Florida- and Utah-based providers of home alarm technology services are now complying with an order to cease uses of their acronym trademark following recent rulings against them rendered by the U.S. District Court for the Southern District of Florida and the U.S. Court of Appeals for the Eleventh Circuit. That district court preliminarily enjoined those providers from using the acronym APT in connection with their business, and denied their motion to stay the injunction.  The enjoined providers appealed the preliminary injunction order to the Eleventh Circuit, and filed an emergency motion for a stay of the injunction, but the Eleventh Circuit likewise denied that motion.

On March 11, 2013, the Eleventh Circuit docketed an appeal filed on March 5, 2013 by Alarm Protection Technology Florida, LLC, Jacob Dahl, Adam Schanz, and Alarm Protection Technology, LLC (collectively “Appellants”).  They appealed from a February 27, 2013 order from the Southern District of Florida, granting the above-described preliminary injunction in favor of plaintiff ADT LLC (“ADT”). In that order, the district court found, among other things, that ADT established “as a matter of law” that there was a likelihood of confusion between ADT and APT as used in connection with home alarm system products.

District Court’s Grant of Preliminary Injunction

The U.S. Supreme Court listed the general criteria for preliminary injunctions in federal cases: “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”^[1]  Citing  Eleventh Circuit law, the Northern District of Georgia has added: “The plaintiff’s likelihood of success on the merits is the most important of the four factors because if plaintiff is unable to make such a showing, the other requirements need not be considered.”^[2]

In assessing likelihood of success on the merits of ADT’s infringement claim, the district court evaluated several likelihood of confusion factors.  Some of the more notable findings by that court on this issue include:

• As to strength: “ADT’s mark is registered, pervasive and famous.”^[3]

• “Both [marks] are three-letter acronyms set in white sans-serif capital letters across a blue field, differing only by middle letter; the differing middle letters, P and D, look and sound alike; and both acronyms sound alike when spoken in door-to-door cold sales calls.”^[4]

• “Intent may be inferred because Defendants market identical products and services with an acronym strikingly similar in spelling and sound to the market leader’s name.”^[5]

After concluding that ADT established its infringement claim “as a matter of law for the purposes of awarding the preliminary injunction,” the district court found that the remaining three preliminary injunction criteria also favored issuance of a preliminary injunction.^[6]  The court thus granted ADT’s motion and required Appellants to, within 14 days from issuance of its order, “remove all prior or existing uses of the APT acronym wherever it appears, including without limitation all advertising and all customer yard signs, and to withdraw all registrations of tradenames with the Utah or other state authorities that claim or reserve the right to use a name that includes the APT acronym . . . .”^[7]

On March 5, 2013, the same date as Appellants filed their Notice of Appeal, they filed an Emergency Motion requesting the district court to stay its preliminary injunction order pending the appeal.  In an order entered March 11, 2013, the district court denied that Emergency Motion.

Appellants’ Motion Requesting Eleventh Circuit to Stay Preliminary Injunction

Under Rule 8 of the Federal Rules of Appellate Procedure, any litigant who previously moved in the district court to stay an injunction but was denied such relief, or who shows “that moving first in the district court would be impracticable” can file a motion with the appellate court to stay the injunction.  On March 12, 2013, Appellants filed such a motion with the Eleventh Circuit, designating it an Emergency Motion.^[8]

Under that appellate rule, courts assess the following factors in analyzing a motion to stay an injunction:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.^[9] 

In their motion, Appellants contended: “If Appellants are required to comply with the Injunction Order, they will have been forced to completely rebrand from the ‘APT’ mark already, so that any subsequent decision by the Eleventh Circuit in their favor would be too late.”^[10]

Appellants pointed out, interestingly, that: (1) at the time the district court issued its order, a motion to dismiss two of the defendants from the case, for lack of personal jurisdiction, was pending, but that the district court has not ruled on that motion;^[11] (2) on December 3, 2012, ADT had obtained a previous preliminary injunction on non-trademark counts, which led to a moratorium preventing Appellants’ sales force from selling services to current ADT customers absent specified safeguards;^[12] and (3) ADT’s trademark count was added to the case by way of amendment on December 15, 2012, almost 5 months after it filed the original complaint.^[13]

Appellants argued that ADT delayed in bringing its trademark claims, which occurred around 3 years after their Utah business was established and more than one year after their Florida business was established, and that this delay was “[p]erhaps the best evidence of lack of irreparable injury” to ADT.^[14]

In arguing that they were likely to succeed on the merits, Appellants asserted that ADT did not submit any survey evidence of actual confusion, and that the evidence of six alleged instances of actual confusion did not link the alleged confusion to use of the trademarks.^[15]  They also argued that none of those instances occurred after imposition of the moratorium following the grant of the first preliminary injunction.^[16]

Despite these and other arguments set forth in Appellants’ Emergency Motion, the Eleventh Circuit denied that motion just one day after its filing.  In an order entered on March 13, 2013, the Eleventh Circuit issued its order, the full text of which provides:

Appellants’ “Emergency Motion to Stay Court’s February 27 2013 Order Granting Appellee’s Motion for Preliminary Injunction” is DENIED, as Appellants have failed to demonstrate that they qualify for the relief they request.  See Hilton v. Braunskill, 481 U.S. 770, 776, 107 S.Ct. 2113, 95 L.Ed.2d 724 (1987); Garcia-Mir v. Meese, 781 F.2d 1450, 1453 (11th Cir. 1986).

The Clerk is directed to treat any motion for reconsideration as a non-emergency matter.

Appellants’ Efforts to Comply with Preliminary Injunction

In an unopposed motion for extension of time filed with the Southern District of Florida on March 14, 2013 (one day after the Eleventh Circuit’s denial of the Emergency Motion to Stay Injunction), Appellants indicated the following:

3.   Defendants have made their best efforts to comply with the February 27, 2013

Order within the timeline provided. By the end of the day today, March 14, 2013, Defendants will have done the following:

a. Ceased use of the “APT” acronym in its trademarks and service marks;

b. Ceased use of the “APT” acronym in advertising;

c. Ceased use of the “APT” acronym in telephone numbers, email addresses, internet domain names and web page addresses;

d. Ceased use of the “APT” acronym in contract and legal documents;

e. Ceased use of the “APT” acronym on business cards and company stationary;

f. Instructed sales agents to cease use of the “APT” acronym in any manner, including in sales pitches;

g. Withdrawn registration of trade names containing the “APT” acronym with state authorities.

Appellants asked the court for another 30 days to remove existing customer yard signs and to have replacement signs printed.  On March 15, 2013, the court granted that motion.

The appeal is ADT LLC v. Alarm Protection Technology Florida, LLC et al., No. 13-11014, filed 03/05/13, and docketed 03/11/13 in the U.S. Court of Appeals for the Eleventh Circuit.

The underlying district court litigation is ADT LLC v. Alarm Protection Technology Florida, LLC et al., No. 12-80898-CIV-RYSKAMP/HOPKINS, U.S. District Court for the Southern District of Florida.