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RWT CORP. v. WONDERWARE CORP.

July 3, 1996

RWT CORPORATION, Plaintiff,
v.
WONDERWARE CORPORATION, Defendant.



The opinion of the court was delivered by: BUCKLO

 This case presents a trademark dispute involving the competing marks ONTRACK and INTRACK. Each term is a trademark for computer software for "manufacturing execution systems," called "MES." RWT Corporation, the owner of the ONTRACK mark, which is federally registered, No. 1,764,091, sued Wonderware Corporation, the owner of INTRACK, in December of 1995. RWT seeks a preliminary injunction barring Wonderware from further use of the INTRACK mark pending the conclusion of this suit. The parties conducted expedited discovery and I held an evidentiary hearing on the motion. For the reasons stated in this opinion, RWT's motion is denied.

 RWT is an Illinois corporation located in Mt. Prospect, Illinois. RWT designs, produces, and sells MES software. RWT began using the ONTRACK mark on its MES software in 1990. ONTRACK software is designed for use in manufacturing plants. It tracks or monitors products through each step of the manufacturing process, monitoring the steps in that process, which allows a company to know what is happening on the factory floor at any time. It will report on such things as schedules, resource status, work-in-process status, the amount of scrap and non-conforming product, historical trends, and productivity. MES software can identify a particular part used in a particular product, raw materials used, and which manufacturer provided the materials. ONTRACK software is run on personal computers.

 RWT'S principal product is ONTRACK software, constituting, along with maintenance of the product, 70 percent of RWT's revenue. During the past year, RWT spent in excess of $ 90,000 advertising or promoting ONTRACK through direct mailers, brochures, trade shows, and print media advertisements in North America and Europe. RWT prominently displays its ONTRACK mark.

 RWT obtained federal trademark registration for ONTRACK on April 13, 1993, for computer software.

 Wonderware is a Delaware corporation with headquarters in Irvine, California. It is a public corporation with annual sales exceeding $ 35 million. Until 1995, although Wonderware sold computer software, it did not compete with RWT. Sometime in 1994, Wonderware began negotiations with another company, EnaTec, which owned a software called Chinook, which competed with ONTRACK, although the sale was not finally announced until June, 1995.

 Wonderware's first public announcement that it would market a software, which combined the Chinook and Wonderware's own InTouch software and would be called INTOUCH, was at a large trade show at McCormick Place in Chicago, in March, 1995. It is unclear how much of an announcement took place at the show. The show is a huge exhibition, and Wonderware's exhibit was large and covered several, perhaps all, of its products. When the exhibit arrived in Chicago, it did not include any sign identifying any product as INTRACK. Sometime during the show, or perhaps before it opened, a sign was put up, identifying one display as INTRACK. Furthermore, in the months after the show, Wonderware sent letters, one of which went to RWT's president, Bernard Asher, in which it described several products, including INTRACK, which it said was "due out this spring." For a couple of months, it also ran an advertisement in trade journals describing INTRACK software. On June 29, 1995, Wonderware announced that it had purchased the remaining 80 percent ownership of EnaTec and that it had combined the EnaTec software with its own "in our soon-to-be-announced InTrack MES product."

 Wonderware made its first sale of INTRACK software in November, 1995.

 Issuance of a Preliminary Injunction

 A party seeking a preliminary injunction must first demonstrate that (1) it has some likelihood of succeeding on the merits and (2) it has no adequate remedy at law and will suffer irreparable harm if preliminary relief is denied. Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). If the party establishes both these criteria, the court then considers (3) the balance of harm to each party of denying or granting the injunction and (4) the public interest. Id. at 11-12. The court then balances all four factors, using a "sliding scale" approach. Id. at 12. "Even if [the plaintiff] has only a modest chance of prevailing on the merits, it would be entitled to a preliminary injunction if it could show that the denial of the injunction would inflict severe irreparable harm on the plaintiffs." Green River Bottling Co. v. Green River Corp., 997 F.2d 359, 361 (7th Cir. 1993).

 Trademark Validity

 Wonderware argues that RWT's ONTRACK registration should be declared invalid on the ground that ONTRACK is descriptive. *fn1" Wonderware relies on statements in RWT's promotional materials that say "Get your factory OnTrack;" "By dispatching and tracking your order," the customer can tell how it is doing; and "Get OnTrack." RWT says the statements carry a double meaning, intending to convey the idea that the customer should buy the ONTRACK software. RWT also notes that of 25 MES systems listed in Defendant's Exhibit 13, ONTRACK is the only one that uses the word "track" in its name.

 Wonderware's evidence indicates there may be another company out there that also calls itself an MES manufacturer that also markets software called ONTRAC. Wonderware points to various evidence that the word "track" is part of the name of other MES or similar products. RWT, of course, claims protection for ONTRACK, not "track."

 The Seventh Circuit holds that in most cases whether a trademark is suggestive or descriptive is a question of fact. E.g., Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 953 (7th Cir. 1992), cert. denied, 507 U.S. 1042, 123 L. Ed. 2d 497, 113 S. Ct. 1879 (1993). In Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 609 (7th Cir. 1986), Judge Posner referred readers to Judge Friendly's discussion in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976), on the difference between descriptive and suggestive marks. Judge Friendly noted that the category of suggestive marks was created to provide protection to marks that were not really fanciful but also not "exactly descriptive." Id. at 10. But as Judge Friendly noted, ...


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