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EMSL Analytical, Inc. v. Testamerica Analytical Testing Corp.

April 4, 2006

EMSL ANALYTICAL, INC., PLAINTIFF(S),
v.
TESTAMERICA ANALYTICAL TESTING CORP., ET AL, DEFENDANT(S).



The opinion of the court was delivered by: Honorable Robert B. Kugler

OPINION

Presently before the Court is Plaintiff EMSL Analytical, Inc.'s ("EMSL" or "Plaintiff") Motion for a Preliminary Injunction. The motion seeks an injunction under Federal and State law to preclude the Defendants Testamerica Analytical Testing Corp., et al, ("Defendants") from infringing Plaintiff's marks. For the reasons which follow, Plaintiff's application is denied.

I. BACKGROUND

A. Plaintiff

EMSL is a New Jersey corporation, established in 1981, which specializes in analytical and laboratory testing services including indoor air quality and related environmental testing work. Although EMSL provides a wide array of testing services,*fn1 approximately 50% of EMSL's current revenue comes from asbestos testing and related services.

EMSL is also a geographically diverse company. Since the creation of its first laboratory in Camden, New Jersey, EMSL has built a national network of 25 testing laboratories and one service center, which is located in Charleston, South Carolina. Customers nationwide can send their specimens to EMSL laboratories for testing. Although not all of the locations offer the full range of EMSL's services, all of the locations at the very least offer asbestos testing.

B. Defendants

TestAmerica Environmental Microbiology Laboratory, Inc. ("EMLab") provides indoor air quality laboratory services. Based out of California, EMLab specializes in mold testing and analysis of air and surface samples of fungi, bacteria and other potentially harmful air contaminants. (Bell Affidavit at ¶ 2, Def. Ex. A.) Since its establishment in 1989, EMLab has expanded rapidly and now has two full service laboratories in San Bruno and San Diego and 20 Micro Labs nationwide. (Bell Affidavit, at ¶ 2.) In 2003, EMLab merged with TestAmerica, Inc., a national provider of laboratory services for multiple industries, including petroleum testing, hazardous waste and ground water monitoring, pesticide and herbicide testing, and asbestos testing. (Bell Affidavit, at ¶ 3.) Two years later, in 2005, EMLab itself began providing asbestos-related testing services, which had previously been outsourced. (Bell Affidavit, at ¶¶ 10-11.) During 2005, EMLab's asbestos-related services accounted for only $25,000 or .25% of its total annual revenue of approximately $10 million. (Bell Affidavit, at ¶¶ 4, 11.)

C. The Marks at Issue

In conjunction with its services, EMSL has adopted the names and marks "EMSL," "EMSL" and diamond design, "EMSL ANALYTICAL," and related names and marks (collectively "EMSL marks"). EMSL also owns United States Service Mark Registration No. 2,199,503 for the mark "EMSL" in design form. (See EMSL's Registration attached to Compl. as Ex. B.) The United States Patent and Trademark Office ("USPTO") issued the EMSL Registration on October 27, 1998 and the registration achieved incontestable status in 2004. (See Pl. Ex. B.) Although the Defendants do not contest EMSL's ownership of an incontestable registration for such mark, they do point out that the incontestable registration only confers statutory protection to the specific logo shown in the registration itself. (Def. Mem. at 8.)

Plaintiff alleges that Defendants have used and continue to use marks that infringe upon EMSL's marks. Specifically, EMSL identifies the following marks as infringing: (1) EML, (2) Environmental Microbiology Laboratory, Inc., (3) Environmental Microbiology Laboratories, Inc., (4) EMLab, and (5) EMLab Environmental Microbiology Laboratory, Inc. (Pl. Mem. at 6.)

In response, the Defendants argue that the only marks in question are Plaintiff's EMSL mark and Defendants' "EMLab" and "Environmental Microbiology Laboratory, Inc." marks. (See Def. Mem. at 8-10.) Despite Plaintiff's assertions to contrary, Defendants stopped using the EML mark almost five years ago and they have no intention or desire to use it in the future. (Bell Affidavit ¶ 6). Defendants contend that the only arguable commercial use of the EML mark Plaintiff could find is a single section on the "Career Opportunities" page of EMLab's website, which was probably there before the adoption of the EMLab name, and once brought to the attention of Defendants, was immediately corrected. (Bell Affidavit, at ¶7). Also, Defendants assert that the Plaintiff's challenge to Defendants' "Environmental Microbiology Laboratories, Inc." mark is meritless because EMLab's attempt to register that as a mark was a mistake that was corrected in the USPTO by amending the application to seek registration of Defendants' "Environmental Microbiology Laboratory" mark, which is a mark that has allegedly been used by Defendants since early 1989. (See Ex. L attached to Def. Mem.) Therefore, Defendants argue that the only marks at issue are Plaintiff's EMSL marks and Defendants' "EMLab" and "Environmental Microbiology Laboratory" marks.

II. STANDARD FOR PRELIMINARY INJUNCTIVE RELIEF

The grant of a preliminary injunction is an extraordinary remedy that should only be granted in limited circumstances. Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d. Cir. 2004) (citing Am. Tel. & Tel. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d Cir. 1994) (internal citations omitted)). Preliminary relief is only warranted where it is necessary to "preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Texas v. Camenisch, 451 U.S. 390, 395 (1981); see Anderson v. Davila, 125 F.3d 148, 156 (3d Cir. 1997) (noting that the purpose of a preliminary injunction is to maintain the status quo, not decide the issues on their merits).

A district court may grant a motion for a preliminary injunction only if the party seeking the injunction shows (1) likelihood of success on the merits; (2) denial will result in irreparable harm to the plaintiff; (3) granting the injunction will not result in irreparable harm to the defendant; and (4) granting the injunction is in the public interest. P.C. Yonkers, Inc. v. Celebrations the Party and Seasonal Superstore, LLC, 428 F.3d 504 (3d Cir. 2005) (citing Nutrasweet Co. v. VitMar Enterprises, 176 F.3d 151, 153 (3d Cir.1999) (quoting Maldonado v. Houstoun, 157 F.3d 179, 184 (3d Cir. 1998))). The party seeking the injunctive relief bears the burden of showing that the extraordinary remedy is necessary. Acierno v. New Castle County, 40 F.3d 645, 653 (3d Cir. 1994).

III. DISCUSSION

A. Likelihood of Success on Merits: Trademark Infringement Claim

To prevail in a trademark infringement case under Section 32 of the Lanham Act and New Jersey law, the plaintiff must demonstrate (1) it owns the mark at issue, (2) its mark is valid and legally protectable, and (3) the defendant's use of the mark to identify its goods or services is likely to create confusion concerning the origin of those goods or services. 15 U.S.C. § 1125(a); Commerce Nat'l Ins. Servs. v. Commerce Ins. Agency, Inc., 214 F.3d 432, 437 (3d Cir. 2000); Apollo Distrib. Co. v. Jerry Kurtz Carpet Co., 696 F. Supp. 140, 143 (D.N.J. 1988) (noting that the analysis for trademark and unfair competition claims under New Jersey law is the same as the analysis under federal law). In analyzing whether the plaintiff has shown a likelihood of prevailing on these elements, the Court must determine that the plaintiff has a "reasonable probability" of success. Moteles v. Univ. of Pa., 730 F.2d 913, 919 (3d Cir. 1984).

1. Ownership and Validity of EMSL's Marks

When a mark has been federally registered and obtains incontestable status under the Lantham Act, it is valid and legally enforceable. Lucent Info. Mgmt., Inc. v. Lucent Tech., Inc., 186 F.3d 211, 215 (3d Cir. 1999); Fisons Horticulture, Inc. v. Vigoro Ind., Inc., 30 F.3d 466, 472 (3d Cir. 1994). Because it is undisputed that Plaintiff owns an incontestable registration for its EMSL and diamond design mark, Plaintiff has shown the ownership, validity, and legally protectable status of that mark.

Non-registered trademarks are often categorized by degree of distinctiveness. Those categories include (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). Suggestive, arbitrary, or fanciful marks are inherently distinctive and entitled to protection because they do not have an obvious relation to the goods or services to which they refer. Jews for Jesus v. Brodsky, 993 F. Supp. 282, 298 (D.N.J. 1998). However, even a non-inherently distinctive mark may acquire distinctiveness if it attains secondary meaning. Id. A mark obtains secondary meaning when the "primary significance of the terms in the minds of the consuming public is not the product but the producer." Id.

Plaintiff argues that all of its marks (including those that are not registered) bear no logical relationship to the laboratory services that EMSL offers under the marks, making those marks arbitrary and inherently distinctive. Alternatively, EMSL argues that since 1981 it has made continuous use of its marks in the sale and advertisement of its goods and services, establishing Plaintiff's ownership and priority of use in the marks.

The Defendant only tangentially addresses these matters as part of its arguments under the "likelihood of confusion" element.

2. Likelihood of Confusion

Originally, the Third Circuit held that in trademark infringement cases where the parties deal in competing goods and services, the court need rarely look beyond the mark itself to determine whether there is a likelihood of confusion. Interspace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir. 1983). In those situations, the court would generally "examine the registered mark, determine whether it is inherently distinctive or has acquired sufficient secondary meaning to make it distinctive, and compare it against the challenged mark." Id.

By contrast, where the parties deal in non-competing goods and services, the court would look beyond the mark itself to the nature of the products and the context in which they are sold. Id. In other words, there would be a greater likelihood of confusion between marks for non-competing goods and services when the non-competing products had similar sales contexts and a close relationship. Id. In Lapp, the court went on to list ten factors for consideration in non-competing products cases. Id. at 463 (citing Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir. 1978)).

However, the Third Circuit later revised the applicability of the Lapp factors by holding that "whether or not the goods compete, the Lapp factors should be employed to test for likelihood of confusion." A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 215 (3d Cir. 2000) In explaining this holding, the Court noted that "we do not hold that a district court must use the factors . . . . If the products are directly competing, and the marks are clearly very similar, a district judge should feel free to consider only the similarity of the marks themselves." Id. at 214. Furthermore, not all factors will be relevant in every case, and some factors may be weighed more heavily than others depending on the particular factual setting. Id. at 215. In other words, in the case of competing products, the district court ...


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