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Geographical Scope of Permanent Injunctions Challenged

June 17, 2015
Post by Blog Staff

 

Federal trademark rights are generally enforceable throughout the United States.  However, confusion can arise where contrary decisions have been made by district courts in different geographical regions relating to the same mark. The Fourth Circuit's March decision in Georgia Pacific Consumer Prods. LP v. Von Dreble Corp, an appeal from the Eastern District of North Carolina, provides an exemplary case of such confusion, involving three different federal judicial districts. The court ultimately held that an injunction prohibiting trademark infringement may be enforced in circuits in which there is not a prior judgment enjoining the infringer's action.

Georgia Pacific Consumer Products LP ("Georgia Pacific‚¬) owns the trademark for "enMotion"used on motion activated paper-towel dispensers designed for ten inch paper towels. Its competitor, von Dreble Corp. ("von Dreble‚¬) designed a less expensive paper towel that could be "stuffed"into the enMotion product. As a result, Georgia Pacific commenced three separate actions against von Dreble, each alleging that advertising the "stuffing"was contributory trademark infringement. The jury in the suit action brought in the Eastern District of North Carolina (Fourth Circuit) returned a verdict for Georgia Pacific, and the lower court issued a permanent, nationwide injunction against von Dreble, while the two parallel actions continued in the Western District of Arkansas (Eighth Circuit) and the Northern District of Ohio (Sixth Circuit). By the time of trial with which the Fourth Circuit was concerned had concluded, the Western District of Arkansas held that the practice of "stuffing"did not create a likelihood of confusion and the Court of Appeals for the Eighth Circuit affirmed. Meanwhile, the Northern District of Ohio concluded that the Arkansas judgment precluded Georgia Pacific from relitigating their claim, which the Court of Appeals for the Sixth Circuit affirmed. On appeal in the Fourth Circuit, von Dreble challenged the geographical scope of the Eastern District of North Carolina's injunction.

The Fourth Circuit reviewed the scope of the injunction for abuse of discretion and concluded "equity requires that injunctions be carefully tailored,‚¬ especially where there is comity between circuits. The court also concluded that allowing a permanent, nationwide injunction to stand in the eleven states comprising the Sixth and Eighth Circuits would "affront the courts"and would leave litigants in those states confused. Therefore, the court chose not to authorize an injunction that would operate within those jurisdictions, nor to the remaining circuits due to comity. Allowing an injunction to apply to the remaining circuits would create a split of which court to follow—the Fourth Circuit or the Sixth and Eighth Circuits. Ultimately, the Fourth Circuit concluded that the unique circumstances of the case required that the injunction be limited geographically to only states located within the Fourth Circuit and remanded with instructions to modify the injunction as such.

The full opinion can be found here.  



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