Opinion
Civil Action No. 03-6945.
October 21, 2004
MEMORANDUM
Plaintiff CNB Financial Corp. ("CNB") is a Pennsylvania corporation headquartered in Clearfield, Pennsylvania. CNB, through its wholly-owned subsidiary County National Bank, renders community banking services to individuals and small businesses. Since 1934 County National Bank has operated as full-service financial institution with branch offices located throughout central Pennsylvania. In January 2004, Defendant CNB Community National Bank ("CNB (IO)"), a Pennsylvania corporation, began operation in Clarion County, Pennsylvania. CNB(IO) also provides banking services to individuals and small businesses.
See Findings of Fact, Order dated September 29, 2004.
By Order dated September 29, 2004, this Court found, inter alia, that CNB met the requisite elements for preliminary injunctive relief. In particular, this Court found that CNB demonstrated a likelihood of success on the merits and irreparable harm. The Court entered an Order which enjoined the defendant from "using CNB or any phonetic equivalent, as a mark or name or as a component of the mark, name or domain name on and in connection with any banking and financial services not originating from or authorized by the plaintiff." Moreover, the defendant was ordered to modify all advertising and promotional material bearing "CNB" not yet distributed. The Order became effective on October 6, 2004 when plaintiff posted the requisite bond.
A court may properly issue a preliminary injunction when the following factors weigh in favor of the movant: (1) that it will be immediately and irreparably harmed by the defendants' conduct, (2) a reasonable likelihood of success on the merits, (3) the extent to which the harm to the plaintiff outweighs the possible harm to the defendant if the motion is granted, and (4) the public interest lies in granting the motion. See Opticians Ass'n of America v. Independent Opticians of America, 920 F.2d 187, 191-92 (3d Cir. 1990). "Preliminary injunctive relief is an extraordinary remedy and should be granted only in limited circumstances." Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004) (citation and internal quotations omitted). "One of the goals of the preliminary injunction analysis is to maintain the status quo, defined as the last, peaceable, noncontested status of the parties," which in a trademark case is the time prior to the alleged infringing conduct. Id. (quotingOpticians, 920 F.2d at 197) (add'l citation omitted). The plaintiff bears the burden of proving a likelihood of success on the merits and irreparable harm.
In this motion to stay preliminary injunction pending appeal, the defendant avers that it will suffer irreparable harm if a stay is not granted. Plaintiff opposes this motion contending that the defendant is unlikely to succeed on appeal and the harm suffered to CNB far outweighs the hardship to the defendant by denying the stay.
DISCUSSION
A. Standard for Stay Pending Appeal
Pursuant to Federal Rule of Civil Procedure 62(c), a district court may "suspend, modify, restore or grant" an injunction during the pendency of an appeal from an interlocutory or final judgment either granting or denying the injunction. To grant a stay pending appeal, the court must determine: (1) whether movant is likely to succeed on the merits of the appeal, (2) whether movant will be irreparably harmed if the stay is denied, (3) whether other parties will be substantially harmed by the stay; (4) when the stay will harm the public interest. Hilton v. Braunskill, 481 U.S. 770, 776 (1987). See also Sentry v. Pearl, 662 F. Supp. 1171 (E.D.Pa. 1987).
B. Likelihood of Success on Merits
In its previous opinion, this Court found that CNB is likely to succeed on the merits. Specifically, the Court concluded that CNB had put forth evidence demonstrating its likelihood of success on the merits of its trademark infringement claim, and established as a matter of law irreparable harm. In Dunkin' Donuts, Inc. v. Liu, the Court stated "[this] Court's earlier finding that Plaintiffs have a likelihood of success on the merits precludes the Court from finding that, for purposes of this motion, Defendants have likelihood of success on the merits on the same issue." 2001 WL 111610 (E.D.Pa 2001). Here, the same logic applies. Moreover, the Defendant CNB (IO) has not made any showing that it is likely to succeed on the merits. Defendants assert legal propositions without providing any substantiating evidence, without more, this Court cannot now find that CNB(IO) is likely to succeed on the merits. Therefore, CNB (IO) has failed to satisfy this prong of the factor analysis.
C. Irreparable Harm
CNB (IO) argues that if it were preliminary enjoined from using the designation "CNB," its goodwill would be negatively impacted. CNB (IO) further claims that reversal of the name upon winning on appeal, would be confusing to its customers. And furthermore, a forced change of name represents wrongdoing by the bank. In the present situation, CNB (IO) premises its arguments upon the assumption that it will prevail on appeal. However, CNB(IO) presents no compelling evidence to suggest that such an outcome is likely. Moreover, as stated in this Court's previous ruling, injury to goodwill alone does not pass muster as irreparable harm. In regard to the name change, in this modern society, where mergers and acquisitions are common business practice, consumers and bankers are not unaccustomed to name changes of banking institutions. In this instance, CNB(IO) is being required to make an analogous transition. This Court maintains that it is possible for CNB(IO) to formulate a new name and make the resulting transition without being irreparably harmed. Therefore, CNB(IO) has not demonstrated that it will be irreparably harmed if the stay is denied.
D. Substantial Harm to CNB
For the Court to now conclude that CNB would not suffer substantial harm if the stay were granted would reverse this Court's order dated September 29, 2004 ruling that CNB would suffer immediate irreparable injury absent a preliminary injunction. Further, the arguments espoused by the defendant are the same arguments that have been addressed by this court in the prior proceedings. This Court has already found that irreparable injury would result to CNB if the defendants continued using the trademark in a manner that was likely to confuse CNB's customers.
E. Public Interest
CNB(IO) claims that the public will be severally harmed if the preliminary injunction is enforced. In particular CNB (IO) states, "it is difficult to gauge whether customers of the Defendant's bank will be able to access their finances." See Doc. 45, p. 8. CNB(IO) does not elaborate on the specifics of this alleged inability for customers to access their finances. The only legal authority cited to support the Defendant's proposition is non-binding bankruptcy court cases, which are not contextually related to this case. Thus, CNB(IO) has not demonstrated that failure to grant the stay would harm the public interest.
CONCLUSION
For the reasons noted herein, CNB(IO)'s motion for a stay pending appeal is denied.