BIG WANTS SMALL ENJOINED
1. This application for a preliminary injunction is brought to stop Small and Cpaatty ("the Counterdefendants") from committing electronic piracy on the Internet. Big is a national provider of tax filing and other state tax services. Since January 2005, it has operated an Internet website under the registered domain name "TaxHQ.COM" that not only advertises Big's services, but also provides on-line services directly to clients throughout the United States and the world. The website prominently features the marks "TaxHQ®" and "Big TaxHQ®" in connection with the website and the services that Big offers. Big's use of the "TaxHQ®" mark dates back to 1997, when it started distributing a promotional newsletter with that title throughout the country, including Washington.
2. In late June 2007, Big discovered that the Counterdefendants are operating a website under virtually the same domain name (TaxHQ.NET), which the Counterdefendants registered in March 2007. The website, which displays the mark "TaxHQ" on most of its pages, offers many of the same types of services that Big offers on its website. Big also discovered that the website employs several variations of the word "TaxHQ" as keywords, which are embedded in the website's code and are designed to attract Internet search engines to the site when a generalized search request is made for "TaxHQ."
3. Granting a preliminary injunction is essential to prevent the Counterdefendants' website and services from being confused with those of Big. Although Counterdefendants claim to have a federal trademark registration for their mark that predates Big's federal registrations, there can be no fair dispute that Big was using the "TaxHQ®" mark in interstate commerce (and in Washington) years before the Counterdefendants' first claimed use in 2003. As such, Big has superior rights.
4. For a helpful discussion of the function and uses of Internet domain names, search engines, and keywords, see Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1044-45 (9th Cir. 1999).
Big and Its Initial Use of "TaxHQ"
5. Founded in 1950, Big is a leading provider of tax services and filings and other federal and state tax services throughout the United States and the world. [Declaration of William A. Person ("Person Decl.") ~ 2]. In 2006 alone, Big provided service to over 100,000 clients in the United States and abroad. Operating through a national network of branch offices and service providers, Big serves the needs of major corporations, accounting firms and law firms in every state in the country, including Washington, by advising about state tax and regulatory issues and dealing with federal, state and local taxation and regulatory authorities, including but not limited to assisting in the preparation of returns and other submissions to such authorities.
6. One key to Big's continued success has been its ability to reach out to the accounting,corporate and legal communities across the country to publicize and market the services it offers. As part of that effort, in 1997, Big created a newsletter, entitled "TaxHQ", that it started distributing three to four times a year throughout the United States (including Washington) to existing and prospective clients. The TaxHQ® newsletter told readers about Big's services and capabilities and associated Big's services with that mark. The "TaxHQ®" mark appeared prominently on the first page of each issue, and appeared in the text of a number of articles. By 2003, Big had spent several hundreds of thousands of dollars to prepare and distribute the newsletter.
7. Between 1997 and the beginning of 2003, the TaxHQ® newsletter was regularly distributed to clients and prospective clients throughout the United States, including Washington. During that time, Big conducted business in every state in the country, working either through branch offices or (as in Washington at that time) through local service providers to serve clients located in those states and to provide services for clients located elsewhere.
8. Between 12,000 and 20,000 copies of TaxHQ were distributed per issue from 1997 to 2003. From the beginning of 2003 until 2007 (when the name of the newsletter was changed), the TaxHQ newsletter continued to be distributed in every state in the country, including Washington, in much the same way.
Creation of the TaxHQ Internet Site
9. As a result of Big's distribution of the TaxHQ newsletter before 2003, Big's clients and prospective clients increasingly recognized the mark "TaxHQ" as the source of Big's services. In 1998-2001, Big decided to capitalize on that success by making use of the mark on a new Internet website. At the time, most of Big's services could be obtained only by contacting Big directly by telephone, facsimile or an office visit. Moving to the Internet was the next logical step as it provided the means to make information readily accessible to clients and permitted clients to obtain many of Big's services directly on-line.
10. In October 2004, Big registered with Network Solutions, Inc. ("NSI") (a firm the U.S. government uses to register Internet addresses) the domain name "TaxHQ.COM" to serve as Big's web address: ..http://www.TaxHQ.com..: The following January, after extensive development, promotional effort, and considerable financial investment, Big launched the TaxHQ® website on the Internet under Big's new "TaxHQ" web address. The result was a web-enabled tool that allowed for interactive communication between clients and Big, providing quick access to client accounts, Big services, and useful reference materials.
11. Besides providing promotional information about Big's services and materials of general interest to the accounting, legal and business communities (such as news, legislative updates and links to relevant websites), subscribers to the TaxHQ website were given direct on-line access to Big services.
12. The TaxHQ® website contained, and still contains, well over a hundred pages of content, and, equally important, allows subscribing members to receive company services directly on-line. The mark "TaxHQ®" and the related mark "Big TaxHQ®" are displayed prominently on the pages of the website.
13. Since the website was launched in January 2005, access to the TaxHQ® website has been available throughout the United States (including Washington) and the world. Big has spent millions of dollars in developing, improving and advertising the site under the "TaxHQ®" mark. The TaxHQ website has received wide recognition under the "TaxHQ®" mark for its utility, ease of use and comprehensiveness.
Big's U.S. Trademark Registrations
14. Recognizing the value of the "TaxHQ®" mark, Big submitted a federal trademark application to register it on November 26, 2004. The United States Patent and Trademark Office ("PTO") registered the trademark in Big's name on May 19, 2006, as U.S. Trademark Reg. No. 2,000,000. After the launching of Big'sTaxHQ website Big, on March 10, 2005, filed an application for the registration of the related service mark "Big TaxHQ". The PTO registered that mark in Big's name on January 12, 2007, under U.S. Trademark Reg. No. 2,000,001, in connection with the provision of computer services, namely, providing on-line database in the fields of tax information, tax documents, and related information on filing tax documents and related legal forms.
Big's Discovery Of Counterdefendants' Infringing Acts
15. Big first learned of the Counterdefendants' infringing acts in June 2007, when it came across the Counterdefendants' website while searching the Internet. [Verified Counterclaim 11 12]. The site, which says that it is sponsored by plaintiff/counterdefendant Small, P.C., is addressed to a nationwide audience in the business, accounting and legal communities, identical to the classes of clients that Big seeks to attract. It solicits business for a number of services that are the same as those that Big offers and features on its TaxHQ® website and other promotional materials. For example, as is featured on Big's website, the Counterdefendants' website offers assistance in tax and legal services to determine choice of entity questions, including tax document preparation and the formation of corporate entities (not just in Washington, but nationwide). Emblazoned across the top of every one of the Counterdefendants' website's pages is the legend "TaxHQ", which is identical to Big's marks "TaxHQ®" and "Big TaxHQ®". Equally alarming is the site's web-address: "www.TaxHQ.net", which (except for the suffix "net"), is the same as the web-address for Big's TaxHQ® website, which incorporates Big's protected marks. [NSI records indicate that plaintiff counterdefendant Small registered the domain name "TaxHQ.NET" with NSI in March 2007, two and a half years after Big registered "TaxHQ.COM" with NSI. [Verified Counterclaim 11 13] The Counterdefendants' website also is accessible under the domain name "abouttax.COM." Big also discovered that the Counterdefendants have used Big's mark "TaxHQ®" as website keywords, which are embedded in machine-readable HTML code that is not visible on the website pages. By embedding those marks in the website's buried HTML code, the Counterdefendants attract to their website Internet search engines and Internet users who search for Big's TaxHQ® website by making a generalized search request for "TaxHQ".
16. The Counterdefendants' use of its marks on its Internet site and advertising has occurred despite their knowledge of Big's prior use of the TaxHQ marks. In fall 2004, after Big registered the domain name "TaxHQ.COM" with NSI, third-party defendant John Cpaatty contacted Big to question Big's use of the "TaxHQ" mark in Big's domain name. [Declaration of Big Official 11 3] Big told Cpaatty that it had been using and featuring the TaxHQ® mark for years as part of its national marketing efforts. Big also sent Cpaatty copies of past TaxHQ® newsletters that display the mark prominently. Big had no further contact with Cpaatty until it discovered the Counterdefendants' website in June 2007.
17. Further investigation revealed records indicating that third-party defendant John T. Cpaatty apparently holds a federal trademark registration for the service mark "TaxHQ". [Verified Counterclaim 11 16] Big did not know of that registration until June 2007, after it discovered Counterdefendants' website. The application for registration claims that Cpaatty made first use of the mark in commerce on March 31, 2003, which also is alleged in plaintiff-counterdefendant's complaint. [Complaint ~ 6]. Big believes that the mark was registered in October 2005 [Verified Counterclaim ~ 16], which was seven months before the federal registration of Big's mark "TaxHQ®" and a year after being put on notice of Big's superior rights to the mark.
18. After discovering the Counterdefendants' website, Big's general counsel sent the Counterdefendants' a letter in late June 2007 demanding that further infringement cease. [Verified Counterclaim 11 18]. Rather than respond to that letter, plaintiff/counterdefendant Small served on Big the complaint filed in this action, alleging that Big is purportedly infringing its mark.
Big's Need For Immediate Relief
19. Big is gravely concerned over the Counterdefendants' use of "TaxHQ®" and similar marks in their website and advertising. [Person Dec!' 11 22]. The marks that they are using are virtually identical to Big's "TaxHQ®" marks and are being used to offer many of the same types of services that Big offers. Moreover, by engineering its website to attract users who use "TaxHQ" as a search term, Big is worried that clients and prospective clients who are searching for Big's TaxHQ website will be diverted to the Small website, which will result in lost business opportunities. Given the similarity in the marks and the services and the likely diversion of Internet users to the Small website, Big also is concerned that users will mistakenly believe that the Counterdefendants are somehow affiliated with Big. As Big has no control over the quality of services that they provide, Big is worried that Counterdefendants' continued use of Big's TaxHQ® marks will diminish the goodwill that Big has created in the "TaxHQ®" and "Big TaxHQ®" marks.
20. Over the last ten years, Big has invested millions of dollars in developing and promoting the TaxHQ® marks and website and in promoting Big's services under the "TaxHQ®" and "Big TaxHQ®" marks, which has led major corporations, accounting firms and law firms throughout the United States to consider "TaxHQ" as synonymous with Big's services. The Counterdefendants' continuing and willful infringement of those marks jeopardizes that investment.
21. A party is entitled to a preliminary injunction in a trademark case if he demonstrates either (I) a combination of probable success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in his favor." Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1046 (9th Cir. 1999); accord Rent-AiCenter, Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 602 (9th Cir. 1991). All of the factors set forth in those alternative standards favor granting Big a preliminary injunction.
22. Big IS LIKELY TO SUCCEED ON THE MERITS.
23. To establish an infringement or unfair competition claim under the Lanham Act, Big must establish that the Counterdefendants are using a mark that is confusingly similar to a valid, protectable mark owned by Big. See Brookfield, 174 F.3d at 1046; AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979). The facts shown in Big's supporting declarations demonstrate that Big satisfies that standard.
24. "TaxHQ" is a Protectable Mark and Big Owns the Mark Because It Made Use of It in Interstate Commerce Well Before the Counterdefendants Did.
25. To succeed on a claim for infringement or unfair competition, a party must first demonstrate that its mark is protectable in the sense that it is not merely descriptive of the party's services or a generic term, but instead is inherently distinctive or possesses secondary meaning. E.g., Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1390-91 (9th Cir. 1993) (making distinction). The mark "TaxHQ" satisfies that standard because it is inherently distinctive, being properly classified either as an arbitrary designation or as being merely suggestive of the services to which it is associated. The use of term "Tax" within the mark suggests at most an association with tax matters, but the mark is not "descriptive" of tax services because it "requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of goods and services." Union Nat 'I Bank ofTexas, Laredo Union Natl Bank of Texas,Austin, 909 F.2d 839, 845 (5th Cir. 1990). As such, even if "TaxHQ®" is treated as a suggestive mark rather than an arbitrary mark, it is still inherently distinctive and is considered "protectable without proof of secondary meaning." at 844; accord Sleekcraft Boats, 599 F.2d at 349.
27. A party seeking relief also must demonstrate that it owns the mark. Again, it is beyond fair dispute that Big satisfies that requirement. Although the Counterdefendants appear to have been the first to apply for federal registration for their mark, it is indisputable that Big was the first to use the mark "TaxHQ®" in interstate commerce in association with its services. As such it owns the mark: "It is axiomatic in trademark law that the standard test of ownership is priority of use. To acquire ownership of a trademark it is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services." Sengoku Works Ltd. v. RMC Int'I, Ltd.,96F.3d 1217, 1219 (9th Cir. 1996), Thus, as shown by the accompanying declaration of William A. Person, Big started using the "TaxHQ®" mark in interstate commerce in 1997 when it used the mark as the title of a promotional newsletter to clients and potential clients describing Big's services, associating those services with the "TaxHQ" mark. Before and after 2003, that newsletter was distributed three to four times a year to clients and prospective clients in every state in the country, including Washington. The TaxHQ mark was later used as the title and domain name of Big's website starting in January 2005, and has been used since that time to promote and provide Big's services. In contrast, the plaintiffs complaint concedes that the Counterdefendants did not make use of their mark until March 2003, when it allegedly was included in an advertisement in a Seattle newspaper. [Complaint ~ 6) Counterdefendants later used the mark as part of the domain name for its website. However, that occurred no earlier than after the registration of the domain name "TaxHQ.NET" in March 2007, which was more than two years after Big started using "TaxHQ.COM" as its web address.
28. Given these facts, Big must be deemed to be the senior user of the "TaxHQ®" mark and, as such, it has a right to enjoin others, including the Counterdefendants, from making use of that mark if it is likely to result in consumer confusion. See, e.g., Brookfield, 174 F.3d at 1047 ("The first to use a mark is deemed the 'senior' user and has the right to enjoin 'junior' users from using the confusingly similar marks in the same industry and market or within the senior user's natural zone of expansion."); Tally-Ho. Inc. v. Coast Community College Dist., 889 F.2d 1018, 1023 (lith Cir. 1989) ("The first to use a mark on a product or service in a particular geographic market, the senior user, acquires rights in the mark in that market" and "may extend into uses in 'related' product or service markets. "). As Counterdefendants were aware of Big's senior rights in the name and mark "TaxHQ" from, at the latest, fall 2004, their infringing use is reprehensible and demands injunctive relief.
The Counterdefendants' Use of the "TaxHQ" Marks in Their Advertising and in Their Website and Domain Name is Likely to Cause Confusion.
29. In determining whether a likelihood of confusion exists, the' Ninth Circuit relies on the Sleekcraft test, which considers: (1) the similarity of the parties' marks; (2) the relatedness or proximity of the two companies' products or services; (3) the marketing channels used by the parties; (4) the strength of the asserted mark; (5) the infringing party's intent in selecting its mark; (6) the degree of care likely to be exercised by purchasers in selecting goods or services; (7) evidence of actual confusion; and (8)the likelihood of expansion in product or service lines. See Sleekcraft Boats, 599 F.2d., at 348-49. 30.
The Key Sleekcraft Factors: Similarity of Marks, Services and Marketing Channels.
30. Of the eight Sleekcraft factors, the first three-the similarity of the parties' marks, services and marketing channels--are generally deemed to be the most important. See Brookfield, 174 F.3d at 1054 ("[S]ome factors --such as the similarity of the marks and whether the two companies are direct competitors --will always be important"). All three lead inescapably to the conclusion that the Counterdefendants' marks are confusingly similar to Big's.
Similarity of Big's and Small's Marks:
31. Small's mark "TaxHQ" is identical to Big's mark "TaxHQ®". See Official Airline Guides, Inc, 6 F.3d at 1392 (a court must assess the similarity of the marks in terms of their sight, sound, and meaning, with similarities weighed more heavily than differences); Sleekcraft Boats, 599 F.2d at 351 (same).
32. The Counterdefendants' domain name "TaxHQ.NET" is close in appearance and sound to Big's mark "TaxHQ®".The only difference is the addition of the top-level domain identifier "NET" to the Counterdefendants' domain name, and that difference is inconsequential. See, e.g., Interstellar Starship Servs., Ltd. v. EPIX, Inc., No. 98-35142, 1999 U.S. App. LEXIS 16536 at *7-*8 (9th Cir. July. 19, 1999) ("epix.com" identical to "EPIX"); Brookfield, 174 F.3d at 1055 ("movebuff.com" indistinguishable from "MovieBuff'); Public Servo CO. V. Nexus Energy Software Inc., 36 F. Supp. 2d 436, 439 (D. Mass. 1999) ("energyplace.com" virtually identical to "energy place"); Minnesota Mining & Mfg. Co. v. Taylor, 21 F. Supp. 2d 1003, 1005 (D. Minn. 1998) (finding "postits.com" and "Post-it" to be the same or substantially identical).
The Relatedness and Proximity of the Two Companies' Services:
33. There also can be no doubt that the Counterdefendants and Big are competitors seeking to sell similar services to the same corporate, accounting and legal consumers. Among other things, as a comparison of the two companies' websites confirms, both offer assistance to businesses in Washington and elsewhere involving tax and legal services in the nature of determining choice of entity questions, including tax document preparation and the formation of corporate entities. The similarity of those services, coupled with the virtual identity of the marks the parties use, compels a finding that there is high likelihood of confusion. See Brookfield, 174 F.3d at 1056 (where there is a virtual identity of marks, "if they were used with identical products or services [a] likelihood of confusion would follow as a matter of course."); Lindy Pen Co. v. Bic Pen Corp., 796 F.2d 254, 256-57 (9th Cir. 1986) (where those two factors weighed in favor of a finding of a likelihood of confusion, reversing a district court's contrary finding even though all the other factors weighed against it).
The Marketing Channels Used by the Parties:
34. The fact that Big and the Counterdefendants market their services through the Internet, using virtually identical domain names, exacerbates the likelihood of confusion: (a) people searching the Internet for Big's TaxHQ® website and finding Counterdefendants' site may simply assume that they have reached Big's site or believe that Counterdefendants are associated with, or sponsored by, Big; (b) consumers may wrongly assume that Big TaxHQ® website is no longer offered and has been replaced by the Counterdefendants' site; or (c) even if consumers realize that Counterdefendants' site is not the same as Big's TaxHQ® website, it may wrongly divert trade to the Counterdefendants' site because of its use of the identifying portion of Big's domain name. See Brookfield, 174 F.3d at 1057 (identifying these areas of likely confusion if companies make use of the Internet under virtually identical domain names); Interstellar Starships, 1999 U.S. App. LEXIS 16536 at *8 (similar)
35. The Remaining Sleekcraft Factors.
36. The remaining Sleekcraft factors either indicate a high likelihood of confusion or are at least not contrary to such a finding:
The Strength of Big's Mark:
37. To the extent that the "TaxHQ®" mark is characterized as suggestive rather than arbitrary, the mark is presumed to be weak. However, a weak mark can be strengthened through long use of the mark, advertising expenditures and actual marketplace recognition. See Brookfield, 174 F.3d at 1058. All those factors favor the strength of Big's mark: (a) Big has spent hundreds of thousands of dollars since 1997 promoting its services in its TaxHQ newsletter; (b) Big has invested millions of dollars in developing and advertising its website under the "TaxHQ®" mark; and (c) Big's TaxHQ website has received national recognition from the accounting, corporate and legal communities. But even if this were not the case, any perceived weakness in the "TaxHQ®" mark would not outweigh the three other factors addressed above, which clearly demonstrate a high likelihood of confusion. See Brookfield, 174 F.3d at 1058-59 (where the products involved are closely related and the parties' Internet domain names are nearly identical, "the strength of the mark is of diminished importance in the likelihood of confusion analysis."); New West Corp. v. NYM Co., 595 F.2d 1194, 1202 (9th Cir. 1979)(similar).
The Counterdefendants' Intent in Selecting and Using Their Mark:
38. As no discovery has yet occurred, Big cannot categorically state that the Counterdefendants were aware of Big's prior use of the "TaxHQ®" mark when they allegedly started using their infringing mark in March 2003. It is clear, however, that given their contact with Big in fall 2004, they were aware of Big's use of that mark in newsletters and on the Internet well before they registered the virtually identical domain name "TaxHQ.NET" in March 2007 and set up a competitive website using that name. The only inference that can be drawn from those facts is that they intended their website to be confused with Big's. See Brookfield, 174 F.3d at 1059 ("[I]ntentional registration of a domain name knowing that the second-level domain is another company's valuable trademark weighs in favor of likelihood of confusion.").
The Degree of Care Likely to Be Exercised by Purchasers in Selecting Services
39. Many of the Internet users that visit the parties' websites are likely to be sophisticated, which may help to mitigate some of the confusion between the Counterdefendants' site and services and those of Big. However, it is likely that a significant number of users lack that sophistication, particularly if they are seeking services for the first time. In such cases where consumer sophistication varies either as to the product or service or to the use of the Internet to obtain the product or service, the likelihood of confusion is measured against the likely standard of care exercised by "the least sophisticated consumer." .See Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277,293 (3d Cir. 1991). Thus, although this factor is not dispositive, it favors finding that confusion is likely here.
40. Evidence of Actual Confusion:
41. Big has not yet encountered evidence of substantial actual confusion, but the lack of such evidence appears to be attributable largely to the recency of the Counterdefendants's registration of the "TaxHQ.net" domain name last March and the apparent recency of their use of the mark on their website. Such confusion appears inevitable as time goes on.
Likelihood of Expansion in Service Lines
42. The likelihood of expansion of product lines is relatively unimportant where, as here, two companies already compete to a significant extent, inviting public confusion. See Brookfield, 174 F.3d at 1060.
The Counterdefendants' Use of "TaxHQ" and Variations of that Mark in Their Website keywords Also is Likely to Cause Confusion.
43. The Counterdefendants' use of "TaxHQ" as keywords on their website also is likely to engender consumer confusion. In its recent decision in Brookfield, the Ninth Circuit recognized that the use of keywords that are confusingly similar to another's protected mark can result in "initial interest confusion," where Internet users searching for one site are diverted by the keywords to another. Brookfield, 174 F.3d at 1062. "Although there is no source confusion in the sense that consumers know they are patronizing another site rather than the site they originally intended, the owner of the site using the confusingly similar keywords "improperly benefits from the goodwill" that the owner of the other site has developed in its mark. See also id. at 1064 ("Using another's trademark in one's metatags is much like posting a sign with another's trademark in front of one's store."); Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d 1394, 1405 (9th Cir. 1997) (use of another's trademark in a manner calculated "to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion, may be still an infringement."). Applying those standards here, it is evident that the Counterdefendants' keywords are identical or virtually identical to Big's mark "TaxHQ®" and that the keywords are being used on a website that is promoting services the same as and similar to those offered by Big and displaying a mark deceptively similar to Big's. Moreover, although intent is not required to show infringement, as Counterdefendants' knew of Big's use of "TaxHQ" as a domain name before they registered their website domain name, it is a fair inference that they also knew that using "TaxHQ" keywords on their site would divert Internet users to their site. In such circumstances, the Counterdefendants' use of the "TaxHQ" keywords is likely to confuse the consuming public and should be enjoined. See Brookfield, 174 F.3d at 1065-66 (barring use of "MovieBuff' as metatag where it was confusingly similar to mark "MovieBuff'); Playboy Enters. v. Asiafocus Int'l, Inc., No. Civ. 97-734-A, 1998 U.S. Dist. LEXIS 10359 at *8, *18 (E.D. Va. Feb. 2, 1998) (using "Playboy" and "Playmate" as keyword-metatags infringed marks owned by Playboy), adopted, 1998 U.S. Dist. LEXIS 10459 (E.D. Va. Apr. 10, 1998); Playboy Enters. v. Calvin Designer Label, 985 F. Supp. 1220, 1221 (N.D. Cal. 1997) (likely success on the merits where use of "Playboy" as a metatag infringed mark "Playboy").
44. ALL THE OTHER FACTORS FAVOR GRANTING A PRELIMINARY INJUNCTION.
A. Big Will Suffer Irreparable Injury Unless the Counterdefendants' Infringing Uses Are Enjoined and Such an Injunction Is in the Public Interest.
Once a party demonstrates a likelihood of confusion, it is ordinarily presumed that it will suffer irreparable harm unless injunctive relief is granted. See, e.g., Metro Pub. Ltd. v. San Jose Mercury News, 987 F.2d 637, 640 (9th Cir. 1993). That presumption is buttressed here by the fact that Big has invested millions of dollars since 1997 in developing and advertising services under its "TaxHQ®" marks throughout the country, including Washington. Allowing Counterdefendants to continue infringing that mark, especially on their website and as a domain name and keywords, deprives Big of the commercial benefit it intended to and is entitled to derive from that investment. That loss increases each day that Counterdefendants' infringement is allowed to continue. Issuing a preliminary injunction also will serve the public interest because it would avoid the inevitable public confusion that will otherwise result. See Tally-Ho, Inc., 889 F.2d at 1029.
B. The Balance of Hardships Favors Big.
45. The balance of hardships tips sharply in Big's favor. In contrast to the substantial injury that Big is suffering from Counterdefendants' infringement, Big expects that discovery will show that until 2007, the only investment of any note that the Counterdefendants made to promote their mark was the cost of placing an advertisement using the mark in the Seattle newspaper. Big also expects the evidence to show that Counterdefendants decided to use the "TaxHQ.NET" domain name and the "TaxHQ" keywords only after learning of Big's use of that mark on the TaxHQ® website. Given that knowledge, any hardship that the Counterdefendants may encounter from discontinuing their use of their infringing marks, particularly on their website, is self-inflicted and should carry no weight in determining whether a preliminary injunction should issue.
46. Conclusion: Big's application for a preliminary injunction should be granted and the Court should enter an order consistent with the proposed order accompanying Big's application.
We will deal with Big's discovery next.
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