Ty, Inc. v. Jones Group, Inc.
| Decision Date | 05 June 2000 |
| Docket Number | No. 99 C 2057.,99 C 2057. |
| Citation | 98 F.Supp.2d 988 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | TY, INC., Plaintiff, v. The JONES GROUP, INC., Defendant. |
Avrum Sidney Katz, James Patrick White, Julie Anne katz, Scott Michael Gettleson, Louise T. Walsh, Welsh & Katz, Ltd., Chicago, IL, for plaintiff.
Andrew M. Hale, Rock, Fusco & Garvey, Chicago, IL, Joseph John Cecala, McCarthy, Duffy, Neidhart & Snakard, Chicago, IL, Jeffrey D. Corso, Myers & Miller, Chicago, IL, for defendant.
At issue before the court is Plaintiff Ty Inc.'s ("Ty") Motion for Preliminary Injunction. For the reasons set forth below, Plaintiff's Motion is granted.
Since 1993, Ty has sold plush toys throughout the United States under the name "BEANIE BABIES." Ty has also licensed the BEANIE BABIES mark for use in McDonald's promotions in 1997, 1998 and 1999. BEANIE BABIES have become somewhat of a national phenomenon as evidenced by dozens of newspaper and magazine articles, television news stories, web sites and books and magazines devoted to BEANIE BABIES. (See Pl. Mot. at 2.)
Ty has obtained U.S. Federal Trademark Registrations for the marks BEANIE BABIES and THE BEANIE BABIES COLLECTION. Ty claims that it owns common law trade mark rights in the mark BEANIE, which was initially used by Ty and the public as early as May of 1995, as a nickname for BEANIE BABIES. Id. at 3.
Defendant, Jones Group ("Jones"), in conjunction with NASCAR, corporate sponsors and individual NASCAR drivers, manufactures and sells plush toys under the name Beanie Racers. Beanie Racers are shaped like race cars and they are made from similar material as and are similar in size to Beanie Babies. Jones claims that it owns the exclusive rights to the registered mark BEANIE RACER.1
Ty filed the present lawsuit against Jones alleging that Ty purportedly owned a common law trademark to the word "Beanie," and alleging that Jones infringed that common law trademark by using the mark BEANIE RACERS for its bean bag racing cars. Ty claims that Jones' strategy for marketing its Beanie Racers is similar to that used by Ty for its Beanie Babies, namely: Jones avoids selling its products to mass marketers in favor of specialty stores and limits the production of certain styles of Beanie Racers in order to enhance their collectability. Id. at 4. Ty also notes that Jones markets its Beanie Racers by making overt references to Ty's Beanie Babies. For example, one of Jones' advertisements states that "[e]ach Beanie Racer is constructed from a plush material (like Beanie Babies)...." Id. at 4; Ex. A. Finally, Ty contends that the retailers of Jones' Beanie Racers are advertising these products on the Internet using Ty's registered trademark BEANIE BABIES in the metatags2 of Internet sites that sell Beanie Racers. Id. at 5.
In order to succeed on a motion for a preliminary injunction, the movant has the burden of proving: "(1) that it has no adequate remedy at law; (2) that it will suffer irreparable harm if the preliminary injunction is not issued; (3) that the irreparable harm it will suffer if the preliminary injunction is not issued outweighs the irreparable harm that the nonmovant will suffer if the injunction is issued; (4) that it has a reasonable likelihood of prevailing on the merits; and (5) that issuing the injunction will not harm the public interest." Brunswick Corp. v. Jones, 784 F.2d 271, 273-74 (7th Cir.1986). See, Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429, 1432 (7th Cir.1986); Roland Machinery Co. v. Dresser Ind., 749 F.2d 380, 382-88 (7th Cir.1984).
In the context of a motion for a preliminary injunction in a trademark infringement case, a plaintiff need only show that he or she has a "better than negligible" chance of succeeding on the merits in order to justify the issuance of an injunction. International Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1084 (7th Cir.1987). See Curtis v. Thompson, 840 F.2d 1291, 1296 (7th Cir. 1988); Brunswick Corp., 784 F.2d at 275 ( ") (quoting Omega Satellite Products Co. v. City of Indianapolis, 694 F.2d 119, 123 (7th Cir.1982)).
In a trademark infringement claim, the plaintiff must prove: "(1) the validity of its trademark; and (2) the infringement of that mark." Platinum Home Mortgage Corp. v. Platinum Financial Group, Inc., 149 F.3d 722, 726 (7th Cir.1998). See Echo Travel, Inc. v. Travel Associates, Inc., 870 F.2d 1264, 1266 (7th Cir.1989). "The validity of a mark pertains to whether a `word, term, name, symbol or device,' 15 U.S.C. § 1125(a)(1), is entitled to protection under trademark law by focusing on whether the mark specifically identifies and distinguishes one company's goods or services from those of its competitors." Platinum Home, 149 F.3d at 726. "The infringement of a mark concerns whether the actions of a subsequent user of a substantially similar or identical mark causes a likelihood of confusion among consumers as to the source of those specific goods or services." (emphasis added) Id.
In order to succeed on a motion for preliminary injunction, a plaintiff must prove that it has an inadequate remedy at law and that it would suffer irreparable harm if a preliminary injunction does not issue. Ty, Inc. v. Westhighland Publishing, Inc., 1998 WL 698922, *19 (N.D.Ill. 1998). "These two elements are often merged because they involve the same analysis." Id. See, e.g., Meridian Mut. Ins. Co., 128 F.3d at 1120. Our Seventh Circuit court has often recognized that "`... damages occasioned by trademark infringement are by their very nature irreparable and not susceptible of adequate measurement for remedy at law....'" International Kennel Club of Chicago, Inc., 846 F.2d at 1092 (quoting Processed Plastic Co. v. Warner Communications, 675 F.2d 852, 858 (7th Cir.1982)). "`This presumption, it appears, is based on the judgment that it is virtually impossible to ascertain the precise economic consequences of intangible harms, such as damage to goodwill, caused by such violations.'" West Highland Publishing, 1998 WL 698922 at *20 (quoting Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 16 (7th Cir.1992)).
Defendant argues that Plaintiff's lengthy delay in seeking injunctive relief shows that there is no threat of irreparable harm. Defendant notes that Plaintiff waited eight months after filing its suit before it sought injunctive relief. "While irreparable harm is generally presumed in the usual trademark infringement case, that presumption is overcome where the plaintiff delays in seeking injunctive relief." Ohio Art Co. v. Lewis Galoob Toys, Inc., 799 F.Supp. 870, 887 (N.D.Ill.1992). Defendant sites to several cases as examples of delays that have resulted in courts denying injunctive relief. See, Johnson Publishing, Co., Inc. v. Willitts Designs Int'l, Inc., 1998 WL 341618 (N.D.Ill.1998) (); Stokley-Van Camp, Inc. v. Coca-Cola Co., 1987 WL 6300 (N.D.Ill.1987) (); Borden, Inc. v. Kraft, Inc., 1984 WL 1458 (N.D.Ill.1984) ().
Plaintiff maintains that when it filed the instant suit, it indicated to Defendant that it would be seeking a preliminary injunction. Moreover, according to Plaintiff, Defendant cannot avail itself of a laches defense because it knowingly infringed on Plaintiff's rights and because it was not lulled into a false sense of security. "Delay, in itself ... does not preclude the finding of irreparable injury in a trademark case in this circuit." Phillip Morris, Inc. v. Allen Distributors, Inc., 48 F.Supp.2d 844, 854 (S.D.Ind.1999). "[D]elay is only one among several factors to be considered; [the] cases do not support a general rule that irreparable injury cannot exist if the plaintiff delays in filing its motion for a preliminary injunction." Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025 (7th Cir.1979), cert. denied, 447 U.S. 924, 100 S.Ct. 3016, 65 L.Ed.2d 1116 (1980). A defendant must have been "lulled into a false sense of security or ... acted in reliance on the plaintiff's delay." Id.
In response to the cases cited by Defendant, which seemingly support its argument that Plaintiff's eight-month delay in filing the instant motion is long enough to preclude an entry by this court in Plaintiff's favor, Plaintiff cited several cases which support the proposition that an eight-month delay does not preclude issuance of a preliminary injunction in Plaintiff's favor. See, Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025 (7th Cir.1979) (); Whistler Corp. v. Dynascan Corp., 1988 WL 142216 (N.D.Ill.1988) (); American Express Co. v. American Express Limousine Service Ltd., 772 F.Supp. 729 (E.D.N.Y.1991) (...
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