Team Rubicon Global, Ltd. v. Team Rubicon, Inc.

Background

Team Rubicon Global, Ltd., the plaintiff and counter-defendant, moved to stay the court’s May 19, 2020 order while it pursued an appeal. That earlier order granted Team Rubicon, Inc.’s motion for a preliminary injunction and denied Team Rubicon Global’s motion. The injunction barred Team Rubicon Global from continuing to use Team Rubicon’s trademarks, but it did not otherwise prohibit Team Rubicon Global from continuing its operations.

Team Rubicon Global alternatively asked the court to require Team Rubicon, Inc. to post security under Rule 65(c) of the Federal Rules of Civil Procedure. Security is money or a financial guarantee intended to cover certain losses if an injunction later proves improper. Team Rubicon, Inc. argued that the parties’ trademark license agreement waived any bond requirement for injunctive relief. The court noted that the parties had not addressed a bond during the earlier preliminary-injunction proceedings.

Stay Pending Appeal

The court applied four factors for deciding whether to stay an order pending appeal: likelihood of success on the merits, irreparable harm to the party seeking the stay, harm to the opposing party if a stay is issued, and the public interest.

The court relied on its earlier conclusions that Team Rubicon, Inc. was likely to succeed on its breach-of-contract and trademark-infringement claims, that the absence of an injunction would likely cause Team Rubicon, Inc. substantial harm through presumed harm under the license agreement and confusion from continued trademark use, and that the injunction served the public interest. The court found that Team Rubicon Global had not provided a basis to change those conclusions.

The court also found that the harm Team Rubicon Global described— including lost funds invested in its products and employee-retention payments—was primarily financial and could be remedied with money damages. It rejected Team Rubicon Global’s assertion that the injunction forced it to cease operations entirely, explaining that the May order prohibited continued use of the trademarks but did not otherwise prohibit operations.

The court therefore denied Team Rubicon Global’s request for a stay pending appeal and its alternative request for a stay until the Court of Appeals decided whether to stay the injunction.

Security

The court concluded that the license agreement did not clearly resolve whether the parties intended to waive a bond for preliminary injunctive relief. The court also had not made a final determination that Team Rubicon Global breached the agreement. It therefore required Team Rubicon, Inc. to post security pending a final determination on the merits.

The court set the security at $1,000,000, based on information from the parties and an estimate of Team Rubicon Global’s projected 2020 revenue. Team Rubicon, Inc. had to post the security with the Clerk of Court by June 19, 2020, in cash held in an interest-bearing court account or as a letter of credit.

Disposition

The court denied the motion to stay the May 19 order and granted the request to set bond. The case remained referred to Magistrate Judge Fox for general pretrial management. Judge Laura Taylor Swain signed the order.