-BLM Aqua Logic, Inc. v. Aquatic Logic, Inc. et al, No. 3:2009cv01791 - Document 50 (S.D. Cal. 2009)

Court Description: MEMORANDUM Decision Granting Plaintiff's Motion for Preliminary Injunction. The Court denies 22 Motion for an Evidentiary Hearing Signed by Judge Marilyn L. Huff on 1/29/2009. (ag) Modified on 10/30/2009 to not that document no 22 was denied (ag)(jrl).

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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 AQUA LOGIC, INC., a California Corporation, CASE NO. 09-CV-1791 H (BLM) MEMORANDUM DECISION GRANTING PLAINTIFF S MOTION FOR PRELIMINARY INJUNCTION 13 Plaintiff, vs. 14 15 16 AQUATIC LOGIC, INC., an Illinois Corporation; DOMENIC VITRO; and DOES 1 through 10, inclusive, 17 Defendants. 18 19 Plaintiff Aqua Logic, Inc. ( Plaintiff ) filed its complaint against Defendants Aquatic 20 Logic, Inc. and Domenic Vitro ( Defendants ) on August 17, 2009. (Doc. No. 1.) Plaintiff 21 filed a motion for preliminary injunction on August 31, 2009. (Doc. No. 4.) Defendants filed 22 their opposition on September 29, 2009, (Doc. No. 18.), and Plaintiff submitted its reply on 23 October 6, 2009. (Doc. No. 25.) The Court held a hearing on October 13, 2009 at 10:30 a.m. 24 in courtroom 13. Cindy A. Brand and Ross G. Simmons appeared on behalf of Plaintiff and 25 Benjamin Davidson appeared on behalf of Defendants. For the following reasons, the Court 26 grants Plaintiff s motion for preliminary injunction. 27 /// 28 /// -1- 09cv1791 1 BACKGROUND 2 Plaintiff is a corporation of the State of California. (Doc. No. 1 ¶ 5.) Plaintiff 3 alleges that it is a large aquarium, aquarium products, pond and pond products provider in 4 the Untied States. (Id. ¶ 11.) Plaintiff is the owner of United States Trademark 5 Registration No. 2,353,216 for fish tanks, namely aquariums and fish tank cooling, 6 heating, and recirculation systems comprised of water chillers, heat pumps, and electronic 7 temperature controllers. (Id. ¶ 13.) Plaintiff has used the Aqua Logic mark and trade 8 name for almost twenty years by prominently displaying it on products, containers, 9 advertisements, displays, and other associated materials. (Id. ¶ 19.) In addition to 10 marketing its products through trade magazines, Plaintiff advertises its products on its 11 website: www.aqualogicinc.com. (Id. ¶ 11; Doc. No. 30 ¶ 4.) Defendant Aquatic Logic is a corporation of the State of Illinois. (Id. ¶ 6.) 12 13 Defendant Domenic Vitro is the founder and president of Aquatic Logic, Inc. (Doc. No. 20 14 ¶ 2.) Defendant Vitro alleges that he began Aquatic Logic as a sole proprietorship in 15 September 2008 to market water treatment products that are specifically designed for 16 outdoor ponds. (Id. ¶ 5.) Defendant Vitro trademarked the name Aquatic Logic on 17 September 10, 2008, and incorporated under the same name on April 27, 2009. (Id. ¶¶ 5,7.) 18 In or around September 2008, Defendant Vitro alleges that he launched the website 19 www.aquaticlogic.com to provide information regarding his company and the products it 20 provides. (Id. ¶ 8.) Plaintiff alleges that Defendant Vitro currently operates the website 21 located at www.aquticlogic.com. (Doc. No. 1 ¶ 7.) Defendants allege that they primarily 22 sell their products to distributors in the lawn and garden industry and that they advertise in 23 publications that cater to that industry. (Doc. No. 20 ¶ 15.) Plaintiff alleges that it became aware of Defendants in December 2008 upon seeing 24 25 an advertisement in a trade journal titled PondBiz. (Doc. No. 4-2 ¶ 14.) Plaintiff also 26 alleges that it became aware of Defendants website in December 2008. (Id. ¶ 18.) 27 /// 28 /// -2- 09cv1791 On or about January 5, 2009, Plaintiff sent a letter to Defendants requesting that they 1 2 cease and desist from all current and future uses of the term Aquatic Logic and the 3 domain names www.aquaticlogic.com, www.aquaticlogic.net, and 4 www.auaticlogic.org. (Doc. No. 1 ¶ 33.) Plaintiff sent another letter with the same 5 request on or about March 13, 2009. (Id. ¶ 34) Plaintiff did not receive a response to either 6 letter. (Id. ¶¶ 33-34.) On or about April 8, 2009, Plaintiff alleges that it was contacted by the National 7 8 Sales Manager for a trade magazine titled Water Garden News and that the Manager was 9 interested in knowing why payments had not been made on Plaintiff s account. (Id. ¶ 31.) 10 After further research, the Manager informed Plaintiff that there had been a mistake and the 11 Vice President of Plaintiff was led to believe the debt was owed by Defendants and not 12 Plaintiff. (Id.) Plaintiff also alleges that it received a check from Sea Life Designs, Inc., one of 13 14 Plaintiff s customers, on or about May 10, 2009. (Id. ¶ 30.) One of Plaintiff s employees 15 contacted the company upon realizing there was no outstanding balance. (Id.) Plaintiff 16 alleges that its employee was informed that the check was sent to Plaintiff in error and 17 should have been sent to Defendants. (Id.) 18 In early August, 2009, Plaintiff allegedly realized that Defendants had expanded 19 their line from one product to include fifteen additional products. (Doc. No. 4-2 ¶ 18.) 20 Defendants allege that they have not expanded their product line since September 2008, but 21 have merely changed the size of the containers in which their products are sold. (Doc. No. 22 20 ¶ 18.) DISCUSSION 23 24 25 I. Preliminary Injunction Legal Standard A plaintiff is entitled to a preliminary injunction in a trademark case when he 26 demonstrates either (1) a combination of probable success on the merits and the possibility 27 of irreparable injury or (2) the existence of serious questions going to the merits and that 28 the balance of hardships tips sharply in his favor. Sardi s Restaurant Corp. v. Sardie, 755 -3- 09cv1791 1 F.2d 719, 723 (9th Cir. 1985) (emphasis omitted); see Grocery Outlet Inc. v. Albertson s 2 Inc., 497 F.3d 949, 951 (9th Cir. 2007). The factors represent two points on a sliding 3 scale in which the required degree of irreparable harm increases as the probability of 4 success decreases. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 5 2001) (quoting Prudential Real Estates Affiliates, Inc. v. PPP Realty, Inc., 204 F.3d 867, 6 874 (9th Cir. 2000)). Moreover, the two formulations are not separate tests but the outer 7 reaches of a single continuum. Grocery Outlet, 497 F.3d at 951 (quoting Los Angeles 8 Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1201 (9th Cir. 1980). In a trademark case, the likelihood of success on the merits hinges on plaintiff s 9 10 ability to show that defendant is using a mark confusingly similar to its own. See 11 GoTo.com. Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000). So central is the 12 issue of confusion that upon a showing of likelihood of success on the merits, the Court 13 may presume irreparable injury. Brookfield Commc ns, Inc. v. West Coast Entm t Corp., 14 174 F.3d 1036, 1066 (9th Cir. 1999). 15 II. 16 Probable Success on the Merits - Likelihood of Confusion To determine the likelihood of confusion, courts look to eight factors announced by 17 the Ninth Circuit in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). The 18 Sleekcraft factors are: (1) the similarity of the marks; (2) the relatedness of the two 19 companies' services; (3) the marketing channel used; (4) the strength of the mark; (5) 20 Defendant s intent in selecting its mark; (6) evidence of actual confusion; (7) the likelihood 21 of expansion into other markets; and (8) the degree of care likely to be exercised by 22 purchasers. GoTo.com., 202 F.3d at 1205 (citing Sleekcraft, 599 F.2d at 348-49). 23 This eight factor test is pliant some factors are much more important than others, 24 and the relative importance of each individual factor will be case-specific. Brookfield 25 Commc ns, 174 F.3d at 1054. In the context of the Web in particular, the three most 26 important Sleekcraft factors are (1) the similarity of the marks, (2) the relatedness of the 27 goods or services, and (3) the simultaneous use of the Web as a marketing channel. 28 GoTo.com, 202 F.3d at 1205 (quotation marks and citations omitted). After assessing these -4- 09cv1791 1 important factors, it is often possible to reach a conclusion regarding confusion without 2 considering every factor. See Brookfield Commc ns, 174 F.3d at 1054 (citing Dreamworks 3 Prod. Group v. SKG Studio, 142 F.3d 1127, 1130-32 (9th Cir. 1998)). 4 A factory-by-factor analysis leads this Court to believe that, based on the evidence 5 presented by the Parties, the likelihood of confusion between Plaintiff s and Defendants 6 mark is significant. 7 1. The greater the similarity of the marks at issue, the greater the likelihood for 8 9 Similarity of the marks confusion. The Ninth Circuit has developed certain detailed axioms to guide this 10 comparison: first, the marks must be considered in their entirety and as they appear in the 11 marketplace; second, similarity is adjudged in terms of appearance, sound, and meaning; 12 and third, similarities are weighed more heavily than differences. GoTo.com, 202 F.3d at 13 1206 (citations omitted). With respect to appearance, Plaintiff argues that the color, font, and style of the two 14 15 marks are very similar. (Doc. No. 4-2 ¶ 20.) Specifically, Plaintiff asserts that both logos 16 are two toned with fish attached to them. (Doc. No. 25 at 3.) Defendants, on the other 17 hand, point to detailed differences between the two logos, focusing on variances in font, 18 color, and layout. (Doc. No. 20 ¶¶ 11-12.) While the two marks are not identical, the 19 Court finds notable similarities. The logos have similar color schemes and fonts, and both 20 feature a fish on the left side of the mark. Weighing similarities more heavily than 21 differences, GoTo.com, 202 F.3d at 1205, the Court finds that the two marks are 22 sufficiently similar in appearance to lead to confusion. In Sleekcraft, the Ninth Circuit stated that [s]ound is also important because 23 24 reputation is often conveyed word-of-mouth. We recognize that the two sounds can be 25 distinguished, but the difference is only in a small part of one syllable. 599 F.2d at 351- 26 52. Here, as there, the marks sound very similar and are differentiated by only one syllable. 27 The potential for confusion is therefore significant. 28 /// -5- 09cv1791 Because the similarity in appearance and sound between the two marks could lead to 1 2 confusion, this factor weighs in Plaintiff s favor. 3 2. Related goods are generally more likely than unrelated goods to confuse the public 4 5 Relatedness of the two companies services as to the producers of the goods. Brookfield Commc ns, 174 F.3d at 1055. Plaintiff argues that both Plaintiff and Defendants provide goods and services to the 6 7 aquarium and pond industry. (Doc. No. 4 at 9.) Plaintiff further explains that the pond 8 and aquarium industries are sub-parts of the larger aquatic industry that it serves. (Doc. 9 No. 25 at 4.) Defendants, however, maintain that Aquatic Logic deals exclusively in pond 10 products, and that Plaintiff deals only in aquarium products. (See Doc. No. 18 at 1.) Based 11 on the evidence presented by Plaintiff, this appears to be untrue. Specifically, Plaintiff 12 markets products, such as heaters and chillers, that are used in both ponds and aquariums. 13 (Doc. No. 30 ¶ 6.) Plaintiff also advertises its products in pond industry trade journals such 14 as Koi USA and Water Gardens. (Id ¶ 4.) Beyond overlap in the markets served by Plaintiff and Defendants, the two 15 16 companies appear to provide similar products. For example, both sell bacteria-based 17 products that are used in aquatic systems. (Id. ¶ 5.) More generally, both Plaintiff and 18 Defendants market products intended to make aquatic environments cleaner and more 19 hospitable to aquatic species. (See Doc. No. 4-2 ¶ 3; Doc. No. 20 ¶ 13.) 20 The similar nature of the goods and services provided by the parties leads the Court 21 to believe that the possibility of confusion is significant. Therefore, this factor also weighs 22 in Plaintiff s favor. 23 3. Marketing channel used Convergent marketing channels increase the likelihood of confusion. Sleekcraft, 24 25 599 F.2d at 353. When the Web is used as a marketing channel, the potential for confusion 26 is particularly significant because competing marks can be seen at the same time on the 27 same screen. GoTo.com, 202 F.3d at 1207. 28 /// -6- 09cv1791 Both Plaintiff and Defendants market their products through their respective 1 2 websites where their similar marks are prominently displayed. Their web addresses are 3 also similar. As discussed in GoTo.com, use of the internet as a marketing channel 4 exacerbates the potential for confusion. Id. Additionally, it appears that Plaintiff and 5 Defendants advertise in the same trade journal called Water Garden News. (See Doc. No 6 4-2 ¶ 16.) Thought Defendant attempts to distinguish marketing channels by labeling its target 7 8 audience the lawn and garden industry, (Doc. No. 20 ¶ 15.), the Court is convinced that 9 the lawn and garden, pond, and aquarium industries are sufficiently related to lead to 10 confusion. This factor therefore also weighs in Plaintiff s favor. 11 4. Strength of the mark 12 The stronger a mark, the more likely it is to be remembered and associated in the 13 public mind with the mark s owner and the more protection it is accorded by trademark 14 law. See Brookfield Commc ns, 174 F.3d at 1058; GoTo.com, 202 F.3d at 1207. Marks 15 can be conceptually classified along a spectrum of increasing inherent distinctiveness. 16 From weakest to strongest, marks are categorized as generic, descriptive, suggestive, and 17 arbitrary or fanciful. GoTo.com, 202 F.3d at 1207 (internal citations omitted). 18 Plaintiff argues that its mark is arbitrary or fanciful. (Doc. No. 4 at 9.) However, 19 Plaintiff also asserts that it uses the mark in the aquatic field. (Id.) Since aqua is used 20 in both the mark and the description of the relevant field, the Court is inclined to consider 21 the mark suggestive rather than either arbitrary or fanciful. Moreover, Plaintiff has failed, 22 thus far, to provide evidence that its mark is remembered and associated with Plaintiff in 23 the public s mind. 24 Defendants also suggest that the mark is not strong because there are other 25 companies that use the Aqua Logic mark in connection with the sale of pool products and 26 biodegradable lubricants, among other goods and services. (Doc. No. 18 at 2-3.) The 27 Ninth Circuit recently stated that [w]hen similar marks permeate the marketplace, the 28 strength of the mark decreases. One Industries, LLC v. Jim O Neal Distrib. Inc., 578 F.3d -7- 09cv1791 1 1154, 1164 (9th Cir. 2009). The fact that there are other companies using the Aqua 2 Logic mark does weigh against Plaintiff. However, it appears that the marks are used in 3 industries unrelated to the industry at issue in this case and that the strength of Plaintiff s 4 mark is not diminished in the market it serves. While this factor does not weigh strongly in Plaintiff s favor, it does not tip the scale 5 6 in Defendants direction. 7 5. Defendants intent in selecting their mark When the alleged infringer knowingly adopts a mark similar to another's, reviewing 8 9 courts presume that the defendant can accomplish his purpose: that is, that the public will 10 be deceived. Sleekcraft, 599 F.2d at 354. However, a finding of intent to confuse is not 11 required for a finding of trademark infringement. Brookfield Commc ns, 174 F.3d at 1059; 12 GoTo.com, 202 F.3d at 1208. It appears that Defendant Vitro lacked actual knowledge of Plaintiff s existence 13 14 when he created the name Aquatic Logic for his company. Defendant Vitro states that he 15 first became aware of Plaintiff when he received a cease and desist letter on January 5, 16 2009, and that he began Aquatic Logic and trademarked the name several months before in 17 September 2008. (Doc. No. 20 ¶¶ 5, 9.) 18 While this factor does not weigh in Plaintiff s favor, proof of intent to copy is not 19 necessary for a finding of a likelihood of confusion. This factor is therefore not decisive. 20 6. 21 22 23 Evidence of actual confusion Evidence that use of the two marks has already led to confusion is persuasive proof that future confusion is likely. Sleekcraft, 599 F.2d at 352. Plaintiff has alleged two instances of actual confusion. First, on or about May 10, 24 2009, Plaintiff received a check from Sea Life Designs. (Doc. No. 4-2 ¶ 17.) Realizing 25 that the company had no outstanding balance, Plaintiff contacted Sea Life Designs. (Id.) 26 The company informed Plaintiff that the check had been sent to them in error and should 27 have been sent to Defendants. (Id.) Second, on or about April 8, 2009, the National Sales 28 Manager for a trade journal called Water Garden News contacted Plaintiff to ask why -8- 09cv1791 1 payment had not been made on Plaintiff s account. (Id. ¶ 16.) After further investigation, 2 the Manager informed Plaintiff that he had been mistaken, and Plaintiff was led to believe 3 it was Defendant s debt that the Manager sought. (Id.) 4 From this evidence, the Court finds that use of the two marks has already led to 5 confusion. Plaintiff s apparent uncertainty about Defendants role in the April 8, 2009 6 phone call leads the Court to hesitate before considering it an instance of actual confusion. 7 The incident with the check, on the other hand, clearly shows that the public has been 8 confused by the similarity between the two marks. Since evidence of past confusion is 9 persuasive proof of likely future confusion, the Court finds that this factor weighs heavily 10 in Plaintiff s favor. See Sleekcraft, 599 F.2d at 352. 11 7. Likelihood of expansion into other markets 12 A strong possibility that either party may expand his business to compete with the 13 other will weigh in favor of finding that the present use is infringing. Sleekcraft, 599 F.2d 14 at 354 (citing Restatement of Torts § 731(b)). However, [t]he likelihood of expansion in 15 product lines factor is relatively unimportant where two companies already compete to a 16 significant extent. Brookfield Commc ns, 174 F.3d at 1060. As discussed with respect to the relatedness of the two companies services, the 17 18 Court finds that Plaintiff and Defendants already compete to a significant extent by 19 providing similar products that are used in the same industry. The likelihood of expansion 20 in Defendants product lines is therefore relatively unimportant and the Court declines to 21 consider this factor further. 22 8. Degree of care likely to be exercised by purchasers In assessing the likelihood of confusion to the public, the standard used by the 23 24 courts is the typical buyer exercising ordinary caution. Although the wholly indifferent 25 may be excluded, the standard includes the ignorant and the credulous. When the buyer 26 has expertise in the field, a higher standard is proper though it will not preclude a finding 27 that confusion is likely. Sleekcraft, 599 F.2d at 353 (citations omitted). 28 /// -9- 09cv1791 1 Defendants argue that both companies market their products to high-end, 2 sophisticated consumers with disposable incomes. (Doc. No. 18 at 9.) Moreover, Mr. 3 Fenner, one of Defendants declarants, compares possible confusion between the two lines 4 of products to someone in the market for a sedan accidentally purchasing a pickup truck. 5 (Doc. No. 21 ¶ 20.) Plaintiff, on the other hand, disputes the idea that their consumers are 6 high-end and sophisticated, and suggests that only minimal care is used when choosing 7 products like bacteria for aquatic systems. (Doc. No. 25 at 7.) Since neither Plaintiff nor Defendants have presented sufficient evidence to support 8 9 these claims, the Court cannot determine the degree of care exercised by purchasers. 10 Despite its lack of clarity, the Court finds that other factors weigh so strongly in Plaintiff s 11 favor, that a finding for Defendants on this factor would not tip the balance in their favor. From its analysis of the Sleekcraft factors, the Court determines that Plaintiff has 12 13 demonstrated a likelihood of success on the merits. 14 III. Possibility of Irreparable Injury In a trademark infringement case, irreparable injury may be presumed from a 15 16 showing of likelihood of success on the merits. See Brookfield Commc ns, 174 F.3d at 17 1060; GoTo.com, 202 F.3d at 1209. Plaintiff has therefore demonstrated a combination of 18 likelihood of success on the merits and the possibility of irreparable injury necessary to 19 entitle it to a preliminary injunction. 20 IV. 21 Parties Other Requests and Motions On September 29, 2009, Defendants filed a request for an evidentiary hearing in 22 connection with Plaintiff s motion for a preliminary injunction. (Doc. No. 22.) Exercising 23 its discretion, the Court denies Defendants request. On October 6, 2009, Plaintiff filed an 24 objection to evidence presented in Defendants opposition to Plaintiff s motion for 25 preliminary injunction. (Doc. No. 27.) The Court notes Plaintiff s objections. To the 26 extent they are valid, the court sustains them. To they extent the objections are invalid, the 27 Court overrules them. Plaintiff filed a request for judicial notice on October 6, 2009. (Doc. 28 No. 28.) The Court grants Plaintiff s requests to the extent the offered documents are - 10 - 09cv1791 1 properly subject to judicial notice. 2 CONCLUSION 3 Plaintiff has shown a probability of success on the merits and a possibility of 4 irreparable injury if injunctive relief is not granted. Plaintiff is therefore entitled to a 5 preliminary injunction. 6 7 IT IS SO ORDERED. DATED: October 29, 2009 ________________________________ MARILYN L. HUFF, District Judge UNITED STATES DISTRICT COURT 8 9 10 COPIES TO: 11 All parties of record 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 11 - 09cv1791

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