and Design" mark was directed at sophisticated web users; five, Interland's use of "HALO" was purely acronymic; six, Interland's use of the "HALO" term combined with pervasive use of the term "Interland"; and, seven, HM's enforcement efforts were inherently selective. See Ashby Dec., Exh. 11. Convinced that HM's position and request were untenable, Interland pledged to defend itself aggressively against any and all trademark-violation allegations. Id.

Interland, in fact, continued to use the "blueHALO" moniker in its press releases, denoting the term with a superscript "SM," see, e.g., Ashby Dec., Exh. 12, often using the mark in combination with "shared" or "Architecture," and rerouting all visitors to the "bluehalo.com" website directly to Interland's corporate home-page. See Ashby Dec. ¶ 9. In response, HM filed this action on March 14, 2003. See Compl. at 1. Since the initiation of this action, Interland has not discontinued its use of the "blueHALO" mark; HM now seeks a preliminary injunction mandating that Interland do so.

LEGAL STANDARD

A preliminary injunction is a "provisional remedy." Napa Valley Pub. Co. v. City of Calistoga, 225 F.Supp.2d 1176, 1180 (N.D.Ca.2002) (Chen, Mag. J.) (citation omitted). Aimed at preserving the status quo and at preventing the occurrence of irreparable harm during the course of litigation, id., preliminary injunctions may be issued where the moving party has established two prerequisites for equitable relief: one, a threat of irreparable injury and, two, the inadequacy of available legal remedies. See Fed.R.Civ.P. 65 (placing this type of injunctive relief within the bounds of the court's discretion and equitable power); Easyriders Freedom F.I.G.H.T. v. Hannigan, 92 F.3d 1486, 1495 (9th Cir.1996); Big Country Foods, Inc. v. Board of Educ. of Anchorage Sch. Dist., 868 F.2d 1085, 1087 (9th Cir.1989).

In general, a preliminary injunction is appropriate where a plaintiff can demonstrate "either: (1) a likelihood of success on the merits and the possibility of irreparable injury; or (2) that serious questions going to the merits were raised and the balance of hardships tips sharply in [plaintiff s] favor." Southwest Voter Registration Education Project v. Shelley, 344 F.3d 914, 917 (9th Cir.2003) (en banc; per curiam) (citing Clear Channel Outdoor, Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir.2003), and Walczak v. EPL Prolong, Inc., 198 F.3d 725, 731 (9th Cir.1999)); see also Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir.1999) (distilling four relevant factors into this two part test); Los Angeles Memorial Coliseum Comm. v. National Football League, 634 F.2d 1197, 1200-01 (9th Cir.1980) (listing the likelihood of plaintiffs success on the merits, the threat of irreparable harm to the plaintiff if the injunction is not issued, the relative balance of harm between the parties, and the public interest as factors to consider). The two components of this test sit on a kind of sliding scale or "continuum," Southwest Voter, at 917; thus, "the less certain the district court is of the likelihood of success on the merits, the more plaintiffs must convince the district court that the public interest and balance of hardships tip in their favor." Id. at 917-18 (noting, too, that review of a district court's preliminary...