Opinion
Case No. 5:22-cv-260-MJF
2023-03-13
MC3 INVESTMENTS LLC d/b/a The Local Café, Plaintiff/Counter-Defendant, v. The LOCAL BRAND, INC., Defendant/Counter-Plaintiff.
Henry Jared Doster, Doster Law PLLC, Panama City, FL, for Plaintiff/Counter-Defendant. Harold Clayton McGurk, Pro Hac Vice, Law Office of Clay McGurk, Orange, CA, Jeffrey Scott Carter, Jeff Carter PA, Panama City, FL, for Defendant/Counter-Plaintiff.
Henry Jared Doster, Doster Law PLLC, Panama City, FL, for Plaintiff/Counter-Defendant. Harold Clayton McGurk, Pro Hac Vice, Law Office of Clay McGurk, Orange, CA, Jeffrey Scott Carter, Jeff Carter PA, Panama City, FL, for Defendant/Counter-Plaintiff. ORDER Michael J. Frank, United States Magistrate Judge
Defendant has moved for a preliminary injunction that would prohibit Plaintiff's use of its logos. Doc. 26. Plaintiff responded in opposition. Doc. 31. A hearing is not necessary. At this stage, Defendant fails to demonstrate a substantial likelihood of success on the merits of its trademark-infringement counterclaim and that it will suffer irreparable injury in the absence of a preliminary injunction. This court, therefore, must deny Defendant's motion for a preliminary injunction.
I. BACKGROUND
Plaintiff is a single-location coffee shop and café located in Panama City, Florida. Doc. 1 at 5 ¶ 11. Defendant, a company based in southern Florida, sells apparel, beer, and rum, among other things. Id. ¶ 16; Doc. 26 at 3. Defendant owns several registered trademarks, including:
| Reg. No. | Mark | Goods and Services |
|---|---|---|
| 4,742,397 | Image materials not available for display. | IC 025 - Bathing suits; Flip flops; Hats; Sandals; Shorts; T-shirts; Tank tops. |
| 5,258,583 | Image materials not available for display. | IC 025 - Baseball caps and hats; Hats; Short-sleeved or long-sleeved t-shirts; T-shirts. |
| 5,638,359 | Image materials not available for display. | IC 025 - Clothing, namely, shirts, namely, T-shirts. |
| 5,638,360 | Image materials not available for display. | IC 025 - Clothing, namely, shirts, namely, T-shirts. |
| 5,698,178 | Image materials not available for display. | IC 014 - Key chains; Key rings. |
| 6,211,815 | Image materials not available for display. | IC 032 - Beer. |
| 6,435,780 | Image materials not available for display. | IC 033 - Rum. |
| 6,674,950 | Image materials not available for display. | IC 025 - Hats; T-shirts; Shirts; Headwear, namely, hats, caps. |
When Plaintiff opened in November 2022, it used the following logo:
Image materials not available for display.
Doc. 1 at 6-7 ¶ 19; Doc. 26 at 2.
Sometime in October 2022, one of Defendant's consumers allegedly contacted Defendant's president, Matthew Lilly, about Plaintiff's logo. Doc. 26 at 48 ¶ 18. Lilly allegedly contacted Plaintiff's owner, Greg Cash, and explained that Plaintiff's logo "was causing confusion over whether [Defendant] was the owner [of] or associated with" Plaintiff. Id. ¶ 19.
On October 8, 2022, after informal communications failed to resolve the parties' dispute, Defendant sent Plaintiff a cease-and-desist letter. Doc. 1 at 7 ¶ 21; Doc. 26 at 4, 49 ¶ 22. Shortly after receiving the letter, Plaintiff began using a new logo:
Image materials not available for display. Doc. 1 at 7-8 ¶ 23; Doc. 25 at 18 ¶ 30; Doc. 26 at 4.
On November 7, 2022, after learning of Plaintiff's new logo, Lilly again contacted Cash, expressed his disapproval of the new logo, and requested that Cash cease use of the new logo. Doc. 1 at 8 ¶ 24; Doc. 25 at 31; Doc. 26 at 4, 49 ¶ 24. The next day, Plaintiff initiated this civil action. Doc. 1. Plaintiff seeks a declaration that its logos do not violate sections 1114 and 1125(a) of the Lanham Act and analogous Florida law.
On February 2, 2023, Defendant filed an amended answer and asserted counterclaims under sections 1114 and 1125(a) of the Lanham Act, as well as Florida's Deceptive and Unfair Trade Practices Act ("FDUTPA"), Fla. Stat. § 501.201 et seq. Doc. 25. Almost two weeks later, on February 15, 2023, Defendant filed the present motion for a preliminary injunction. Doc. 26.
On February 16, 2023, this court denied Defendant's motion for a temporary restraining order and reserved ruling on Defendant's motion for a preliminary injunction. Doc. 27.
Defendant requests a preliminary injunction prohibiting Plaintiff from using either of Plaintiff's logos "in association with signage on [Plaintiff's building] and billboards" and "in advertisements and promotional materials" in various media. Id. at 2. Defendant contends that the requested relief is warranted to preserve the status quo. According to Defendant, Plaintiff's logos cause consumers to perceive incorrectly an association between Plaintiff and Defendant. Id. at 8. Defendant asserts that this false association weakens Defendant's brand recognition and allows Plaintiff to increase wrongfully consumer traffic to Plaintiff's business. Id. at 6-8.
II. DISCUSSION
The Lanham Act, 15 U.S.C. § 1051 et seq., authorizes injunctive relief. See 15 U.S.C. § 1116(a). Injunctive relief in the form of a preliminary injunction is an extraordinary remedy. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008); Bloedorn v. Grube, 631 F.3d 1218, 1229 (11th Cir. 2011). Indeed, the grant of a preliminary injunction is "the exception rather than the rule." United States v. Lambert, 695 F.2d 536, 539 (11th Cir. 1983). The chief function of preliminary injunctions "is to preserve the status quo until the merits of the controversy can be fully and fairly adjudicated." Ne. Fla. Chapter of Ass'n of Gen. Contractors v. City of Jacksonville, 896 F.2d 1283, 1284 (11th Cir. 1990); see Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981); All Care Nursing Serv. v. Bethesda Mem'l Hosp., Inc., 887 F.2d 1535, 1537 (11th Cir. 1989).
To establish entitlement to a preliminary injunction, a movant must demonstrate:
1. a substantial likelihood of success on the merits of the underlying claim;Winter, 555 U.S. at 20, 129 S.Ct. 365; Vital Pharms., Inc. v. Alfieri, 23 F.4th 1282, 1290-91 (11th Cir. 2022); In re Gateway Radiology Consultants, P.A., 983 F.3d 1239, 1254-55 (11th Cir. 2020). Failure to establish even one of the elements is fatal to a motion for a preliminary injunction. CBS Broad., Inc. v. EchoStar Commc'ns Corp., 265 F.3d 1193, 1200 (11th Cir. 2001); Church v. City of Huntsville, 30 F.3d 1332, 1342 (11th Cir. 1994). A. Defendant Fails to Demonstrate a Substantial Likelihood of Success
2. a likelihood of suffering irreparable injury if the preliminary injunction is not granted;
3. the threatened injury to the movant outweighs any injury the nonmovant might suffer from the injunction; and
4. the injunction would not disserve the public interest.
Defendant asserts three counterclaims: (1) a trademark-infringement claim under 15 U.S.C. § 1114; (2) a claim of false designation of origin under 15 U.S.C. § 1125(a); and (3) a claim under FDUTPA. Doc. 25 at 20-21.
In its motion for a preliminary injunction, Defendant discusses the merits of its "federal trademark infringement claim under the Lanham Act." Doc. 26 at 9 (emphasis omitted). Defendant fails to address the merits of its remaining counterclaims other than asserting that, because it is likely to succeed on the merits of its counterclaim of "trademark infringement," Defendant also is likely to succeed on the merits of its "common law unfair competition" counterclaim. Id. at 20. Regardless, courts apply the same standard to both federal and state-law claims of trademark infringement and unfair competition. Suntree Techs., Inc. v. Ecosense Int'l, Inc., 693 F.3d 1338, 1345 (11th Cir. 2012); Chanel, Inc. v. Replicachanelbag, 362 F. Supp. 3d 1256, 1262 (S.D. Fla. 2019); see Fla. Int'l Univ. Bd. of Trs. v. Fla. Nat'l Univ., Inc. ("FIU"), 830 F.3d 1242, 1265 (11th Cir. 2016). Defendant's likelihood of prevailing on its trademark-infringement counterclaim, therefore, mirrors Defendant's likelihood of prevailing on its other counterclaims.
To prevail on a trademark-infringement claim under section 1114, a party ultimately must "demonstrate (1) that it owns a valid mark with priority, and (2) that the [opposing party's] mark is likely to cause consumer confusion." FCOA LLC v. Foremost Title & Escrow Servs. LLC, 57 F.4th 939, 946 (11th Cir. 2023); FIU, 830 F.3d at 1255. This entails a two-step analysis.
1. Step One: A Valid Mark
Defendant asserts that it has eight valid trademarks that are relevant to this action, including its Local Marks. Doc. 26 at 9-10; see id. at 3. Plaintiff apparently contests that Defendant owns a valid trademark insofar as Plaintiff raises as an affirmative defense that Defendant's Local Marks "are primarily geographically descriptive." Doc. 28 at 8. Plaintiff presumably is arguing that because Defendant's Local Marks "are primarily geographically descriptive" they are not entitled to trademark protection, although that argument is not clear from Plaintiff's answer or its response in opposition to Defendant's motion. Id.
A trademark is "any word, name, symbol, or device, or any combination thereof [used] to identify and distinguish [one's] goods . . . from those manufactured or sold by others and to indicate the source of the goods." Leigh v. Warner Bros., 212 F.3d 1210, 1217 (11th Cir. 2000) (quoting 15 U.S.C. § 1127). A federal trademark registration with the United States Patent and Trademark Office ("PTO") is "prima facie evidence of the validity of the registered mark." 15 U.S.C. § 1115(a); Matal v. Tam, 582 U.S. 218, 226, 137 S.Ct. 1744, 198 L.Ed.2d 366 (2017).
"A mark is primarily geographically descriptive if 'the primary significance the term would have in the marketplace for the particular services in question is geographic, that is, that the term names a place. Further, it must be shown that there is a basis for prospective purchasers of such services to make an association between the place named by the term and the services.' " Sarco Creek Ranch v. Greeson, 36 F. Supp. 3d 726, 731 (S.D. Tex. 2014) (quotation omitted); see Forschner Grp. v. Arrow Trading Co., 30 F.3d 348, 355 (2d Cir. 1994) ("A geographically descriptive term or phrase is one that 'designates geographical location and would tend to be regarded by buyers as descriptive of the geographic location of origin of the goods or services.' ") (quotation omitted). "[W]hen a business name primarily signifies the place where the business is located, it does not connote to consumers the particular business associated with the good and thus is not deserving of trademark protection." Sarco Creek Ranch, 36 F. Supp. 3d at 728.
A mark is not descriptive, however, merely because it contains a geographic term, especially if "the geographic meaning is . . . unconnected with the goods." Helpful Hound, L.L.C. v. New Orleans Bldg. Corp., 331 F. Supp. 3d 581, 593 (E.D. La. 2018) (quoting World Carpets, Inc. v. Dick Littrell's New World Carpets, 438 F.2d 482, 486 (5th Cir. 1971)). "Rather, the relevant inquiry is whether, upon consideration of all terms comprising a composite mark, 'the term is being used geographically.' " Sand Hill Advisors, LLC v. Sand Hill Advisors, LLC, 680 F. Supp. 2d 1107, 1113 (N.D. Cal. 2010) (quoting Japan Telecom, Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 871 (9th Cir. 2002)).
Because Defendant's Local Marks are registered with the PTO, its Local Marks are presumed valid, and Plaintiff ultimately must rebut that presumption. 15 U.S.C. § 1115(a); Matal, 582 U.S. at 226, 137 S.Ct. 1744. Additionally, because Plaintiff raises this argument as an affirmative defense, Plaintiff bears the burden of demonstrating a likelihood that its affirmative defense will succeed. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006) ("[T]he burdens at the preliminary injunction stage track the burdens at trial."); Swain v. Junior, 958 F.3d 1081, 1092 (11th Cir. 2020) (per curiam) (same); Disney Enters. v. VidAngel, Inc., 224 F. Supp. 3d 957, 974 (C.D. Cal. 2016) (same).
Plaintiff contends that Defendant's Local Marks "are primarily geographically descriptive" because:
1. Defendant's Local Marks contain an upside-down outline of Florida,Doc. 31 at 12-16. In support of its argument, Plaintiff cites Jet Miami LLC v. Miami Jet Inc., No. 17-24132-CV-GAYLES/MCALILEY, 2019 WL 4395242, at *3 (S.D. Fla. Aug. 21, 2019), report and recommendation adopted, 2019 WL 4394092, at *1-2 (S.D. Fla. Sept. 13, 2019). In concluding that the plaintiff's state-registered trademark "JETMIAMI" was descriptive, the court in Jet Miami LLC noted that the PTO rejected the plaintiff's trademark application as "primarily geographically descriptive" because "Miami" is a known geographic location and the plaintiff "was offering aircraft related services from an address in Miami." 2019 WL 4395242, at *3.
2. Defendant's products associated with the Local Marks are advertised and sold throughout Florida, and
3. many of Defendant's Local Marks are displayed alongside "a stylized flag or seal of the State of Florida."
Defendant's Local Marks, as noted above, are presumed valid. 15 U.S.C. § 1115(a); Matal, 582 U.S. at 226, 137 S.Ct. 1744. Additionally, although an outline of Florida obviously depicts a known geographic location, Defendant appends an "upside-down" outline of the shape of the State of Florida to the "OCAL" in its Local Marks to serve as the letter "L" in the word "Local." Doc. 26 at 3. Given the lack of description included in Defendant's Local Marks, a customer could not readily conclude that Defendant sells apparel, beer, and rum, just by looking at Defendant's Local Marks. Defendant's Local Marks, therefore, differ from the plaintiff's trademark in Jet Miami LLC because Defendant's Local Marks are registered federally and are not entirely descriptive.
Because Defendant's Local Marks are presumed valid and Plaintiff fails to rebut that presumption or demonstrate that it is likely to succeed on its "primarily geographically descriptive" affirmative defense, Defendant demonstrates that it is substantially likely to establish that its Local Marks are valid.
2. Step Two: Likelihood of Confusion
The likelihood-of-confusion analysis under step two is itself broken into two steps. Initially, a court considers seven factors that "can provide circumstantial evidence of likelihood of confusion." FCOA LLC, 57 F.4th at 947; Custom Mfg. & Eng'g, Inc. v. Midway Servs., Inc., 508 F.3d 641, 648 (11th Cir. 2007). The seven factors are:
1. the strength of the allegedly infringed mark;FCOA LLC, 57 F.4th at 947 (quoting FIU, 830 F.3d at 1255). "[T]he two most important circumstantial facts are respectively actual confusion and the strength of the mark." Id. (citing FIU, 830 F.3d at 1255); Suntree Techs., Inc., 693 F.3d at 1346. But a court need not consider "all of these factors in every case." Sovereign Mil. Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order ("Sovereign Mil."), 809 F.3d 1171, 1181 (11th Cir. 2015) (quotation omitted).
2. the similarity of the infringed and infringing marks;
3. the similarity of the goods and services the marks represent;
4. the similarity of the parties' trade channels and customers;
5. the similarity of advertising media used by the parties;
6. the intent of the alleged infringer to misappropriate the proprietor's good will; and
7. the existence and extent of actual confusion in the consuming public.
In the second part of step two, "the court weighs each of the relevant circumstantial facts—independently and then together—to determine whether the ultimate fact, likelihood of confusion, can reasonably be inferred." FCOA LLC, 57 F.4th at 947 (citing Frehling Enters. v. Int'l Select Grp., 192 F.3d 1330, 1335 (11th Cir. 1999)). In analyzing the seven factors, a court must do more than simply determine whether a majority of the factors indicate that a likelihood of confusion exists. Suntree Techs., Inc., 693 F.3d at 1346 (quoting AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1538 (11th Cir. 1986)). A court instead "must evaluate the weight to be accorded the individual factors and then make its ultimate decision." Id. (quoting AmBrit, Inc., 812 F.2d at 1538).
(a). Strength of the Mark
"Strength or 'distinctiveness' describes a mark's ability to allow consumers to identify the source of a good or service." FCOA LLC, 57 F.4th at 948; Trilink Saw Chain, LLC v. Blount, Inc., 583 F. Supp. 2d 1293, 1310 (N.D. Ga. 2008). Courts assess a trademark's strength—the second most important factor—by considering the trademark's "conceptual strength and commercial strength." FCOA LLC, 57 F.4th at 948.
"Conceptual strength describes the potential of a mark to aid consumer recognition, which [courts] evaluate through an abstract linguistic analysis." Id. at 949. Conceptual strength hinges on whether the trademark is generic, descriptive, suggestive, or fanciful or arbitrary, with generic being the weakest and fanciful or arbitrary being the strongest. Id.; FIU, 830 F.3d at 1256-57. A trademark's classification is "based on the relationship between the mark and the service or good it describes." FIU, 830 F.3d at 1256. The Eleventh Circuit has described the respective classifications as follows:
Generic marks . . . refer to a class of which an individual product is a member (for example, "liquor store" used in connection with the sale of liquor). Descriptive marks describe a characteristic or quality of an article or service (for example, "vision center" denoting a place where glasses are sold). Suggestive marks suggest characteristics of the goods and services and require imaginative effort by the consumer in order to be understood as descriptive (such as "penguin" being applied to refrigerators). Finally, arbitrary marks . . . bear no relationship to the product (e.g., "Sun Bank" is arbitrary when applied to banking services).Id. at 1256-57 (citing Frehling Enters., 192 F.3d at 1335).
Commercial strength, on the other hand, "refers to the real-world consumer recognition of a mark, most often created by the efforts and work of the mark holder." FCOA LLC, 57 F.4th at 950 (citations omitted). To determine a mark's commercial strength, courts look to "third party use; advertising and promotion; sales and number and types of customers; recognition by trade, media, and customers; and survey of likely customers." Id. (citing 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 11:81 (4th ed. 2016)).
Defendant asserts that its Local Marks are arbitrary or fanciful because they use an upside-down outline of Florida as an "L." Doc. 26 at 11, 45. Defendant also asserts that it has "expended substantial time, labor, skill, and expense in developing, advertising, and promoting" its Local Marks, including distributing over 150,000 free decals of its Local Marks, selling its beer and rum products in approximately 150 restaurants and bars throughout Florida, and selling its clothing apparel under its Local Marks in approximately 85 stores throughout Florida. Id. at 46-47 ¶¶ 10-11; see Doc. 31 at 61-62 (showing an interactive map of businesses in Florida that offer Defendant's beer and rum products).
Plaintiff contends that Defendant provides no analysis to support its claim that Defendant's Local Marks are arbitrary or fanciful. Doc. 31 at 19. Plaintiff also contends that Defendant fails to articulate how Defendant's efforts to promote and advertise its Local Marks are relevant to the strength of those trademarks. Id.
Defendant's argument that its Local Marks are arbitrary or fanciful, although brief, has some merit. The Local Marks bear no relationship to Defendant's services or products—apparel, beer, and rum—on which they are placed. Defendant's Local Marks, therefore, likely are fanciful or arbitrary and have substantial conceptual strength. See FCOA LLC, 57 F.4th at 949 (defining a fanciful or arbitrary mark as "a word or phrase that bears no relationship to the product (e.g., 'Sun Bank' is arbitrary when applied to banking services)") (quoting Frehling Enters., 192 F.3d at 1335); Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1358 (11th Cir. 2007) (noting that " 'ivory' is generic of elephant tusks but arbitrary as applied to soap") (quoting Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1184 (5th Cir. 1980)).
Additionally, Lilly's declaration sets forth Defendant's efforts to promote and advertise its Local Marks by distributing over 150,000 free decals of its Local Marks, selling its beer and rum products in approximately 150 restaurants and bars throughout Florida, and selling its clothing apparel under its Local Marks in approximately 85 stores throughout Florida. Doc. 26 at 46-47 ¶¶ 10-11. Lilly also states that Defendant has an annual gross revenue of over $1 million. Id. at 47 ¶ 14. Missing from Defendant's discussion, however, is evidence of third-party use, if any; the number and types of customers; "recognition by trade, media, and customers"; and "likely customers" by survey. FCOA LLC, 57 F.4th at 950. Nevertheless, Defendant has demonstrated that its Local Marks have at least some commercial strength.
Because Defendant demonstrates that its Local Marks have conceptual strength and at least some commercial strength, this factor weighs in Defendant's favor.
(b). Similarity of the Marks
The greater the similarity between the allegedly infringed mark and allegedly infringing mark, "the greater the likelihood of confusion." Id. at 952 (quoting FIU, 830 F.3d at 1260). The marks need not be identical, however. Instead, courts apply the "subjective eyeball test," by considering " 'the overall impressions that the marks create, including the sound, appearance, and manner in which they are used,' rather than comparing isolated features." Id. (quotations omitted). Furthermore, the "mere fact that two marks contain the same word does not, in itself, make the marks 'substantially similar.' " Tarsus Connect, LLC v. Cvent, Inc., 452 F. Supp. 3d 1334, 1351-52 (N.D. Ga. 2020) (quoting Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 502 (5th Cir. 1979)).
Defendant argues that this factor weighs in its favor because the dominant portion of Plaintiff's logos is the word "Local" with either the initial "L" or the terminal "1" replaced with an "upside-down" representation of the shape of the State of Florida. Doc. 26 at 12. Defendant also argues that both of Plaintiff's logos use font similar to the font in Defendant's Local Marks. Id. at 11-13. Plaintiff does not address this factor.
Although Plaintiff's logos include "the" and "café," these are generic words that do little to distinguish Plaintiff's logos from Defendant's Local Marks. FCOA LLC, 57 F.4th at 953 (noting that distinctive words are "far more important than generic words like title and escrow"). Additionally, both Plaintiff's logos and Defendant's Local Marks emphasize the word "Local." That is, a consumer's eye likely would be drawn to the word "Local" given its size and the "upside-down" representation of the State of Florida replacing an "L." Furthermore, Plaintiff's logos and Defendant's Local Marks use similar fonts. Id. (noting that the distinctive part of the parties' marks appears in similar font); Homes & Land Affiliates, LLC v. Homes & Loans Mag., LLC, 598 F. Supp. 2d 1248, 1262 (M.D. Fla. 2009) (finding the parties' respective marks similar, in part, because both marks used "Homes &" and "use[d] all capitals and block lettering"). This factor, too, weighs in Defendant's favor.
(c). Similarity of the Services and Products
The third factor requires a court to consider whether the parties' services and products "are the kind that the public attributes to a single source." FIU, 830 F.3d at 1261 (quoting Frehling Enters., 192 F.3d at 1338); FCOA LLC, 57 F.4th at 953. Said differently, a court must determine "whether the goods are so related in the minds of consumers that they get the sense that a single producer is likely to put out both goods." Tarsus Connect, LLC, 452 F. Supp. 3d at 1352 (quoting ITT Corp. v. Xylem Grp., LLC, 963 F. Supp. 2d 1309, 1321 (N.D. Ga. 2013)).
Defendant contends that given the similarities between Plaintiff's logos and Defendant's Local Marks, consumers likely will conclude that Plaintiff's services and Defendant's products originate from the same source. Doc. 26 at 14-16 (citing Savannah Coll. of Art & Design, Inc. v. Sportswear, Inc., 983 F.3d 1273, 1284 (11th Cir. 2020) ("[T]his factor is less important in cases . . . that concern the use of the plaintiff's service marks on the defendant's goods for the very reason that the plaintiff's marks embody the plaintiff's goodwill and reputation.")). Defendant also asserts that two years ago it planned to open "a burger joint stand or grill in a food court" and that it currently is looking for "beach-front property to open its first grill, café or eatery." Id. at 16, 47. Financial difficulties caused by the COVID-19 pandemic, however, allegedly have stalled Defendant's plans to open a restaurant in a food court and purchase beach-front property. Id.
Plaintiff argues that Defendant offers no evidence that the parties offer the same goods or services. Doc. 31 at 19. That is, Defendant does not allege that Plaintiff sells apparel, beer, or rum, and Defendant concedes that it currently does not operate a café. Id. Plaintiff also argues that none of Defendant's registered marks relate to "café services" or "restaurant services." Id. at 20.
At this stage, there apparently is little to no overlap between the services and goods offered by Defendant—apparel, beer, and rum—and the services and goods offered by Plaintiff, which is a single-location café that does not sell clothing or alcoholic beverages. See FCOA LLC, 57 F.4th at 953 (noting that both parties sold insurance); FIU, 830 F.3d at 1261 (noting that both parties offered overlapping bachelor's degree programs and one master's program); Homes & Land Affiliates, LLC, 598 F. Supp. 2d at 1263 (finding that the parties offered "virtually identical" services because they both were "magazines selling advertising space for real estate professionals and related services for distribution to the general public via a free magazine"). Defendant's plans to open a restaurant do not alter this determination. Furthermore, the present action is distinguishable from Savannah College of Art & Design, Inc. insofar as the defendant in that action used the plaintiff's exact marks without a license. 983 F.3d at 1278, 1284. Plaintiff's logos, although similar to Defendant's Local Marks, are not identical to Defendant's Local Marks. This factor, therefore, weighs in Plaintiff's favor.
(d). Similarity of Trade Channels and Customers
The fourth factor "focuses on 'where, how, and [with] whom' the parties transact with their actual and potential customers." FCOA LLC, 57 F.4th at 954 (quoting Sovereign Mil., 809 F.3d at 1187-88). The primary focus of this inquiry is on "the overlap of the customer bases, because the greater the overlap, the greater the likelihood that consumers will be exposed to both marks and become confused." Id. (citing Savannah Coll. of Art & Design, Inc., 983 F.3d at 1284); FIU, 830 F.3d at 1261. This inquiry also focuses on "whether the medium (e.g., stores, agents, online, mail, etc.) that customers frequent would expose them to both marks, not on whether the products or services are sold in the same location or manner." FCOA LLC, 57 F.4th at 954 (citations omitted).
Plaintiff correctly notes that Defendant does not address this factor. Doc. 31 at 21. Defendant notes several times in its motion, however, that it sells clothing bearing its Local Marks "in over 85 different locations in Florida" and that it sells its "bear and rum products" bearing its Local Marks "in over 150 restaurants and bars in Florida." Doc. 26 at 15. Defendant also states that it has distributed throughout Florida more than "150,000 free decals" bearing its Local Marks. Id. at 11. Lilly's declaration supports these assertions. Id. at 46-47.
Given these claims, it is likely that there is at least some overlap between Plaintiff's and Defendant's respective customer base. The extent of that overlap is unknown, however, because Defendant did not address this factor. This factor, therefore, weighs in Plaintiff's favor.
(e). Similarity of Advertising
The fifth factor "focuses on the audience reached by the advertisements of the parties." FCOA LLC, 57 F.4th at 955 (citing Sovereign Mil., 809 F.3d at 1187-88). In assessing this factor, courts consider whether "the overlap in readership of the parties' advertisements is 'significant enough' that 'a possibility of confusion could result.' " Id. (quoting PlayNation Play Sys., Inc. v. Velex Corp., 924 F.3d 1159, 1168-69 (11th Cir. 2019)). "[T]he greater the overlap or similarity of the audiences, the greater the likelihood of confusion." Id. (citing Sovereign Mil., 809 F.3d at 1187-88).
Defendant asserts that the parties use at least one common means of advertising: the internet. Doc. 26 at 16. Defendant also asserts that Plaintiff continues to use its original logo on a sign perched over the café and on the café's front door. Id. at 16-17.
Defendant's argument that both parties advertise via the internet carries little weight because Defendant does not articulate to whom the advertisements are directed. "[H]aving a website or advertising online informs the court precious little about exposure and confusion." FCOA LLC, 57 F.4th at 955 n.18 (citing Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011)). Furthermore, Defendant does not explain how Plaintiff's signage is similar to any of Defendant's advertising methods. See Doc. 31 at 22. This factor, therefore, weighs in Plaintiff's favor.
(f). Plaintiff's Intent
The penultimate factor focuses on whether the allegedly infringing party "had a conscious intent to capitalize on the [opposing party's] business reputation, was intentionally blind, or otherwise manifested improper intent" in adopting the protected mark. FIU, 830 F.3d at 1263 (quoting Custom Mfg. & Eng'g, Inc., 508 F.3d at 648). The primary question, therefore, is whether the allegedly infringing party acted in "bad faith." Trilink Saw Chain, LLC, 583 F. Supp. 2d at 1316; see Crossfit, Inc. v. Quinnie, 232 F. Supp. 3d 1295, 1308 (N.D. Ga. 2017). Adopting a party's mark with the intent to derive a benefit from the other party's reputation "justif[ies] the inference that there is confusing similarity" between the parties' respective marks. Frehling Enters., 192 F.3d at 1340.
"[P]rior knowledge of a senior user's trademark does not necessarily give rise to an inference of bad faith and may be consistent with good faith." Michael Caruso & Co. v. Estefan Enters., 994 F. Supp. 1454, 1462 (S.D. Fla. 1998) (quoting Arrow Fastener Co. v. Stanley Works, 59 F.3d 384, 397 (2d Cir. 1995)). Continued use of an allegedly infringing mark with knowledge that the mark is substantially similar to a senior mark and after objections to the mark's use, however, may evidence intent or at least intentional blindness. See Frehling Enters., 192 F.3d at 1340.
Defendant asserts that in October 2022, before Plaintiff opened, Lilly contacted Cash after a "customer" contacted Lilly to ask whether, in light of Plaintiff's original logo, Defendant and Plaintiff were related. Doc. 26 at 18, 48. Lilly sent Cash images of Defendant's registered marks and asked Cash not to use Plaintiff's original logo. Id. at 18, 47; see Doc. 28 at 12.
Cash allegedly refused these entreaties, and Plaintiff's original logo remains on the sign over the café and on the café's front door. Doc. 26 at 18; see id. at 52, 56-57. Additionally, Defendant asserts that Plaintiff's second logo is located on a billboard in Panama City, Florida. Doc. 26 at 18, 49; see id. at 54.
Plaintiff responds that it did not intentionally seek "to infringe any valid trademark rights held by Defendant" and Plaintiff attempted to resolve this dispute before initiating this litigation. Doc. 31 at 23; see Doc. 28 at 12, 15.
At the outset, Plaintiff's efforts to redesign its original logo—simply by moving the "upside-down" outline of Florida from the initial "L" in "Local" to the terminal "1"—do not necessarily negate a finding of bad faith. After all, Plaintiff's efforts may simply have been an attempt to avoid litigation. See Homes & Land Affiliates, LLC, 598 F. Supp. 2d at 1264.
As to the circumstances surrounding Plaintiff's use of its logos, when Plaintiff opened, Plaintiff knew that its original logo—at a minimum—resembled Defendant's Local Marks. Plaintiff does not dispute that the sign above the café and the café's front door continue to bear Plaintiff's original logo. Plaintiff also does not dispute that it is using on a billboard in Panama City its second logo, which is similar to its original logo and, therefore, similar to Defendant's Local Marks.
Thus, even though Defendant did not present any evidence that Plaintiff adopted its logos with the intent of deriving a benefit from Defendant's business, there is at least some evidence that Plaintiff continues to use its logos with the knowledge that there is a potential for confusion between Plaintiff's logos and Defendant's Local Marks. This factor, therefore, weighs slightly in Defendant's favor.
(g). Actual Confusion
The final factor—actual confusion—is the most important factor, although evidence of actual confusion is not a prerequisite for succeeding on a trademark-infringement claim. Sovereign Mil., 809 F.3d at 1189 (citing Amstar Corp. v. Domino's Pizza, 615 F.2d 252, 263 (5th Cir. 1980)). Under this factor, courts must consider whether any actual confusion has occurred. FCOA LLC, 57 F.4th at 956 (citing Frehling, 192 F.3d at 1340). "[T]he quantum of evidence needed to show actual confusion is relatively small." Wreal, LLC v. Amazon.com, Inc., 38 F.4th 114, 139 (11th Cir. 2022) (quoting Jellibeans, Inc. v. Skating Clubs of Ga., Inc., 716 F.2d 833, 845 (11th Cir. 1983)). Indeed, even "very little" evidence of actual confusion "is highly probative." Sovereign Mil., 809 F.3d at 1189 (quoting World Carpets, Inc. v. Dick Littrell's New World Carpets, 438 F.2d 482, 489 (5th Cir. 1971)).
The strength of actual-confusion evidence "depends on 'the number of instances of confusion,' 'the kinds of persons confused,' and the 'degree of confusion.' " Id. (quoting Safeway Stores, Inc. v. Safeway Disc. Drugs, Inc., 675 F.2d 1160, 1167 (11th Cir. 1982)). "Short-lived confusion or confusion of individuals casually acquainted with a business," for example, "is worthy of little weight." FIU, 830 F.3d at 1264 (quoting Safeway Stores, Inc., 675 F.2d at 1167). Evidence of actual-customer confusion bears more substantial weight. Id. Also relevant to this inquiry is "the extent of advertising, the length of time for which an infringing product has been advertised, and any other factors that might influence the reporting of actual confusion." FCOA LLC, 57 F.4th at 956.
As noted above, Lilly states that a single "customer" expressed confusion after seeing Plaintiff's original logo. Doc. 26 at 48 ¶ 18. Lilly also states that before Plaintiff opened in November 2022, he "received more texts and phone call from different people who wondered whether" Plaintiff was associated with Defendant. Id. ¶ 21. But Lilly fails to identify the allegedly confused individuals beyond indicating that one was a "customer," and the others were "people." Id. ¶¶ 18, 21. Lilly also fails to specify the number of "people" that contacted him. Furthermore, Lilly did not state whether the alleged confusion is ongoing. See FIU, 830 F.3d at 1264 (noting that "[s]hort-lived confusion . . . is worthy of little weight") (quoting Safeway Stores, Inc., 675 F.2d at 1167). This factor, therefore, weighs in Plaintiff's favor.
(h). Balancing the Seven Factors
Of the seven factors discussed above, three arguably favor Defendant: (1) the strength of Defendant's Local Marks, which is the second most important factor; (2) the similarity between Plaintiff's logos and Defendant's Local Marks; and (3) Plaintiff's intent in adopting its logos, although this factor weighs only slightly in Defendant's favor. Four factors, on the other hand, arguably favor Plaintiff: (1) the lack of similarity between the respective products and services offered by the parties; (2) the lack of similarity between the parties' respective advertising methods; (3) the lack of similarity between the parties' respective trade channels and customers; and (4) the lack of evidence of actual confusion, which is the most important factor.
After weighing each of these factors individually and then together, Defendant fails to demonstrate—at least at this stage—a substantial likelihood of success on the merits of its trademark-infringement counterclaim. For this reason alone, therefore, this court must deny Defendant's motion for a preliminary injunction. CBS Broad., Inc., 265 F.3d at 1200; Church, 30 F.3d at 1342; All Care Nursing Serv., 887 F.2d at 1537. B. Defendant Fails to Demonstrate that It Will Suffer Irreparable Injury
Even if Defendant had demonstrated that it likely would succeed on the merits of one of its counterclaims, this court would be required to deny Defendant's motion for a second, related reason: Defendant fails to demonstrate that it will suffer irreparable injury from Plaintiff's use of Plaintiff's logos.
In assessing claims of irreparable injury, courts look to factors such as "loss of control of reputation, loss of trade, and loss of goodwill." Ferrellgas Partners, L.P. v. Barrow, 143 F. App'x 180, 190 (11th Cir. 2005) (quotation omitted); Hoop Culture, Inc. v. Gap, Inc., 122 F. Supp. 3d 1338, 1346 (M.D. Fla. 2015). Courts also look to the urgency with which a party moved for a preliminary injunction. Wreal, LLC v. Amazon.com, Inc., 840 F.3d 1244, 1248 (11th Cir. 2016). "A delay in seeking a preliminary injunction of even only a few months—though not necessarily fatal—militates against a finding of irreparable harm." Id.; Hi-Tech Pharms., Inc. v. Herbal Health Prods., Inc., 311 F. Supp. 2d 1353, 1357-58 (N.D. Ga. 2004).
To demonstrate irreparable injury, Defendant relies on its claim that it is substantially likely to prevail on its trademark-infringement counterclaim. Doc. 26 at 20-21. Additionally, Lilly asserts in his declaration that Defendant "will suffer losses and damage to its goodwill and reputation" if Plaintiff is not enjoined from using Plaintiff's logos "and any other variation of the word 'LOCAL' or any other word that uses" an upside-down outline of Florida as an "L." Id. at 49 ¶ 27.
As noted above, Defendant fails to carry its burden of demonstrating that it is substantially likely to prevail on the merits of its trademark-infringement claim. Additionally, other than Lilly's affidavit, Defendant offers no evidence demonstrating that Plaintiff's use of its logos will cause Defendant to lose control of its reputation, suffers a loss of trade, or suffer a diminution of its goodwill.
Furthermore, Defendant filed the present motion more than three months after Plaintiff initiated this action and almost two weeks after filing its amended answer and counterclaims. Defendant may have had good reasons to proceed deliberately. But, as discussed above, a belated motion for a preliminary injunction "militates against a finding of irreparable harm." Wreal, LLC, 840 F.3d at 1248; Hi-Tech Pharms., Inc., 311 F. Supp. 2d at 1357-58.
Defendant's unexplained deliberateness is coupled with the fact that Defendant relies only on Lilly's affidavit as evidence of irreparable harm. That evidence presumably was available to Defendant at least by the date Plaintiff initiated this civil action. This further undermines Defendant's claim that it will suffer irreparable injury in the absence of a preliminary injunction. Wreal, LLC, 840 F.3d at 1248-49 (noting that the preliminary-injunction motion relied exclusively on evidence available to the moving party at the initiation of the lawsuit).
For this reason, even if Defendant had established the likelihood that it would prevail on the merits, this court would be required to deny Defendant's motion for a preliminary injunction.
Because Defendant did not establish the first and second essential elements for a preliminary injunction, this court perceives no need to address the third and fourth elements.
III. CONCLUSION
A preliminary injunction is an extraordinary remedy that courts should grant only in a small subset of cases. Winter, 555 U.S. at 24, 129 S.Ct. 365; Bloedorn, 631 F.3d at 1229. Because Defendant fails to demonstrate that it likely will prevail on its trademark-infringement counterclaim and that it will suffer irreparable injury from Plaintiff's use of Plaintiff's logos in the absence of a preliminary injunction, Defendant fails to show that a preliminary injunction is appropriate. Defendant's motion for a preliminary injunction, therefore, is DENIED.
SO ORDERED this 13th day of March, 2023.