United States District Court for the Northern District of California

SONY COMPUTER ENTERTAINMENT AMERICA INC., Plaintiff, v. GAMEMASTERS, MICHAEL CHADDON, and CAROL CHADDON, Defendants.

NO. C 99-02743 TEH

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

87 F. Supp. 2d 976; 1999 U.S. Dist. LEXIS 21719; 54 U.S.P.Q.2D (BNA) 1401

November 4, 1999, Decided

November 4, 1999, Filed

DISPOSITION: [**1] PLAINTIFF'S REQUEST FOR PRELIMINARY INJUNCTION GRANTED.

CASE SUMMARY

PROCEDURAL POSTURE: Plaintiff video game company brought civil action against defendant alleged counterfeiters for trademark and copyright infringement, contributory trademark and contributory copyright infringement under the Lanham Act, 15 U.S.C.S. § 1051 et seq., violation of the Digital Millennium Copyright Act, 17 U.S.C.S. § 1201, unfair competition under Cal. Bus. & Prof. Code § 17500, and under the Lanham Act. Plaintiff moved for preliminary injunction.

OVERVIEW: Plaintiff video game company learned that defendant alleged counterfeiters were selling allegedly counterfeit accessories for plaintiff's games, after one of plaintiff's employees purchased allegedly counterfeit accessories from defendants' store. Plaintiffs brought a civil suit alleging trademark infringement, trademark counterfeiting, contributory trademark and contributory copyright infringement in violation of the Lanham Act, 15 U.S.C.S. § 1051 et seq., violation of the Digital Millennium Copyright Act, 17 U.S.C.S. § 1201, unfair competition in violation of Cal. Bus. & Prof. Code § 17500, and violation of the Lanham Act. Plaintiff moved for a preliminary injunction, which was granted. Plaintiff created a presumption of exclusive ownership upon presentment of trademark registration certificates for titles and designs for company product trademarks. Plaintiff was able to show likelihood of success on the merits by proving that defendants' infringing use of its trademark was likely to cause confusion among consumers. Irreparable harm was presumed from plaintiff's prima facie showing of likelihood of success on the merits of its trademark infringement claims.

OUTCOME: Plaintiff's request for preliminary injunction was granted. Presumption of plaintiff's exclusive ownership of trademarks having been established, plaintiff demonstrated that it was likely to prevail upon merits of its claim that defendant's sale of its product violated the Digital Millennium Copyright Act. Irreparable harm was inferred from plaintiff's prima facie showing of likelihood of success on the merits of trademark infringement claims.

CORE TERMS: trademark, console, counterfeit, controller, packaging, card, memory, preliminary injunction, infringement, user, video game, consumer, peripheral, accessory, seized, contributory, technological, unauthorized, box, Copyright Act, registered, import, stylized, trademark infringement, trade dress, circumventing, selling, irreparable injury, registration, manufactured

LexisNexis® Headnotes Hide Headnotes

Civil Procedure > Jurisdiction > Subject Matter Jurisdiction > Federal Questions > General Overview

Civil Procedure > Jurisdiction > Subject Matter Jurisdiction > Jurisdiction Over Actions > General Overview

HN1Go to the description of this Headnote. The United States District Court for the Northern District of California has jurisdiction over trademark violation action pursuant to 15 U.S.C.S. § 1121, as it arises under the Lanham Act, 15 U.S.C.S. § 1051 et seq., pursuant to 28 U.S.C.S. § 1331, as it presents a federal question, pursuant to 28 U.S.C.S. § 1338(a), as this suit concerns an act of Congress relating to patents, copyrights and trademarks.

Civil Procedure > Jurisdiction > Subject Matter Jurisdiction > Supplemental Jurisdiction > Ancillary Jurisdiction

Civil Procedure > Venue > General Overview

HN2Go to the description of this Headnote. The United States District Court for the Northern District of California has supplemental jurisdiction over plaintiff and defendants' state law claims under 28 U.S.C.S. § 1367 and the doctrines of ancillary and pendent jurisdiction.

Civil Procedure > Venue > Individual Defendants

Civil Procedure > Venue > Multiparty Litigation

HN3Go to the description of this Headnote. Venue is proper in the United States District Court for the Northern District of California pursuant to 28 U.S.C.S. § 1391(b), 1400(a) because defendants reside within this judicial district and a substantial part of the events giving rise to the alleged claims occurred in this district.

Communications Law > Related Legal Issues > Copyright

Computer & Internet Law > Copyright Protection > Digital Millennium Copyright Act > Remedies

Patent Law > Remedies > Equitable Relief > Injunctions

HN4Go to the description of this Headnote. The federal courts have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office. 15 U.S.C.S. § 1116; 17 U.S.C.S. § 1203.

Trademark Law > Infringement Actions > Remedies > Equitable Relief > Preliminary Injunctions

Trademark Law > Protection of Rights > Registration > Evidence

Trademark Law > Special Marks > Service Marks > Registration

HN5Go to the description of this Headnote. A federal registration of a service mark constitutes prima facie evidence of the exclusive right to use the registered mark in the United States. 15 U.S.C.S. § 1115(A).

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

Evidence > Inferences & Presumptions > General Overview

HN6Go to the description of this Headnote. The preliminary injunction is an equitable remedy. As such, it is an extraordinary remedy, and the burden is on the moving party to make a clear showing that the remedies at law are inadequate.

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

HN7Go to the description of this Headnote. A court may issue a preliminary injunction if it determines (1) the moving party will suffer irreparable injury if the relief is denied; (2) the moving party will probably prevail on the merits; (3) the balance of potential harm favors the moving party; and, (4) the public interest favors granting relief. An alternative standard is to demonstrate either (1) a combination of probable success on the merits and the possibility of irreparable injury if relief is not granted, or (2) the existence of serious questions going to the merits, and that the balance of hardships tips sharply in its favor. Even if the balance of hardships tips decidedly in favor of the moving party, it must be shown, as an irreducible minimum, that there is a fair chance of success on the merits. The required showing of harm varies inversely with the required showing of meritoriousness.

Trademark Law > Federal Unfair Competition Law > False Advertising > General Overview

Trademark Law > Federal Unfair Competition Law > Trade Dress Protection > General Overview

Trademark Law > Infringement Actions > Remedies > Equitable Relief > Preliminary Injunctions

HN8Go to the description of this Headnote. In the trademark context, the standard for issuing a preliminary injunction tracks the traditional standard with a few exceptions. The likelihood of success on the merits is demonstrated by proving that a person's infringing use of the mark is likely to cause confusion, or to cause mistake, or to deceive as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. 15 U.S.C.S. § 1125(a)(1)(A).

Trademark Law > Likelihood of Confusion > Consumer Confusion > General Overview

Trademark Law > Likelihood of Confusion > Intent > General Overview

Trademark Law > Likelihood of Confusion > Similarity > Appearance, Meaning & Sound > General Overview

HN9Go to the description of this Headnote. Eight factors are traditionally considered in determining the likelihood of confusion of a trademark: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) types of goods and degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines. At the preliminary injunction stage, the trial court is not required to consider all of those factors, since the record will not likely be sufficient to permit thorough consideration.

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

Trademark Law > Likelihood of Confusion > Consumer Confusion > General Overview

HN10Go to the description of this Headnote. Once plaintiff establishes a likelihood of confusion, it is ordinarily presumed that the plaintiff will suffer irreparable harm if injunctive relief does not issue.

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

Trademark Law > Infringement Actions > Remedies > Equitable Relief > Preliminary Injunctions

Trademark Law > Likelihood of Confusion > Consumer Confusion > General Overview

HN11Go to the description of this Headnote. Loss of business is not the test of irreparable injury in motions for preliminary injunctions against the use of a trademark. The fact that plaintiff has had the symbol of its reputation placed in the hands of another is irreparable injury.

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

Civil Procedure > Appeals > Standards of Review > Clearly Erroneous Review

HN12Go to the description of this Headnote. The district court has broad discretion in deciding whether to issue a preliminary injunction, and will not be overturned on appeal, unless the district court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact.

Trademark Law > Infringement Actions > Determinations

HN13Go to the description of this Headnote. Trademark infringement occurs when a person uses a mark in commerce, without the registrant's consent, in a manner that is likely to cause confusion, mistake or deception. 15 U.S.C.S. § 1114.

Trademark Law > Infringement Actions > Determinations

Trademark Law > Likelihood of Confusion > Consumer Confusion > General Overview

HN14Go to the description of this Headnote. To prevail at trial, a plaintiff must prove that there is a likelihood of confusion in defendant's use of the trademark.

Trademark Law > Infringement Actions > Determinations

Trademark Law > Likelihood of Confusion > Consumer Confusion > General Overview

HN15Go to the description of this Headnote. A plaintiff may establish a prima facie case of trademark infringement by showing (1) rightful ownership of the marks in suit and (2) likelihood of confusion or mistake amongst the public from a defendant's use of the marks.

Trademark Law > Federal Unfair Competition Law > General Overview

Trademark Law > Trademark Counterfeiting Act > Civil Actions > General Overview

HN16Go to the description of this Headnote. Trademark counterfeiting occurs by producing or selling a product that bears a counterfeit trademark. 15 U.S.C.S. § 1116(D)(B)(I).

Trademark Law > Conveyances > General Overview

Trademark Law > Infringement Actions > General Overview

Trademark Law > Trademark Counterfeiting Act > Civil Actions > General Overview

HN17Go to the description of this Headnote. Section 1114 of the Lanham Act, 15 U.S.C.S. § 1051 et seq., which establishes the trademark counterfeiting cause of action, prohibits the use of any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale of any goods where such use is likely to cause confusion or to deceive. 15 U.S.C.S. § 1114(1)(a).

Criminal Law & Procedure > Defenses > General Overview

Trademark Law > Subject Matter > Labels, Packaging & Trade Dress

Trademark Law > Trademark Counterfeiting Act > Civil Actions > Defenses

HN18Go to the description of this Headnote. Willful blindness is no defense to a charge of knowing and intentional trademark counterfeiting. It is enough that a retailer failed to inquire further because he was afraid of what the inquiry would yield.

Trademark Law > Infringement Actions > Contributory Infringement

Trademark Law > Infringement Actions > Determinations

Trademark Law > Special Marks > Service Marks > General Overview

HN19Go to the description of this Headnote. Contributory infringement occurs when the defendant either intentionally induces a third party to infringe the plaintiff's mark or supplies a product to a third party with actual or constructive knowledge that the product is being used to infringe the service mark.

Trademark Law > Infringement Actions > Determinations

HN20Go to the description of this Headnote. One who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a contributory infringer.

Trademark Law > Infringement Actions > Contributory Infringement

Trademark Law > Infringement Actions > Determinations

HN21Go to the description of this Headnote. The gravamen of a contributory trademark infringement action is the defendant's knowledge.

Trademark Law > Infringement Actions > Determinations

HN22Go to the description of this Headnote. A consumer's choice to play a non-territorial game cannot be an activity infringing a trademark.

Communications Law > Related Legal Issues > Copyright

Computer & Internet Law > Copyright Protection > Digital Millennium Copyright Act > Prohibited Conduct

HN23Go to the description of this Headnote. The Digital Millennium Copyright Act, among other things, prohibits distribution of any product or device which: (1) is primarily designed or produced for the purpose of circumventing a technological measure (or a protection afforded by a technological measure) that effectively controls access to a system protected by a registered copyright or effectively protects a right of a copyright owner in a registered work or portion thereof; (2) has only limited commercially significant purpose or use other than to circumvent such a technological measure (or protection afforded it); or (3) is marketed for use in circumventing such a technological measure (or protection afforded by it). 17 U.S.C.S. § 1201(a)(2)-(3), (b)(1)-(2).

Communications Law > Related Legal Issues > Copyright

Computer & Internet Law > Copyright Protection > Digital Millennium Copyright Act > Prohibited Conduct

HN24Go to the description of this Headnote. The Digital Millennium Copyright Act, 17 U.S.C.S. § 1201 prohibits manufacture or distribution of technologies, products and services used to circumvent technological measures which control access. The prohibition applies only if such circumventing technologies are primarily designed for this purpose, have only limited commercial purpose beyond such circumventing purpose, or are marketed for the prohibited purpose. This provision is immediately effective.