Toys "R" Us v. Akkaoui

Citation
Toys “R” Us, Inc. v. Akkaoui, 40 U.S.P.Q.2d (BNA) (N.D. Cal. 1996).

SUMMARY OF FACTS: Plaintiffs Toys “R” Us and Geoffrey, Inc., the holder of the Toys “R” Us trademark, seek a preliminary injunction against defendants (1) Mohamad Ahmad Akkaoui, (2) Lingerienet, and (3) Acme Distributors for trademark dilution and infringement. Defendants were all doing business as Adults “R” Us. Also, plaintiffs seek attorneys’ fees and costs.

On August 28, 1996, plaintiffs learned that defendants were operating a website and shopping service featuring various sexual devices and clothing under the name “adultsrus.” Plaintiffs demanded that the site be shut down, but the demand was turned down. Thereafter, plaintiffs filed suit alleging (1) trademark dilution, (2) trademark infringement, (3) false designation of origin, and (4) unfair competition.

On October 2, defendants filed an objection to plaintiffs’ motion because they claim that since they had stopped using names such as “Adults R Us” by October 1, there was no longer any activity for the plaintiffs to enjoin. But the plaintiffs reply that as of October 4, their sites could still be found on the Internet. Therefore, plaintiffs continue with their request that the court issue a preliminary injunction to ensure a more thorough removal of the name “Adults R Us” from the Internet and to prevent defendants from infringing or diluting plaintiff’s trademarks again.

Preliminary injunction: To grant a preliminary injunction, the court must consider the following four factors: (1) the likelihood of the moving party's success on the merits; (2) the possibility of irreparable injury to the moving party if relief is not granted; (3) the extent to which the balance of hardships favors the respective parties; and (4) in certain cases, whether the public interest will be advanced by granting the preliminary relief.

The moving party is entitled to a preliminary injunction if it establishes either of the following: (1) a combination of the first and second factors above or (2) the existence of serious questions going to the merits, the balance of hardships tipping sharply in its favor, and at least a fair chance of success on the merits.

Here, the plaintiffs establish a combination of the first and second factors above:

(1) Probability of Success on the Merits: The plaintiffs are suing the defendants for trademark dilution and infringement.

(a) Trademark dilution: 15 U.S.C. 1125(c)(1) states that the owner of a famous mark is entitled to an injunction “against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark.” (Emphasis added). Upon determining whether a mark is famous and distinctive, the Court may consider the factors including: (1) how inherent or distinct the mark is; (2) the duration and extent of use of the mark in connection with the goods or services that the mark is used with; (3) the duration and extent of advertising and publicity of the mark; and (4) the degree of recognition of the mark in the trading areas and channels of trade use by the marks’ owner and the person against whom the injunction is sought.

Applying various factors including those listed above, the Court finds that the Toys “R” Us family of marks were famous and distinct before the defendants began identifying themselves as “Adults R Us.” Plaintiffs have used the Toys “R” Us and Kids “R” Us marks for over two decades and have advertised their products through many channels. All marks have acquired a strong degree of distinctiveness. Therefore, Toys “R” Us and Kids “R” Us qualify as famous, distinctive marks and are eligible for protection from dilution.

Dilution defined: Dilution is defined as “lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception." This was established to protect famous marks from future uses “that blur the distinctiveness of the mark, tarnish, or disparage it.” The Court finds that the plaintiffs’ family of marks is tarnished by associating them with a line of sexual products that are conflicting with the image that the plaintiffs have attempted to maintain.

Thus, plaintiffs have established a strong probability of prevailing on the merits of their trademark dilution cause of action and thus the Court does not need to address their trademark infringement claim.

(2) Irreparable injury to the moving party if relief is not granted: This is the second factor that the Court must consider in its decision to grant a preliminary injunction. It establishes that a trademark loses the strength it once possessed when it has become diluted. Since plaintiffs have established that “Adults R Us” dilutes their trademarks, they have also established that they will likely suffer irreparable injury if “Adults R Us” continues.

ANALYSIS OF COURT’S DECISION: As to the plaintiffs’ request for a preliminary injunction against the defendants, because defendants have not thoroughly removed all references to “Adults R Us” from the Internet and have not informed the Court that a preliminary injunction would impose an undue burden on them, a preliminary injunction is appropriate. Therefore, plaintiffs are entitled to a preliminary injunction even if all references to “Adults R Us” have been removed from the Internet.

As to the plaintiffs’ request for attorneys’ fees and costs, the court is only authorized to award reasonable attorneys’ fees when a violation has actually succeeded on the merits. Here, the Court has only determined that plaintiffs are likely to succeed on the merits and thus does not a