Opinion
Civ. 01-4096-KES
December 19, 2003
ORDER
Defendant, Companion Products, Inc. (CPI), requests modification and clarification of the judgment and a stay of injunction pending its current appeal. Plaintiff, Gateway, Inc., opposes the motion. Gateway moves to compel CPI to comply with the court's judgment and for sanctions. CPI objects.
BACKGROUND
Gateway is a corporation that sells computers, computer products, computer peripherals, computer accessories, and other electronic products throughout the world. Beginning in 1988, Gateway began using black and white cow spots on their products, packaging, advertising, and promotional materials. In 1992, Gateway registered its trademarks for a stylized black and white cow-spots design and its slogan "Gateway Country." Gateway registered the trademarks in association with computers and computer peripherals.
CPI sells plush stuffed animals called "stretch pets" that wrap around computer monitors, CPUs, or televisions. "StretchPets" is CPI's registered trademark. One of its top selling products is a black and white spotted cow, "Cody Cow," which CPI began selling in 1999. CPI attempted to sell Cody Cow to Gateway, but Gateway rejected the idea. Gateway thereafter sent CPI a cease and desist letter. The letter notified CPI that its Cody Cow infringed on Gateway's trademark and noted that if sales of Cody Cow did not cease, Gateway would file suit. Counsel for CPI informed the company's president, Dennis Byer, that the black and white cow spots did not infringe upon Gateway's trademark. CPI continued to produce Cody Cow.
Gateway filed suit against CPI alleging false designation of origin and unfair competition in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) and the common law of South Dakota; trademark infringement in violation of 15 U.S.C. § 1051-1127 and the common law of South Dakota; trademark dilution in violation of 15 U.S.C. § 1125(c); and deceptive trade practices in violation of SDCL 37-24-6(1) and the common law of South Dakota. CPI maintained that its product neither infringed upon nor diluted Gateway's trademark. CPI further argued that the black and white spots were functional and that Gateway's trademark was limited to the spots on a box.
A trial before an advisory jury commenced on February 4, 2003. The jury returned a verdict in favor of CPI on the issues of trademark infringement, trade dress infringement, and dilution. The parties subsequently filed post-trial briefs. The court issued an opinion on August 19, 2003, in which it did not adopt the advisory jury's verdict. The court found in favor of Gateway on the issues of trademark and trade dress infringement and in favor of CPI on the issue of dilution.
CPI now requests clarification of the court's order to "deliver up for destruction all packing, literature, labels, advertising, and other materials of an infringing nature in CPI's possession or control." It argues that the evidence does not show and the court did not find that CPI's boxes and brochures create a likelihood of confusion. CPI also requests a stay of the destruction order pending a decision on its appeal to the Eighth Circuit. Gateway argues that CPI"s motion is untimely and does not meet the substantive requirements of either Rule 59(e) or 60(b). Gateway also maintains that no extraordinary circumstances warrant a stay. Gateway moves for an order compelling CPI to comply with the court's order and for sanctions.
DISCUSSION
1. Motion to Reconsider
The Federal Rules of Civil Procedure do not mention motions to reconsider. The Eighth Circuit has instructed courts to consider such motions either under Rule 59(e) or Rule 60(b). Sanders v. Clemco Indus., 862 F.2d 161, 168 (8th Cir. 1988). See also Schoffstall v. Henderson, 223 F.3d 818, 827 (8th Cir. 2000) (holding that Rule 59(e) applies to a motion to reconsider); Broadway v. Norris, 193 F.3d 987, 989 (8th Cir. 1999) (analyzing whether Rule 59(e) or Rule 60(b) applies to a motion to reconsider). "When the moving party fails to specify the rule under which it makes a postjudgment motion, that party leaves the characterization of the motion to the court's somewhat unenlightened guess." Sanders, 862 F.2d at 168.
Rule 59(e) permits a party to file a motion to alter or amend a judgment within ten days of that judgment. Fed.R.Civ.P. 59(e);Dale Selby Superette Deli v. United States Dep't of Agriculture, 838 F. Supp. 1346, 1347 (D. Minn. 1993). Motions made after the expiration of ten days are considered under Rule 60(b).Sanders, 862 F.2d at 169. The court issued a judgment against CPI on August 19, 2003. CPI requested reconsideration on October 15, 2003. CPI's motion does not specify the rule under which it was filed. Because it exceeds the ten-day time limit imposed by Rule 59(e), the court will consider CPI's motion under Rule 60(b).
Rule 60(b) allows a party to seek relief from a final judgment or order if the party can prove mistake, inadvertence, surprise, excusable neglect, or other reasons. Wilburn v. Pepsi-Cola Bottling Co. of St. Louis, 492 F.2d 1288, 1290 (8th Cir. 1974). See 6 Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Federal Practice and Procedure § 1489 (2d ed. 1990). "Rule 60(b) provides for extraordinary relief which may be granted only upon an adequate showing of exceptional circumstances." Reyher v. Champion Int'l Corp., 975 F.2d 483, 488 (8th Cir. 1992). Such motions are disfavored.Rosebud Sioux Tribe v. A P Steel, Inc., 733 F.2d 509, 515 (8th Cir. 1984).
A motion to amend a judgment is appropriate "to correct manifest errors of law or fact or, in some limited situations, to present newly discovered evidence." Dale Selby Superette, 838 F. Supp. at 1347. They are not simply "vehicle[s] for . . . reargument on the merits." Broadway, 193 F.3d at 990. "A motion to reconsider is frivolous if it contains no new evidence or arguments of law explaining why the [judge] should change an original order." Magnus Elecs., Inc. v. Masco Corp. of fad., 871 F.2d 626, 629 (7th Cir. 1989). Failing to present new information not previously considered by the court is "a controlling factor against granting relief." Sanders, 862 F.2d at 170.
CPI is entitled to a modification of the judgment under Rule 60(b). CPI points to a mistake in the court's judgment that restrains CPI from "doing any other act or thing which dilutes Gateway's cow-spots trademark." Because CPI prevailed on the issue of dilution, the court erred in restraining any actions that diluted Gateway's trademark. Indeed, the order should restrain CPI from doing any other act or thing which infringes upon Gateway's cow-spots trademark. The court, therefore, will grant CPI's request to modify this portion of the order so that the order now restrains CPI from "doing any other act or thing which infringes upon Gateway's cow-spots trademark."
No exceptional circumstances, however, entitle CPI to additional relief from the court's judgment. CPI has neither produced any newly discovered evidence nor advanced new arguments in support of its motion. Indeed, CPI merely raises an issue it previously argued at trial: that because its boxes and brochures are red and prominently display the StretchPets trademark, they neither cause consumer confusion nor infringe upon Gateway's trademark. The court has already considered this argument and CPI's supporting evidence and found that CPI's marketing materials and packaging also are likely to cause consumer confusion. A district court can deny a motion to reconsider for this reason alone.Broadway, 193 F.3d at 990.
Indeed, the court's memorandum opinion and order issued on August 19, 2003, considered whether CPI's boxes and labels dispelled the likelihood of consumer confusion. The court found that consumer confusion will likely result regardless of CPI's packaging. Accordingly, the judgment includes CPI's boxes, brochures, and in-store displays. The court finds, however, that affixing labels to cover the infringing images of "Cody Cow" complies with the judgment and order. Destruction of this packaging is not necessary as long as the images of "Cody Cow" are covered or deleted. CPI must still provide Gateway a report in writing and under oath setting forth, in detail, how it has complied with the order and prevented any infringing images from reaching the public.
No other alterations of the judgment are warranted. CPI has not pointed to any excusable neglect or misrepresentation. It "failed to state any grounds upon which [it] could justify relief from judgment under Rule 60(b)." United States v. Whitford, 758 F.2d 329, 331 (8th Cir. 1985). Accordingly, this court will not further reconsider its order dated August 19, 2003. See id (motion to reconsider properly denied where party restated its previous arguments and failed to raise any newly discovered issues of material fact not known by the district court at the time of the previous ruling); Sanders, 862 F.2d at 169-70 (district court previously ruled that statute of limitations barred claim; thus motion to reconsider was denied since party raised only issues of law that the court previously rejected).
2. Motion to Stay
Parties seeking a stay pending appeal "must show that (1) they are likely to succeed on the merits, (2) they will suffer irreparable injury unless the stay is granted, (3) no substantial harm will come to other interested parties, and (4) the stay will do no harm to the public interest." Arkansas Peace Center v. Arkansas Dept. of Pollution Control 992 F.2d 145, 147 (8th Cir. 1993).
"The first element goes to the sensible administration of justice: a stay should not ordinarily be granted if the court determines that the injunction will ultimately take effect in any event." Reserve Mining Co. v. United States, 498 F.2d 1073, 1077 (8th Cir. 1974). CPI has offered neither argument nor proof to demonstrate that it will likely succeed on the merits. The court previously analyzed these issues in its August opinion and found against CPI. CPI has not raised any novel or complex areas of law. See Arkansas Peace Center, 992 F.2d at 147 (more likely to succeed on the merits where defendants raised serious and substantial legal issues). Accordingly, this factor weighs against issuing a stay.
Second, CPI has not demonstrated any irreparable harm if the court did not grant the stay. CPI must show that the "injury complained of is of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm." Packard Elevator v. Interstate Commerce Comm'n, 782 F.2d 112, 115 (8th Cir. 1986). Economic loss does not amount to irreparable harm unless the loss threatens the very existence of the party's business. Id. CPI has not specifically alleged how it will suffer irreparable harm if the court does not issue a stay. "Bare allegations of what is likely to occur are of no value since the court must decide whether the harm will in fact occur."Id. There is no evidence that CPI is subject to imminent harm that threatens the loss of its business. This factor, therefore, does not favor a stay.
Third, failure to enforce the judgment can potentially harm Gateway. In its August opinion, the court found that CPI's product is likely to cause confusion among consumers. "When a likelihood of confusion exists, plaintiffs' lack of control over the quality of defendants' services constitutes an immediate and irreparable injury, regardless of the actual quality of those services." Sturgis Area Chamber of Commerce v. Sturgis Rally Races, Inc., 99 F. Supp.2d 1090, 1101 (D.S.D. 2000). Thus, this factor dictates against a stay.
Fourth, a stay will harm the public's interest. "Once the likelihood of confusion is shown, it follows that the public interest is damaged if such confusion continues." Id. at 1102 (quoting 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 30.52 (4th ed. 1997)). This court has previously concluded that CPI's product causes confusion among consumers. Accordingly, staying the injunction is detrimental to the public. This factor weighs against granting a stay.
CPI has not presented any evidence nor cited any legal authority to support its request for a stay. It summarily stated that a stay would not harm Gateway, that failing to grant a stay would materially harm CPI, and that there is a likelihood of success on appeal. These conclusions do not justify extraordinary relief in the form of a stay. Furthermore, all four factors dictate against staying the injunction. CPI's request, therefore, is denied.
3. Motion to Comply and Sanctions
Gateway requests an order compelling CPI to comply with the injunction. The judgment orders CPI to deliver up for destruction "all packages, literature, labels, advertising, and other materials of an infringing nature in CPI's possession or control." To the extent that the current order permits CPI to cover or delete the infringing image on its marketing and packaging materials, CPI need not comply with the precise wording of the August 19, 2003, judgment. All other requirements in the judgment remain in effect and CPI is ordered to immediately comply with them. No sanctions against CPI are warranted because the current order of the court clarifies the previous judgment. CPI must now comply with each condition of the judgment in light of this order and the court's previous August 19, 2003, order. CPI must also file and serve on Gateway a "report in writing under oath setting forth in detail the manner and form in which CPI has complied with the terms of this injunction."
CONCLUSION
The court will modify the judgment for the reasons previously cited. No other modifications are warranted nor do the circumstances justify a stay of the judgment. CPI is ordered to comply with the judgment. No sanctions will issue against it.Accordingly, it is hereby
ORDERED that CPI's request for modification of the judgment and clarification of the injunction (Docket 164) is granted in part and denied in part.
IT IS FURTHER ORDERED that CPI's request for a stay of injunction pending appeal (Docket 164) is denied.
IT IS FURTHER ORDERED that Gateway's motion to compel defendant to comply with the court's judgment (Docket 168) is granted.
IT IS FURTHER ORDERED that Gateway's motion for sanctions (Docket 168) is denied.