Today, the Ninth Circuit Court of Appeals handed POM Wonderful a belated Christmas gift, and an unusual one at that. It reversed the denial of a preliminary injunction in a case it had brought against PUR Beverages, a d/b/a of Robert G. Hubbard, Jr., and the marketer of a beverage called “pŏm”. According to their website,
Pur Pom is a great tasting Pomegranate drink that refreshes and energizes your body with only the finest of natures ingredients including vitamins, fruits and a unique proprietary blend of all natural supplements designed to power and heal your body. This delicious Pomegranate beverage will give you a boost of natural energy without the chemicals you will find in other energy drinks.
According to POM Wonderful, Pur Pom is a product that infringes on its trademark.
So they sued Pur in the United States District Court for the Central District of California, where Judge Margaret M. Morrow refused a preliminary injunction on the grounds that POM Wonderful was unlikely to succeed on the element of customer confusion, necessary to success on a Lanham Act claim, and POM Wonderful appealed the denial of a preliminary injunction, an exception to the usual rule that you cannot appeal a case in the middle. And the Ninth Circuit, after setting up for POM Wonderful the highest hurdles for reversal, in fact reversed Judge Morrow, although the case goes back to her for determination of whether POM Wonderful meets the other factors required for a preliminary injunction. Still, the case is notable for the height of the hurdles POM Wonderful was able to clear.
To begin with, any preliminary injunction is “an extraordinary and drastic remedy”, as the Supreme Court has held. You’re basically asking for the relief you’d get after trial before a trial is held. So a court granting a preliminary injunction needs to know both that you’re really likely to win your case and that there’s a good reason to give you your relief in advance of trial. That won’t be easy. But what if you lost at the District Court level? The standard the Ninth Circuit uses to review a denial of a preliminary injunction is “clear error”. Clear error results “from a factual finding that was illogical, implausible, or without support in inferences that may be drawn from the facts in the record.” So this isn’t just a disagreement about the interpretation of the facts and the law; it’s sending a signal the District Court was essentially off the rails.
So how does POM Wonderful win? Well, here are the marks, side by side:
In the Ninth Circuit, there is an eight(!)-part test to determine likelihood of confusion, the key to success in a trademark action. The lower court found, and the Ninth Circuit agreed, that POM Wonderful’s mark was “strong”. Similarly, both courts agreed that the products competed in essentially the same marketplace. Also, both courts agreed that for products that are in these products’ price range, consumers won’t spend a lot of time parsing if these two marks represent the same producer of pomegranate juice or not.
The courts diverged on the question of whether the marks were similar. The District Court held they were not, while the Ninth Circuit held that they were. The difference was in part based on factors such as the way the three letters are pronounced (identically, it was agreed) and the light letters on a dark background with a fanciful character replacing the “o”. In addition, the factors were to be weighed more favorably to POM Wonderful because of the finding that its mark was strong. The other critical factor was the convergence of marketing channels. In other words, how do the parties market their products and where? The District Court, according to the Ninth Circuit, essentially required that POM Wonderful prove it was selling to the exact same stores. The Ninth Circuit took a less strict approach, considering that the consumers and retail outlets for the products were generally similar. It found the other three factors–actual confusion, defendant’s intent and product expansion–to be neutral rather than negative for POM Wonderful. Switching five of the factors that the lower court had weighed against the plaintiff, you can see how the court could find that the high hurdle was overcome.
As noted, this is not the end of the road for this case; Judge Morrow will get it back to decide whether the other injunction factors are present. But POM Wonderful is probably feeling pretty good right now.