DocketNumber: 17 C 5596
Citation Numbers: 310 F. Supp. 3d 949
Judges: Feinerman
Filed Date: 3/9/2018
Status: Precedential
Modified Date: 10/19/2024
Redbox Automated Retail, LLC brought this suit against Xpress Retail LLC ("DVDXpress"), alleging trademark infringement and false advertising in violation of the Lanham Act,
Preliminary Factual Findings
Redbox and DVDXpress both operate DVD rental services through automated vending machines called kiosks. Doc. 1 at ¶¶ 4-5; Doc. 29 at pp. 1-2, ¶ 1. Redbox's kiosks feature the word mark REDBOX and are branded with distinctive red coloring on their face and sides. Doc. 24-1 at ¶ 4. Redbox has registered trademarks for its word mark and for the kiosks' color scheme. Docs. 1-1, 1-2, 1-3, 1-4, 1-5.
In early 2016, Redbox learned that DVDXpress was using kiosks that were, like Redbox's, entirely red in color. Doc. 65-3 at 8. Around the same time, Redbox also learned that DVDXpress was advertising-on its kiosks, its website, and elsewhere-that customers could rent movies through DVDXpress twenty-eight days before the same DVDs became available through Redbox.
On January 1, 2017, nearly a year after Redbox first learned of DVDXpress's conduct, several Redbox officials discussed via email DVDXpress's red kiosks and comparative "28 days before ... Redbox" advertising. Doc. 65-15 at 2. As to the advertising, one official stated, "I think that's false advertising[.] We are day and date for most[.]"
On April 10, 2017, some fifteen months after Redbox first learned of DVDXpress's comparative advertising, Redbox sent a letter to DVDXpress stating that its "28 days before ... Redbox" advertising was false as to "many movies" and asking DVDXpress to cease and desist. Doc. 1-6 at 2, 4. The letter requested a response by April 24. Id. at 4. DVDXpress did not respond-because, it says, the letter was sent to an incorrect address. Doc. 29 at p. 30, ¶ 68.
On July 31, 2017, some eighteen months after first learning of DVDXpress's red kiosks and comparative advertising, and more than three months after sending the cease-and-desist letter to which it had received no response, Redbox filed this suit. The complaint alleges that DVDXpress's red kiosks infringe Redbox's registered trademarks and common law trade dress rights, in violation of
Discussion
Injunctive relief is available under the Lanham Act "to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under subsection (a) ... of section 1125."
The Seventh Circuit traditionally has applied a presumption of irreparable harm in false advertising and trademark infringement suits.
DVDXpress contends that Redbox's delay in seeking a preliminary injunction demonstrates that it will not suffer irreparable harm if that relief is denied. It is important to note that DVDXpress does not raise a laches defense, which would have required showing that it was prejudiced by or had detrimentally relied on Redbox's delay, and which, if successful, would have precluded permanent as well as preliminary injunctive relief. See Citibank ,
Redbox concedes that it waited some eighteen months to seek injunctive relief after learning of DVDXpress's alleged trademark infringement. It denies, however, having delayed in bringing its false advertising claim. It therefore is sensible to address the two claims separately.
*953I. Trademark Infringement Claim
A lengthy, unexplained delay in seeking relief calls into question "how urgent the need for [preliminary] equitable relief really is." Michigan v. U.S. Army Corps of Eng'rs ,
Redbox cites only one case where a delay (two years) longer than its delay here did not defeat preliminary injunctive relief, but that decision incorrectly conflated the laches and irreparable harm standards in holding that the delay did not defeat irreparable harm given that the defendant could not prove detrimental reliance. See Marathon Petroleum Co. v. Mt. Everest Real Estate Holding Co. ,
It is true that a lengthy delay might not undermine a claim of irreparable harm if the delay was "caused by the plaintiff's ignorance of the defendant's competing product or the plaintiff's making good faith efforts to investigate the alleged infringement." Tough Traveler ,
Standing alone, Redbox's unexplained eighteen-month delay in seeking injunctive relief on its trademark claim precludes a finding of irreparable harm. Icing on the cake is provided by the January 1, 2017 email from Redbox's CEO, which stated that the company had already looked "many times" into the matter of DVDXpress's red kiosks and concluded that there was no infringement. Doc. 65-15 at 2. That email demonstrates that Redbox was "well aware of [its] rights and had *954concluded that they were not violated." Tom Doherty Assocs., Inc. v. Saban Entm't, Inc. ,
Because Redbox has not demonstrated irreparable harm as to its trademark infringement claim, its motion for a preliminary injunction on that claim is denied. See Graham v. Med. Mut. of Ohio ,
II. False Advertising Claim
Redbox argues that it has not delayed at all in bringing its false advertising claim, even though it admittedly learned of DVDXpress's comparative advertising campaign in early 2016, because it seeks relief based only on DVDXpress's advertising regarding DVDs released between December 2016 and July 2017. Doc. 72 at 16-17. But the content of DVDXpress's advertising-"Rent it here first 28 days before ... Redbox"-has not changed since early 2016, even if the movies to which the slogan referred have changed as new DVDs were released. If that comparative advertising claim was false when Redbox learned about it in early 2016, then Redbox should have brought suit then, rather than waiting over a year to challenge it.
At the hearing, Redbox maintained that DVDXpress's comparative advertising was only "partially false" in early 2016, and that Redbox brought suit when the advertising became false as to more DVDs. According to Redbox, this change occurred when its new agreements with Warner Bros., Fox, and Universal Pictures decreased the delay between a DVD's release and its availability at Redbox kiosks. Redbox cites news reports of those agreements in its reply brief, although the agreements themselves are not in the record. Doc. 72 at 17 n.42. The news report of the Warner Bros. agreement is dated May 22, 2017; the report of the Fox agreement is dated July 13, 2017; and the report of the Universal agreement is dated December 21, 2017.
If Redbox did in fact have a 28-day delay for all Warner Bros., Fox, and Universal DVDs in early 2016, and then filed suit shortly after the new agreements eliminated or reduced the delay, then Redbox perhaps could not be faulted for waiting to seek relief, for it would have done so as soon as DVDXpress's advertising became false. But out of the twenty-four recent movies that Redbox claims it had available within twenty-eight days of their release dates, it identifies only eight that were distributed by Warner Bros., Fox, or Universal, leaving sixteen that were distributed by other studios. Doc. 61-1 at ¶¶ 35(d), 35(h), 35(i), 35(j), 35(k), 35(l), 43, 44(e). (Redbox identifies twelve additional movies that, it alleges, DVDXpress falsely advertised to have twenty-eight days before Redbox. Id. at ¶¶ 45-46. But Redbox does not say when those allegedly false *955advertisements were made or when the DVDs were released, let alone identify the studios that distributed them, so they do not affect the assessment of Redbox's delay.) And, significantly, Redbox points to no evidence that DVDXpress's comparative advertising as to DVDs from those other studios was any less false in early 2016 than it was when DVDXpress sent its cease-and-desist letter on April 10, 2017, or when it filed suit on July 31, 2017. Even as to the Warner Bros., Fox, and Universal DVDs, Redbox itself acknowledges that the 28-day delay did not apply categorically before its agreements with those studios were amended. Doc. 72 at 5. That is confirmed by the fact that, out of the eight DVDs distributed by those three studios, all of which Redbox claims to have made available fewer than twenty-eight days after their release dates, five were released before the new agreements went into effect. Doc. 61-1 at ¶¶ 35(h), 35(i), 35(j), 35(k), 35(l).
Given that only three of the twenty-four DVDs identified by Redbox were plausibly affected by the new agreements, it cannot be that DVDXpress's comparative advertising became substantially false as a result of those agreements. And Redbox has not identified any other reason why DVDXpress's advertising would have been any less false in early 2016, when Redbox first learned about it, than it was in April or July 2017. Indeed, the above-referenced email shows that by January 1, 2017 at the latest, at least one Redbox official believed that DVDXpress had engaged in "false advertising" because "[w]e are day and date for most [DVDs.]" Doc. 65-15 at 2.
Redbox's delay in asserting its false advertising claim, therefore, began in early 2016, at the same time as its delay in asserting its trademark infringement claim. The false advertising delay arguably ended earlier, however, as Redbox sent its cease-and-desist letter to DVDXpress on April 10, 2017, some three months before filing suit on July 31. Yet there is good reason not to stop the clock when the letter was sent. If the letter had led to negotiations with DVDXpress, then Redbox perhaps could not be faulted for waiting to see if the dispute could be resolved out of court. See Times Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C. ,
In sum, Redbox's eighteen-month delay in seeking injunctive relief on its false advertising claim defeats its assertion of irreparable harm, just as it did for its trademark infringement claim. And even if the delay is deemed to have ended when Redbox sent the cease-and-desist letter, Redbox still could not demonstrate irreparable harm, as a fifteen-month delay remains well outside of the twelve-month window beyond which federal courts usually decline to grant preliminary injunctions. See McCarthy, supra , § 31:31. It would be particularly inappropriate to make an exception here, where Redbox's CEO received an email seven months before suit was filed from a company official describing DVDXpress's comparative advertising *956as "false" as to "most" of Redbox's DVDs. Doc. 65-15 at 2. Again, the court "decline[s] to manufacture a sense of urgency that is not supported by plaintiff's own conduct." Krueger ,
Conclusion
Redbox's motion for a preliminary injunction is denied.