Keystone Consolidated Indus. v. Mid-States Distr.
| Decision Date | 03 December 2002 |
| Docket Number | No. 02-1139.,02-1139. |
| Citation | 235 F.Supp.2d 901 |
| Court | U.S. District Court — Central District of Illinois |
| Parties | KEYSTONE CONSOLIDATED INDUSTRIAL INC., Plaintiff, v. MID-STATES DISTRIBUTING COMPANY, INC., Blain Supply, Inc. and Oklahoma Steel & Wire Co., Inc., Defendants. |
Richard N. Gentry, Jr., Vonachen Lawless Trager & Slevin, F. Louis Behrends, Behrends & Gentry, Peoria, IL, Jon O. Nelson, Joseph J. Berghammer, Helen H. Minsker, Banner & Witcoff, Chicago, IL, for Plaintiff.
David E. Jones, L. Lee Smith, Stephen M. Morris, James Paul LeFante, Hinshaw & Culbertson, Peoria, IL, Eric O. Haugen, Mark J. Burns, Orrin M. Haugen, Haugen Law Firm PLLP, Minneapolis, MN, Douglas A. Miller, Haynes Studnick Kahan O'Neill & Miller, LLC, F. William McLaughlin, Wood Phillips Katz Clark & Mortimer, Chicago, IL, for Defendants.
Before the Court is Plaintiff's Motion for Preliminary Injunction [Doc. # 9]. As this matter arises under § 43(a) of the Lanham Act, 15 U.S.C. § 1114(a)(1), the Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331. The Court grants Plaintiff's Motion for Preliminary Injunction for the reasons that follow.
Plaintiff Keystone Consolidated Industrial Inc. ("Keystone") is a manufacturer of wire fencing products located in Bartonsville, IL.. Keystone has manufactured wire fencing products since 1889. In 1920, Keystone decided to color the top wire strand of its field fencing products red to distinguish its products from its competitors. In 1954, Keystone extended its color placement scheme by coloring the individual barbs of its barbed wire products red. In 1935, Keystone began using the "King Ranch" mark in connection with wire fencing products.
Keystone obtained incontestable Federal Registrations on the Principal Register for the preceding marks, as set forth in the following table:
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Registration Date of Date of
Mark Number Goods First Use Registration
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Red band or red-colored 141,481 Wire 5/3/1920 4/26/1921
portion at top of fencing fencing
in IC 6
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KING RANCH 1,321,770 Wire 1935 2/26/1985
fencing
in IC 6
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Red colored barbs attached 622,004 Barbed 2/22/1954 2/28/1956
to metallic colored wires wire in
IC 6
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Color red used on the top 2,004,747 Metal 8/12/1991 10/8/1996
margin strand of the goods wire
fencing
and
metal
wire
panels
in IC 6
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Defendant Midstates Distributing Company, Inc. ("Midstates") is a North Dakota Corporation with its principal place of business in St. Paul, MN.. Midstates is a fifty two member cooperative with members in the United States and Canada.
Defendant Oklahoma Steel & Wire Co. ("Oklahoma Steel") is an Oklahoma corporation with its principal place of business in Madill, OK.. Oklahoma Steel manufactures wire fencing products.
Defendant Blain Supply, Inc. ("Blain") is a Wisconsin Corporation with its principal place of business in Janesville, WI. Blain is a retail member of the Midstates' cooperative.
In the fall of 2000, Midstates began a private label wire fencing program. This program featured field wire fencing with a green top wire and barbed wire fencing with green colored barbs. Midstates selected "Ranch King" as its brand name and Oklahoma Steel to manufacture the actual products. In the early part of 2001, Midstates applied for federal registration of its wire fencing marks and "Ranch King" mark in connection with wire fencing products on the Principal Register. The United States Patent and Trademark Office ("PTO") denied Midstates' applications. Thereafter, Midstates applied for registration on the Supplemental Registry for all three marks. At the time of the Preliminary Injunction hearing, the PTO had granted registration of the green barbed barb wire mark on the Supplemental Registry, with the green top wire mark still pending.
After learning of Midstates' marks, Keystone filed the instant suit alleging trademark infringement, trademark dilution and unfair competition. In conjunction with its claims, Keystone filed the instant Motion for Preliminary Injunction that was the subject of a three day hearing.
The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held. As a threshold matter, a party seeking a preliminary injunction must demonstrate (1) some likelihood of success on the merits and (2) that it has no adequate remedy at law and will suffer irreparable harm if the injunction is denied. See Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc., 128 F.3d 1111, 1114-15 (7th Cir.1997). If a plaintiff fails to establish either of these elements, then a court's analysis "ends and the preliminary injunction should not be issued." Adams v. City of Chicago, 135 F.3d 1150 1154 (7th Cir.1998). If, however, the plaintiff clears both thresholds, "the court must next consider (3) the irreparable harm the non-movant will suffer if the injunction is granted balanced against the irreparable harm to the movant if relief is denied, and (4) the effect granting or denying the injunction will have on non-parties." Meridian, 128 F.3d at 1114. The Court then weighs the four factors in deciding whether to grant the injunction. See Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir.1992). The Seventh Circuit has portrayed the proper weighing process as a "sliding scale" approach, that is, "the stronger the case on the merits, the less irreparable harm must be shown." Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167, 1172 (7th Cir.1997) (citations omitted). "The balancing of imponderables involved in the decision whether to grant or deny a preliminary injunction is a task calling for a judgment based on the particulars of the individual case." Planned Parenthood of Wis. v. Doyle, 162 F.3d 463, 465 (7th Cir. 1998).
Under § 43(a) of the Lanham Act, Keystone must establish: (1) that it has protectable trademarks; and (2) a "likelihood of confusion" exists as to the origin of the Mid-states' products. See 15 U.S.C. § 1114(1)(a); 15 U.S.C. § 1125(a); A.J. Canfield Co. v. Vess Beverages, Inc., 796 F.2d 903, 906 (7th Cir.1986). At the preliminary injunction stage, however, Keystone need only show that it has a "better than negligible" chance of succeeding on the merits to justify injunctive relief. International Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1084 (7th Cir.1988).
Keystone owns registrations in the Principal Register for the red top-wire strand trademark used on its field fencing products and the red barbed trademark used on its barbed wire products. In addition, Keystone possesses a registration for the "King Ranch" word mark in the Principal Register used on its fencing products. These registrations are "prima facie evidence of the validity of the registered mark" and of Keystone's exclusive right to use these registered marks in connection with its wire fencing products. 15 U.S.C. § 1115(a).
Mid-states has asserted the defense of functionality to Keystone's red top wire strand and red barb barbed wire marks. A brand's shape, color, pattern, or other design characteristic cannot claim trademark protection if it is "functional." Thus, the Court must resolve whether the placement of color on the top wire strand of field fencing and on the individual barbs of its barbed wire fencing products is functional. The Court finds that Mid-states has failed to carry its burden in proving that the preceding two marks are functional.
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