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Wm. Wrigley Jr. Co. v. Swerve IP, LLC

United States District Court, N.D. Illinois, Eastern Division

September 28, 2012

WM. WRIGLEY JR. COMPANY, Plaintiff and Counter-Defendant,
v.
SWERVE IP, LLC, Defendant and Counter-Claimant.

Page 795

Douglas N. Masters, Regan Anne Smith, Loeb & Loeb, Chicago, IL, for Plaintiff and Counter-Defendant.

Page 796

Rakesh Mahendra Amin, Ryan Mathew Kaiser, Amin Talati, LLC, Chicago, IL, for Defendant and Counter-Claimant.

MEMORANDUM OPINION AND ORDER

HARRY D. LEINENWEBER, District Judge.

Before the Court is Swerve IP's Motion for a Preliminary Injunction, and Wrigley's Motion to Strike and Motion for a Hearing. For the reasons contained herein, Wrigley's Motions are granted in part and denied in part, and Swerve's Motion for a Preliminary Injunction is continued pending a hearing.

I. BACKGROUND

Defendant and Counter-Claimant Swerve IP, LLC (" Swerve IP" ) moves for a preliminary injunction, barring Plaintiff and Counter-Defendant Wm. Wrigley Jr. Co. (" Wrigley" ) from allegedly infringing Swerve's federally registered trademark.

Swerve IP holds a word mark (SWERVE), the name of its " all-natural" erythirtol-based non-sugar sweetener. It has used the mark since 2001. The United States Patent and Trademark office (the " USPTO" ) registered it in September 2009. (Swerve IP acquired the rights to the mark via assignment in 2011, evidently when the sweetener part of the business changed hands.) That registration covers " natural sweetener" in International Class 030 (which includes a large number of food and candy products).

Swerve sweetener is sold (in one-pound bags and in single-use packets) through online retailers such as Amazon.com and certain physical stores like Whole Foods. Similar sweeteners are evidently sold in convenience stores, and Swerve IP hopes to expand to those stores in the near future. The sweetener is also used in the commercial manufacture of some food products, including diet pralines, but Swerve IP hopes to expand into more mainstream markets, including chewing gum. The sweetener is promoted via social media sites such as Facebook and Twitter.

Wrigley manufactures and sells the popular " 5" brand of chewing gum. There are a dozen different flavors, one of which is called " Swerve" — because, Wrigley claims, it changes from a " tangy" to a " sweet tropical" flavor when chewed. The gum is not " all-natural" but is sugar-free, and is marked as containing natural and artificial flavors. Wrigley markets 5 Gum as an extreme sensory experience, targeting customers in their teens and 20s. 5 Gum is sold mainly in grocery and convenience stores, though it is also available through Amazon.com.

In October 2010, Wrigley learned of Swerve IP's mark. That month, it applied to register " swerve" in International Class 030, covering " chewing gum." Swerve IP opposed the registration. By all appearances, the opposition is still pending before the Trademark Trial and Appeal Board (the " TTAB" ).

In July 2011, Wrigley launched the Swerve flavor of 5 Gum. The flavor is featured on its website and social media outlets, and was advertised individually (but is no longer). In late 2011, Swerve IP sent Wrigley a cease-and-desist demand regarding the Swerve mark. Evidently after settlement discussions arising out of the TTAB proceeding failed, Wrigley filed a declaratory judgment action before this Court regarding its use of the Swerve term. Swerve IP has moved for a preliminary injunction.

II. LEGAL STANDARD

" A party seeking a preliminary injunction is required to demonstrate a

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likelihood of success on the merits, that it has no adequate remedy at law, and that it will suffer irreparable harm if the relief is not granted." Promatek Industries, Ltd. v. Equitrac Corp., 300 F.3d 808, 811 (7th Cir.2002). If it meets that standard, the court then also must consider whether and to what extent the injunction would harm the enjoined party and/or the public. Id. These factors are evaluated on a sliding scale; the more likely a movant is to prevail on the merits, the less heavily the balance of harms needs to tip in its favor. Id.

III. DISCUSSION

As this briefing is largely under seal the Court discusses the evidence in only general terms.

A. Motion to Strike

Wrigley has moved to strike portions of Swerve IP's reply, contending that it includes new evidence and new arguments which could have been raised in the original motion. Swerve IP contends that its evidence and argument are in proper response to issues raised in Wrigley's response, and was obtained in discovery after Swerve IP filed its motion.

Replies are not to be used to " patch holes" in the original briefing. E2Interactive, Inc. v. Blackhawk Network, Inc. No. 09-CV-629, 2010 WL 1981640, at *1 (W.D.Wis. May 17, 2010). However, at this stage, unlike summary judgment, the record is not necessarily complete before the motion is filed. Cf. Black v. TIC Inv. Corp., 900 F.2d 112, 116 (7th Cir.1990) (new evidence in a summary judgment reply should not be considered, unless the other side had a chance to respond). Accordingly, district courts permit some " new" facts and arguments in replies, if they are directly responsive to issues raised in a response and do not prejudice the other side. See, e.g., Wynn v. Express, LLC, No. 11 C 4588, 2012 WL 386716, at *3 (N.D.Ill. Feb. 6, 2012) (collective action preliminary certification). The Court discusses each item of " new" evidence as necessary below.

B. Motion for Hearing

Wrigley claims that the Court must hold a hearing, so that it can confront the factual issues created by Swerve IP's reply brief. It claims that, because the Court opted to rule on the Motion to Strike simultaneously with the Injunction Motion, Wrigley needs a hearing " to be assured that the Court will not consider" the challenged material in ruling on the injunction. Wrigley's Request for Hrg. 2. Wrigley's fear that the Court will rule against it on the Motion to Strike is not a valid basis for holding a hearing. See Promatek, 300 F.3d at 814 (preliminary injunction hearing is required if the nonmoving party's evidence raises genuine issues of material fact.) Furthermore, Wrigley's refusal to detail all of the fact issues that it believes exist, Request for Hrg. 2 n. 2, is grossly insufficient. As noted, the Court will not consider new evidence and argument that would unfairly prejudice Wrigley. The Court will note when and if it finds questions of fact necessitating a hearing.

C. Preliminary Injunction

The parties agree that, at this stage, Swerve IP's state law claims stand or fall with the federal claims, and have not separately briefed them. The Court follows suit.

As noted above, a party seeking a preliminary junction must demonstrate a likelihood of success on the merits. Promatek, 300 F.3d at 811. The parties appear to agree that irreparable injury may be presumed from trademark infringement. The Seventh Circuit ...


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