American Board of Psychiatry & Neurology, Inc. v. Johnson-Powell

                  UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT

                                   

No. 97-1289

      AMERICAN BOARD OF PSYCHIATRY AND NEUROLOGY, INC.,

                    Plaintiff, Appellant,

                              v.

                 GLORIA JOHNSON-POWELL, M.D.,

                     Defendant, Appellee.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

      [Hon. George A. O'Toole, Jr. U.S. District Judge]
                                                                  

                                         

                            Before

                     Stahl, Circuit Judge,
                                                     

         Campbell and Bownes, Senior Circuit Judges.
                                                               

                                         

Roibin  J.  Ryan with  whom  Christopher  B. Sullivan,  Kirkland &
                                                                              
Ellis, Richard S.  Nicholson, and Cooke,  Clancy & Gruenthal,  L.L.P.,
                                                                             
were on brief for appellant.
Alice E. Richmond,  with whom Ann Pauly and Richmond, Pauly & Ault
                                                                              
LLP, were on brief for appellee.
           

                                         

                       OCTOBER 23, 1997
                                         


          CAMPBELL, Senior Circuit Judge.  Plaintiff American
                                                    

Board of Psychiatry and Neurology, Inc. ("ABPN") appeals from

the  district court's denial  of a preliminary  injunction to

order Dr. Gloria Johnson-Powell to desist from infringing its

certification  mark.  ABPN had alleged  in its complaint that

Dr. Johnson-Powell had  falsely claimed, both under  oath and

on  her curriculum  vitae, that  she  was ABPN-certified,  in

violation  of   the  Trademark  Act  of  1946,  15  U.S.C.   

1114(1)(a)-(b)  (the  "Lanham  Act").    While  seemingly  in

agreement that  Dr.  Johnson-Powell had,  in fact,  committed

such  infringements,  the  court  denied  relief  because  it

believed she  was unlikely to  infringe in the future.   ABPN

asserts on appeal  that the district court  erred in refusing

to grant  a the  preliminary injunction.   While the  case is

close, we cannot say that the district court acted beyond its

discretion; hence we affirm.

                        I.  BACKGROUND

          The facts are  largely undisputed.  ABPN is  a non-

profit Illinois corporation that certifies psychiatrists  and

neurologists  as  specialists qualified  in  their respective

fields.1   ABPN secured and  owns a federal  registration for

the mark:  "The American Board of Psychiatry  and Neurology."

                    
                                

1.  ABPN certification is optional and is distinct from state
licensure.

                             -2-


ABPN authorizes physicians  to use its mark if  they have met

ABPN's  requirements  and  received  an ABPN  certificate  or

license to use the mark.

          Dr.  Johnson-Powell is  a  prominent physician  and

psychiatrist who has often testified as an expert  witness in

court.   Although Dr. Johnson-Powell  is not certified by the

ABPN,  she claimed under  oath on several  occasions that she

was  ABPN-certified.    Dr. Johnson-Powell  first  made  such

statements  at a  deposition and  during  trial testimony  in

1991.  In  1993, after Dr. Johnson-Powell said  she was ABPN-

certified   in  a   deposition,   a  lawyer   challenged  her

certification status at  trial.  She proclaimed  ignorance of

whether  she  was actually  certified.    In 1995  she  again

misstated  her  status  at  a  deposition  and  during  trial

testimony.  In  addition to her sworn testimony, Dr. Johnson-

Powell also distributed  a resume on which she  claimed to be

certified and even included a purported certification number.

          ABPN   first   learned  of   Dr.   Johnson-Powell's

assertions in November of 1995.  ABPN wrote to her, inquiring

about her  actions.   She replied that  a clerical  error had

caused the inadvertent inclusion of a certification number on

her resume and that she had remedied the error.

          ABPN  brought  this  suit  for  certification  mark

infringement  on December  17,  1996  in  the  United  States

District  Court  for  the  District  of  Massachusetts.    On

                             -3-


December  30, the court granted a temporary restraining order

ex parte against  Dr. Johnson-Powell.  On January  23 and 24,

1997, both parties attended a preliminary injunction hearing.

ABPN  presented  documentary   evidence  and  testimony;  Dr.

Johnson-Powell, who did  not personally appear,  tendered her

affidavit  promising not to repeat her infringing conduct and

attaching a redacted resume that did not  include a reference

to ABPN  certification.  She  also asserted that she  has not

seen  patients  nor provided  expert  witness  services since

1995.

          Upon completion of the hearing, the district  court

denied  ABPN's request  for a  preliminary  injunction.   The

court  reasoned  that,  although ABPN  demonstrated  a strong

likelihood that it would prevail on the merits, it had failed

to demonstrate a sufficient likelihood of irreparable harm in

the near future.  ABPN brings this  interlocutory appeal from

the   district  court's  order  denying  its  request  for  a

preliminary injunction.2

                   II.  STANDARD OF REVIEW

          In trademark actions as in others, courts of appeal

will  reverse  a  district court's  denial  of  a preliminary

                    
                                

2.  Our  appellate  jurisdiction  rests  upon   28  U.S.C.   
1292(a)(1), which provides for  appeals from "[i]nterlocutory
orders  of the  district  courts . . . granting,  continuing,
modifying, refusing or dissolving injunctions."  Id.
                                                                

                             -4-


injunction  only if the district court abused its discretion.

See Camel  Hair & Cashmere  Inst. of Am., Inc.  v. Associated
                                                                         

Dry Goods  Corp., 799 F.2d  6, 12-13 (1st Cir.  1986) (citing
                            

Planned  Parenthood League  of Mass.  v.  Bellotti, 641  F.2d
                                                              

1006, 1009  (1st Cir.  1981)).    Application of  an improper

legal standard, however,  is never within a  district court's

discretion.   See Camel Hair, 799  F.2d at 13.   Similarly, a
                                        

district  court  abuses  its  discretion  if  it  incorrectly

applies the law to particular facts.  Id.  We review findings
                                                     

of  fact made  as  part  of the  district  court's denial  of

injunctive  relief under a  clearly erroneous standard.   See
                                                                         

Keds Corp.  v. Renee Int'l  Trading Corp., 888 F.2d  215, 222
                                                     

(1st  Cir. 1989).    Absent  clear error  or  other abuse  of

discretion, we will not reverse a district court's  denial of

an  injunction merely because we  would have been inclined to

grant the injunction had we  heard the matter ourselves.  See
                                                                         

Celebrity, Inc. v.  Trina, Inc., 264 F.2d 956,  958 (1st Cir.
                                           

1959).

                       III.  DISCUSSION

          As  noted,  ABPN has  registered  its certification

mark.   A  registered certification  mark  receives the  same

protection  as  a trademark.    See  15  U.S.C.    1054.    A
                                               

registrant may obtain  an injunction to preserve the value of

its mark and  to prevent future infringement.   See 15 U.S.C.
                                                               

                             -5-


   1114, 1116.  Here, ABPN sought a preliminary injunction to

protect its  mark in  the interim  before the  district court

could finally resolve ABPN's claims for damages and permanent

injunctive relief.

          We  have  stated   that  a  district   court,  when

determining  whether to issue  a preliminary injunction  in a

trademark  action,   should  weigh  four  factors:   (i)  the

plaintiff's likelihood of success on the merits; (ii) whether

the  plaintiff  risks  suffering  irreparable   harm  if  the

injunction   is  not  granted;   (iii)  whether  such  injury

outweighs the harm that injunctive relief would cause for the

defendant;  and (iv)  whether the  public  interest would  be

adversely  affected  by  granting or  denying  an injunction.

See Equine Techs., Inc. v. Equitechnology, Inc., 68 F.3d 542,
                                                           

544 (1st Cir.  1995).  Here, in denying  relief, the district

court  mentioned two of  these four  factors in  remarks made

from  the  bench.    It  indicated that  it  found  a  strong

likelihood of success  on the merits  by noting that:  "[t]he

indications   are  very  strong   that  there  has   been  an

infringement  in  the past[,]  so  strong  as to  be  perhaps

undeniable."     Nevertheless,  in   denying  a   preliminary

injunction it said it "[did] not think  that there has been a

                             -6-


showing  that there is  likely irreputable [sic]  harm in the

future."3  

          ABPN asserts that  the district court erred  in two

respects.  First, it contends  that the district court abused

its discretion by relying upon an incorrect legal standard to

determine whether  ABPN would suffer irreparable harm without

a  preliminary injunction.   Second,  ABPN  asserts that  the

court clearly erred when it found that Dr. Johnson-Powell was

not likely to infringe ABPN's mark in the near future.

1.   Incorrect Legal Standard.
                                         

          To  support its  argument  that the  district court

used an incorrect legal standard to assess the likelihood  of

irreparable harm, ABPN relies on  cases in which we have held

that a trademark  plaintiff who demonstrates a  likelihood of

success  on the merits  creates a presumption  of irreparable

harm.  See,  e.g., Societe des Produits Nestle,  S.A. v. Casa
                                                                         

Helvetia, Inc., 982 F.2d 633, 640 (1st Cir. 1992); Keds Corp,
                                                                        

888 F.2d at  220; Camel  Hair, 799  F.2d at 14-15.   We  have
                                         

declared in cases such as this one, involving literally false

statements, that "only a slight  likelihood of injury need be
                                                       

shown to warrant injunctive relief."  Camel Hair, 799 F.2d at
                                                            

                    
                                

3.    The court did not expressly balance the relief afforded
by the injunction against the harm to the defendant; however,
it said  that it did not "rest  the denial of the preliminary
injunction on  an assessment  of Dr. Johnson-Powell's  likely
reaction."    It  made  no  mention  of  the  impact  of  the
injunction on the public interest.

                             -7-


15  (emphasis added).   Reducing  the  standard of  proof for

irreparable  harm in trademark actions reflects the intent of

  43(a) of the Lanham Act, 15 U.S.C.   1125(a), "to encourage

commercial companies to act as the fabled 'vicarious avenger'

of consumer rights."  Camel Hair, 799 F.2d at 15.
                                            

          ABPN  argues  that  the district  court  abused its

discretion   by   requiring   it  to   demonstrate   "likely"

irreparable  harm and imminent  infringement.  We  agree with

the district court,  however, that, while certification  mark

and trademark infringements  may be presumed without  more to

cause irreparable harm, there is no parallel presumption that

because  such infringements have  occurred in the  past, they

will  inevitably  be  continued into  the  future.4   Rather,

plaintiff  retained   the  ordinary   burden  of   showing  a

sufficient likelihood that the infringing conduct would occur

in the  future so as to give rise  to an enjoinable threat of

irreparable harm.

          Here,  the  court  determined  that  there  was "no

prospect  that   there  would   be   [future]  occasions   of

infringement."  It  is clear from Camel Hair  itself that the
                                                        

                    
                                

4.  In   saying  this,  we  do  not  question  that  previous
infringing  conduct  will  ordinarily  imply      often  very
strongly     the likelihood  of continued  future violations,
and  thus may  well  be  persuasive  evidence  of  threatened
irreparable harm.  We say  merely that such evidence does not
amount to a  legal presumption; it is proof  that, like other
factual   evidence,  may  be  rebutted  by  other  facts  and
circumstances.

                             -8-


court made no  legal error in considering whether  or not the

evidence  as  a   whole  indicated  a  threat   of  continued

infringement.    One of  the  Camel Hair  defendants  who had
                                                    

previously  sold infringing  garments  removed them  from its

racks prior to  the preliminary injunction hearing.   Against

that  defendant, we upheld the  district court's denial of an

interlocutory   injunction,  stating   that  "there   was  no

likelihood of [that particular  defendant] causing any injury

to [the plaintiff] at the  time the request for an injunction

was  being considered."   Camel  Hair, 799  F.2d at 13.   The
                                                 

purpose of interlocutory injunctive relief is to preserve the

status  quo pending final  relief and to  prevent irreparable

injury to the plaintiff    not simply to punish past misdeeds

or set an example.   See CMM Cable Rep., Inc. v. Ocean  Coast
                                                                         

Properties,  Inc.,  48   F.3d  618,  620  (1st   Cir.  1995);
                             

Acierno v. New  Castle  County, 40  F.3d  645, 647  (3d  Cir.
                                          

1995).  Absent  likelihood of future infringement,  there can

be  none of  the  ill  effects that  an  injunction seeks  to

prevent: no  loss of future  profits, no loss of  goodwill or

reputation.     Thus,  contrary  to  ABPN's  suggestion,  the

district  court's   inquiry  into  the  question   of  future

irreparable injury was proper.

          ABPN contends that  Camel Hair  commands courts  to
                                                    

grant  a preliminary injunction in  a trademark action if the

plaintiff   demonstrates  even   a  "slight   likelihood"  of

                             -9-


irreparable  injury.  The district court's use of "likely" is

said to have  signaled use  of too high  a standard of  proof

here.5   But  while  even  a  "slight likelihood"  of  future

infringement may  well warrant injunctive  relief, we  cannot

say  that  a  district  judge's  discretion  to  withhold  an

injunction turns here  on such nuances  of phraseology.   The

"slight likelihood" standard  was discussed in Camel  Hair in
                                                                      

reference to  whether the  act of  infringement would  itself

create  irreparable  harm,   not  to  whether  there   was  a

likelihood of  infringement in the  future.  As we  have said

elsewhere, "[b]y  its  very  nature,  trademark  infringement

results in  irreparable harm  because the  attendant loss  of

profits,  goodwill, and  reputation cannot  be satisfactorily

quantified, and, thus, the  trademark owner cannot adequately

be compensated."  Societe Des Produits Nestle, S.A., 982 F.2d
                                                               

at 640.    Certainly a  court should  grant an  interlocutory

                    
                                

5.  At one point  the court stated that  "harm isn't presumed
if it's not certain or if it's certain that they  won't occur
or not certain that they won't occur."  Presumably, the judge
meant that he found little likelihood that Dr. Johnson-Powell
would  infringe  in   the  near  future.    This  reading  is
buttressed by  the fact that,  in the same breath,  the judge
analogized this matter  to Camel Hair by noting  that in both
                                                 
cases  there was  "no prospect that  there would  be [future]
occasions of infringement from the defendant."  
     The judge  also noted, however,  that he did  not "think
there  [was] a showing  that [the infringing]  behavior [was]
likely to continue," and stated that the general requirements
of equity demand  that a plaintiff "show the  likelihood they
are about  to suffer some  irreparable harm."  He  also found
that the  relevant question  for the  court was  "whether the
harm is likely to occur or not."  

                             -10-


injunction in  a  trademark case  when  a realistic  risk  of

future  infringement  (within   the  time   covered  by   the

injunction)  has been  demonstrated, but  we  cannot say  the

district court misunderstood this point.

          To  be sure, there was ample  evidence here of past

infringing  conduct, not to mention conduct indicative of bad

faith.   As mentioned in note 4, supra, such evidence, if not
                                                  

rebutted, may  give rise to  a strong inference  that further

infringing acts will occur in the future.  Even so, we cannot

say that  a  defendant can  never  take actions  and  provide

assurances  sufficient,  in  the face  of  such  evidence, to

convince a court that she will not commit future  violations.

Our system leaves  it primarily in the hands  of the district

court to ascertain whether the danger of future harm has been

adequately established so  as to warrant the protection of an

injunction.  In arguing for a  rule that, in a situation like

this, injunctive relief  is necessarily required as  a matter

of law, ABPN points to  our language in Camel Hair  that "the
                                                              

district  court's   finding  that   it   was  probable   that

defendant's labels were literally  false in itself  warranted

the grant of the injunction sought."  Camel Hair, 799 F.2d at
                                                            

16.   But in that aspect of Camel Hair,  it is clear that the
                                                  

                             -11-


district judge found,  and that we accepted,  that infringing

conduct would continue unless enjoined.6

          We,  therefore,  reject  ABPN's  argument that  the

court committed legal  error in denying injunctive  relief on
                                 

the ground that there was no prospect of future infringement.

2.   Findings of fact.
                                 

          ABPN's  more potent argument  is that, even  if the

court used a permissible legal standard to assess irreparable

harm, the district court clearly erred in its factual finding

thatDr. Johnson-Powell would not infringe in the near future.

          ABPN  argues that the  court below should  not have

credited Dr. Johnson-Powell's claim of voluntary reformation7

because her conduct did not rise to the level of "irrefutably

demonstrated, total  reform."   Pic Design  Corp. v. Bearings
                                                                         

                    
                                

6.  In Camel  Hair, the  district  court found  "there was  a
                              
probability  that   further  marketing  of   [the  infringing
product] would occur if an injunction was not issued."  Camel
                                                                         
Hair, 799 F.2d  at 9; see also  Keds Corp., 888  F.2d at  217
                                                      
(noting  that defendant  had  refused  to  stop  selling  its
remaining inventory  of the infringing product);  Donoghue v.
                                                                      
IBC/USA  (Publications),  Inc.,  886 F.  Supp.  947,  953 (D.
                                          
Mass.),  aff'd, 70  F.3d  206 (1st  Cir.  1995) (noting  that
                          
defendant continued its infringing activity).

7.  Dr.  Johnson-Powell  filed  an affidavit,  in  which  she
asserted, inter  alia, that:  (1) she  has not  seen patients
                                 
since 1995; (2) she has not  circulated her infringing resume
since  1995;   (3)  the  false   claim  on  her   resume  was
inadvertent; (4) she  tried to locate and destroy  all copies
of her misleading resume; (5) she has not served as an expert
witness, nor assisted an expert  witness, since 1995; and (6)
she will not claim to be Board certified in the future.  

                             -12-


Specialty Co., 436  F.2d 804, 809 (1st Cir.  1971).  We think
                         

ABPN reads Pic Design out of context.
                                 

          In Pic Design,  we limited an earlier  statement in
                                   

Electronics Corp.  of Am.  v. Honeywell,  Inc., 428  F.2d 191
                                                          

(1st Cir.  1970).  In that  earlier case, we stated  in dicta

that  "[w]e might  accept  the  principle that  so  far as  a

preliminary injunction  is concerned,  . . . voluntary reform

will always suffice."   Id. at 195 (emphasis added).   In Pic
                                                                         

Design,  we modified  our  statement  in  Honeywell  so  that
                                                               

voluntary  reform will always  suffice to  prevent injunctive
                                                              

relief  only  if  it  is  "irrefutably  demonstrated,   total

reform."  Pic Design,  436 F.2d at 809.  It  does not follow,
                                

however, that a district court may, in its discretion, credit

a claim of reform only  if it meets the Pic Design  standard.
                                                              

Our affirmance  of an  injunction in  that case  demonstrated

only that a court does  not necessarily abuse its  discretion

by  granting an  injunction  when  the  nonmoving  party  has

voluntarily  abated its infringing activity.  Whether a court

goes  too far  in denying  an  injunction in  the absence  of

something less than total reform is a fact-specific matter.

          ABPN argues that  the record contains  insufficient

evidence  for a  court to  conclude  that Dr.  Johnson-Powell

would not  engage in infringing  conduct in the  near future.

As ABPN correctly  notes, our decision to affirm the district

court's  denial of  injunctive  relief  against  one  of  the

                             -13-


defendants in  Camel Hair rested  upon the good faith  of the
                                     

infringer and the infringer's rapid and credible cessation of

its infringing  activities.  See Camel Hair, 799  F.2d at 13.
                                                       

ABPN argues that Dr. Johnson-Powell has not displayed similar

good  faith and  that  she is  extremely  likely to  infringe

again.

          We   must  agree   that   the   evidence  of   past

infringement  is  very  strong.   The  district  court itself

remarked  that  the  evidence  of Dr.  Johnson-Powell's  past

infringement was  "so strong  as to  be perhaps  undeniable."

The district court  also thought her affidavit  was "probably

not true," apparently in respect to the claimed "inadvertence

of the error  on the resume."   It can also be  inferred from

the  record that Dr. Johnson-Powell violated past promises to

reform her  conduct.   Moreover, Dr.  Johnson-Powell did  not

proffer  her affidavit until  after the  court had  entered a

temporary restraining order, timing argued by ABPN to suggest

a  lack of sincerity.  Clearly, Dr. Johnson-Powell's behavior

does not  rise to the  level of reformation displayed  by the

defendant  in Camel  Hair; on  this record,  the court  could
                                     

undoubtedly have issued preliminary  injunctive relief had it

been so  inclined.  Our  review, however, is for  clear error

and  for abuse of  discretion.  See  Keds Corp., 888  F.2d at
                                                           

222.  We cannot say these standards were reached here.

                             -14-


          Despite its  skepticism about  some aspects  of Dr.

Johnson-Powell's  affidavit,  the  district  court  plausibly

found  that  the  character  of  Dr.   Johnson-Powell's  past

misstatements   rendered   the   possibility   of   recurring

infringement  remote.    Serving as  a  courtroom  expert and

disseminating a resume, Dr.  Johnson-Powell's two methods  of

infringement, are "not like someone offering goods for sale,"

which could  occur at any  time.   In support of  the court's

determination was Dr.  Johnson-Powell's affidavit of  January

8, 1997,  filed with  the court by  her attorneys  and signed

under penalty  of perjury, in  which she stated that,  in the

future,  she  has "no  intention  to and  will  not represent

[herself]  as  being  certified  by  The  American  Board  of

Psychiatry  and  Neurology   and  will  not  engage   in  any

unauthorized  use of the registered certification mark of The

American  Board of  Psychiatry  and  Neurology."    She  also

indicated  that she  no  longer engages  in  the business  of

testifying as an  expert witness.   Along with the  affidavit

was a copy of her  curriculum vitae which no longer contained

her claim of certification.  Her attorneys, moreover, offered

to stipulate in writing that, "from this date forward, Gloria

Johnson-Powell will not represent  herself as being certified

by [ABPN] and will not engage in any unauthorized use of  the

registered certification mark." 

                             -15-


          The district  court retains jurisdiction  over this

matter pending final  determination of the action  brought by

ABPN.      Dr.   Johnson-Powell   and   her   attorneys   are

unquestionably aware  that any violation  during that  period

would constitute a serious breach of faith with the court and

would erode  any hopes defendant  may continue to have  for a

successful outcome.  ABPN, moreover,  will still  be able  to

request  final injunctive relief.  District courts are better

positioned than  ourselves to  observe the  nuances of  these

matters.   Viewing all the evidence available to the district

court and the posture of  this appeal through the deferential

lens of the applicable standard of review, we cannot say that

the  district court  clearly erred  or  otherwise abused  its

discretion  in concluding that the defendant will not further

infringe  ABPN's mark  in the  future period  during  which a

preliminary injunction would operate.

          Affirmed. 
                              

                             -16-