Opinion
Case No. 11 CV 1370
10-05-2011
Merlin's Franchising, Inc. Plaintiffs, v. GARY W. SCHARP, Defendant.
AGREED FINDINGS OF FACTS AND CONCLUSIONS OF LAW
THIS MATTER having come before this Court on Plaintiffs Motion for the issuance of a Temporary Restraining Order, notice having been given to Defendant, and all parties having been given an opportunity to be heard. The Court, after hearing arguments and reviewing the pleadings, has decided to issue this Agreed Temporary Restraining Order based on the following findings of facts and conclusions of law:
Agreed Facts
1. Plaintiff, MERLIN FRANCHISING, INC. ("Merlin"), is an Illinois corporation with its principal place of business in St. Charles, Illinois.
2. Defendant, GARY W. SCHARP, is an individual and a citizen of the State of Illinois formerly owning and operating auto repair shops, as a Merlin franchisee, d/b/a Merlin 200,0000 Miles Shops located at 2406 N. University Street, Peoria, IL 61604 and 927 Washington Street, East Peoria, IL 61611.
3. Merlin is the licensor of the trade name and service mark "Merlin" issued by the United States Patent and Trademark Office, and the "Merlin" marks including "200,000 Miles Shop"; the building turret design, the smiling Merlin magician, and the dwarves hat have achieved a secondary meaning and have become incontestable.
4. That Merlin is the licensor of the Merlin trade name and service marks issued by the State of Illinois.
5. That Merlin, grants licenses to independently owned and operated franchisees to use the Merlin name and service mark as outlined in franchise agreements.
6. That there are fifty-three (53) authorized Merlin 200,000 Miles Shops nationwide.
7. That Defendant's Franchise Agreements to operate Merlin Shops, in Peoria and East Peoria, Illinois, are terminated.
8. That the Franchise Agreements at ¶15.E.&F. contains a Non-Compete provision which prohibits Defendant from conducting a competing business within two miles of his current locations or any other Merlin shop for two years.
9. That Defendant's continued use of the Merlin service mark, trademark, and name without any authorization or license would constitute trademark infringement, and any continued operation of a competing business by Defendant at its current locations or within 2 miles would violate the Non-Compete provisions of the Franchise Agreements. The buildings themselves are trademarked with the castle-like turrets - a Merlin licensed trademark. (Complaint Exhibit "A"). The "turrets" should not be altered during the pendency of this Agreed Order.
AGREED CONCLUSIONS OF LAW
1. The Court finds that there is a strong likelihood of success by Merlin on the merits of its Complaint.
2. The Court finds that there is a threat of irreparable harm being suffered by Merlin if a Temporary Restraining Order were not issued. 683 F.2d 704 (2d Cir. 1982).
3. Merlin will suffer irreparable harm due to the likelihood of confusion among the consuming public. Further, the Lanham Act specifically provides for injunctive relief as the appropriate remedy for a licensor whose trademark is being used without its consent or authorization. (15 U.S.C., §1116).
4. The Court finds that it is well settled that when a franchise relationship does not exist, one cannot use the franchisor's trademarks.
5. The Court finds that the balance of harms factor for the issuance of injunctive relief favors the Plaintiffs.
6. The Court finds that the public interest favors the issuance of the Temporary Restraining Order.
7. The Court finds that Merlin has no adequate remedy at law. The Lanham Act expressly allows for injunctive relief to be granted in situations like this involving trademark infringement (15 U.S.C., §1116).
Enter: James E. Shadid
U.S. District Judge
Timothy J. Howard #01271202
Michael R. Lied #06197844
Howard & Howard Attorneys PLLC
211 Fulton Street #600
Peoria, IL 61602
309/672-1483
Gregory J. Ellis, Esq. #03127073
GREGORY J. ELLIS, ESQ., LTD.
18 Executive Ct
South Barrington, IL 60010
847/842-0999
9/30/11