Donut Joe's, Inc. v. Interveston Food Services, LLC

101 F. Supp. 3d 1172, 2015 U.S. Dist. LEXIS 52665, 2015 WL 1840431
District Court, N.D. Alabama·Decided April 22, 2015·No. Case No. 2:13-CV-1578-VEH·Published·Cited by 3 cases

Opinion

MEMORANDUM OPINION

VIRGINIA EMERSON HOPKINS, District Judge.

This case is now before the court on a motion for summary judgment (“the Motion”) (Doc. 54), filed on January 15, 2015 by defendant Interveston Food Services, LLC (“Interveston”), the only remaining defendant1 in this case. Interveston seeks summary judgment in its favor on the only remaining claims2 in this case: the trademark infringement claims made against it by plaintiff Donut Joe’s, Inc. (“Donut Joe’s”). (Doc. 54). Donut Joe’s responded to the Motion on February 5, 2015. (Doc. 65, Doc. 66), and also filed a Motion To Strike several pieces of Interveston’s evidence. (Doc. 68). Interveston filed a reply brief to Donut Joe’s response on February 19, 2015, (Doc. 69), as well as a Response In Opposition to the motion to strike. (Doc. 70). Therefore, the matter is now under submission.

I. STATEMENT OF MATERIAL FACTS3

A. Undisputed Facts

1. The Origins Of Donut Joe’s And The Donut Chef

In July 2009, Donut Joe’s opened a shop in Pelham, Alabama that primarily sells donuts and coffee. Towards the end of [1177]*11772010, Werner Beiersdoerfer and Michael Kenneth Flowers approached Donut Joe’s President and sole shareholder, Richard Byrd, about potentially opening a Donut Joe’s franchise. Beiersdoerfer and Flowers are members of Interveston.4 Neither Beiersdoerfer nor Flowers had prior experience operating a restaurant. Beiers-doerfer’s son, Brock Tyson Beiersdoerfer, was formerly a member of Interveston. Beiersdoerfer’s explicit intent in placing his son as a member in Interveston Food Services, LLC was due to “the potential consequences and the legal action I faced, at that time.” Beiersdoerfer’s son was installed as a member of Interveston as a “favor” to Beiersdoerfer, even though he “was never a part of the LLC as a functioning body.” Beiersdoerfer did not have any membership interest in the LLC until December 2011, at the earliest, when his son resigned and transferred his interest to Beiersdoerfer for no consideration or reason.

On November 12, 2010, Beiersdoerfer and Flowers entered into a Confidentiality and Non-Disclosure Agreement with Do-nut Joe’s. In February 2011, the parties entered into a Letter of Understanding with respect to Interveston’s development of Donut Joe’s shops in Alabama. Interve-ston then began the process of opening a Donut Joe’s shop. Interveston initially investigated a location in Clanton, Alabama, but ultimately chose a location in Calera, Alabama.

Around May 2011, Interveston entered into a lease for space, obtained approval from the Shelby County Health Department, and obtained a building permit from the City of Calera, keeping Donut Joe’s apprised of the progress via emails. (Ex. 6.) -Interveston also obtained financing and purchased equipment for the Calera location, including “[t]ables, trays, chairs, mixers, ice machine, displays, refrigerators, ovens, [and] freezers.” The build-out of the Calera store began in early June 2011 and, around June 14, 2011, Byrd met with Interveston at the Calera location to discuss the build-out and go over the plans. The parties could not agree5 on the-final terms of a license arrangement, and their business relationship terminated at the end of June 2011. Because Interveston had already entered into a lease agreement, begun building out the space to accommodate a donut shop, and purchased equipment for the store, Interveston proceeded to open an independent donut shop in the Calera location.

After the business relationship between Donut Joe’s and Interveston terminated, Byrd drove to The Donut Chef location in Calera while it was still under construction, saw a donut character painted on the wall of the store, and took photographs of the inside of the store. On August 2, 2011, Byrd sent an email relaying that Interve-ston was opening up a donut store and that he had taken photographs of the store in Calera. On August 28, 2011, Byrd purchased the domain name for the website TheDonutChef.com. On or about September 18, 2011, Interveston opened The Do-nut Chef store in Calera.

2. The Marks

Interveston engaged Roger Meadows, a corporate communications professional who assists businesses in branding, to help [1178] design a name and a logo for the 'Calera donut shop. Meadows proposed a number of potential names and designs. Flowers initially wanted to use the name “DJ’s Donuts and Java” to promote a musical theme for the shop, but Beiersdoerfer rejected it, and Meadows did not recommend it because he thought it was weak. In-terveston also rejected one of Meadow’s proposed logos on the basis that it contained the word “Joe.” Ultimately, Interve-ston selected “The Donut Chef,” one of the names proposed by Meadows. Meadows came up with the concept for The Donut Chefs logo. Interveston never showed the Donut Joe’s marks to Meadows, and, in fact, Meadows had never seen the Donut Joe’s logo before his deposition in this case.

Interveston registered The Donut Chef trademark with the Alabama Secretary of State on December 27, 2013. The mark consists of a personified doughnut character wearing a chefs hat along with the words “THE DONUT CHEF.”6 Color has not been claimed as a feature of the mark. Interveston is the sole owner of the “Do-nut Chef’ marks. Interveston explicitly maintains the rights to all trademarks and dictates how licensee stores will use its marks. Under their licensing agreements, licensees receive the rights to use The Donut Chefs trademarks without alteration.

Donut Joe’s owns two registered trademarks — the Donut Joe’s name, registered with the United States Patent and Trademark Office (“USPTO”) in July 2011, and the Donut Joe’s logo, registered with the USPTO in July 2012. In the registration of the word mark, Donut Joe’s specifically disclaimed the exclusive right to use the word “donut” apart from the Donut Joe’s mark in conjunction with the sale of donuts and restaurant services. Donut Joe’s logo mark consists of the stylized wording “DO-NUT JOE’S” and a design of a donut wearing a chefs hat and holding a cup of coffee, on an oval shaped background carrier, above a smaller oval background carrier containing the words “Fresh Coffee & Donuts To Go!” Donut Joe’s considers its corporate colors to be orange, green, brown, and white, and the inside of its store utilizes these colors.

The Donut Chefs primary colors are red, yellow, and brown. The inside walls of The Donut Chef store are painted yellow and include a picture of its donut character.

3. Business Practices, Advertising, And Locations

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Donut Joe's, Inc. v. Interveston Food Services, LLC, 101 F. Supp. 3d 1172, 2015 U.S. Dist. LEXIS 52665, 2015 WL 1840431 (N.D. Ala. 2015).

101 F. Supp. 3d 1172 (Donut Joe's, Inc. v. Interveston Food Services, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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