Lorillard Tobacco Co. v. Amouri's Grand Foods
| Decision Date | 30 June 2006 |
| Docket Number | No. 05-1642.,05-1642. |
| Citation | 453 F.3d 377 |
| Parties | LORILLARD TOBACCO COMPANY, Plaintiff-Appellant, v. AMOURI'S GRAND FOODS, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Kathleen A. Lang, Dickinson Wright, PLLC, Detroit, Michigan, for Appellant. Daniel M. Clark, Detroit, Michigan, for Appellee. ON BRIEF: Kathleen A. Lang, Nicole M. Clinton, Joscelyn C. Boucher, Dickinson Wright, PLLC, Detroit, Michigan, for Appellant. Daniel M. Clark, Detroit, Michigan, for Appellee.
Before: MOORE and GIBBONS, Circuit Judges; SHADUR, District Judge.*
Lorillard Tobacco Co. ("Lorillard") brought this action against Amouri's Grand Foods, Inc. ("Grand Foods"), asserting a variety of trademark, unfair competition and consumer protection violations under federal law and Michigan state law. Lorillard accompanied its Complaint with a motion for preliminary injunction, which the district court denied. Lorillard now appeals that denial. We REVERSE the denial and REMAND this case to the district court for the reasons and on the terms stated in this opinion.
Lorillard manufactures and sells cigarettes under a variety of brand names (J.A. 55).1 One of its most popular brands is "Newport," which Lorillard has sold since 1956 (id.). Lorillard and its affiliated entities have registered a number of marks related to the brand, including NEWPORT, NEWPORT (stylized), LORILLARD, Spinnaker Design and NEWPORT and Design, and they have committed considerable resources to promoting and marketing the brand (id.). Grand Foods is a retail convenience store that sells (among other items) Lorillard cigarettes, including Newports.
On or about March 8, 2005,2 while conducting a review of the freshness of Grand Foods' stock of Lorillard cigarettes, Lorillard sales representative Everett Williams ("Williams") discovered four packs of Newport cigarettes that, based on his experience with the indicia of authentic Newport packaging, he suspected were counterfeit (J.A. 49). Williams accordingly forwarded those packages to Lorillard Manager of Sales Planning Edward O'Brien ("O'Brien") (id.), who has "specialized knowledge" and experience in recognizing counterfeit Lorillard products (id. 50). Upon inspection O'Brien determined that the packages were in fact counterfeit (id. 51), noting three differences between the counterfeit and genuine packages of Newport: the foil on the top of the counterfeit packages was silver rather than gold, the "cellophane tear tape tab" on the counterfeit packages protruded from the right front edge of the pack rather than the left, and the printing on the packages, especially the words "Lorillard" and "Greensboro," was clearer on the bogus version than on the real thing (id.).
After confirming that the packages were counterfeit, Lorillard filed its Complaint (J.A. 5-17), simultaneously moving for an ex parte seizure order under 15 U.S.C. § 1116(a) and (d)3 and for a temporary restraining order ("TRO") and preliminary injunction under Fed.R.Civ.P. 65 (id. 19-21). Both the seizure order and the TRO were granted, and on March 23 United States Marshals, accompanied by Lorillard representatives, conducted a seizure at Grand Foods during which four additional Newport packages thought to be counterfeit were seized (id. 100).4
Two weeks later, on April 5, the district court held a hearing as to the remaining portion of Lorillard's motion, its request for a preliminary injunction (J.A. 145-69). While Lorillard had submitted both evidence and a supporting brief that argued it had satisfied all four factors required for preliminary injunctive relief (id. 22-65), Grand Foods submitted neither. During the hearing Grand Foods offered to agree not to sell counterfeit Newport packages knowingly (id. 161-63), but Lorillard refused that offer.5 After hearing from both parties' counsel, the district judge said "the equities...tend to be...in favor of [Grand Foods]" (id. 163) and "I don't think" that "equity dictates issuing a preliminary injunction" (id. 167).
On April 7 the district court entered an order denying an injunction "[f]or the reasons stated on the record" during the April 5 hearing (id. 66). At no point during the hearing, however, had the district court clearly indicated which "equities" it was "weighing" in coming to its conclusion, nor had it discussed the four preliminary injunction factors Lorillard had addressed in its brief (J.A. 145-69). Lorillard now appeals the denial of its motion for preliminary injunction.
We review a district court's decision to grant or deny a preliminary injunction for abuse of discretion (United States v. Any & All Radio Station Transmission Equip., 204 F.3d 658, 665 (6th Cir.2000)). Such an abuse exists when the district court "relied upon clearly erroneous findings of fact improperly applied the governing law, or used an erroneous legal standard" (Blue Cross & Blue Shield Mut. of Ohio v. Blue Cross & Blue Shield Ass'n, 110 F.3d 318, 322 (6th Cir.1997)). In addressing a motion for preliminary injunction the district court should consider (1) the likelihood that the movant will succeed on the merits, (2) whether the movant will suffer irreparable harm without the injunction, (3) the probability that granting the injunction will cause substantial harm to others and (4) whether the public interest will be advanced by issuing the injunction (Six Clinics Holding Corp., II v. Cafcomp Sys., Inc., 119 F.3d 393, 399 (6th Cir.1997)). In making its determination the "district court is required to make specific findings concerning each of the four factors, unless fewer factors are dispositive of the issue" (id.).
Lorillard first contends that in denying the injunction the district court failed to apply the appropriate four-factor test. Lorillard further urges that it has adequately demonstrated that each of the factors supports preliminary injunctive relief, so that we should direct the district court to grant the requested injunction. We agree on both counts.
As already indicated, the record makes it abundantly clear that the district court did not look to the prescribed factors in reaching its decision. Neither the court's oral statement during the April 5 hearing nor its April 7 written order makes any findings, specific or otherwise, as to the likelihood of Lorillard's success on the merits, the risk of Lorillard suffering irreparable harm if the injunction were not issued, the particular harms to others that an injunction would cause or the impact of an injunction on the public interest. Instead the announced predicate for the district court's ruling was a generalized statement as to the "equities" of the case and as to which party they "tend[ed]" to favor. We find those omissions to be an abuse of discretion.
Normally when we encounter such a situation, we simply vacate or reverse the improper denial of a preliminary injunction and remand for further consideration under the proper standards (Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 234 (6th Cir.2003)). But on the less frequent occasion when (as here) the record unequivocally calls for an injunction, an appellate court may simply instruct the district court to grant the requested relief (Patton v. Dole, 806 F.2d 24, 31 (2d Cir. 1986)). Here the ensuing discussion shows that Lorillard has unquestionably satisfied each of the requisite criteria.
At trial Lorillard will have to establish several elements to prevail on its claims (see, e.g., Homeowners Group, Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1105 (6th Cir.1991)), but at this preliminary stage Grand Foods challenges only one: Lorillard's ability to demonstrate a "likelihood of confusion" among consumers due to Grand Foods' use of the Newport mark.6 To that end we have in the past identified eight such elements, not all of which may be relevant in every case: (1) strength of the mark, (2) relatedness of the goods, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) likely degree of purchaser care and sophistication, (7) defendant's intent in selecting its mark and (8) likelihood of expansion of the product lines using the marks (id. at 1106; Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280 (6th Cir.1997)). As Lorillard's cogent analysis of those factors demonstrates persuasively (and as might be expected in any counterfeiting case—especially where the counterfeiting is skillful), here there is a certainty of "confusion among consumers regarding the origin" of the cigarette packages offered for sale by Grand Foods (id.).
We are not at all persuaded by Grand Foods' arguments in rebuttal. Rather than replying to Lorillard factor by factor, Grand Foods instead contends that the fact that it did not intend to sell counterfeit items and that it did not create, manufacture or package such items precludes Lorillard from succeeding on its claim. But we have repeatedly held that a showing of intent is not required to demonstrate the likelihood of confusion (see, e.g., AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 799 (6th Cir.2004)). While a "defendant's intent" is one of the eight factors noted above, it is considered only in the sense that its existence can "strengthen[ ] the likelihood of confusion" (Champions Golf Club, Inc. v. Champions Golf Club, Inc., 78 F.3d 1111, 1121 (6th Cir. 1996)). Its absence, on the other hand, does not preclude such likelihood (id.). After all, if "potential purchasers are confused, no amount of good faith can make them less so" (Fuji Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591, 596 (5th Cir.1985)).7 Nor, given the clear rejection of an intent requirement in this context, do we see any justification for...
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