Grocery Outlet Inc. v. Albertson's Inc.

497 F.3d 949, 2007 WL 2264702

• Court: Court of Appeals for the Ninth Circuit
• Decided: August 9, 2007
• Docket: 06-16380, 06-16448
• Status: Published

Opinions

PER CURIAM Opinion; Concurrence by Judge WALLACE; Concurrence by Judge McKEOWN

PER CURIAM.

Grocery Outlet, Inc. (“Grocery”) appeals from a preliminary injunction granted in favor of Albertson’s, Inc. (“Albertson’s”), one of its competitors in the retail grocery industry. The district court concluded, at this stage of the proceedings, that Albert-son’s was the legal owner of the LUCKY mark for retail grocery services and products and rejected Grocery’s claim that Al-bertson’s abandoned the LUCKY mark through its publicly advertised announcement that LUCKY stores were converted to Albertson’s stores after a company merger in late 1999.

We review a preliminary injunction for abuse of discretion. Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., Inc., 240 F.3d 832, 839 (9th Cir.2001). We review underlying legal issues de novo and findings of fact for clear error. Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1046 (9th Cir.1999).

A preliminary injunction may be granted in a trademark case where the moving party demonstrates either “(1) a combination of probable success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in [its] favor.” Sardi’s Rest. Corp. v. Sardie, 755 F.2d 719, 723 (9th Cir.1985) (emphases in original). “These two formulations represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases.” A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001) (quotation marks and citation omitted). They are not separate tests but “the outer reaches of a single continuum.” Los Angeles Mem’l Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1201 (9th Cir.1980) (quotation marks and citation omitted).

To establish infringement of a registered trademark, the trademark holder must show that it is (1) the owner of a valid, protectable mark, and (2) that the alleged infringer is using a confusingly similar mark. 15 U.S.C. § 1114(1); Brookfield, 174 F.3d at 1046. Abandonment is a defense to a claim of infringement of a registered trademark. 15 U.S.C. § 1115(b)(2). The Lanham Act provides for two ways that a trademark may be abandoned, namely, through (1) nonuse, or (2) the mark becoming generic. See 15 U.S.C. § 1127. To show abandonment by nonuse, the party claiming abandonment must prove both the trademark owner’s (1) “discontinuance of trademark use” and (2) “intent not to resume such use.” Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., 458 F.3d 931, 935 (9th Cir.2006) (citing 15 U.S.C. § 1127).

Grocery does not dispute the district court’s finding that Albertson’s is the legal owner of various federal and state trademark registrations of the LUCKY mark associated with retail grocery services and products. Nor does it dispute that Grocery’s use of the LUCKY mark for retail grocery services was likely to cause consumer confusion. Thus, the district court’s conclusion that Albertson’s was likely to succeed on its trademark infringement claim necessarily turned on whether Grocery was likely to prove its abandonment defense.

Although the parties disagree as to the standard of proof applicable to the defense of abandonment, Grocery waived its challenge on this point by adopting the clear and convincing standard in its briefing in the district court. In light of the district court’s findings and this concession, we need not resolve the burden of proof issue.

The district court’s analysis is careful and thorough. The findings are preliminary and, as the district court noted, “are not meant to be binding.” We conclude that the district court did not abuse its discretion in concluding that Albert-son’s demonstrated a strong likelihood of prevailing on the merits of its trademark infringement claim and the possibility of irreparable injury in the absence of a preliminary injunction. Nor did it abuse its discretion in concluding that Grocery did not establish its defense of abandonment, where Albertson’s offered sufficient evidence of its intent to resume use of the LUCKY mark within the reasonably foreseeable future during the short period of alleged nonuse. See 15 U.S.C. § 1127; Electro Source, 458 F.3d at 935.

AFFIRMED.