L.L. BEAN, INC. v. BANK OF AMERICA Civil No. 08-177-P-H.
630 F.Supp.2d 83 (2009)
L.L. BEAN, INC., Plaintiff v. BANK OF AMERICA, et al., Defendants.
United States District Court, D. Maine.
June 25, 2009.
Allyson E. Kurker, S. Elaine McChesney, Bingham McCutchen LLP, Boston, MA, Angela H. Zimmern, Bradley R. Kutrow, Grant D. Goldenberg, McGuire Woods LLP, Charlotte, NC, Corin R. Swift, Bingham McCutchen LLP, Portland, ME, for Defendants.
ORDER AFFIRMING THE RECOMMENDED DECISION OF THE MAGISTRATE JUDGE
D. BROCK HORNBY, District Judge.
After oral argument on June 23, 2009, and upon de novo review, I adopt the Report and Recommended Decision of Magistrate Judge Martin (Docket Item 125).
I make these additional observations.
2. I understand that L.L. Bean does not demand that the defendants de-activate all accounts, or change all the account numbers or prevent telephone and internet use of the account numbers, but instead seeks to prevent only the physical use of the old L.L. Bean card at a point of sale in the marketplace. L.L. Bean, Inc.'s Objections to Report and Recommendation at 7.
3. There is room for reasonable minds to differ over whether a consumer's physical presentation of the old card at a point of sale results in the defendants' "use" of the Bean trademark when the defendants accept the transaction. See id. at 7-8; Defs.' Response to Pl.'s Objections at 6-7.
4. I accept L.L. Bean's concern that any use of its mark is objectionable, but I also observe that the record fails to provide evidence about the scope of the problem, i.e., how many consumers continue to use the old plastic despite the instructions not to.
Ultimately, I conclude with the Magistrate Judge that L.L. Bean has not met its burden of satisfying the standards for the preliminary injunction that it requests. L.L. Bean's motion for preliminary injunction is
1 REPORT AND RECOMMENDATION
DAVID L. MARTIN, United States Magistrate Judge.
Before the Court is L.L. Bean, Inc.'s Motion for Preliminary Injunction to Prevent Continued Infringement of Its Trademarks, with Incorporated Memorandum of Law (Doc. # 68) ("Motion for Preliminary Injunction" or "Motion"). The Motion has been referred to me for preliminary review, findings, and recommended disposition pursuant to 28 U.S.C. § 636(b)(1)(B). A hearing was conducted on April 14, 2009. For the reasons stated herein, I recommend that the Motion be denied.
This case arises out of a co-branded credit card agreement (the "Agreement") between L.L. Bean, Inc. ("Bean"), and FIA Card Services, N.A. ("FIA").
By the Motion, Bean seeks to require FIA and Bank of America Corporation ("BAC")
Applicable Legal Standard
In determining whether a preliminary injunction should be granted a court must consider: (1) the likelihood of the movant's success on the merits; (2) the anticipated incidence of irreparable harm if the injunction is denied; (3) the balance of relevant equities (i.e., the hardship that will befall the nonmovant if the injunction issues contrasted with the hardship that will befall the movant if the injunction does not issue); and (4) the impact, if any, of the court's action on the public interest. Borinquen Biscuit Corp. v. M.V. Trading Corp.,
The sine qua non of the four part test is likelihood of success on the merits: if the moving party cannot demonstrate that it is likely to succeed in its quest, the
The Court is unpersuaded that Bean has met its burden with respect to the Motion. In particular, the Court is unconvinced that Bean has made a substantial showing that it is likely to succeed on the merits with respect to the relief requested in the instant Motion.
Although Bean argues that FIA's obligation under the Agreement to "replace the credit card plastic ...," Agreement ¶ 27(g)(ii), requires that FIA not only issue new cards but also deactivate the Old Bean Cards or refuse to honor any transaction made with the old card, the Agreement lacks such requirements. If Bean wanted such provisions, it could have negotiated for them when the Agreement was drafted.
The Court is also unconvinced that Bean has shown that FIA is using Bean's trademarks. The only "use" of the trademarks occurred while FIA had a license to do so. Distilled to its essence, Bean's complaint is that FIA has allowed cardholders who were issued valid credit cards, which Bean authorized, to continue using their unexpired cards. While Bean appears to contend that this use by the cardholders constitutes unlawful use by FIA of its trademarks because FIA could legally terminate the accounts of these cardholders, see Affidavit of Bryce Johnston (Doc. # 71) ("Johnston Aff."), Ex. 1 (Credit Card Agreement) at 25, the Court finds this contention unpersuasive. The holders of the Old Bean Cards are able to make purchases over the telephone and on the Internet without physically presenting or displaying their cards to anyone. Indeed, a cardholder could destroy his/her Old Bean Card but continue to make telephone and Internet purchases simply by providing the card number and security code which s/he had copied from the card. Under Bean's view, such purchases would presumably still constitute unlawful use of its trademarks by FIA. The Court rejects such contention. As Defendants suggest, Bean appears to conflate the physical credit card plastic with the underlying credit card account. See Opposition at 1.
Even if the Court were to consider only situations where a cardholder physically presents his or her Old Bean Card to a merchant, the Court is still unconvinced that this constitutes unlawful use of Bean's trademark by FIA. Bean authorized FIA to use Bean's trademarks on the Old Bean Cards and to issue those cards to cardholders with expiration dates extending beyond the term of the Agreement. The Court sees no basis under trademark law for Bean to control the cardholders' continued use of the Old Bean Card plastic. In short, Bean's argument that FIA is "using" its trademarks is a stretch. Preliminary injunctions should be issued only where it is clear that the movant is entitled to relief. See Q Div. Records, LLC v. Q Records and QVC, Inc., No. Civ.A. 99-10828-GAO, 2000 WL 294875, at *2 (D.Mass. Feb. 11, 2000)("A preliminary injunction,
Moreover, this "Court should only sparingly exercise its authority to issue an interlocutory injunction which requires a defendant to take affirmative action." Stanton v. Brunswick Sch. Dep't,
Given Bean's inability to make the necessary showing with respect to the first factor, it is not mandatory for the Court to discuss the remaining three factors. See Esso Standard Oil Co. (Puerto Rico) v. Monroig-Zayas, 445 F.3d at 18 ("[I]f the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity."). Nevertheless, in the interest of completeness, the Court will briefly state its findings with respect to the remaining three factors.
With respect to the anticipated incidence of irreparable harm, even accepting Bean's claim that it is being harmed
As for the balance of the relevant equities, the Court finds that they weigh in favor of FIA and against Bean. The Court is persuaded by the Ziccarelli affidavits that the only practical way for Defendants to deactivate the Old Bean Card "accounts is to cancel each customer's account ..., open a new account number, and print new card plastic with the new account number." Ziccarelli Aff. ¶ 54. Thus, the relief requested by Bean would require FIA to change the account numbers of 1½ million customers. See id. This would be a huge undertaking and impose a substantial hardship on FIA. See id. In contrast, the hardship on Bean if the injunction does not issue is much less. The hardship stems from a far smaller number of card holders who, despite the issuance of replacement cards and repeated notices and advisories regarding the end of the relationship between FIA and Bean, continue to use their Old Bean Cards. As already noted, the number of these card holders diminishes each month as the Old Bean Cards expire.
The final factor is the impact of the Court's action on the public interest. If the Court grants the Motion, FIA will be forced to change the account numbers of 1½ millions credit card holders. Such action will doubtless cause inconvenience and possibly severe hardship to many of these individuals. On the other hand, if the Motion is denied, Bean will continue to have holders of the Old Bean Card annoyed and possibly angered by Bean's refusal (or inability) to provide the Bean benefits which they were promised under the program which no longer exists. Again, however, the incidents of such annoyed or angered customers must necessarily be declining with each passing month as the Old Bean Cards expire. Thus, the public interest weighs against Bean and in favor of FIA.
Bean has not shown a likelihood of success on the merits because the Agreement does not require that FIA deactivate the Old Bean Cards and/or dishonor transactions made with such cards. Bean also has not shown that FIA is using Bean's trademarks. Even assuming that Bean is suffering irreparable harm, the incidence of that harm is declining as the Old Bean Cards expire, and it will cease totally when the last of those cards expire in June 2011. The balance of equities favors FIA and weighs against Bean because granting the
Accordingly, for the reasons stated above, I recommend that the Motion be denied. Any objections to this Report and Recommendation must be specific and must be filed with the Clerk of Court within ten (10) days of its receipt. See Fed.R.Civ.P. 72(b); D. Me. Local R. 72.1. Failure to file specific objections in a timely manner constitutes waiver of the right to review by the district court and of the right to appeal the district court's decision. See United States v. Valencia-Copete,
April 28, 2009
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