District court erred in granting preliminary injunction, Second Circuit rules

The US Court of Appeals for the Second Circuit has reversed a district court’s grant of a preliminary injunction for abuse of discretion based on an erroneous strength evaluation of descriptive marks (City of New York v Henriquez, case 23/325, 16 April 2024, Livingston, CJ, Walker, Carney, JJ).

Case background

Juan Henriquez is a first responder with the Fire Department of New York (FDNY). In 2011, Henriquez began organising what he called “medical special operations conferences” (MSOCs) around the United States, eventually partnering with the FDNY. Six years into working with the FDNY, the relationship soured. Henriquez then applied to register MEDICAL SPECIAL OPERATIONS CONFERENCE as a trademark. 

The USPTO rejected his application on the basis that the mark was merely descriptive. Henriquez amended his application under Section 2(f) of the Lanham Act, which allows registration of descriptive marks that have been used on a “substantially exclusive and continuous basis” for at least five years. The USPTO agreed to register his mark.

The FDNY and the City of New York brought a suit seeking to cancel the trademark. Henriquez counterclaimed for infringement of the registered mark and the related unregistered mark ‘MSOC’. The district court granted Henriquez a preliminary injunction and barred the FDNY from using the terms ‘medical’, ‘special’ and ‘operations’ in its branding. The FDNY appealed.

The appeal

The FDNY raised two issues on appeal: whether the district court abused its discretion by enjoining the FDNY’s use of the marks and whether the district court granted an “overbroad” injunction. The Second Circuit agreed with the FDNY on the first issue and thus did not reach the second. 

The Second Circuit requires analysis of the eight likelihood-of-confusion factors under Polaroid when considering a preliminary injunction. While no single factor is dispositive, the strength of a mark “is especially important” and the court was “reluctant to affirm any preliminary injunction founded upon an erroneous strength analysis”.

The district court’s errors 

The Second Circuit found three “missteps” that led the district court to commit legal error by improperly categorising Henriquez’s two marks as “at least strongly suggestive”, when in fact the marks were inherently descriptive.

First, the Second Circuit explained that the district court did not properly consider Henriquez’s past concessions about his marks. Henriquez registered his mark under Section 2(f) of the Lanham Act – conceding descriptiveness. Henriquez also argued before the district court that both of his marks were valid based on secondary meaning, which is only necessary for descriptive marks. Because “[w]hat parties say about their marks matters”, the district court was wrong to ignore admissions of descriptiveness.

Second, the Second Circuit found that the district court did not properly consider the USPTO’s characterisation of the marks as descriptive. Courts should “accord great weight to the PTO’s conclusions” and only decline to follow those conclusions “for compelling reasons”. The court noted that the USPTO initially rejected Henriquez’s application and only granted registration under Section 2(f), which requires an admission that marks are descriptive – but have acquired secondary meaning. Registration under Section 2(f) does not alter the USPTO’s determination that a mark is inherently descriptive. The Second Circuit explained that the district court had not afforded this determination any weight, let alone “great weight”.

Last, the district court had failed to assess the marks’ distinctiveness within the relevant market. It determined that the marks were not descriptive to the general public, who may think that the Medical Special Operations Conference referred to conferences about medical surgeries instead of first-responder trainings. The real question was whether prospective MSOC attendees would find the marks descriptive. This suggested that the marks were merely descriptive.

These three missteps led the district court to err in granting Henriquez a preliminary injunction based on its findings with regard to the strength of the marks. The Second Circuit found that this error was enough to overturn the injunction, even though neither party briefed any other Polaroid factors.

Key takeaways 

Trademark registrations under Section 2(f) of the Lanham Act are valid and enforceable, but parties should be prepared to effectively assert or defend them by understanding the parameters of a secondary meaning registration.