Federal District Court Opinions

GONANNIES, INC. v. GOAUPAIR.COM, INC., (N.D.Tex. 12-7-2006)
GONANNIES, INC., et al., Plaintiffs, v. GOAUPAIR.COM, INC.,
et al., Defendants. Civil Action No. 3:06-CV-0631-L.
United States District Court, N.D. Texas, Dallas Division.
December 7, 2006

MEMORANDUM OPINION AND ORDER

SAM LINDSAY, District Judge

Before the court is Plaintiffs’ Motion for Preliminary
Injunction, filed September 15, 2006.[fn1] Having considered
the motion, response, reply, the contents of the appendices
submitted by both parties in support of their briefing,
Plaintiffs’ Verified First Amended Complaint, along with
the record and applicable law, the court denies Plaintiffs’
Motion for Preliminary Injunction.

I. Factual and Procedural Background

This lawsuit involves two companies in the domestic
personnel staffing industry. Plaintiff GoNannies, Inc.
(“GoNannies”) is a closely held Texas corporation in the
business of matching domestic personnel with families who
are in need of such services. Plaintiff Monta Caprise
Spooner Fleming (“Fleming”) owns 100 percent of GoNannies’s
stock and is its president. Defendants are GoAuPair
Operations, LLC (“GoAuPair Operations”), a domestic
personnel staffing company doing Page 2 business in Utah,
along with its manager, A. William Kapler, III.[fn2] The
following facts pertinent to resolving Plaintiffs’ Motion
for Preliminary Injunction are taken from the evidence
before the court contained in the parties appendices
submitted with their supporting briefs, including
affidavits and exhibits, and Plaintiffs’ First Amended
Complaint, which is verified.[fn3]

Plaintiffs first used the term “GoNannies” in commerce in
July 2003. Flemming registered the Internet domain name
www.gonannies.com on or about July 9, 2003. Fleming applied
for federal registration of the mark “GO NANNIES” on or
about July 28, 2003, and the United States Patent and
Trademark Office granted her application and registered the
mark on August 23, 2005.

In the beginning of 2004, GoAuPair Operations purchased
substantially all of the assets of Exploring Cultural and
Educational Learning, Inc. (“Exploring Cultural”).
Exploring Cultural did business under the names “goAUPAIR”
and “goNANI.” Explorer Learning began using “goAUPAIR” and
“goNANI” “as trade names for its business as early as 1999.
Sometime in 2000, Explorer Learning launched a website at
www.gonani.com. Explorer Learning used the term “goNANI”
continuously as part of its print advertising, online
advertising and telephone directories. From the time
GoAuPair Operations purchased Explorer Learning’s assets in
early 2004, it has also Page 3 continuously used the term
“goNANI” as part of its print advertising, online
advertising and telephone directories, and has continuously
used the domain name www.gonani.com.

Defendants have submitted copious documentary evidence
that Defendants’ and Explorer Learning’s use of the term
“goNANI” began as early as 1999, many years before
Plaintiffs adopted and used the term “Go Nannies.” See
generally Decl. of A. William Kapler, III and Exs. A-P.
Such evidence includes, without limitation: records
reflecting that the domain name www.gonani.com was
registered on December 19, 1999, more than three (3) years
before Fleming registered www.gonannies.com (Kapler Decl.
¶ 4 and Ex. A); records reflecting that the website
www.gonani.com was online as early as May 2001 (id. ¶
5 and Ex. J); evidence that “goNANI” was registered as a
dba in the State of Utah as of April 20, 2000 (id. ¶
8 and Ex. C); goNANI advertising flyers and an advertising
brochure from 2002 (id. ¶ 16 and Ex. K); and
numerous goNANI Employer Background and Information forms
from as early as 2001, and fee agreements from as early as
2002 (id. ¶¶ 9-14 and Exs. D-I).

On March 1, 2006, Plaintiffs discovered that Defendants
were using the name “goNANI.” On April 7, 2006, Plaintiffs
sued, among others, GoAuPair Operations and Kapler. In
their First Amended Complaint, Plaintiffs allege, inter
alia, that Defendants’ use of “goNANI,” which they allege
is almost identical and confusingly similar to their
federally registered trademark, “Go nannies,” constitutes
trademark infringement in violation of the Lanham Act, 15
U.S.C. § 1051, et seq. Plaintiffs also allege unfair
competition under the common law, false designation of
origin and deceptive trade practices, along with violations
of the Anticybersquatting Consumer Protection Act, in
connection with Defendants’ use of the term “goNANI” and
the website www.gonani.com. With regard to Defendants’ use
of “goNANI” with an (r) designation, Plaintiffs have sued
Defendants for Page 4 false advertising and misusing the
statutory notice of (r) in connection with the unregistered
term “goNANI.” Defendants have counterclaimed seeking,
among other things, cancellation of Plaintiffs’ registered
“Go Nannies” mark due to Defendants’ prior use of “goNANI.”

On September 15, 2006, more than six (6) months after
discovering Defendants’ allegedly infringing use, and more
than five (5) months after initially filing this lawsuit,
Plaintiffs filed an Emergency Motion for a Temporary
Restraining Order and Preliminary Injunction seeking an
order from the court barring, among others, Defendants
GoAuPair Operations and Kapler from using the term “goNANI”
and using the symbol (r) in connection with “goNANI.” By
order dated September 19, 2006, the court denied
Plaintiffs’ Emergency Motion for Temporary Restraining
Order, after considering, among other things, the extensive
delay between Plaintiffs’ filing of this lawsuit and
seeking a temporary restraining order. The court set a
briefing schedule for Plaintiffs’ Motion for Preliminary
Injunction, which is now ripe for adjudication. The facts
pertinent to resolve Plaintiffs’ Motion for Preliminary
Injunction have been taken from the evidence before the
court contained in the parties appendices submitted with
their supporting briefs, including affidavits and exhibits,
and Plaintiffs’ First Amended Complaint, which is verified.

II. Analysis

A. Applicable Legal Standard

There are four prerequisites for the extraordinary relief
of a temporary restraining order or preliminary injunction.
To prevail, Plaintiffs must demonstrate: (i) a substantial
likelihood of success on the merits; (ii) a substantial
threat of immediate and irreparable harm for which it has
no adequate remedy at law; (iii) that greater injury will
result from denying the temporary restraining order than
from its being granted; and (iv) that a temporary
restraining order will not disserve the Page 5 public
interest. Clark v. Prichard, 812 F.2d 991, 993 (5th Cir.
1987); Canal Authority v. Callaway, 489 F.2d 567, 572 (5th
Cir. 1974) (en banc). The party seeking such relief must
satisfy a cumulative burden of proving each of the four
elements enumerated before a temporary restraining order or
preliminary injunction can be granted. Mississippi Power
and Light Co. v. United Gas Pipeline, 760 F.2d 618, 621
(5th Cir. 1985); Clark, 812 F.2d at 993. Otherwise stated,
if a party fails to meet any of the four requirements, the
court cannot grant the temporary restraining order or
preliminary injunction.

B. Plaintiffs’ Motion for Preliminary Injunction

1. a substantial likelihood of success on the merits

In support of their Motion for Preliminary Injunction,
Plaintiffs argue that they have a substantial likelihood of
prevailing on the merits of their trademark infringement
claim since they registered the mark “GO NANNIES” on or
about July 28, 2003, and Defendants have since used a
nearly identical and confusingly similar name, “goNANI.” In
response, Defendants make several arguments. With regard to
Plaintiffs’ attempt to enjoin them from using the term
“GoNani,” Defendants contend that, based on the evidence
and applicable law, Plaintiffs have failed to carry their
burden of showing a substantial likelihood of prevailing on
the merits because the evidence is clear that Defendants
were the first to use “goNANI” in nationwide commerce years
prior to Plaintiffs’ claimed first use in July 2003. Thus,
Defendants contend that the likely outcome is that GoAuPair
Operations will prevail against Plaintiffs on its
counterclaim for cancellation of the registered “GoNannies”
mark. As to Plaintiffs’ attempt to enjoin Defendants from
allegedly “misusing the statutory notice of ® in connection
with the unregistered term “GoNANI” and from falsely
advertising “goNANI(r),” Defendants contend that in
Plaintiffs’ Motion for Preliminary Page 6 Injunction,
Plaintiffs only address their claim for trademark
infringement under the Lanham Act, and neglect to suggest
that the use of the (r) designation is causing them harm,
much less irreparable harm. Alternatively, Defendants
contend that Plaintiffs’ delay in seeking injunctive relief
defeats any argument that absent an injunction they will be
subjected to irreparable harm.

It is black letter trademark law that “it is not the
registration, but only actual use of a designation as a mark
that creates rights and priority over others . . . [I]n the
United States, the rule of priority is that ownership and
priority go to the party who was the first to use.” J.
Thomas McCarthy, McCarthy on Trademarks § 16:1 (West
2006). As stated by the Fifth Circuit:

Ownership of trademarks is established by use, not
registration. The first one to use a mark is generally
held to be the “senior” user and is entitled to enjoin
other “junior” users from using the mark, or one that is
deceptively similar to it, subject to the limits of the
senior user’s market and natural area of expansion.

Union Nat’l Bank of Texas, Laredo, Texas v. Union Nat’l Bank
of Texas, Austin, Texas, 909 F.2d 839, 842 (5th Cir. 1990)
(footnote omitted) (emphasis added).

In this case, as already set forth above (see supra at 3),
Defendants have presented copious evidence that Defendants’
and Explorer Learning’s use of the term “goNANI” began as
early as 1999, many years before Plaintiffs adopted and
used the term “Go Nannies.” See generally Decl. of A.
William Kapler, III and Exs. A-P. Evidence of such
extensive prior use, at a minimum, defeats Plaintiffs’
argument that it has a substantial likelihood of prevailing
on the merits on its claims of trademark infringement under
the Lanham Act.[fn4] Page 7

With regard to Plaintiffs claims relating to Defendants’
alleged use of the (r) designation in connection with the
term “goNANI,” as set forth directly below, even if
Plaintiffs have established a substantial likelihood of
prevailing on the merits, which the court assumes without
finding, they have failed to establish that such use is
causing them irreparable harm.

2. a substantial threat of immediate and irreparable harm

In support of this prong, Plaintiffs argue that Defendants
continued use of the term “goNANI” is “likely to cause
confusion among consumers as to the source of the products
and services offered in connection with the designation.
This substantial likelihood of confusion, by law, results
in immediate and irreparable harm.” Pl. Mot. at 11 (and
cases cited therein). Irreparable harm requires a showing
that: (1) the harm to Plaintiffs is imminent (2) the injury
would be irreparable and (3) that Plaintiffs have no other
adequate legal remedy. See Chacon v. Granata, 515 F.2d 922,
925 (5th Cir. 1975). In the Fifth Circuit, “preliminary
injunctions will be denied based on a failure to prove
separately each of the four elements of the four prong test
for obtaining the injunction.” See GTE Card Services, Inc.
v. AT & T Corp., 1997 WL 74712, *2 (N.D. Tex. Feb. 12,
1997) (Fitzwater, J.), aff’d, 124 F.3d 191 (Table Decision)
(5th Cir. 1997) (quoting Plains Cotton Coop. Ass’n of
Lubbock, Tex. v. Goodpasture Computer Serv., Inc., 807 F.2d
1256, 1261 (5th Cir.) (holding in copyright infringement
case that rule of presumed injury upon finding of
likelihood of success on the merits is not established in
Fifth Circuit, and affirming denial of preliminary
injunction where appellant did not persuade district court
or circuit court that “any harm stemming from the alleged
infringement . . . is not compensable in damages”), cert.
denied, 484 U.S. 821 (1997)). Similarly, in the context of
a claim for trademark infringement under the Lanham Act,
the Fifth Circuit has declined to presume the existence of
irreparable harm. Id. (and cases cited therein). Page 8
The Fifth Circuit has stated in a Lanham Act case that “a
plaintiff must also show that it will suffer irreparable
harm if the injunction is not granted.” Seven-Up Co. v.
Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir. 1996)
(addressing denial of permanent injunction in Lanham Act
§ 43(a) claim)). In short, even presuming that
Plaintiffs had established a substantial likelihood of
prevailing on the merits, the court rejects Plaintiffs’
argument that a substantial threat of irreparable injury is
to be presumed in such a case. The court determines that,
as an alternative ground for denying Plaintiffs’ Motion for
Preliminary Injunction, Plaintiffs have failed to carry
their burden of persuasion that their real or threatened
injuries cannot be compensated by monetary damages.
Plaintiffs have not introduced any evidence of their own to
show a threat of irreparable injury which cannot be
adequately compensated by monetary damages.

Moreover, even if the Fifth Circuit were to entertain a
presumption of irreparable harm under the circumstances
presented in this case, the court agrees with Defendants’
argument that Plaintiffs’ delay in seeking a preliminary
injunction rebuts any presumption of irreparable harm. The
law is well-established that:

[D]elay in seeking a remedy is an important factor
bearing on the need for a preliminary injunction. Absent a
good explanation, a substantial period of delay militates
against the issuance of a preliminary injunction by
demonstrating that there is no apparent urgency to the
request for injunctive relief. Evidence of an undue delay
in bringing suit may be sufficient to rebut the
presumption of irreparable harm.

Wireless Agents, L.L.C. v. T-Mobile USA, Inc., 2006 WL
1540587, *3 (N.D. Tex. June 6, 2006) (Fitzwater, J.)
(internal citations and punctuation omitted). Although
Plaintiffs first learned of the alleged infringing conduct
on March 1, 2006, and filed this action on April 7, 2006,
they nonetheless did not file the present motion seeking
injunctive relief until September 15, 2006, and only after
Page 9 settlement negotiations had soured.[fn5] Based on
these facts, the court determines, as it did in denying
Plaintiffs’ request for an emergency temporary restraining
order (see Order, September 19, 2006), that Plaintiffs’
undue delay would be sufficient to rebut any possible
presumption of irreparable harm. See generally Tough
Traveler, Ltd. v. Outbound Prod., 60 F.3d 964, 968 (2nd
Cir. 1995) (vacating preliminary injunction where movant
waited four (4) months to seek a preliminary injunction
after filing suit); Citibank, N.A. v. Citytrust, 756 F.2d
273, 276 (2nd Cir. 1985) (ten (10) week delay in seeking
injunction for trademark infringement undercut claim of
irreparable harm); Boire v. Pilot Freight Carriers, Inc.,
515 F.2d 1185, 1193 (5th Cir. 1975) (affirming district
court’s denial of temporary injunctive relief where movant,
among other things, delayed three (3) months in making its
request).

III. Conclusion

For the reasons set forth above, the court denies
Plaintiffs’ Motion for Preliminary Injunction. As set forth
above, Plaintiffs have failed to demonstrate a substantial
likelihood of prevailing on the merits and, alternatively,
have failed to demonstrate that they will suffer immediate
and irreparable injury for which they have no adequate
remedy at law.

[fn1] The original title of Plaintiffs’ motion is
“Plaintiffs’ Emergency Motion for a Temporary Restraining
Order and Preliminary Injunction.” By order dated September
19, 2006, the court denied Plaintiffs’ Emergency Motion for
Temporary Restraining Order and set a briefing schedule for
Plaintiffs’ Motion for Preliminary Injunction, which is
ripe for adjudication.

[fn2] Kapler has filed a motion to dismiss for lack of
personal jurisdiction that is pending before the court.
Kapler states that by responding to Plaintiffs’ Motion for
Preliminary Injunction he is not waiving his jurisdictional
arguments. Plaintiffs have also sued and sought injunctive
relief against GoAuPair.com, Inc. Defendants, however, have
submitted evidence that this entity does not exist. See
Declaration of A. William Kapler, III in Opposition to
Motion for Preliminary Injunction ¶ 27. Another
Defendant, Jacque Bray-Butler, Ph.D., has filed a motion to
dismiss for lack of personal jurisdiction, which is pending
before the court. Plaintiffs have not sought injunctive
relief against her.

[fn3] In support of their Motion for Preliminary
Injunction, Plaintiffs rely on Plaintiffs’ First Amended
Complaint, which is verified. Along with their reply brief,
Plaintiffs submitted as evidence the “Declaration of Monta
Caprise Spooner Fleming in Support of Plaintiff[s]’ Reply
to Response to Plaintiff[s]’ Motion for Preliminary
Injunction” and exhibits attached thereto. The evidence
submitted by Defendants in opposition to Plaintiffs’ Motion
for Preliminary Injunction includes the “Declaration of A.
William Kapler, III in Opposition to Motion for Preliminary
Injunction” and exhibits thereto.

[fn4] The full extent of Defendants’ and Explorer Learning’s
prior use of the term “GoNani” is an issue of fact, and
cannot be determined conclusively at this time. The
evidence of prior use presented, however, is sufficient to
defeat Plaintiffs’ Motion for Preliminary Injunction.

[fn5] Plaintiffs contend in their reply brief that the delay
was caused by counsel for Defendants, who allowed them
repeated extension to file pleadings during ongoing
settlement discussions which eventually fell through.
Beyond these statements, however, Plaintiffs do not direct
the court to evidence that Defendants are responsible for
the delay. In any event, although settlement discussions
might entail some delay in seeking injunctive relief, it is
difficult to see how they would support Plaintiffs’ delay
of over six (6) months from the time of learning of the
alleged infringing conduct and seeking injunctive relief
from the court. Page 1