Judge Recommends Denial of Sprint Preliminary Injunction Request in Nextel Trademark Case
Monday, July 09, 2018 | Comments

A Florida magistrate judge recommended denial of a preliminary injunction request from Sprint to stop Florida-based Nextel World (NW) and Retrobrands from selling radio products under the Nextel name. Judge Lurana Snow cited Sprint’s delay in requesting the injunction and failure to prove that there was a likelihood that Sprint will prevail on the merits of its case, two components required in determining if an injunction is appropriate.

In January, Retrobrands filed a trademark application for the Nextel trademark with the U.S. Patent and Trademark Office (USPTO) and an application to cancel Sprint’s remaining Nextel-related trademarks, arguing that Sprint had abandoned the trademark. Sprint responded by filing a lawsuit in Florida district court in April, arguing that it had not abandoned its trademark, and Retrobrands and Nextel World are stealing the Nextel trademark to use its goodwill to sell subpar radio products.

Sprint also filed a motion for a preliminary injunction to prevent the two companies from using the Nextel brand during the lawsuit. Sprint argued that Retrobrands’ and NW’s use of the Nextel trademark harms Sprint because it and Nextel are inextricably tied together in consumers’ consciousness, and so any issues with the products will reflect back onto Sprint and not the two companies.

One factor in determining whether a preliminary injunction is appropriate is whether there is a “substantial likelihood” that a plaintiff will succeed on the merits of the case.

“Even if Sprint had not delayed in seeking injunctive relief, the court is persuaded by defendants’ argument that Sprint’s lack of use of the Nextel mark compels a conclusion that there is not a substantial likelihood of Sprint’s success on the merits and, thus, injunctive relief is unwarranted at this stage,” Snow’s wrote in her findings.

Under the Lanham Act, a trademark is assumed abandoned if a company has stopped using the trademark with no intent to begin using it again.

In their response to the motion for a preliminary injunction, Retrobrands and NW pointed to public statements from Sprint executives saying that it did not plan to bring back Nextel when it shut down the Nextel iDEN network in 2012. Additionally, the two companies argued that Sprint had removed any references to Nextel in its financial reports for the past several years.

Sprint argued that it was still using the Nextel trademark on several Sonim Technologies’ Strike phones that it sells. An image in court documents shows the phrase “Nextel Inspired” on the back of boxes for those phones. Retrobrands and NW argued that such a phrase was not enough to prove use.

“Sprint does not dispute that it has cancelled, abandoned or allowed to expire several of its registrations of Nextel-related marks but argues that it still has at least one active mark and has the right to protect the Nextel mark even if it isn’t being actively used today,” Snow wrote. “This argument must fail. As noted by the Eleventh Circuit, ‘trademark rights flow from use, not from intent to protect rights. Were the rule otherwise, a party could hold trademarks that it never intended to use but did not want to allow others to use.’ ”

Additionally, Snow found that Sprint’s request for a preliminary injunction was undermined by a delay between Sprint discovering the alleged trademark infringement and requesting an injunction.

Stephen Calabrese, owner of NW, filed an application for the Nextel trademark in 2016, and then had a booth with Nextel-branded products at the International Wireless Communications Expo (IWCE) in 2017. Sprint became aware of the products at that show after several attendees expressed confusion that the Nextel booth was so far away from the Sprint booth, according to court documents.

Sprint began sending cease-and-desist letters to NW in April 2017, and in October 2017, NW ceased use of the trademark for a while before partnering with Retrobrands to continue its efforts to obtain the trademark. As late as February of this year, Sprint received notice from Calabrese’s lawyer that he was no longer using the trademark, Sprint said in court documents.

After his application for the trademark was denied, Calabrese partnered with Retrobrands, which filed the applications for the trademark and for canceling Sprint’s trademark in January. Retrobrands is licensing the trademark to NW, Retrobrands owner Jeff Kaplan said in an interview last month.

Sprint filed its lawsuit and its request for a preliminary injunction in April.

“As observed by Magistrate Judge Torres in [Menudo Int’l vs. Miami Prod.], when a plaintiff ‘delays filing a complaint after a substantial amount of time,’ it ‘undercuts the sense of urgency … and suggests that there is, in fact, no irreparable injury,’ ” Snow wrote.

Snow said that Sprint had not provided a reasonable explanation for why it had delayed in requesting a preliminary injunction.

“There are periods of several months of unexplained delay between Sprint’s efforts to protect its alleged use of the Nextel mark and the filings of this case,” Snow wrote. “In addition, Sprint has not offered an explanation for why it failed to monitor proceedings before the USPTO related to the Nextel mark.”

Snow acknowledged Sprint’s efforts to settle the issue before it was brought to court by contacting NW through cease-and-desist letters and calls to NW’s attorney but noted that there was a delay of several months between when Sprint found those efforts were not successful and when it filed the lawsuit and request for injunction. “Sprint’s delay in seeking injunctive relief is fatal to its request for entry of a preliminary injunction, particularly where there is at least a colorable claim that Sprint’s indisputably limited, if any, use of the Nextel mark in the past five years has been merely to secure trademark rights to reserve the mark for future use,” Snow concluded. “As such, Sprint has not established a substantial likelihood of success on the merits which could support its request for entry of a preliminary injunction.”

Any objections to Snow’s findings from either side are due by July 19. Jose Martinez, the lead judge in the case, will make the final determination on the injunction.

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