Antitrust Law Daily Wrap Up, ADVERTISING—9th Cir.: Separate tests should have been applied for preliminary injunction request, (Mar 13, 2014)

By Jody Coultas, J.D.

A district court abused its discretion in its denial of Wells Fargo & Company’s motion for a preliminary injunction against a firm using the former name of its insurance company when it did not separately consider a Lanham Act false advertisement claim, according to the U.S Court of Appeals in San Francisco (Wells Fargo & Co. v. ABD Insurance & Financial Services, Inc., March 11, 2014, Gould, R.). The court withdrew an earlier not-for-publication order in the matter in light of a request for publication and remanded the case for reconsideration.

Wells Fargo acquired ABD Insurance and Financial Services in 2007 (Former ABD), and changed the name of ABD to “Wells Fargo Insurance Services.” However, Wells Fargo continued to use the former ABD mark on customer presentations and solicitations, the abdi.com website and metatags, and continued to accept customer payments made to ABD. Previous ABD employees launched a New ABD, using the exact same name as Former ABD, when they learned that Wells Fargo had not renewed the registration of the Former ABD mark.

To obtain a preliminary injunction, Wells Fargo was required to establish: (1) a likelihood of success on the merits, (2) that the plaintiff will likely suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tip in its favor, and (4) that the public interest favors an injunction.

The district court abused its discretion when it did not separately consider Wells Fargo’s Lanham Act false advertisement claim, according to the court. The district court included that claim in its trademark infringement analysis because it found the false advertisement claim to be derivative of infringement claim. However, the test to determine whether a false advertising violation has occurred is distinct from the test to determine whether a trademark has been infringed. Therefore, the claims required the application of separate tests.

In light of the recent decision in Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., 736 F.3d 1239 (9th Cir. 2013), the court declined to address the district court’s holding that Wells Fargo failed to establish that it would likely suffer irreparable harm.

The district court also erred in holding that Wells Fargo abandoned the ABD mark, according to the court.

The case is No. 4:12-cv-03856-PJH.

Attorneys: Felicia Boyd (Barnes & Thornburg LLP) for Wells Fargo & Co. and Wells Fargo Insurance Services USA, Inc. Kerry Lynn Duffy (Bartko Zankel Bunzel & Miller) for ABD Insurance & Financial Services, Inc.

Companies: Wells Fargo & Co.; ABD Insurance & Financial Services, Inc.

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