In its recent decision in Arborjet, Inc. v. Rainbow Treecare Scientific Advancements, Inc., a case involving claims for breach of contract and trademark infringement, the U.S. Court of Appeals for the First Circuit affirmed a preliminary injunction based upon the contract claims, but vacated the portion of the order requiring trademark attribution. In an opinion authored by retired Supreme Court Justice David Souter, sitting by designation and writing for a three-judge panel, the First Circuit held that the District Court had no basis upon which to include trademark relief in the injunction.
Plaintiff Arborjet manufactures and sells TREE-äge, a chemical solution that protects trees from various pests. Defendant Rainbow Treecare was at one time the contractually exclusive distributor of TREE-äge. After termination of the agreement between the parties, Rainbow began to market ArborMectin, which it touted on its website to be an improvement upon TREE-äge. Rainbow did not use the ® symbol with the TREE-äge or ARBORJET marks when making these claims, nor did it include a disclosure attributing ownership of these marks to Arborjet. It is not uncommon for an advertiser to include such attribution when making comparative claims to the products of others, although it is not a legal requirement. Arborjet claimed that Rainbow’s failure to do so was likely to cause consumer confusion.
District Court Decision
Arborjet filed suit and moved for a preliminary injunction. Its trademark count was based on Rainbow’s comparative advertising claims. Its breach of contract count was based on Arborjet’s allegation Rainbow had actively tested ArborMectin while still under contract with Arborjet, in violation of a provision that prevented Rainbow from engaging in “affairs intended to replicate Arborjet’s products or processes.”
District of Massachusetts Judge Gorton found that Arborjet was likely to succeed on the merits of its contract claims and issued an order enjoining Rainbow from further sales of ArborMectin pending resolution of the action. In considering Arborjet’s trademark claims, Judge Gorton found that most factors weighed against a finding of likelihood of confusion, and therefore that Arborjet was not likely to succeed on the merits of its infringement claims. Nevertheless, Judge Gorton admonished Rainbow that it “should be more careful with its attribution of proprietary marks” on its website, and as part of the injunction ordered Rainbow to properly attribute Arborjet’s trademarks “by appending the ® symbol” with a footnote stating “Registered Trademark of Arborjet, Inc.”
First Circuit Appeal
Rainbow filed an appeal of the preliminary judgment order. The First Circuit affirmed the preliminary injunction against sales of ArborMectin based on Arborjet’s contract claims, but vacated the trademark relief. Justice Souter did not undertake an independent review of the trademark claims, but based the decision squarely on Judge Gorton’s holding that Arborjet was not likely to succeed on the merits of that count. Justice Souter’s decision affirmed that likelihood of success on the merits is the “sine qua non” of a preliminary injunction, indicating that the other relevant factors (irreparable harm, balance of the equities, and service of the public interest) become “matters of idle curiosity” in its absence. Accordingly, the First Circuit vacated the trademark attribution portion of the order because it was “unsupported by a finding of likely success on a relevant claim.”
This case does not break any new ground in trademark law, but it makes an important point clear – even when injunctive relief is merited on other grounds, a plaintiff is not entitled to enjoin the defendant in regard to trademark use unless it meets the criteria for such relief based directly upon related trademark causes of action, or some other basis not at issue in Arborjet such as an enforceable agreement not to use a certain mark. Arborjet did not show that it was likely to succeed on its trademark claims and the First Circuit acted accordingly.
This does not mean, of course, that Arborjet cannot ultimately prevail before a jury. Apparently, it will at least get its chance to try – the case is currently scheduled to go to trial on October 13, 2015.