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SNA, INC. v. ARRAY

May 28, 1999

SNA, INC. AND SILVA ENTERPRISES LIMITED, PLAINTIFFS,
v.
PAUL ARRAY AND HORIZON UNLIMITED, DEFENDANTS. RICHARD F. SILVA AND SNA, INC., PLAINTIFFS, V. DOUGLAS KARLSEN, A/K/A DOUGLAS JAWORSKI T/A TURBINE DESIGN, INC., DEFENDANT.



The opinion of the court was delivered by: Katz, Senior District Judge.

    FINDINGS OF FACT AND CONCLUSIONS OF LAW

The plaintiffs in these two consolidated cases are Richard Silva and two companies he operates, SNA, Inc. and Silva Enterprises, Ltd (SEL). Through these companies, Silva is in the business of manufacturing do-it-yourself kits for an amphibious aircraft called the Seawind. The defendants are Douglas Karlsen and a company he operates called Turbine Design, Inc. and Paul Array and a company he operates called Horizon Unlimited. Both of these companies are involved in the seaplane industry in various ways.

In these lawsuits, Silva contends that the defendants have breached contracts with his company, have defamed him and disparaged his company, have infringed on his company's trademark and trade dress rights, have engaged in unfair competition by misappropriating his company's trade secrets, have interfered with his company's contractual relations and prospective business relations, and have engaged in a civil conspiracy. Defendants Karlsen and Turbine Design have counterclaimed, alleging antitrust violations and seeking to invalidate Silva's patent and trademark.

Plaintiffs have moved for a preliminary injunction. Upon consideration of the motion, the defendants' responses thereto, and after a hearing, the court makes the following findings of fact and conclusions of law.

Preliminary Injunction Standard

In deciding whether to grant a preliminary injunction, the court must consider whether: (1) the movant has shown a reasonable probability of success on the merits; (2) the movant will be irreparably injured by denial of relief; (3) granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) granting the preliminary relief will be in the public interest. See Council of Alternative Political Parties v. Hooks, 121 F.3d 876, 879 (3d Cir. 1997). A request for preliminary relief should only be granted if the court is convinced that all factors favor the relief. See Opticians Ass'n of Amer. v. Independent Opticians of Amer., 920 F.2d 187, 192 (3d Cir. 1990). Plaintiffs have a high burden in showing irreparable injury:

  Establishing a risk of irreparable harm is not
  enough. A plaintiff has the burden of proving a clear
  showing of immediate irreparable injury. The
  requisite feared injury or harm must be irreparable —
  not merely serious or substantial, and it must be of
  a peculiar nature, so that compensation in money
  cannot atone for it.

ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987) (internal quotes and cites omitted). An injunction should not be granted if a legal remedy is available: "The availability of adequate monetary damages belies a claim of irreparable injury." Frank's GMC Truck Ctr., Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir. 1988).

Breach of Contract

On this record, it is unclear whether Karlsen breached a contractual obligation to plaintiffs. The pieces of paper bearing Karlsen's signature are unclear as to just what was agreed (i.e., whether he agreed not to copy parts from any Seawind, or just from the particular planes to which these contracts explicitly refer). The ambiguities are not persuasively resolved by the parol evidence on this record. It is also unclear whether Array breached his purchase agreement with SNA, because it is unclear whether the non-copy provision in the contract would apply to a situation where he had molds made from a plane other than his own.*fn2

Additionally, as to both Horizon Unlimited's contract and Karlsen's contracts, if the parol evidence does establish they mean what plaintiff contends, there is a serious question whether the contracts are enforceable as a matter of public policy because of their attempt to create a private patent for a product not qualifying for federal patent law protection. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989) (holding that Florida statute prohibiting using direct molds to copy unpatented boat hulls was pre-empted by federal patent laws); compare Aronson v. Quick Point Pencil Co., 440 U.S. 257, 99 S.Ct. 1096, 59 L.Ed.2d 296 (1979) (ruling that private agreement did not run afoul of patent law because it did not forbid anyone from copying an unpatented product).

If, notwithstanding these factual and legal obstacles, plaintiffs are able to prove their claims, money damages will provide an adequate remedy at law, as there is no demonstrated threat of future harm which injunctive relief can rectify in any practicable way.

Defamation and Commercial Disparagement

For purposes of the preliminary injunction, the court can only be concerned with statements currently on one or the other of defendants' webpages. Any defamation or disparagement that was there in the past and has since been removed is properly remedied by a damages action, and the court cannot enjoin possible future defamation.*fn3 During closing argument, plaintiff's counsel conceded that the court should not edit anyone's web page.

The type of statements made on Horizon Unlimited's webpage is seen by examining the site's "Seawind Information Menu," which is in essence a table of contents to all the Seawind-related materials on the site. See Pl.Ex. 25. It contains each back issue of the Seawind Builders Newsletter and some listings with titles such as "My Plane" and "A lane Called the Seawind." It also contains an entire sections called "SNA and Dick Silva," with titles including "Dick Silva commits Patent Fraud," "Dick Silva copies parts," and "Dick Silva copies more parts."*fn4 Every listed title is a link to a page of the site that then contains detailed materials and commentary on the named topic.

Plaintiffs have some likelihood of success of proving that some of the childish and mean statements made on the website defame Silva or disparage SNA, if they are able to point to particular statements and prove the required elements as to those particular statements, which they have not successfully done on the present record. If they do, there will an adequate remedy at law for damages if the statements are untrue and there is no persuasive showing of irreparable injury which can be prevented by a preliminary injunction at this time.

Trademark Infringement

In trademark infringement cases, the ongoing likelihood of confusion itself constitutes an irreparable injury. See Opticians Ass'n of Amer. v. Independent Opticians of Amer., 920 F.2d 187, 195-97 (3d Cir. 1990) (holding that "since we have already held that the concurrent use of [plaintiff's mark by the defendants] creates the likelihood of confusion, the inescapable conclusion is that there was also irreparable injury"). Thus, the irreparable injury inquiry is folded into the consideration of plaintiffs' likelihood of success on the merits.*fn5

The plaintiffs have a federally registered trademark consisting of a Seawind logo, and they claim to have a common law trademark in the word Seawind alone. The defendants use the word Seawind in their businesses in various ways: Turbine Design uses the phrase "Turbine Seawind" in marketing its services and has begun marketing a plane named the Harpoon that has been advertised as a "six-place Seawind" or "Super Seawind." Horizon Unlimited operates the Seawind Pilots Association, publishes The Seawind Builders Newsletter, ...


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