Pure mourning: Pom fails to get preliminary injunction again

Pom Wonderful LLC v. 
Pur Beverages LLC, No. 13-cv-06917 (C.D. Cal. Aug. 6, 2015) 
 
Pom fares no better its second time around. Although the
court of appeals previously found likely confusion between its marks and
defendant’s “pūr pŏm” energy drink (which allegedly contains no pomegranate
juice at all) and remanded for a re-analysis of the remaining preliminary injunction
factors, Pom was unable to show irreparable harm distinct from its showing on
likely confusion. 
 
The harm at issue must not merely be irreparable; it must
also be imminent. “Speculative injury does not constitute irreparable injury
sufficient to warrant granting a preliminary injunction.” Thus, unsupported and
conclusory statements about harm are insufficient. Herb Reed.  A finding of
reputational harm “may not be based on ‘pronouncements [that] are grounded in
platitudes rather than evidence.’”
 
Pom argued three varieties of irreparable harm: (1) the POM
mark would lose distinctiveness and potentially become generic; (2) it would lose
its return on its investment in its mark; and (3) its reputation and goodwill
would be harmed.
 
As for loss of distinctiveness, Pom offered the declaration
of Fernando Torres, the Chief Economist at IPmetrics LLC, an intellectual
property consulting firm.  Torres stated
that the problem with free riders like Pur is that infringement “will
eventually destroy the value of the reputational investment embodied in the
trademark.” He opined that, because Pom Wonderful has cultivated a distinctive
brand using the POM mark, “allowing a third party to make a confusing use of
‘pom’ under the guise of a generic abbreviation for the ingredient pomegranate
would help push the valuable POM trademarks toward generic use.” Such a “loss
of distinctiveness” couldn’t be quantified in terms of lost sales or lost
profits.  The court was unimpressed.  “Although Torres cites economic theory to
supports his opinions, the opinions are not tied to actual evidence, and
constitute little more than assertions grounded in ‘platitudes rather than
evidence’” (quoting Herb Reed).  His conclusions “would apply in any trademark
infringement case where the plaintiff owns a distinctive trademark.” A risk isn’t
a likelihood of irreparable harm.
 
There was no evidence that the “distinctiveness” or
perceived value of Pom’s mark would likely be affected negatively by Hubbard’s
use of “pūr pŏm,” including no evidence that consumers’ association of the POM
mark with Pom Wonderful had weakened since pūr pŏm entered the market or that
other companies had attempted to market pomegranate beverages under “pom” in
the more than two years since Pur began doing done so. “Such evidence might
make irreparable harm likely, as opposed to just merely possible.” But Torres
merely assumed that others would, in the future, begin using the POM mark on
their products after observing Hubbard do so. That was mere speculation on this
record.  Plus, Torres said it takes time
for genericide to occur, and didn’t opine that this period could run during the
pendency of the trial.  Ultimately, the
court found, his opinions were “little more than speculative statements
regarding the type of harm that can arise in any trademark infringement case.”  His evidence was non-specific to Pom Wonderful
“and equally applicable to any trademark infringement case. Consequently, it is
not sufficient to show a likelihood of irreparable harm.”
 
Pom quoted defendant Hubbard’s statement to the press in
response to the question, “Would you consider changing your drink’s name, and
why or why not?”
 
I will prove that pom means
pomegranate.  When I do, it will make
their standard word trademark of ‘POM,’ that is currently incontestable,
invalid. They will lose their registration of the mark under the theory of
genericness. Although it may be true that when they initially got the standard
word mark of ‘POM’ it had no meaning at the time. They, and numerous other
makers of pomegranate flavored products, have widely used the term pom to
describe pomegranate flavoring. Just like I do with my product.  The term has now become generic, and thus,
not deserving of Federal Trademark Registration. . . . Mark my words: I will be
the company that makes Pom Wonderful lose their trademark ‘POM.’ I will then
allow the consumer packaged goods industry to use the properly used, and widely
known term ‘pom’ to describe its pomegranate flavored products, without the
threat of a bully company suing every person or company that utters those three
letters in sequence.
 
Pom argued that this was an admission that “part of his
reason for using ‘pŏm,’ as part of his energy drink’s name, is to pave the way
for others to use POM as a flavor descriptor, turning this incontestable mark
into a non-protectable generic word.” 
But the court found that these statements weren’t about this case, but
rather about ongoing cancellation proceedings before the TTAB, wherein Pur
argued that Pom abandoned its word mark by using “P♥M” rather than “POM.” Risks
connected to the cancellation petition weren’t connected to the purported
infringement, and didn’t adequately demonstrate likely irreparable harm from
that infringement.
 
Plus, even attributing this statement to the current
infringement, that didn’t show irreparable harm, just because it might become
generic “over time” if third parties begin to use it in a descriptive and/or
generic sense.  Pom actively polices its
trademark and this hypothesized use has yet to begin.  Again, this was merely speculative.
 
Loss of return on investment by preventing Pom from fully
exploiting its reputation: Pom argued that Pur’s use “limit[s] Pom’s ability to
control the reputation of its recognized brand and the perception of Pom’s
premium quality products.” This was again speculative and not supported by
evidence. Torres claimed that post-infringement, the value the trademark lost
due to the infringing activity is never recouped, but the testimony offered
wasn’t specific to Pom.  Since it would be
true in every infringement case, this claim couldn’t be “squared with the rule
that a plaintiff must adduce evidence of likely irreparable harm to obtain an
injunction.”
 
Harm to reputation and goodwill: Pom argued that (1) the
infringement damaged its ability to communicate a consistent brand message; (2)
Pom’s reputation as a seller of healthy beverages conflicted directly with
consumers’ perception of energy drinks; and (3) Pom lacked control over the
quality of Pur’s products.
 
As for the brand message claim, Pom argued that it focused on
communicating that it uses only 100% pure pomegranate juice in its products.
Pom has expended substantial resources marketing products that contain only
100% pomegranate juice and litigating against companies that market their
products as “pomegranate juice” when the products are predominantly cheaper
“filler juices.” Because Pur’s product contained no pomegranate juice, any
association between Pom and Pur would harm Pom’s brand. Likewise, while Pom “prides
itself [on] advertising that is sophisticated, smart and witty,” Pur’s ads are
often “low-brow and tasteless.”  But
there was no evidence of harm to Pom’s goodwill.  Though Pur had been selling its products for more
than two years, there was no evidence Pom’s customers were aware of Pur’s
product or that they had a negative reaction to it or to Pur’s
advertising.  It was certainly “possible”
that Pom’s reputation and/or goodwill could be damaged by having less control
over its brand messaging, but it didn’t show that such harm was likely.
 
There is a distinction between a likelihood of irreparable
harm and a showing of actual harm.  But
one way to show likely irreparable harm is to show actual confusion or harm
right now.  Post-Herb Reed cases have therefore, when granting injunctive relief,
often relied on “some evidence of actual confusion or actual harm,” including
confusion surveys.  (NB: Confusion is not
harm; harm is harm.  Also, a survey doesn’t
necessarily show actual confusion of plaintiff’s
customers, unless the parties compete directly, so it doesn’t inherently show
the damage that the court said it was looking for.)  Among other cases, the court cited OTR Wheel
Engineering, Inc. v. West Worldwide Services, Inc., 602 Fed. Appx. 669 (9th
Cir. Mar. 18, 2015), which affirmed a preliminary injunction and found that
there was some evidence of irreparable harm where the infringing product was
sold to the plaintiff’s major customer, which led to a dispute between the
plaintiff and its customer—“a nonquantifiable injury to the goodwill it had
created with its customer.”  In Life
Alert Emergency Response, Inc. v. LifeWatch, Inc., 601 Fed. Appx. 469 (9th Cir.
Feb. 4, 2015), there was a declaration “reporting numerous and persistent
complaints from would-be customers who received robo-calls for what they believed
were Life Alert products,” as well as emails and social media posts
substantiating the threat to Life Alert’s reputation and goodwill.
 
Negative association with energy drinks: Pom noted that
energy drinks have been associated with 224 adverse event reports to the FDA
between Jan. 2012-Nov. 2014.  But that
didn’t go far enough to show that Pur was a disreputable product, or that Pom’s
customers associated Pur’s product with Pom or saw energy drinks as
disreputable. Again, absent evidence about Pom’s consumers, this was merely
conclusory and speculative.
 
The court distinguished and disagreed with E&J Gallo
Winery v. Grenade Beverage, LLC, No. 1:13-cv-00770- AWI-SAB, 2014 WL 4073241,
*1 (E.D. Cal. Aug. 15, 2014), report and recommendation adopted, 2014 WL
5489076, *1 (E.D. Cal. Sept. 8, 2014), which had accepted a similar theory of
harm involving Gallo wine v. EL GALLO for energy drinks.  Gallo said it didn’t want to be associated with
energy drinks because it believed that mixing alcohol and energy drinks
promoted irresponsible behavior.  The
court reasoned: “While Plaintiff may not have introduced admissible evidence to
support the proposition that energy drinks are associated with irresponsible
drinking or that an association with energy drinks would be harmful to
Plaintiff’s reputation, it is enough that Plaintiff has introduced evidence of
loss of control over their own business reputation.”
 
Not only is this case on appeal, it’s directly at odds with Titaness
Light Shop
, in which the 9th Circuit rejected a plaintiff’s
speculative theory that its customers wouldn’t want to be associated with
defendant’s product, which was sold on “a website that supposedly catered to
marijuana growers.” “[A]ssertions by a representative of the plaintiff that its
goodwill and reputation would be harmed if consumers associated its product
with an item that did not fit the plaintiff’s brand image” were not sufficient.
The Ninth Circuit in Titaness observed
that the plaintiff did not show that its “customers [were] aware of the
website, [that they] would associate the products on the site with    marijuana, or [that they] would stop
purchasing Sunlight products if they mistakenly believed that Sunlight was
marketing to marijuana growers.”  
 
Basically, the Ninth Circuit ruled that “it was not
sufficient for a movant to assert that it had developed a particular brand
image and that any association with a product inconsistent with that image
would harm its reputation.”  But that’s
what Gallo accepted and what Pom
asked the court to accept here.  More
fundamentally, Gallo essentially
presumed irreparable harm without evidence other than its likely success on the
merits.  “If a conclusory assertion that
a third party has used the plaintiff’s mark in a way that is ‘directly contrary
to [plaintiff’s] philosophy,’ or that plaintiff does ‘not want to associate
itself or its [ ] trademark’ with the third party or its business were
sufficient to satisfy a plaintiff’s burden, it is likely that irreparable harm
would be found in any case where plaintiff was able to demonstrate a likelihood
of success on the merits.”
 
Evidence that customers have a negative perception of energy
drinks in general or of pūr pŏm in particular would probably have sufficed to
show irreparable harm, but that wasn’t present. 
“It would be reasonable to infer likely harm to a plaintiff’s reputation
or goodwill if it could demonstrate that the consuming public has a negative
perception of defendant’s product, a product that is sold under a confusingly
similar mark.”  (Note the structural
similarity here with showing materiality in false advertising—courts generally
don’t require successful plaintiffs to show that the false claim is material to
the exact same people who receive the false message, according to the plaintiff’s
survey; showing that it is the kind of claim that is material in the relevant
context suffices.  At long last, and at
the remedy stage, irreparable harm is being used to reintroduce a materiality
standard to trademark.)
 
Lack of control over the quality of Pur’s products: Pom
argued that it was at risk if even “a single incident of poor quality control
or a single consumer getting ill from drinking pūr pŏm” was reported. Again,
this would be true in every trademark infringement case. There was no evidence
that pūr pŏm had caused illness, or facts allowing a reasonable inference that
this would occur in the future.
 
Pom argued that the danger to it was great because Pur’s
principal was Hubbard, “a litigious and shifty business owner with a checkered
past.” Pom proffered evidence that Hubbard has been charged with theft,
criminal trespass, assault, and attempting to elude the police, and that he had
routinely been “vengeful” in previous litigation to which he has been a party.  As Pom noted, Hubbard had filed a cancellation
petition.  But Hubbard explained that he
did so based on research indicating that Pom Wonderful has never used POM as a
trademark without the “o” in the shape of a heart. Thus, he asserts, Pom was
improperly granted a trademark and/or that it abandoned the word mark by not
using “POM” in commerce. The court would not impute bad faith to Hubbard based
on the fact that he exercised his legal right to file such a petition; plus,
that’s unrelated to irreparable harm from continued infringement.
 
Pur said that all its remaining inventory was pūr pŏm as
opposed to other products; Pom argued that this made clear that Pur was relying
on confusion to stay in business.  That
might be true, or maybe he hadn’t been successful in selling pūr pŏm, which
would cut against finding irreparable harm.

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