Small, in its response to Big's motion for preliminary injunction, starts with its own allegations as to the facts, then expands upon them. Thereafter, like Big, it deals with several legal questions, the most important of which is the likelihood of confusion. Small agrees with Big that, in determining whether a likelihood of confusion exists, the Ninth Circuit Court of Appeals (the Court of Appeals for the district courts in Washington) relies on the Sleekcraft test. Small's response is supported by (side trip) the declaration of John Cpaatty.
As in the case of Big, particularly noteworthy items in Small's response appear in bold. Small emphasizes priority of filing with the USPTO, priority of use with respect to services, Big's knowledge of such priority before it applied for any trademarks and before it set up its Web site, the three years of coexistence, Big's knowledge that Small's main site (and its first site) was abouttax.com (which was operational for over a year prior to the time Big claimed it became aware of TaxHQ.net), the representations made by Big in its applications for trademark registration with the USPTO, and the discontinuance of TaxHQ as the name of Big's newsletter.
Legal procedure provides the party making a motion the opportunity to reply to new material contained in any response by the other side, and Big did reply (see below).
Considering the relative position of the parties at this point, it would appear that the strongest positive point for Big is first use in 1997 and that the strongest negative point for Big is Small's behavior with respect to TaxHQ.net and the keywords. Conversely, the strongest positive point for Small is first registration coupled with knowledge of the same by Big and failure to act in any way over an extended period of time, lending credence to the idea that Big did not view Small's mark as creating a likelihood of confusion with TaxHQ (for the newsletter). The strongest negative point for Small is Big's trouble with dates (examples: claimed first discovery in July, 2007 and claimed registration of TaxHQ.net in March, 2007 instead of the actual date, which was June 2005).
As to setting up the second website (TaxHQ.net) and the use of the keywords, Small and Cpaatty were either tempting fate to steal a little business or really believed that the two parties dealt with a different clientele and that there was no likelihood of confusion. In any event, Big has done a good job of arguing that Small's behavior was less than noble.
On the other hand, Big has (by sticking to its story that it had no knowledge of Small's use of TaxHQ until June, 2007 and that the claimed registration of TaxHQ.net did not occur until two years later than the actual date, presumably to buttress its claim of lack of knowledge until shortly before the cease and desist order was sent) done some damage to its credibility. Proceed to Big's reply to Small's response to the preliminary injunction.
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