APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSSETTS. Hon. Nathaniel M. Gorton, U.S. District Judge.
Scott P. Lopez, with whom Joshua M. D. Segal and Lawson & Weitzen, LLP were on brief, for appellant.
Kristen S. Scammon, with whom Michael S. Day and Torres, Scammon & Day, LLP were on brief, for appellee.
Before Selya, Circuit Judge, Souter,[*] Associate Justice, Lipez, Circuit Judge.
SOUTER, Associate Justice.
This appeal challenges a preliminary injunction meant to enforce a contractual
agreement and prohibit a trademark violation. We affirm in part and reverse in part.
Plaintiff-Appellee Arborjet, Inc. manufactures and sells TREE-age, an emamectin benzoate solution used to protect trees from various pests. Through the period from August 2008 to February 2013, Arborjet granted Defendant-Appellant Rainbow Treecare Scientific Advancements, Inc. an exclusive right to distribute TREE-age. Their sales agency contract included this provision:
[Rainbow] agrees, in view of the confidential information regarding Arborjet's business affairs, plans, and necessities, that [Rainbow] will not engage in affairs intended to replicate [A]rborjet's products or processes.
After the termination of this agreement, Rainbow began marketing and distributing ArborMectin, another emamectin benzoate combination meant to compete directly with TREE-age. Arborjet sued Rainbow in Massachusetts trial court, seeking to enjoin Rainbow's sales of ArborMectin and claiming breach of contract, breach of implied covenant of good faith and fair dealing, false advertising under the Lanham Act and Massachusetts law, 15 U.S.C. § 1125(a)(1)(B); Mass. Gen. Laws ch. 266, § 91, false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), and common law unfair competition. Rainbow removed the action to federal court.
In the preliminary injunction proceedings from which this appeal comes, the district court did not find for Arborjet on the prospects of its Lanham Act or state law tort and statutory claims, but it did find likely success on those for breach of contract and implied covenant of good faith and fair dealing. The court said that Arborjet had " demonstrated a likelihood that it will be able to prove that [Rainbow] engaged in research and development to create a product very similar to TREE-age," in violation of the sales agency agreement. In summarizing the support it found for this conclusion, the court described ArborMectin as the " defendant's own . . . product" and stated that " Rainbow's website describes partnering with several institutions and companies to conduct research studies regarding ArborMectin's effectiveness," at least one of which " took place while Rainbow was . . . subject to the terms of the [sales agency a]greement." The district court accordingly granted Arborjet an ...