## Facts

- TLV filed a 1994 intent-to-use (ITU) trademark application for “REAL WHEELS” for toy-related goods; it had not yet used the mark in commerce.
- WarnerVision later began using “REAL WHEELS” in commerce for automobile-focused home videos and miniature vehicle models, without knowledge of TLV’s ITU filing.
- Buddy L also began using “REAL WHEELS” for toy vehicles without knowledge of TLV’s ITU filing.
- WarnerVision filed a trademark application in 1995; a registration issued.
- Buddy L entered bankruptcy; Empire acquired Buddy L’s assets and asserted rights connected to “REAL WHEELS.”
- Empire also acquired TLV’s interests in the mark, including the ITU application.
- WarnerVision sought to stop Empire/TLV from proceeding under the ITU application and from claiming priority based on the ITU filing date.

## Issues

1. Whether a later good-faith user who begins use after an ITU filing, but before the ITU applicant’s actual use, may obtain preliminary injunctive relief that prevents the ITU applicant from making the use needed to perfect registration and obtain § 1057(c) constructive-use priority.
2. Whether granting such preliminary relief misapplies 15 U.S.C. § 1057(c) by effectively nullifying the ITU applicant’s statutory priority mechanism.

## Decision

- The Second Circuit vacated the preliminary injunction entered for WarnerVision.
- The court held the district court misapplied 15 U.S.C. § 1057(c) and thereby abused its discretion.
- The court affirmed the denial of Empire’s cross-motion for a preliminary injunction against WarnerVision.
- The case was remanded for further proceedings consistent with the court’s interpretation of the ITU framework.

## Legal Principles

- Under 15 U.S.C. § 1057(c), completion of an ITU registration confers a constructive-use date as of the application filing date, establishing nationwide priority against later users (subject to protection for those who used the mark before the ITU filing).
- Courts should not use preliminary injunctions to prevent an ITU applicant from making the commercial use required to complete the ITU process, because doing so can irreversibly deprive the applicant of the statutory opportunity to perfect rights tied to the filing date.
- A preliminary injunction must not function as a final merits determination by awarding ultimate relief and foreclosing statutory rights before full adjudication.

## Conclusion

The Second Circuit held that preliminary injunctive relief cannot be used to block an ITU applicant from completing the steps necessary to obtain the constructive-use priority provided by § 1057(c), and it vacated an injunction that effectively eliminated those statutory benefits while leaving the parties to litigate remaining issues on a full record.


Warnervision Ent. Inc. v. Empire of Carolina, Inc., 101 F.3d 259 (2d Cir. 1996)