June/July 2011 Issue
Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc.,
2011 U.S. App. LEXIS 10882 (1st Cir. May 27, 2011)
In response to defendant’s threat to file suit, plaintiff brought a declaratory judgment action regarding its right to use and register the mark MDTV, which it had been using for healthcare information services for over a decade. Defendant counterclaimed for trademark infringement, unfair competition, and cybersquatting based on its prior use of the MDTV mark for television programs, and moved for a preliminary injunction. The district court granted defendant’s motion for preliminary injunction after finding that defendant was likely to succeed on the merits of its trademark-infringement claim and that there was a presumption of irreparable harm. The First Circuit vacated the preliminary injunction and remanded, holding that the district court erred as a matter of law in presuming the existence of irreparable harm, given the defendant’s decade-long delay in taking action against the plaintiff’s use of the mark.
This case involves a dispute over the priority of use of the MDTV mark. Defendant MDTV Medical News Now, Inc. (“Defendant”) has been producing a nationally televised medical news program under the mark MDTV since 1998. Defendant’s medical news program had a wide viewership base and was not directed to a certain population. Plaintiff Voice of the Arab World, Inc. (“Plaintiff”) was a nonprofit corporation dedicated to providing healthcare information to Arab-Americans and began using the mark MDTV for its services in 1999. Initially, and for sometime thereafter, Plaintiff’s services were specifically targeted to Arab-Americans. Defendant first sent Plaintiff a cease-and-desist letter in January 2000, demanding that Plaintiff select an alternative mark. Plaintiff refused to stop using the mark and applied to register the MDTV mark later that year. Defendant took no further action until September 2001, when it offered to pay Plaintiff for a banner advertisement or landing page on Plaintiff’s website at www.mdtv.com that would direct Internet users to Defendant’s website. The parties, however, were unable to reach an agreement regarding this advertisement. Defendant made another attempt at settlement in August 2002 by proposing a coexistence agreement, but that agreement was also never finalized. In 2005, the parties reached a verbal agreement under which Defendant promised to pay Plaintiff a monthly fee for Plaintiff to host a banner advertisement on Plaintiff’s website that would refer interested users to Defendant’s website. A year later, however, Defendant requested that Plaintiff discontinue the banner ad and that it be relieved of further payments due to low traffic resulting from the banner ad to Defendant’s website.
In August 2009, Plaintiff revised its website by listing a wider scope of services it intended to offer and providing links to certain medical entities. Notably, it also deleted any references that limited the website’s target audience to Arab-Americans. Defendant immediately sent a second cease-and-desist letter threatening to file an action for trademark infringement and cybersquatting. In September 2009, Plaintiff filed an action seeking declaratory judgment that it had a right to use and register the MDTV mark and that its activities did not infringe Defendant’s rights or constitute cybersquatting. Defendant brought counterclaims for trademark infringement and cybersquatting, and moved for a preliminary injunction.
The district court granted Defendant’s motion for preliminary injunction, finding that Defendant was likely to succeed on the merits of its trademark-infringement claim and that there was a presumption of irreparable harm. Plaintiff appealed, arguing, among other things, that (1) presuming irreparable harm in trademark-infringement cases upon a showing of likelihood of success is inconsistent with the Supreme Court’s opinion in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006); and (2) even if irreparable harm may be presumed in certain instances, such presumption should not apply under the facts of this case, given Defendant’s excessive delay in seeking injunctive relief.
The First Circuit vacated the district court’s judgment. As an initial matter, it confirmed that the traditional equitable principles discussed by the Supreme Court in eBay, a patent-infringement case, apply to the determination of preliminary injunctive relief in trademark-infringement cases. However, the court held it was unnecessary to decide whether presuming irreparable harm upon a showing of likelihood of success is consistent with those equitable principles because, even assuming such a presumption is still good law, it was error to apply the presumption here, given Defendant’s ten-year delay in seeking injunctive relief.
The district court recognized that had it not been for the changes to Plaintiff’s website in August 2009, it would have rejected Defendant’s claim of irreparable harm, given that Defendant knew of and acquiesced to Plaintiff’s use of the MDTV mark for nearly ten years. In the district court’s view, the changes to Plaintiff’s website in 2009 “changed the calculus” and revived the presumption of irreparable harm. The First Circuit disagreed for two reasons. First, it found that the changes to Plaintiff’s website were not “sufficiently qualitatively different” so as to justify a renewed presumption of irreparable harm. Second, even after discovering the website changes and sending a second demand letter to Plaintiff on August 15, 2009, Defendant continued to delay in taking action and did not move for preliminary injunctive relief until over three months later on November 25, 2009—and did so only after Plaintiff first sued for declaratory judgment. The court found that such “leisurely pace and lack of urgency” undercut any presumption of irreparable harm.
Because it was error for the district court to presume irreparable harm under the particular facts of the case, the First Circuit vacated the district court’s judgment and remanded for further proceedings. Defendant subsequently filed a petition for rehearing, which was denied on June 21, 2011.
This decision shows the continued uncertainty in light of the Supreme Court’s eBay decision regarding whether a presumption of irreparable harm arises in trademark-infringement cases upon a showing of a likelihood of success on the merits. Given the long-standing body of case law holding that such a presumption exists, it is not surprising that courts have been unwilling to squarely address whether eBay is consistent with such a presumption. In addition to the First Circuit, at least two other courts of appeal have raised this issue but declined to answer it conclusively. Until the courts begin to provide a definitive answer, the standard for obtaining preliminary (and permanent) injunctive relief in trademark cases will be clouded with some degree of uncertainty.