Nitro Leisure Products, L.L.C. (Doing Business as golfballsdirect.com and as Second Chance) v. Acushnet Company

341 F.3d 1356, 67 U.S.P.Q. 2d (BNA) 1814, 2003 U.S. App. LEXIS 17822, 2003 WL 22012615
CourtCourt of Appeals for the Second Circuit
DecidedAugust 26, 2003
Docket02-1572
StatusPublished
Cited by10 cases

This text of 341 F.3d 1356 (Nitro Leisure Products, L.L.C. (Doing Business as golfballsdirect.com and as Second Chance) v. Acushnet Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Nitro Leisure Products, L.L.C. (Doing Business as golfballsdirect.com and as Second Chance) v. Acushnet Company, 341 F.3d 1356, 67 U.S.P.Q. 2d (BNA) 1814, 2003 U.S. App. LEXIS 17822, 2003 WL 22012615 (2d Cir. 2003).

Opinions

Opinion for the Court by Circuit Judge LINN. Dissenting opinion by Circuit Judge PAULINE NEWMAN.

LINN, Circuit Judge.

Acushnet Company (“Acushnet”) appeals from the denial of its motion for a preliminary injunction by the United States District Court for the Southern District of Florida. In re Nitro Leisure Prods., L.L.C., No. 02-14008-CV-Middle-brooks (S.D.Fla. Aug. 9, 2002) (“Order”). Because the district court did not abuse its discretion in denying Acushnet’s motion in view of Acushnet’s failure to show a reasonable likelihood of success on the merits of its claims, we affirm.

[1358]*1358BACKGROUND

Acushnet manufactures and sells golfing equipment, and in particular, golf balls. Acushnet owns and has federally registered the trademarks TITLEIST, ACUSHNET, PINNACLE, and PRO VI. Of particular interest in this case, Acush-net manufactures and markets new golf balls under the TITLEIST name and trademark, including the TITLEIST PRO VI, asserted by Acushnet to be the best selling golf ball in the United States since February 2001. Order at 2-3.

Nitro obtains and sells two categories of used golf balls at a discounted rate. The first category of balls are “recycled” balls. The recycled balls are those found in relatively good condition, needing little more than washing, and are repackaged for resale. Recycled balls represent approximately 30% of Nitro’s sales. The second category includes balls that are found with stains, scuffs or blemishes, requiring “refurbishing.” Nitro’s refurbishing process includes cosmetically treating the balls by removing the base coat of paint, the clear coat layer, and the trademark and model markings without damaging the covers of the balls, and then repainting the balls, adding a clear coat, and reaffixing the original manufacturer’s trademark. Nitro also applies directly to each “refurbished” ball the legend “USED & REFURBISHED BY SECOND CHANCE” or “USED AND REFURBISHED BY GOLFBALLSDIRECT.COM.” In these statements, the terms “Second Chance” and “Golfballsdirect.com” refer to businesses of Nitro. Order at 3. Some, but not all, of the refurbished balls also bear a Nitro trademark. Nitro’s refurbished balls are packaged in containers displaying the following disclaimer:

ATTENTION USED/REFURBISHED GOLF BALLS: The enclosed contents of used/refurbished golf balls are USED GOLF BALLS. Used/Refurbished golf balls are subject to performance variations from new ones. These used/refurbished balls were processed via one or more of the following steps: stripping, painting, stamping and/or clear coating in our factory. This product has NOT been endorsed or approved by the original manufacturer and the balls DO NOT fall under the original manufacturer’s warranty.

According to Nitro, there is a large market for used golf balls. In 2001, Nitro saw annual sales of approximately $10 million, including $4.8 million for refurbished balls. Id.

Nitro originally filed suit against Acush-net in the United States District Court for the Southern District of Florida, alleging, inter alia, unfair competition. Shortly thereafter, Acushnet filed suit in the United States District Court for the Central District of California, alleging that Nitro infringed a number of Acushnet’s patents and violated federal and state trademark laws. Nitro amended its complaint in the Florida case to seek a declaratory judgment that it did not infringe Acushnet’s patents. The California action was subsequently transferred to Florida, and the actions were consolidated.

On April 23, 2002, Acushnet moved for a preliminary injunction on its trademark and patent claims. As to the trademark claims, Acushnet concedes that it has no trademark claim with respect to “recycled” balls and does not object to those sales. As to the “refurbished” balls, however, Acushnet asserts that “Nitro’s refurbishing process produces a golf ball that bears no resemblance to a genuine Acushnet product in performance, quality or appearance” and that “Nitro’s refurbishing process so alters the basic composition of Acushnet’s golf balls that ‘it would be a misnomer to call the article by its original name.’ ” Following oral argument, the dis[1359]*1359trict court on August 9, 2002, issued its Order, concluding that Acushnet had failed to show a likelihood of success on the merits and denying preliminary injunctive relief on both the trademark and the patent law claims.

Before this court, Acushnet seeks review of the denial of its motion for preliminary injunction only as to its trademark infringement and dilution claims. We have jurisdiction pursuant to 28 U.S.C. §§ 1292(c)(1) and 1295(a)(1).

DISCUSSION

Standard of Review

This court generally reviews procedural matters under the law of the regional circuit in which the district court sits. See Payless Shoesource, Inc. v. Reebok Int'l Ltd., 998 F.2d 985, 987 (Fed.Cir.1998). Additionally, we defer to the law of the regional circuit when addressing substantive legal issues over which we do not have exclusive subject matter jurisdiction. See id. In this case, we defer to the law of the Eleventh Circuit in reviewing the district court’s denial of Acushnet’s motion for preliminary injunctive relief from the alleged trademark infringement and dilution.

The Eleventh Circuit reviews a district court’s grant or denial of a preliminary injunction for abuse of discretion. Davidoff & CIE, SA v. PLD Int’l Corp., 263 F.3d 1297, 1300 (11th Cir.2001); McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir.1998). Under the abuse of discretion standard, a reviewing court “must affirm unless [it] at least determine[s] that the district court has made a ‘clear error of judgment,’ or has applied an incorrect legal standard.” CBS Broadcasting, Inc. v. EchoStar Commun. Corp., 265 F.3d 1193, 1200 (11th Cir.2001) (citations omitted). A party seeking a preliminary injunction for trademark infringement must establish four elements: (1) that there is a substantial likelihood of success on the merits; (2) that it would be irreparably harmed if injunctive relief were denied; (3) that the threatened injury to the trademark owner outweighs whatever damage the injunction may cause to the alleged infringer; and (4) that the injunction, if issued, would not be adverse to the public interest. Id. It is well established in the Eleventh Circuit that “[a] preliminary injunction is an extraordinary and drastic remedy not to be granted unless the movant clearly established the ‘burden of persuasion’ as to all four elements.” Davidoff, 263 F.3d at 1300 (quoting Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir.2000) (en banc)).

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341 F.3d 1356, 67 U.S.P.Q. 2d (BNA) 1814, 2003 U.S. App. LEXIS 17822, 2003 WL 22012615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nitro-leisure-products-llc-doing-business-as-golfballsdirectcom-and-ca2-2003.