United States District Court, N.D. Illinois, Eastern Division
ORDER ON DEFENDANT'S MOTION TO STAY PENDING
MATTHEW F. KENNELLY United States District Judge
bench trial, the Court found in favor of plaintiff Ariel
Investments, LLC on its trademark infringement claims. The
Court denied Ariel Investments' request for disgorgement
of defendant Ariel Capital Advisors LLC's alleged profits
but issued an injunction that, among other things, requires
Ariel Capital to cease using the infringing term
"Ariel" within 30 days of entry of the order and
required it to use a disclaimer of association in the
interim. Ariel Capital has filed a notice of appeal and has
moved for a stay of the injunction pending appeal.
purpose of a stay pending appeal is to minimize the costs of
error and mitigate the damage that may be done before a legal
issue is finally resolved. In re A&F Enters., Inc.
II, 742 F.3d 763, 766 (7th Cir. 2014). But a stay is
"not a matter of right, even if irreparable injury might
otherwise result." Nken v. Holder, 556 U.S.
418, 433 (2009). In determining whether to grant a stay, a
court considers the moving party's likelihood of success
on appeal, any irreparable harm that will result to either
side if a stay is granted or denied in error, and whether the
public interest favors one side or the other. In re
A&F Enters., 742 F.3d at 766. The court
applies a sliding scale under which "the greater the
moving party's likelihood of success on the merits, the
less heavily the balance of harms must weigh in its favor,
and vice versa." Id. As the party requesting a
stay, Ariel Capital has the burden to show that the
circumstances justify the Court's exercise of its
discretion to grant a stay.
Likelihood of success
Capital's contention that it is likely to succeed on
appeal focuses on three points. The first concerns the
Court's finding that Ariel Investments established a
likelihood of confusion. Ariel Capital notes that the Court
did not find that each of the seven factors considered in
determining this issue were in Ariel Investments' favor.
That may be so, but it does not mean the evidence was close.
Starting with the seven factors, the Court concluded that
five of them weighed in Ariel Investments' favor and that
one was neutral. There was just one factor that weighed in
Ariel Capital's favor- intent to pass off one's
product as that of another-and even there, the evidence was
somewhat equivocal. Specifically, the Court found that Ariel
Capital's founder Christopher Bray did not adopt the name
Ariel to try to lure customers from Ariel Investments but
rather that he named the firm after his daughter and a
ministry in which he had been involved. But the Court also
found that, contrary to Bray's contention, he "knew
of Ariel Investments prior to founding Ariel Capital"
and "was aware that he was adopting a name similar to
the one Ariel Investments was already using in the same
general field." Decision at 28. Thus the single factor
among the seven that weighed in Ariel Capital's favor did
so "only weakly." Id.
generally, the evidence on the question of likelihood of
confusion was not close. The summary in the Court's decision
[T]he two marks are similar, using the same identifying term
to refer to financial services and products. Both companies
offer individualized investment services to individuals, with
a wide range in the total dollars invested per client.
Further, Ariel Investments has been operating in the
financial market for over thirty years and has repeatedly
policed use of its marks by other financial companies.
Finally, there is evidence of actual confusion: at least one
client of Ariel Capital as well as two others in the
financial industry have shown confusion as to the
relationship between the two companies.
Id. at 29. The requirements for issuance of a
permanent injunction were also clearly established; the
evidence was not close on this either. See Id. at
second point raised by Ariel Capital on the question of
likelihood of success concerns the denial of its motion to
dismiss for lack of personal jurisdiction. The motion
likewise did not present a close question in the Court's
view. And as noted above, the Court found, after considering
the evidence at trial (including Bray's testimony) that
Bray was aware of Ariel Investments and its business before
he named Ariel Capital and knew he was adopting a mark
similar to the one Ariel Investments had long used. Ariel
Capital's knowing adoption of a mark confusingly similar
to the one long used by an Illinois entity in the same field
is more than sufficient to establish the minimum contacts
with Illinois needed to make personal jurisdiction
appropriate. Again, this is not a close question in the
Capital's third point concerns the Court's decision
to allow Ariel Investments to withdraw its jury demand
shortly before trial and to overrule Ariel Capital's
ensuing request for a jury trial. Ariel Investments dropped
its claim for damages and pursued only its request for an
injunction and for disgorgement. The Court, relying on
established authority (albeit not from this circuit),
concluded that the request for disgorgement of profits in a
Lanham Act case is a claim for equitable relief that did not
entitle Ariel Capital to a jury trial. See Ferrari S.P.A.
v. Roberts, 944 F.2d 1235, 1248 (6th Cir. 1991); see
also, e.g., Fifty-Six Hope Rd. Music, Ltd. v. A.V.E.L.A.,
Inc., 778 F.3d 1059, 1074 (9th Cir. 2015). The Supreme
Court "ha[s] characterized damages as equitable where
they are restitutionary, such as in 'action[s] for
disgorgement of improper profits.'" Chauffeurs,
Teamsters & Helpers, Local No. 391 v. Terry, 494
U.S. 558, 570 (1990) (quoting Tull v. United States,
421 U.S. 412, 424 (1987)). This legal issue likewise is not
Capital also contends that it was unfairly prejudiced by the
timing of the withdrawal of Ariel Investments' damages
claim and jury demand shortly before trial. The claim of
prejudice was and is completely conclusory and unsupported.
Even now, Ariel Capital does not identify anything it would
have done differently if it had had more time to adjust. And
as virtually any experienced trial lawyer will tell you, a
bench trial is far simpler than a jury trial-all else being
equal, as in this situation-largely due to the absence of the
need to educate laypersons on matters that are outside their
usual frame of reference.
conclusion, though Ariel, like any appellant, has some
likelihood of success on appeal, this cannot fairly be
characterized as a significant likelihood of success or even
a reasonable likelihood of success.
Capital has also failed to establish any irreparable harm.
First of all, it did not do so at trial, as the Court
concluded in its decision granting ...