Catherine C. Eagles, District Judge.
The plaintiff Fleet Feet, Inc., has used two trademarks, "Change Everything" and "Running Changes Everything," for a number of years in connection with selling running shoes and other athletic apparel and with organizing running and walking races, training, and related events. This summer, the defendants Nike, Inc., Nike USA, Inc., and Nike Retail Services, Inc. ("Nike"), began to use the phrase "Sport Changes Everything" in a large-scale and ubiquitous advertising campaign expected to last through the holidays and into the New Year. Because Fleet Feet has demonstrated a likelihood of success on the merits of its trademark infringement claims and met the other requirements for a preliminary injunction, Fleet Feet's motion will be granted.
To obtain a preliminary injunction, a party must show that: (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm if the injunctive relief is denied, (3) the balance of equities tips in its favor, and (4) injunctive relief would be in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). "Satisfying these four factors is a high bar, as it should be." SAS Inst., Inc. v. World Programming Ltd., 874 F.3d 370, 385 (4th Cir. 2017), cert. denied, ___ U.S. ___, 139 S.Ct. 67, 202 L.Ed.2d 22 (2018).
To show a likelihood of success on the merits of its trademark infringement claims, Fleet Feet must make a strong case that Nike is infringing Fleet Feet's marks.
Nike challenges validity, contending that both "Change Everything" and "Running Changes Everything" are in common use and cannot be trademarked and that Fleet Feet does not use either phrase "as a trademark." It also challenges Fleet Feet's evidence of confusion and asserts the affirmative defense of fair use, which if shown would ultimately defeat any liability.
The Court, having reviewed the motions, the supporting documents, all matters of record,
As noted supra, to obtain a preliminary injunction, a party must show that: (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm if the injunctive relief is denied, (3) the balance of equities tips in its favor, and (4) injunctive relief would be in the public interest. A preliminary injunction is an "extraordinary remedy involving the exercise of very far-reaching power." Pashby v. Delia, 709 F.3d 307, 319 (4th Cir. 2013). In the appropriate case, preliminary injunctions "protect the status quo" and "prevent irreparable harm during the pendency of a lawsuit ultimately to preserve the court's ability to render a meaningful judgment on the merits." In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 525 (4th Cir. 2003), abrogated on other grounds by eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006).
To succeed on the merits, Fleet Feet must prove trademark infringement, which requires it to show ownership of a valid, protectable trademark and to show that Nike's use of an allegedly infringing mark is likely to cause confusion among consumers. Lone Star Steakhouse, 43 F.3d at 930. Nike also asserts fair use, which as an affirmative defense would defeat any liability.
The trademark statute provides that registration of a mark upon the Principal
Here, Nike has offered very little evidence or argument to undermine the validity of the "Change Everything" mark. See Doc. 34 at 17-18 (spending one paragraph on validity issue for both marks). Nike does not contest the fact that Fleet Feet's mark is on the Principal Register. Instead, Nike contends that because it has filed petitions for cancellation, Fleet Feet's "rights are far from settled." Id. But the mere fact that Nike has filed petitions for cancellation does little to undermine the presumptive validity of the CE mark, and Nike cites no cases to the contrary. Nike's perfunctory arguments and absence of evidence do not undermine the presumption of validity.
Since "Change Everything" is not yet on the Principal Register for apparel or athletic shirts, and "Running Changes Everything" is not on it for any uses, they do not enjoy the same presumption. But "ownership of a mark is not dependent on registration, and can also flow from prior use." Dynamic Aviation Grp. Inc. v. Dynamic Int'l Airways, LLC, No. 5:15-CV-00058, 2016 WL 1247220, at *16 (W.D. Va. Mar. 24, 2016). The CE mark for athletic shirts and the RCE mark may still be valid if each "is proven to perform the job of identification: to identify one source and distinguish it from other sources." MicroStrategy Inc., 245 F.3d at 341. A mark identifies its source when it is "used in such a manner that its nature and function are readily apparent and recognizable without extended analysis or research," based on factors including the frequency, consistency, and duration of use of the mark, and the use of any "constant pattern or design to highlight" the mark, such as a particular font. Id. at 341-42.
"Change Everything" for athletic shirts and "Running Changes Everything" for all applied-for uses are both valid marks: they each stand out as a distinct message signaling affiliation with the company. The text consistently appears either in all-caps block print in a font similar to Fleet Feet's company name, or in an all-caps handwriting font—both of which are recognizable across multiple repeated uses. Supra at ¶¶ 12, 20. The marks have been used for several years in a reliable way and in several media associated with Fleet Feet and its other marks: in stores, on its website and social media, on athletic T-shirts, and at races and training events. Supra at ¶¶ 10-12, 18-20. In fact, most of Fleet Feet's examples of CE are photographs of runners in athletic T-shirts, which photographs it also uses on its website, social media, or in-store displays. See supra notes 6-10.
At oral argument, Nike contended that RCE and CE are not valid trademarks because Fleet Feet does not use them as such in every instance. While Fleet Feet sometimes uses the marks in a textual way, rather than standing out as a signifier of origin, supra at ¶¶ 11, 19, Nike has cited no authority in its brief for the proposition that a few textual uses would defeat a far greater number of trademark uses. The
In order to be a valid trademark, the mark must be distinctive. Marks are often classified in categories of generally increasing distinctiveness, from generic, to descriptive, to suggestive, to arbitrary or fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992); George & Co., 575 F.3d at 393-94. On one end, generic marks cannot be trademarked, George & Co., 575 F.3d at 394, and on the other, suggestive, arbitrary or fanciful marks are inherently distinctive and entitled to protection. Two Pesos, Inc., 505 U.S. at 768, 112 S.Ct. 2753. Descriptive marks, in the middle, may be trademarked only if they have acquired distinctiveness, which is called "secondary meaning." Id. at 769, 112 S.Ct. 2753; see 15 U.S.C. § 1052(f) (authorizing trademark registration upon "evidence that the mark has become distinctive"). As suggestive and arbitrary marks are inherently distinctive, they do not require proof of such secondary meaning. See George & Co., 575 F.3d at 394.
Fleet Feet maintains that "Change Everything" is arbitrary and "Running Changes Everything" is suggestive. Doc. 9 at 18-19. Nike asserts that CE and RCE are not valid marks because they are descriptive, rather than distinctive, and they lack secondary meaning. Doc. 34 at 17-18.
As is relevant here, "[d]escriptive marks define a particular characteristic of the product in a way that does not require any exercise of the imagination." George & Co., 575 F.3d at 394. In contrast, suggestive marks do require imagination to associate the mark with the product, and arbitrary marks "typically involve common words that have no connection with the actual product." Id. If the mark imparts information directly, such as "After Tan post-tanning lotion," or "5 Minute Glue," it is descriptive. Id. If it stands for an idea that requires some operation of the imagination to connect it with the goods, however, such as "Coppertone" or "Orange Crush," it is suggestive. Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 464 (4th Cir. 1996). If the mark does not suggest or describe any quality, ingredient, or characteristic of the goods it serves, such as "Tea RoseⓇ flour, CamelⓇ cigarettes, and AppleⓇ computers," the mark is arbitrary. Id.
The "Change Everything" mark is suggestive. Neither the word "change" or the phrase "change everything" directly impart information in a descriptive way about any quality, ingredient, or characteristic of Fleet Feet's goods and services; rather, it is a "more nuanced" phrase. Dynamic Aviation, 2016 WL 1247220, at *19. The word "change" implies substituting or replacing one thing with something else, or altering something, and change can be good, bad, or neutral, depending on context. When used in conjunction with the word "everything" and as applied to retail sporting goods stores, T-shirts, and organizing running and walking race training events, the phrase has a positive meaning, a meaning that it does not necessarily impart when used in everyday language or without association with Fleet Feet's goods and services. As used, it suggests that Fleet Feet's services or purchase of their products will result in positive "change" of "everything," but it does not describe how or why that will happen or directly link in any descriptive way the goods and services to the way that "everything" will "change."
For similar reasons, the mark "Running Changes Everything" is suggestive, not descriptive or arbitrary. The inclusion of the word "running" draws a somewhat straighter line between the mark and the goods and services involved, and it is more apparent how such change will occur and that it will be positive, so the mark is marginally less suggestive than "Change Everything." Even so, "Running Changes Everything" does not directly describe any information about, or quality or characteristic of, Fleet Feet's goods and services. The mark is much less like "After Tan post-tanning lotion," or "5 Minute Glue," marks the Fourth Circuit has characterized as descriptive, George & Co., 575 F.3d at 394, and much more like "Coppertone" or "Orange Crush," which it has characterized as suggestive. Sara Lee, 81 F.3d at 464. "Running Changes Everything" merely suggests that the products and services sold by Fleet Feet will make the runner's life better in an overall, non-specific way, and does not describe the qualities of the goods and services themselves.
Nike contended at oral argument that by seeking to register its "Running Changes Everything" mark on the Principal Register with a claim of acquired distinctiveness, see supra at ¶¶ 22-23, Fleet Feet has conceded the RCE mark is not inherently distinctive. However, it cites no authority for the proposition that Fleet Feet cannot claim a higher degree of distinctiveness than it asserted in its application. The cases Nike cited arise in the context of applications to be registered on the Supplemental Register, not applications for the Principal Register, and in any event those cases merely say that such applications are admissions, not that Fleet Feet is bound by the admission.
Fleet Feet must also show that it is likely to succeed on the element of a likelihood of confusion. Lone Star Steakhouse, 43 F.3d at 933. Fleet Feet may satisfy this element with evidence of either forward or reverse confusion. Forward confusion occurs "when the junior user attempts to trade on the senior user's goodwill and reputation," such that consumers mistakenly believe that the junior user's goods or services are "from the same source as or are connected with the senior user's goods or services." Fuel, 7 F. Supp. 3d at 610. In contrast, "reverse confusion occurs when the junior user's advertising and promotion so swamps the senior user's reputation in the market that customers are likely to be confused into thinking that the senior user's goods are those of the junior user: the reverse of traditional confusion." 4 McCarthy § 23:10.
The factors used for the confusion inquiry in the Fourth Circuit are well established: (1) the strength or distinctiveness of the mark; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services the marks identify; (4) the similarity of the facilities the two parties use in their businesses; (5) the similarity of the advertising used by the two parties; (6) the defendant's intent; (7) actual confusion; (8) the quality of the defendant's product; and (9) the sophistication of the consuming public.
Forward and reverse confusion are factually distinct ways to evaluate the likelihood of confusion. As Fleet Feet contends both exist in this case, the Court will consider them together, clarifying differences between the two as needed. See Teal Bay Alliances, LLC v. Southbound One, Inc., No. MJG-13-2180, 2015 WL 401251, at *16 (D. Md. Jan. 26, 2015) (noting factors to evaluate forward and reverse confusion "are largely the same"); Coryn Grp. II, LLC v. O.C. Seacrets, Inc., 868 F.Supp.2d 468, 484-89 (D. Md. 2012) (evaluating
While Fleet Feet is likely to be successful in showing its marks are distinctive, see discussion supra, the marks are not very strong. See discussion infra. While this lowers the likelihood of success on forward confusion, it conversely strengthens a finding of reverse confusion, as it increases the risk Nike's advertising will overcome Fleet Feet's marks. See A & H, 237 F.3d at 231.
"The strength of a mark is the degree to which a consumer in the relevant population, upon encountering the mark, would associate the mark with a unique source." CareFirst of Md., Inc. v. First Care, P.C., 434 F.3d 263, 269 (4th Cir. 2006). A mark's strength "is evaluated in terms of its conceptual strength and commercial strength." Id.
The conceptual strength inquiry "focuses on the linguistic or graphical peculiarity of the mark, considered in relation to the product, service, or collective organization to which the mark attaches." Id. Conceptual strength requires analysis both of whether a mark is distinctive and how it has been used by third parties. Id. at 269-70. The distinctiveness of the CE and RCE marks is analyzed supra at 23-25. Neither mark is fanciful or arbitrary, but both marks are suggestive and thus are distinctive.
Even if the mark is distinctive, however, "[t]he frequency of prior use of a mark's text in other marks, particularly in the same field of merchandise or service, illustrates the mark's lack of conceptual strength." CareFirst, 434 F.3d at 270; see also A & H, 237 F.3d at 223 (use of a term within the relevant field is "more probative," but "the extensive use of the term in other markets may also have a weakening effect on the strength of the mark"); Fuel, 7 F. Supp. 3d at 611-12 (of 1,000 federal trademark registrations with the word "fuel," at least fifteen were in the same international class, and several others were for items in the same field of action sports, which "weakens the distinctiveness of Fuel's asserted mark"). Both third-party registrations and unregistered uses are relevant to considering conceptual strength, as they indicate how common the relevant terms are in the marketplace. See Petro Stopping Ctrs., L.P. v. James River Petroleum, Inc., 130 F.3d 88, 93-94 (4th Cir. 1997); Sterling Acceptance Corp. v. Tommark, Inc., 227 F.Supp.2d 454, 462 (D. Md. 2002).
Nike provides a list of registered marks that include "change everything" and related phrases, Doc. 38-17, though fewer than half of those are actively used. Supra at ¶ 39. In addition, none are for retail fitness stores, athletic clothing, or race training, which are the areas and ways that Fleet Feet uses its marks. Supra at ¶¶ 10-11, 18-19, 39. There were no other registrations of "running changes everything," supra at ¶ 38, though many of the registered marks shared the format of "[] changes everything." See supra note 44.
Nike also submits examples of several unregistered uses of "change everything" in the athletic field, such as a 2014 Adidas Boost sneaker commercial with "Boost Changes Everything," a 2013 sports cap commercial featuring Jackie Robinson with "First Changes Everything," and a 2018 Gatorade commercial with "Everything Changes." See supra at ¶ 40. These videos end with or include prominently a still shot of the quoted tag line in large, distinct print, without surrounding text. Id. In addition, fitness-related websites have used the phrase "change everything" textually to describe their services or what they
Given the extensive third-party registrations and use of similar phrases in other classes, the "Change Everything" mark, while distinctive, is relatively weak. See, e.g., Sterling, 227 F. Supp. 2d at 462 (plaintiff's mark was weak since the word "Sterling" is used by "a large number of businesses which provide financial services, including many that [like the plaintiff] arrange for boat loans," and there were 18 USPTO registrations in the financial services class and over 350 registrations in other classes including the word). Despite the many marks with a similar format, there are no other uses of "Running Changes Everything," supra at ¶ 42, so it has slightly greater conceptual strength than "Change Everything."
Overall, the "Change Everything" mark is less likely to be associated with running or fitness, which increases its conceptual strength, yet its general nature also means it is used more often in other fields. The "Running Changes Everything" mark is somewhat less suggestive, as it has a closer connection with Fleet Feet's goods and services, but it gains conceptual strength because the phrase itself has not been registered with the USPTO by any other entities, nor is there any evidence of use by other entities. In sum, while neither mark has great conceptual strength, RCE is stronger than CE, and both are protectable without evidence of secondary meaning.
"The commercial-strength inquiry... looks at the marketplace and asks if in fact a substantial number of present or prospective customers understand the designation when used in connection with a business to refer to a particular person or business enterprise." CareFirst, 434 F.3d at 269.
This analysis differs as between forward and reverse confusion. In general, "a consumer first encountering a mark with one set of goods is likely to continue to associate the mark with those goods, which makes advertising crucial: if one manufacturer "expends tremendous sums in advertising while the other does not, consumers will be more likely to encounter the heavily advertised mark first." A & H, 237 F.3d at 230; Teal Bay Alliances, 2015 WL 401251, at *16. If Fleet Feet as the senior user spends more on advertising, then forward confusion is more likely; if Nike as the junior user spends more, however, then reverse confusion is more likely. Indeed, "the relatively large advertising and promotion of the junior user is the hallmark of a reverse confusion case." A & H, 237 F.3d at 231 (quoting 4 McCarthy § 23:10).
In evaluating commercial strength, courts look to six factors: "(1) the plaintiff's advertising expenditures; (2) consumer studies linking the mark to a source; (3) the plaintiff's record of sales success; (4) unsolicited media coverage of the plaintiff's business; (5) attempts to plagiarize the mark; and (6) the length and exclusivity of the plaintiff's use of the mark." Dynamic Aviation, 2016 WL 1247220, at *20 (quoting George & Co., 575 F.3d at 395).
Nike is a far larger company, it has greater resources available for advertising campaigns like this, and it is spending a substantial sum of money on the SCE campaign: $16,000,000 so far. See supra at ¶¶ 3-6, 31. The "Sport Changes Everything" campaign debuted in July during nationally televised sporting events; it has
As to the remaining factors, Fleet Feet does not show the requisite commercial strength for a likelihood of success on the merits as to forward confusion. It has offered no evidence that a consumer will see Nike's products and believe them to be Fleet Feet's. The CE and RCE marks do not typically stand alone without Fleet Feet's name or other marks alongside them (or, in the case of T-shirts, on the other side), supra at ¶¶ 18, 20, which weakens their independent commercial strength. See CareFirst, 434 F.3d at 270. Fleet Feet's advertising and revenue numbers do not indicate how much of its spending was dedicated to these marks nor what its market share may be, see supra at ¶¶ 3-4, and it is Fleet Feet's burden to provide such context to evaluate commercial strength. See Fuel, 7 F. Supp. 3d at 613-14. Fleet Feet provides no evidence of consumer studies or attempts to plagiarize the mark. Fleet Feet's use of these marks for several years, supra at ¶¶ 10, 18, weighs in its favor, but there is also extensive evidence of CE-related third-party registrations in other fields and some evidence of third-party unregistered uses in athletics. See supra at ¶¶ 38-41. Overall, Fleet Feet's evidence of commercial strength for CE and RCE is too thin to support a finding of forward confusion— but it strongly supports a finding of reverse confusion.
In sum, Fleet Feet's "Change Everything" and "Running Changes Everything" marks are distinctive and protectable, and Nike's branding, pervasive presence, and extensive advertising of its infringing mark gives rise to a substantial risk that consumers will associate Fleet Feet's CE and RCE marks with Nike instead of with Fleet Feet. This factor tips in favor of Fleet Feet on a likelihood of reverse confusion.
The more similar two marks are, the greater the likelihood of confusion. Dynamic Aviation, 2016 WL 1247220, at *20. In assessing similarity, courts "focus on the dominant portions" of the parties' marks: "whether there exists a similarity in sight, sound, and meaning which would
The "Sport Changes Everything" mark is quite similar to the "Change Everything" and "Running Changes Everything" marks. Both companies use these marks as stand-alone phrases ornamenting store displays, both in and outside of stores, and on banners, T-shirts, and billboards. See supra at ¶¶ 11, 19, 30. The fonts are not exactly the same: Nike's font varies in different contexts and includes but is not limited to Fleet Feet's two styles. Supra at ¶¶ 12, 20, 33. But these "graphic dissimilarities" do not "overcome the identical use" of two words across the three marks at issue, Dynamic Aviation, 2016 WL 1247220, at *20, particularly since the two companies display their marks in similar ways in stores, in videos, and in other contexts. See supra at ¶ 33 & note 42. And Fleet Feet's CE registration and RCE applications are based on the words, not limited to a particular visual presentation. Supra at ¶¶ 14, 22, 23. Cf. Kelly-Brown v. Winfrey, 95 F.Supp.3d 350, 358 (S.D.N.Y. 2015) (Plaintiff registered a "special form" mark consisting of a particular color and script of lettering, with a disclaimer: "No claim is made to the exclusive right to use own your power apart from the mark as shown.").
In addition, the "Sport Changes Everything" mark is commonly paired with the Nike name or "swoosh." See supra at ¶ 29. This pairing decreases the risk of forward confusion, as consumers will know that "Sport Changes Everything" belongs to Nike rather than Fleet Feet, but it increases the likelihood of reverse confusion as consumers are likely to associate Fleet Feet's similar marks with Nike instead of with Fleet Feet. While Fleet Feet's core marks usually accompany the "Change Everything" and "Running Changes Everything" marks, supra at ¶¶ 12, 20, consumers who are familiar with Fleet Feet's marks and who are now exposed to Nike's extensive SCE campaign may yet think that Nike has bought Fleet Feet or otherwise be confused as to the relationship between the two companies. The frequent placement of Nike's marks next to "Sport Changes Everything" thus increases the risk of reverse confusion. This factor weighs decidedly in favor of Fleet Feet, particularly for reverse confusion.
Both Nike and Fleet Feet sell athletic apparel and sponsor sporting events. Supra at ¶¶ 1-2, 5, 7. While the scale of the two companies is different, and Nike sells a wider variety of sporting goods than does Fleet Feet, supra at ¶ 7, the overlap is sufficient that a consumer may "attribute the products and services to a single source." Dynamic Aviation, 2016 WL 1247220, at *20 (quoting Renaissance Greeting Cards, Inc. v. Dollar Tree Stores, Inc., 227 F. App'x 239, 244 (4th Cir. 2007)). Indeed, Fleet Feet sells dozens of Nike's goods in its stores, alongside its own T-shirts and the goods of several other vendors.
This factor "seeks to determine if confusion is likely based on how and to whom the respective goods of the parties are sold." Fuel, 7 F. Supp. 3d at 618. Nike and Fleet Feet use overlapping methods to distribute their goods: both sell on their own online stores and in retail stores, to a similar customer base. The fact that Fleet Feet sells Nike products in its own stores—that it is a customer as well as a competitor of Nike, supra at ¶ 8—markedly increases the risk of confusion here.
Nike contends this factor weighs in its favor because "Sport Changes Everything" does not appear on Nike product labels sold in Fleet Feet stores, nor has Nike run the SCE campaign in Fleet Feet stores. Doc. 34 at 24-25. But its cited authorities do not arise in the situation that exists here, where a customer will commonly find Nike products in Fleet Feet's stores.
To compare advertising, courts examine "the media used, the geographic areas in which advertising occurs, the appearance of the advertisements, and the content of the advertisements." CareFirst, 434 F.3d at 273. Here, both Fleet Feet and Nike have a national retail presence. Supra at ¶¶ 2, 5. Both companies advertise nationally through social media and online advertising, and both use in-store displays for their respective marks. Supra at ¶¶ 11, 19, 30. Nike's television advertising for SCE's July debut reached a national audience, and while there is no direct evidence that Nike will advertise on television during upcoming major sports events, that is a reasonable inference. See supra at ¶ 31. There is no evidence that Fleet Feet advertises on television, and the record is silent as to any radio or recent print advertising by either. There is thus complete geographic overlap and substantial media overlap. Given the similarity of goods sold, Nike's ongoing use of at least some running-related content to promote SCE, see supra at ¶ 37, the obvious inclusion of "running" within the term "sport," and the fact that many athletes in other sports also run, there is significant overlap between Fleet Feet's primary demographic of runners and the broader demographic of athletes targeted by Nike. Fuel, 7 F. Supp. 3d at 619.
Here, the marks themselves are sometimes used as advertising, as in Nike's billboards and outside-of-store displays, so their similarity as analyzed supra is relevant to this factor as well. The placement and focus of the advertisements are different: it does not appear that Fleet Feet often uses online videos or features individual stories, see supra at ¶¶ 12, 20, in contrast to Nike's dozens of videos posted on YouTube. Supra at ¶¶ 30, 32. But the in-store displays, particularly of "Running Changes Everything" and "Sport Changes
Given the significant overlap in the media used, the appearance of the advertisements, and the content of the advertisements, and the complete overlap in the geographic areas in which advertising occurs, this factor favors Fleet Feet.
For reverse confusion, the question of intent is "whether the junior user adopted the infringing mark knowing, or recklessly disregarding, the senior user's mark—not whether the junior user intended to trade on the senior user's goodwill and reputation." Coryn Grp. II, 868 F. Supp. 2d at 487-88. In other words, this factor asks whether the junior user is "at fault for not adequately respecting the rights of the senior user." 4 McCarthy § 23:10 (collecting cases). As the companies are longstanding partners and competitors, many Nike employees were certainly aware of Fleet Feet's use of the "Change Everything" and "Running Changes Everything" marks before the "Sport Changes Everything" campaign started. Supra at ¶ 28. While the record does not reflect whether Nike did a trademark search in advance of the campaign, the Court infers Nike likely did so, supra at ¶ 28, and such a search would have turned up the "Change Everything" mark. Fleet Feet promptly communicated its concerns to Nike upon discovering the campaign, including a cease-and-desist letter. Supra at ¶ 36. Although Nike changed the SCE campaign for the Chicago and New York City marathons, Nike continued the campaign overall and retained some running content. Supra at ¶ 37. This factor weighs in favor of Fleet Feet on reverse confusion.
For forward confusion, "[t]he intent of a junior user is relevant only if the junior user intended to capitalize on the good will associated with the senior user's mark." CareFirst, 434 F.3d at 273. Fleet Feet has not presented any evidence that Nike intended to capitalize on Fleet Feet's good will. It points only to Nike's apparent failure to conduct a trademark search, but that is insufficient to show such intent, "because knowledge of another's goods is not the same as an intent to mislead and to cause consumer confusion." George & Co., 575 F.3d at 398. As the record does not support this form of intent, this factor weighs in favor of Nike for forward confusion.
Fleet Feet is not required to demonstrate actual confusion in order to show a likelihood of confusion. Lone Star Steakhouse, 43 F.3d at 933. But the lack of any indication of confusion, particularly given the broad reach of Nike's campaign thus far, calls its existence into question. While Nike's campaign began in July, and the complaint was filed at the end of August, Fleet Feet's filings in conjunction with the pending motion include information that is updated through the end of October. See, e.g., Doc. 46 at ¶¶ 4-6 (tallying the number of Nike's SCE videos posted online and the total number of views). As there is no evidence of actual confusion occurring during these several months, this factor weighs in favor of Nike.
There is no evidence that Nike's and Fleet Feet's goods differ in quality, and neither party addressed this factor substantively.
Weighing the relevant factors, the Court concludes that Fleet Feet has met its burden to show a likelihood of reverse confusion, but not of forward confusion. As summarized supra, the evidence is almost non-existent that consumers would connect Nike's products with Fleet Feet, rather than with Nike. But the evidence is strong that consumers may come to associate Fleet Feet's marks, and thus its services and products, with Nike, not with Fleet Feet.
Fleet Feet's distinctive "Change Everything" and "Running Changes Everything" marks have relatively low commercial strength, Fleet Feet's substantial advertising expenditures are a drop in the bucket compared to Nike's spending, and Nike's advertising campaign using the "Sport Changes Everything" phrase is likely to swamp Fleet Feet's marks in the market and to cause consumers to link Fleet Feet's marks with Nike. The similarity of the marks, the advertising, and the facilities and the intent factors weigh in favor of Fleet Feet on reverse confusion. While the lack of any evidence of actual confusion favors Nike, that does not outweigh the other factors. The risk of reverse confusion is especially strong since the campaign is wide-ranging and ongoing; it will last, absent an injunction, through the upcoming holiday shopping season and many major sporting events, exposing many more consumers to Nike's "Sport Changes Everything" mark.
Although Fleet Feet has demonstrated a likelihood of reverse confusion, Nike could "escape liability by establishing the elements of fair use" as an affirmative defense. Tassel Ridge Winery, LLC v. Woodmill Winery, Inc., No. 5:11-cv-00066-RLV-DSC, 2013 WL 5567505, at *6 n.7 (W.D.N.C. Oct. 9, 2013). Ultimately, Nike must prove that SCE "(1) was not used as a trademark or to indicate the source of the goods; (2) was used descriptively, only in order to describe its own goods; and (3) was used in good faith." Id. at *10 (citing 15 U.S.C. § 1115(b)(4); KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118, 125 S.Ct. 542, 160 L.Ed.2d 440 (2004)). At the preliminary injunction stage, upon Fleet Feet's showing of a valid mark and likelihood of confusion, Nike must point to evidence which undermines Fleet Feet's ultimate likelihood of success on the merits, and a conclusory assertion of fair use will not defeat Fleet Feet's showing.
The first requirement for the fair use defense is that Nike is not using "Sport Changes Everything" to "identify the source or origin of its own goods or distinguish its goods from the goods of its competitors." Tassel Ridge, 2013 WL 5567505, at *10. "Possible indicators of trademark use include whether Defendant used the term as a symbol to attract public attention, or whether Defendant took precautionary measures in labeling its goods to ensure that the term would not appear to be used or understood as a trademark." Id. Here, the size and manner of use of the "Sport Changes Everything" mark, its similarity in appearance and font to Nike's core marks, and the attempt to "build a commercial association" between Nike and SCE would indicate trademark use. Id.
Nike uses "Sport Changes Everything" as a mark—and, in some contexts, uses it in a similar manner to its core "Just Do It" mark. Supra at ¶ 29 & note 33. In advertising, Nike uses the SCE phrase in a prominent way: it stands out visually, as a reasonable consumer would expect of a brand identifier. See supra at ¶ 33. In addition, the Nike name, "swoosh" symbol,
Nor does Nike use "Sport Changes Everything" descriptively, as it does not merely describe the goods Nike is selling. Nike contends SCE describes the campaign itself, Doc. 34 at 16, but Nike's internal use of the phrase is not the applicable test: courts evaluate the descriptive character of a challenged mark in relation to the goods or services at issue. See Tassel Ridge, 2013 WL 5567505, at *6 n.7, *11 (descriptive character of mark is evaluated in fair use context in the same way as in the conceptual strength context); see also 15 U.S.C. § 1115(b)(4) (fair use applies for use "of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin") (emphasis added). As with Fleet Feet's marks, it "requires some operation of the imagination" to connect "Sport Changes Everything" with Nike's goods, which renders SCE at least suggestive rather than descriptive. Dynamic Aviation, 2016 WL 1247220, at *18.
Finally, Nike's evidence of good faith is not compelling. As noted supra, if Nike failed to conduct a trademark search in advance of its SCE campaign, that does not itself constitute bad faith, see Tassel Ridge, 2013 WL 5567505, at *12 (bad faith analyzed for fair use in same way as for the intent factor in likelihood-of-confusion analysis), and it does not appear Nike intended to confuse the public by using SCE. See id. But it has not denied that many of its employees work closely with Fleet Feet and were aware of its marks, see supra at ¶ 28, which is relevant for reverse confusion. In any event, even if Nike acted in good faith, that is not enough by itself to establish the fair use defense, and the other elements are not, as discussed supra, supported by the record.
Nike's weak evidence in support of the fair use defense does not undermine Fleet Feet's likelihood of success on the merits.
In addition to demonstrating a likelihood of success on the merits, Fleet Feet must "make a clear showing that it is likely to be irreparably harmed absent preliminary relief." Real Truth about Obama, Inc. v. Fed. Election Comm'n, 575 F.3d 342, 347 (4th Cir. 2009), vacated on other grounds, 559 U.S. 1089, 130 S.Ct. 2371, 176 L.Ed.2d 764 (2010), reinstated in relevant part, 607 F.3d 355 (4th Cir. 2010). "When the failure to grant preliminary relief creates the possibility of permanent loss of customers to a competitor or the loss of goodwill, the irreparable injury prong is satisfied. Irreparable harm must be `actual and imminent' and not `remote' or `speculative.'" Dynamic Aviation, 2016 WL 1247220, at *27. "Blanket claims" that the plaintiff will lose goodwill absent an injunction will not suffice, but "where a plaintiff can demonstrate that it faces commercial harm that cannot be adequately compensated with monetary damages, that plaintiff carries his burden on this factor." Id. at *28.
An injunction is the standard remedy in a trademark infringement case, see 5 McCarthy § 30:1, as it protects the infringed parties' right in their trademark and maintains the status quo. Microsoft, 333 F.3d at 525; Dep't of Parks & Rec. for California v. Bazaar Del Mundo Inc., 448 F.3d 1118,
Given Nike's market power, online and social media presence, and the wide-ranging placement of the "Sport Changes Everything" campaign in stores, billboards, and otherwise, Fleet Feet has shown it is likely to be irreparably harmed if Nike is permitted to continue the campaign through the holiday season and the Super Bowl. The more consumers see "Sport Changes Everything" before they see Fleet Feet's similar marks, the more likely it is they will "come to assume" that Fleet Feet's products are really Nike's or to associate all three marks with Nike. Fuel, 7 F. Supp. 3d at 610 (describing how reverse confusion causes harm); see also A & H, 237 F.3d at 228. This confusion is difficult to quantify, and Nike has not suggested any way that Fleet Feet could be made whole if it ultimately prevails. And given that Nike intends to use "Sport Changes Everything" only until February 2020, supra at ¶ 31, any permanent injunction would issue after the campaign has ended and thus would not protect Fleet Feet's rights. See Kraft Foods Grp. Brands LLC v. Cracker Barrel Old Country Store, Inc., 735 F.3d 735, 741 (7th Cir. 2013) (noting, in affirming a preliminary injunction, that "irreparable harm is especially likely in a trademark case because of the difficulty of quantifying the likely effect on a brand of a nontrivial period of consumer confusion (and the interval between the filing of a trademark infringement complaint and final judgment is sure not to be trivial)"). The level of reverse confusion at issue here, the difficulty of quantifying such harm, and the timing all support a finding in favor of Fleet Feet on this factor.
Nike asserts Fleet Feet delayed in seeking a preliminary injunction, noting that Fleet Feet became aware of Nike's SCE campaign by at least mid-July, filed suit on August 30, and filed the pending motion on September 19. Doc. 34 at 13. But it is reasonable for a litigant to get its ducks in a row before coming to court, and a litigant should not be punished for giving itself time to investigate and prepare its case, so long as it does so expeditiously. It also appears the parties were attempting to avoid the need for litigation for at least some of this time, see supra at ¶ 36, and "the goal of voluntary resolution of disputes" balances against a finding of undue delay. Rebel Debutante, 799 F. Supp. 2d at 580. While Nike contended at oral argument that Fleet Feet was merely attempting to perfect its trademarks by filing applications with the USPTO, the Court has given very little weight to the recent activity at the USPTO. Moreover, this delay is far shorter than in other cases where courts have not found timing to militate against granting a preliminary injunction. See Dynamic Aviation, 2016 WL 1247220, at *29 (citing cases finding irreparable harm with six- and eight-month delays before filing suit). Particularly given the longstanding business relationship between the parties, it was reasonable to investigate and to try negotiation before filing suit.
In the absence of a preliminary injunction, Fleet Feet's property rights will be irreparably harmed.
The balance of the equities favors Fleet Feet. Absent a preliminary injunction, Fleet Feet will essentially be without a remedy if it wins the case, given the SCE campaign's planned end point. Much of the advertising the Court has seen can be modified to delete the infringing use and still be used. While Nike asserts it will need to adjust the SCE campaign significantly if an injunction issues—"hundreds if not thousands of hours of work and many millions of dollars would be wasted," Doc. 35 at ¶ 17—it provides no specific evidence of how much it would cost going forward to make such changes. See Doc. 34 at 28.
Nike also contends it may not be able to replace the campaign at all before the end of the season, Doc. 35 at ¶ 17, but this conclusory evidence shows only uncertain harm.
"There is a strong public interest in preventing trademark infringement. Indeed, the purpose of a trademark is to protect the public from confusion about the identity of the enterprise from which goods and services are purchased." Rebel Debutante, 799 F. Supp. 2d at 581. Nike may still share uplifting stories of athletes whose lives and communities have been improved by their involvement in sports, but they may not do so in a way that infringes on Fleet Feet's protectable marks. Contrary to Nike's argument, see Doc. 34 at 29, changing the SCE mark does not prevent Nike from engaging in ongoing charitable campaigns. An injunction against Nike's ongoing use of the SCE mark will protect the public from further confusion about the source of Fleet Feet's goods.
Rule 65(c) specifies that a "court may issue a preliminary injunction ... only if the movant gives security." Fed. R. Civ. P. 65(c); Pashby, 709 F.3d at 331-32. The Court has the discretion to set the bond amount as it sees fit or waive the
The Court must determine the amount of a bond based on record evidence. Lab. Corp. of Am. Holdings v. Kearns, 84 F.Supp.3d 447, 465 (M.D.N.C. 2015). "The burden of establishing the bond amount rests with the party to be restrained, who is in the best position to determine the harm and will suffer from a wrongful restraint." Id. And in setting the bond amount, the court "should be guided by the purpose underlying Rule 65(c), which is to provide a mechanism for reimbursing an enjoined party for harm it suffers as a result of an improvidently issued injunction." Hoechst, 174 F.3d at 421 n.3. Ordinarily, then, the amount of the bond "depends on the gravity of the potential harm to the enjoined party." Id.
The parties have said little about an appropriate security. Nike contends any bond should be no less than $16,000,000, the amount it has already spent on the SCE campaign, Doc. 30 at 29, while Fleet Feet notes Nike's lack of evidence offered to support how much it would cost to remove the SCE mark and still use the remainder of the already-developed promotional materials. Doc. 44 at 16. Nike should be able to estimate this amount given its previous efforts to rework the SCE campaign for use at the New York and Chicago marathons, see supra at ¶ 37, but it has not met this burden. To the extent Nike contends it will not be able to use any of its already-developed advertising, the record does not support that contention, nor is the evidentiary basis sufficient to set the bond at the level Nike requests. See 11A Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 2954 (3d ed. 2019).
No doubt, however, the injunction will cost Nike money, and the injunction will cause Nike significant problems with its campaign. A substantial bond is appropriate. Accordingly, the Court will set bond at $1,000,000. Should Nike wish to seek a higher amount, it may file a motion to increase the security, accompanied by additional evidentiary support.
Fleet Feet has met its burden to obtain a preliminary injunction. Fleet Feet has demonstrated that it is likely to succeed on the merits. Its "Change Everything" and "Running Changes Everything" marks are both valid and protectable. While there is not much evidence of forward confusion, Fleet Feet has shown a strong likelihood of reverse confusion, as Nike's large multimedia "Sport Changes Everything" campaign is likely to overcome public association between Fleet Feet and its "Change Everything" and "Running Changes Everything" marks. Fleet Feet is also likely be irreparably harmed without a preliminary injunction, since Nike's SCE seasonal use of the SCE mark will damage Fleet Feet's trademark interests further and Fleet Feet's interests will not be protected by a permanent injunction which issues after the advertising campaign is over. Although Nike contends that it would cost significant resources to redo the campaign at this stage, it has provided only conclusory evidentiary support. For these reasons, the balance of equities tips in favor of Fleet Feet. The public interest in enforcing trademark rights and preventing public confusion also lies with Fleet Feet.
It is
