Uatp Ip, LLC, Uatp Management, LLC v. Kangaroo, LLC

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
UATP IP, LLC, UATP MANAGEMENT, LLC,
Plaintiffs-Appellees
v.
KANGAROO, LLC,
Defendant-Appellant
AIR ENTERTAINMENT GROUP, LLC, HAI CHANH
QUACH, DAN TRINH, RAYMON HUNG, EDGAR
ALEJANDRO GUERRERO, ALAN TRINH, TINA
LUU, GOLDEN STAR GROUP, LTD.,
Defendants
______________________
2022-2047
______________________
Appeal from the United States District Court for the
Southern District of Texas in No. 4:21-cv-02478, Judge
Drew B. Tipton.
______________________
Decided: February 16, 2024
______________________
CHRIS P AUL HANSLIK , BoyarMiller, Houston, TX, ar-
gued for plaintiffs-appellees.
STEVEN J ON K NIGHT , Chamberlain Hrdlicka, Houston,
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UATP IP, LLC v. KANGAROO, LLC 2
TX, argued for defendant-appellant. Also represented by
AMBER ALI, AJ F OREMAN, D AVID MIGUEL MEDINA.
______________________
Before REYNA, T ARANTO, and CHEN, Circuit Judges.
CHEN, Circuit Judge.
This interlocutory appeal arises from a motion for a
preliminary injunction filed below by Appellees UATP IP,
LLC and UATP Management, LLC (collectively, UATP)
based on alleged patent and trade dress infringement by
Kangaroo, LLC (Kangaroo). The United States District
Court for the Southern District of Texas granted the pre-
liminary injunction, enjoining Kangaroo from operating
the “Adventure Hub” in its trampoline park, using certain
colors, and using UATP’s confidential information. UATP
IP, LLC v. Kangaroo, LLC, 2022 WL 2898951, at *2 (S.D.
Tex. June 28, 2022) (Order). After full briefing and argu-
ment, we conclude the district court abused its discretion
by failing to make the requisite findings to support its
grant of the preliminary injunction. Further, we find that
UATP failed to prove in its briefing below that it was likely
to succeed on the merits of its patent infringement claim.
Accordingly, we reverse the district court’s grant of the pre-
liminary injunction as to the patent infringement claim,
and vacate and remand as to the trade dress infringement
claim.
BACKGROUND
UATP and Kangaroo are operators of “adventure
parks”—indoor play facilities that include trampolines, zi-
plines, ropes courses, and other attractions. UATP oper-
ates at least 160 facilities (known as Urban Air Adventure
Parks) throughout the country, primarily through fran-
chisees. Kangaroo operates a single play park in Laredo,
Texas that is located in the same building, and uses much
of the same equipment, as a previously existing Urban Air
Adventure Park franchise.
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UATP IP, LLC v. KANGAROO, LLC 3
UATP sued Kangaroo on July 30, 2021 on several
grounds, including patent and trade dress infringement.
In its operative complaint, UATP alleges that Kangaroo in-
fringes U.S. Patent No. 10,702,729 (’729 patent), entitled
“Multi-level Play Equipment.” UATP also alleges that
Kangaroo infringes its trade dress, which UATP describes
in its motion for preliminary injunction as “includ[ing] the
neon orange, yellow, Urban Air Lime Green, and Cosmic
Dust Blue color scheme prevalent throughout Urban Air
franchises, Attractions and equipment and the layout and
placement of the same, signage (content, lettering, and col-
oring), white ball pit, redundancy trampolines, no hold net-
ting, configuration of the safety harnesses and attachment
of same to the equipment, and one way directional tracking
of the zip coaster . . . .” App. 614 (footnotes omitted).
UATP filed its motion for preliminary injunction on
June 9, 2022, over ten months after it filed its original com-
plaint. The district court granted the motion on the
grounds that UATP was likely to succeed on the merits of
both its patent and trade dress infringement claims, and
that UATP was entitled to a rebuttable presumption of ir-
reparable harm that Kangaroo failed to rebut. Order, 2022
WL 2898951, at *1–2.
D ISCUSSION
This court generally reviews preliminary injunctions
according to the law of the regional circuit (here, the Fifth
Circuit), but “gives dominant effect to Federal Circuit prec-
edent insofar as it reflects considerations specific to patent
issues,” such as likelihood of success on the merits. Tinnus
Enters., LLC v. Telebrands Corp., 846 F.3d 1190, 1202–03
(Fed. Cir. 2017). Both the Federal Circuit and the Fifth
Circuit review preliminary injunctions for an abuse of dis-
cretion. Id. at 1203. A party may establish an abuse of
discretion “by showing that the court made a clear error of
judgment in weighing relevant factors or exercised its dis-
cretion based upon an error of law or clearly erroneous
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UATP IP, LLC v. KANGAROO, LLC 4
factual findings.” Abbott Lab’ys v. Andrx Pharms., Inc.,
452 F.3d 1331, 1335 (Fed. Cir. 2006) (quoting Polymer
Techs., Inc. v. Bridwell, 103 F.3d 970, 973 (Fed. Cir. 1996)).
“A preliminary injunction is an extraordinary remedy
never awarded as of right.” Winter v. Nat. Res. Def. Coun-
cil, Inc., 555 U.S. 7, 24 (2008). A party seeking a prelimi-
nary injunction must establish “a reasonable likelihood of
success on the merits, irreparable harm in the absence of a
preliminary injunction, a balance of hardships tipping in
its favor, and the injunction’s favorable impact on the pub-
lic interest.” Murata Mach. USA v. Daifuku Co., 830 F.3d
1357, 1363 (Fed. Cir. 2016) (quoting Nat’l Steel Car, Ltd. v.
Canadian Pac. Ry., 357 F.3d 1319, 1324–25 (Fed. Cir.
2004)). Under Federal Rule of Civil Procedure 52(a)(2), a
district court must offer findings of fact and conclusions of
law to justify the grant or denial of a preliminary injunc-
tion motion. Id. (citing Ali v. Quarterman, 607 F.3d 1046,
1048 (5th Cir. 2010)).
I
We turn first to UATP’s patent infringement claim.
For a preliminary injunction motion, “[t]he burden is al-
ways on the movant to show that it is likely to succeed on
the merits.” BlephEx, LLC v. Myco Industries, Inc., 24
F.4th 1391, 1398 (Fed. Cir. 2022). To establish a likelihood
of success on the merits, “the patentee seeking a prelimi-
nary injunction in a patent infringement suit must show
that it will likely prove infringement, and that it will likely
withstand challenges, if any, to the validity of the patent.”
Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372,
1376 (Fed. Cir. 2009).
We find that UATP’s showing was legally insufficient
to demonstrate likelihood of success on the merits of its pa-
tent infringement claim. “[W]hether performed at the pre-
liminary injunction stage or at some later stage in the
course of a particular case, infringement and validity anal-
yses must be performed on a claim-by-claim basis.”
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UATP IP, LLC v. KANGAROO, LLC 5
Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d
1343, 1351 (Fed. Cir. 2001). But neither UATP’s motion
for preliminary injunction nor the Order ever identified
any claim of the ’729 patent that Kangaroo allegedly in-
fringes. Instead of comparing Kangaroo’s allegedly infring-
ing equipment to any of the claims of the ’729 patent, UATP
and the district court appear to have assumed that Kanga-
roo’s equipment infringes the patent because it was previ-
ously used in an Urban Air Adventure Park. But the
district court never determined that Urban Air Adventure
Parks practice a specific claim of the ’729 patent. By as-
suming that similarities between Kangaroo’s equipment
and the equipment in an Urban Air Adventure Park con-
stitute infringement without any discussion of the claims,
the district court erred in finding a likelihood of success on
the merits.
The district court likewise erred in failing to make any
findings on irreparable harm, balance of the equities, or the
public interest in its analysis relating to UATP’s patent in-
fringement claim. See Fed. R. Civ. P. 52(a)(2) (“In granting
or refusing an interlocutory injunction, the court must []
state the findings and conclusions that support its ac-
tion.”).
II
We turn next to UATP’s trade dress infringement
claim. In the Fifth Circuit, to establish likelihood of suc-
cess on the merits of a trade dress infringement claim, the
plaintiff “must prove that: (1) its trade dress qualifies for
protection; and (2) the trade dress has been infringed by
demonstrating a likelihood of confusion in the minds of po-
tential consumers.” Beatriz Ball, LLC v. Barbagallo Co.
LLC, 40 F.4th 308, 317 (5th Cir. 2022). To qualify for pro-
tection, a trade dress must be (a) non-functional, and (b)
distinctive, either inherently or through acquired
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UATP IP, LLC v. KANGAROO, LLC 6
secondary meaning.1 Wal-Mart Stores, Inc. v. Samara
Bros., Inc., 529 U.S. 205, 210–11 (2000).
Unlike UATP’s failure to present an adequate patent
infringement case, UATP briefed all the necessary ele-
ments of its trade dress infringement claim in the proceed-
ings below. However, the district court failed to make any
findings on whether UATP’s alleged trade dress was non-
functional, inherently distinctive, or had acquired second-
ary meaning. Instead, the district court found that UATP’s
“trade dress claim against Kangaroo is likely to succeed on
the merits, because it has shown that Kangaroo substan-
tially imitated Urban Air’s total image by using the same
colors, attraction structures, and park layout.” Order, 2022
WL 2898951, at *1. The district court’s failure to explain
how it arrived at this finding in view of the relevant trade
dress likelihood of confusion factors, see Xtreme Lashes,
LLC v. Xtended Beauty, Inc., 576 F.3d 221, 227 (5th Cir.
2009), and failure to address the non-functionality or dis-
tinctiveness of UATP’s alleged trade dress, render its anal-
ysis too conclusory to permit meaningful appellate review.
1 The parties dispute whether UATP must show that
its alleged trade dress has acquired secondary meaning, or
whether a showing of inherent distinctiveness suffices. See
UATP’s Response Brief at 23; Kangaroo’s Reply Brief at
10–11. Which showing is required depends on whether
UATP’s alleged trade dress is product packaging or product
design. While product-packaging trade dress may be
shown to be inherently distinctive, product-design trade
dress can never be inherently distinctive and therefore can-
not be protected without a showing of secondary meaning.
Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205,
214–15 (2000). We do not reach the issue of whether
UATP’s alleged trade dress is product packaging or product
design here, but provide this framing for the benefit of the
parties and the district court upon remand.
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UATP IP, LLC v. KANGAROO, LLC 7
See, e.g., Gechter v. Davidson, 116 F.3d 1454, 1458 (Fed.
Cir. 1997) (“A district court therefore may not merely state
its findings in conclusory terms, but must provide suffi-
cient detail to elucidate the reasoning by which the court
reached its ultimate finding on an issue of fact or conclu-
sion on an issue of law; otherwise, the appellate court is
unable to carry out its appellate review function.”).
The district court’s findings relating to irreparable
harm are also deficient. First, the district court erred in
failing to address UATP’s ten-month delay in moving for a
preliminary injunction. See Hybritech Inc. v. Abbott Lab’ys,
849 F.2d 1446, 1457 (Fed. Cir. 1988) (“The period of delay
exercised by a party prior to seeking a preliminary injunc-
tion in a case involving intellectual property is [] one factor
to be considered by a district court in its analysis of irrep-
arable harm.”). Second, the district court erred in finding
that UATP was entitled to a rebuttable presumption of ir-
reparable harm under 15 U.S.C. § 1116(a). Section 1116(a)
entitles a plaintiff seeking a preliminary injunction under
15 U.S.C. § 1125 to a rebuttable presumption of irrepara-
ble harm “upon a finding of likelihood of success on the
merits for a violation.” Because the district court’s analysis
was premised on a flawed likelihood of success finding, the
court’s application of the presumption cannot stand. By
failing to address UATP’s delay in filing its preliminary in-
junction request, and by improperly applying the statutory
presumption, the district court erred.
Finally, as with its analysis relating to the patent in-
fringement claim, the district court’s analysis relating to
the trade dress infringement claim failed to make sufficient
findings on the balance of the equities or the public inter-
est. Because the district court failed to “state the findings
and conclusions that support its action” in granting the
preliminary injunction, as required by Federal Rule of Civil
Procedure 52(a)(2), the court erred.
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UATP IP, LLC v. KANGAROO, LLC 8
CONCLUSION
We find that the district court abused its discretion by
failing to make the requisite findings to support its grant
of the preliminary injunction. Further, we find that there
was a failure of proof in UATP’s briefing below on the like-
lihood of success on the merits of its patent infringement
claim. Accordingly, we reverse the district court’s grant of
the preliminary injunction as to the patent infringement
claim. We vacate and remand as to the trade dress in-
fringement claim.
REVERSED-IN-PART, VACATED-IN-PART, AND
REMANDED
COSTS
Costs to Kangaroo.
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