Florida, testified that with a complex purchasing process in which various software is examined carefully, there is almost no likelihood of confusion. Professor Lutz agreed, however, that at an early stage a prospective purchaser might see ONTRACK or INTRACK, and mistakenly end up considering the wrong product. He also admitted that if a prospective customer saw INTRACK and did not like it, he might never consider ONTRACK due to confusion as to source. He also admitted that a customer might think one company was associated with the other. In making his analysis, Professor Lutz did not interview any end users.
Professor David Yerkes, a professor of English at Columbia University, also testified on behalf of Wonderware. Professor Yerkes testified that people pronounce "in" and "on" with different parts of their mouths, and for that reason and the fact that their meanings are not the same they are unlikely to confuse INTRACK and ONTRACK. He also thought ONTRACK was a generic term for software. Professor Yerkes does not have marketing training or experience. Professor Yerkes also has no training in trademark law, and thought that neither "uptowner" nor "downtowner," or "Blue Nun" nor "Blue Angel," would be likely to be confused with its similar name. (Each term has been found to result in a likelihood of confusion when used on competing products, as discussed below.)
I did not find Professor Yerkes' testimony convincing. Although he may have correctly stated that INTRACK and ONTRACK are linguistically different, his opinion that consumers are unlikely to confuse them is not based on an understanding of the factors courts consider in determining likelihood of confusion. For example, he stated that he believed that consumers were not likely to confuse "uptowner" and "downtowner." In The Downtowner Corp. v. Uptowner Inns, Inc., 178 U.S.P.Q. 105 (T.T.A.B. 1973), the Patent Office Trademark Trial and Appeal Board found the terms "downtowner" and "uptowner" were likely to confuse consumers and refused the defendant the right to register its mark. The Board recognized that the words had different meanings, but found that the words were "associative terms."
Moreover, the Board noted that the terms were not "in common usage as a portion of a business name." Id. at 109. For these reasons, the Board held that consumers were likely to "mistakenly assume that [both "downtowner" and "uptowner" hotel] are all part of the same chain or, are in some way, affiliated therewith." Professor Yerkes', however, indicated that he would not find a likelihood of confusion for the terms.
Similarly, in H. Sichel Sohne, GmbH v. Michel Monzain Selected Wines, Inc., 202 U.S.P.Q. 62 (T.T.A.B. 1979), the Board refused to allow the mark "Blue Angel" to be registered after the holders of the mark "Blue Nun" opposed it. The applicant argued that confusion was unlikely because the terms were different in sound, appearance, and connotation, but the Board rejected this argument, stating that "the fact that the marks have aural and optical dissimilarity is not necessarily controlling on the issue of likelihood of confusion in the marketplace where the marks convey the same general idea or stimulate the same mental reaction." Id. at 65.
Again, Professor Yerkes testified that, under his analysis, the terms would not confuse consumers. I am therefore not persuaded by his testimony.
I find that there is some basis for concluding that RWT may be able to show that the similarity between ONTRACK and INTRACK is likely to confuse persons unfamiliar with the two products. Nevertheless, on this record that evidence is largely conjecture since it is almost exclusively based on the fact that persons have, and are likely easily to mix up or pay little attention to, the "i" or "o" that distinguish "in" and "on" when the words are not used in the normal context of English language. Furthermore, the evidence indicates that actual buyers of MES software generally become familiar with available products. Thus, the principal danger, perhaps the only danger, that a buyer may mistakenly explore, buy or reject ONTRACK because of confusion with INTRACK is at the initial stage, when deciding which products to investigate further.
If buyers of ONTRACK or INTRACK are in fact confused by the products, RWT would be in substantial danger of becoming the victim of reverse confusion.
Reverse confusion occurs when a large junior user saturates the market with a trademark similar or identical to that of a smaller, senior user. In such a case, the junior user does not seek to profit from the good will associated with the senior user's mark. Nonetheless, the senior user is injured because "the public comes to assume that the senior user's products are really the junior user's or that the former has become somehow connected to the latter. The result is that the senior user loses the value of the trademark -- its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets."
Quaker Oats Co., 978 F.2d 947 at 957 (quoted case omitted). Here, Wonderware is a much larger company than RWT and could quickly saturate the MES market with INTRACK. Thereafter, consumers seeing RWT's ONTRACK software may mistakenly identify it with Wonderware rather than RWT, causing RWT to lose its corporate identity. The Seventh Circuit recognizes reverse confusion as "a redressable injury under the Lanham Act." Id. at 958.
Wonderware argues that RWT's motion for a preliminary injunction is barred by laches. Wonderware says the evidence shows conclusively that RWT executives knew at least by February, and certainly April, 1995, that it intended to sell competing software with the trademark INTRACK, but did nothing until it filed this suit in December, 1995, after, says Wonderware, it had expended substantial sums in developing, advertising and promoting the new trademark.
The evidence is inconclusive as to whether RWT learned of the INTRACK name at the March, 1995 show in Chicago. Photographs introduced in evidence do show that the name was displayed prominently during that show, but evidence also showed that the original exhibit did not include the name. RWT executives testified that they did visit the exhibit, but did not see the name. Wonderware executives testified that the replacement name was put on the exhibit before the exhibit opened. Wonderware and RWT executives also disputed a conversation between the two with regard to the name at the show. I need not resolve the credibility issue because Mr. Asher, RWT's president, admits receiving the letter Wonderware sent to all persons who submitted business cards at the exhibit in April, 1995. That letter, described previously, states that Wonderware has a new product known as INTRACK. Mr. Asher testified that it is common in the industry to announce a new product that never reaches market and that, without more, he assumed this product might be "vaporware" (a nonexistent product). He testified that he did call the telephone number listed but never received a return call.
He did see, or should have seen, an advertisement in trade magazines that he subscribed to, and says he generally browsed through, during the next month or so. At any rate, Mr. Asher saw the press announcement made at the end of June announcing the merger of EnaTec and Wonderware and the forthcoming INTRACK software. At that time, he called someone at Wonderware. Mr. Asher's telephone call was returned in September, 1995.
On October 12, 1995, RWT's attorneys sent Wonderware a letter stating that Wonderware's use of the mark INTRACK violated RWT's trademark rights in the name ONTRACK, and demanding that Wonderware stop using the mark. On October 24, 1995, Wonderware's attorneys wrote back, acknowledging receipt of the letter from RWT counsel, and stating that they were making an evaluation and would respond when their analysis was complete. RWT did not hear any more from Wonderware, however, and on November 29, 1995 wrote Wonderware's attorneys stating that unless RWT heard from them by December 4, they would take appropriate action to protect RWT's interests. This letter provoked a response, dated November 30, 1995, in which Wonderware's counsel stated that they were "still reviewing the issue" and that they would respond substantively within several weeks. On December 22, 1995, having heard nothing further from Wonderware, RWT filed this suit. Its motion for a preliminary injunction, filed a month later, was precipitated by its immediate concern that a large trade show would be held at McCormick Place in Chicago, this time with Wonderware's large display situated across the aisle from RWT's much smaller display of its ONTRACK software.
Wonderware argues that RWT's delay in bringing suit prejudiced it because it went to great expense during that time to promote its new name. Wonderware also says it would be very costly to change its name at this point because it would have to change the software itself and undertake a new promotion campaign. I found much of Wonderware's testimony in this regard not to be credible. In terms of future costs, it is about to update the software anyway. A lot of the expenses on which Wonderware relies are for things like boxes, which also are to be replaced soon. Wonderware admitted that it could replace everything within two months.
In addition, at the time of the hearing it actually had only one end user running the INTRACK software.
Wonderware would, presumably, have to undertake a new promotional campaign if it had a new name. But Wonderware is not an innocent victim of any delay by RWT. Wonderware certainly knew of the ONTRACK name and software at least by the March, 1995 trade show in Chicago, where RWT displayed its product. What's more, Wonderware at about that time did a trademark search, which turned up the RWT registration. Wonderware did not seek an opinion of counsel at the time regarding infringement.
To obtain a preliminary injunction, RWT must show that it has "no adequate remedy at law" and will suffer "irreparable harm" if preliminary relief is denied. Abbott Laboratories, 971 F.2d at 11. Irreparable harm is usually presumed in trademark infringement cases. Id. at 16 (explaining the "well-established presumption that injuries arising from Lanham Act violations are irreparable"); Helene Curtis Industries, Inc. v. Church & Dwight Co., 560 F.2d 1325, 1332 (7th Cir. 1977) ("The damage to the goodwill and prominence of the [plaintiff's] trademark through public confusion of it with the [defendant's] trademark is, in itself, an irreparable injury."), cert. denied, 434 U.S. 1070, 55 L. Ed. 2d 772, 98 S. Ct. 1252 (1978). Here, RWT has shown that it may suffer damaged goodwill if Wonderware infringes its trademark. The software products are similar and compete in the same market. Money cannot compensate RWT for this harm. See, e.g., Ideal Industries, Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1026 (7th Cir. 1979), cert. denied, 447 U.S. 924, 65 L. Ed. 2d 1116, 100 S. Ct. 3016 (1980).
Balance of Harms
Because I have decided that RWT has shown at least some likelihood of success on the merits and that it will suffer irreparable harm if the injunction is not issued, I must balance those factors against the harm to Wonderware and the harm to non-parties if the injunction is issued. Abbot Labs, 971 F.2d at 12. I must weigh all four factors, attempting to "'minimize the costs of being mistaken.'" Id. (quoting American Hospital Supply Corp. v. Hospital Products Ltd., 780 F.2d 589, 593 (7th Cir. 1986)). In doing so, the Seventh Circuit mandates a "sliding scale" approach -- one "properly characterized as subjective and intuitive, one which permits district courts to 'weigh the competing considerations and mold appropriate relief.'" Abbot Labs, 971 F.2d at 12 (quoted case omitted).
The Seventh Circuit has also said that the "'granting of a preliminary injunction is an exercise of a very far-reaching power, never to be indulged in except in a case clearly demanding it', presumably because it constrains one of the party's freedom to engage in ... non-criminal behavior." Schwinn Bicycle Co. v. Ross Bicycles, Inc., 870 F.2d 1176, 1181 (7th Cir. 1989) (quoting Roland Machinery Co. v. Dresser Ind., Inc., 749 F.2d 380, 389 (7th Cir. 1984)) (emphasis in original). In this case I have said that I did not think the cost to Wonderware from an injunction would be as great as it attempted to show. Nevertheless, the reality of an injunction in this type of case is that it effectively ends the dispute in most cases because even if the injunction is eventually lifted it is generally not cost productive to go back and attempt to reclaim the enjoined mark. On RWT's side, if there is confusion in the marketplace over these names one party, and since RWT is the smaller company by far it seems more likely to be injured, may well be harmed by lost business. As the trademark owner, of course, every day that Wonderware uses a trademark that is confusingly similar, if it is, harms its ability to protect that mark in the future as well.
The balance of harms therefore comes down to the strength of RWT's trademark and its showing of likelihood of confusion. On these issues, I think under the law of this circuit RWT has shown that it has some but not a better than even chance of prevailing on its claim that it has a valid trademark. Neither is the evidence of likelihood of confusion strong on the present record. I conclude that a preliminary injunction should not issue. If RWT chooses, I will attempt to schedule a trial during the next few months. If it prevails at trial, it will be entitled to an injunction.
Elaine E. Bucklo
United States District Judge
Dated: July 3, 1996