Chipotle Mexican Grill Inc v. Chipotles Grill of Jonesboro Inc et al

Filing 17

ORDER granting pltf's 2 Motion for Preliminary Injunction; defts are ordered to immediately cease and desist using the trademark, trade name, logo, or any other identifying information similar to pltf's that would likely cause confusion between defts and pltf. Signed by Judge Brian S. Miller on 6/9/11. (vjt)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
CHIPOTLE MEXICAN GRILL, INC.,
A Delaware Corporation
v.

PLAINTIFF

CASE NO. 4:10cv01976 BSM

CHIPOTLES GRILL OF JONESBORO, INC.,
An Arkansas Corporation; and CHIPOTLES
GRILL, INC., An Arkansas Corporation

DEFENDANTS

ORDER
Plaintiff Chipotle Mexican Grill, Inc. (“plaintiff”) requests a preliminary injunction
[Doc. No. 2] against defendants Chipotles Grill of Jonesboro, Inc. and Chipotles Grill, Inc.
(hereinafter referred to collectively as “defendants”) to cease using the marks “Chipotles,”
“Chipotles Grill,” “Chipotles Grill of Jonesboro,” “Chipotles Mexican Grill,” or any other
mark which is confusingly similar to those owned by plaintiff. Defendants have responded.
[Doc. No. 10]. For good cause shown, the motion is granted.
I. BACKGROUND
Plaintiff is a Mexican fast-casual restaurant chain that began in Denver, Colorado in
1993. The restaurants operate under the registered trade names “Chipotle®” and “Chipotle
Mexican Grill®.” Plaintiff currently owns and operates 1,000 Chipotle restaurants around
the United States, and the first Arkansas location was recently opened in Fayetteville,
Arkansas. The word marks “Chipotle®” and “Chipotle Mexican Grill®” were both registered
in 2000. Composite marks bearing the Chipotle name have also been registered. The first was
registered in 2000.

Defendant Chipotle’s Grill of Jonesboro, Inc., is a restaurant located in Jonesboro,
Arkansas and was incorporated in Arkansas in 2009. Defendant Chipotle’s Grill, Inc., is a
restaurant located in Beebe, Arkansas and was incorporated in Arkansas in 2006. Both
defendants are owned in whole or in part by Efren Montano.
Plaintiff filed suit against defendants on November 30, 2010, alleging: (1)
trademark/service mark infringement in violation of the Lanham Act; (2) federal unfair
competition in violation of the Lanham Act; (3) false representation and false designation of
origin; (4) common law trademark infringement; (5) unfair competition; (6) misappropriation
of good will and business reputation; (7) violation of the Arkansas Deceptive Trade Practices
Act (“ADTPA”); and (8) violations of Arkansas Code Annotated § 4-71-201et seq. The
motion for preliminary injunction was filed the same day as the complaint.
II. PRELIMINARY INJUNCTION STANDARD
“[W]hether a preliminary injunction should issue involves consideration of (1) the
threat of irreparable harm to the movant; (2) the state of balance between this harm and the
injury that granting the injunction will inflict on other parties litigant; (3) the probability that
movant will succeed on the merits; and (4) the public interest.” Dataphase Sys., Inc. v. C L
Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). “In balancing the equities, no single factor is
determinative.” Id. at 114. “At base, the question is whether the balance of equities so favors
the movant that justice requires the court to intervene to preserve the status quo until the
merits are determined.” Id. For example,
If the chance of irreparable injury to the movant should relief be denied is
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outweighed by the likely injury to other parties litigant should the injunction
be granted, the moving party faces a heavy burden of demonstrating that he is
likely to prevail on the merits. Conversely, where the movant has raised a
substantial question and the equities are otherwise strongly in his favor, the
showing of success on the merits can be less.
Id.
III. DISCUSSION

The Dataphase factors support the granting of a preliminary injunction. Each one
weighs in favor of plaintiff.
A.

Threat of Irreparable Harm
Irreparable harm can be presumed if plaintiff can show a likelihood of consumer

confusion. General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 625 (8th Cir. 1987). As
discussed below, plaintiff has established that consumer confusion is likely. There is
therefore a threat of irreparable harm.
B.

State of Balance Between the Harms
If a preliminary injunction is not entered, the harm to plaintiff will be greater than the

harm to defendants if a preliminary injunction is entered. Plaintiff registered its trademarks
and has spent millions of dollars promoting its brand. As demonstrated by the e-mails and
reviews attached to plaintiff’s motion, plaintiff’s goodwill is being injured by the confusion
created by the utilization of plaintiff’s marks by defendants. Comparatively, the harm
imposed upon defendants by a preliminary injunction is minimal because defendants are local
restaurants that, presumably, rely upon local word of mouth to drive its patronage and not
on a regional or national reputation that is associated with its name.
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C.

Success on the Merits
Plaintiff is likely to succeed on the merits of its Lanham Act claims and similar state

claims. The Lanham Act states, in pertinent part, that
(1) Any person who shall, without the consent of the registrant –
(a) use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering for
sale, distribution, or advertising of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a registered mark
and apply such reproduction, counterfeit, copy, or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods or
services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for the remedies hereinafter
provided.
15 U.S.C. § 1114(1). Additionally,
(1) Any person who, on or in connection with any goods or services, or any
container for goods, uses in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading representation of fact,
which –
(A) is likely to cause confusion, or to cause mistake, or to deceive as to
the affiliation, connection, or association of such person with another
person, or as to the origin, sponsorship, or approval of his or her goods,
services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature,
characteristics, qualities, or geographic origin of his or her or another
person’s good, services, or commercial activities,
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shall be liable in a civil action by any person who believes that he or she is or
is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1). “The Lanham Act prohibits the use of a mark in connection with
goods or services in a manner that is likely to cause confusion as to the source of sponsorship
of the goods or services.” Davis v. Walt Disney Co., 430 F.3d 901, 903 (8th Cir. 2005). In
SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980), the Eighth Circuit set forth
six factors to be considered when determining the likelihood of confusion: (1) the strength
of the plaintiff’s mark; (2) the similarity between the plaintiff’s and defendant’s marks; (3)
the degree to which the allegedly infringing product competes with the plaintiff’s goods; (4)
the alleged infringer’s intent to confuse the public; (5) evidence of actual confusion; and (6)
the degree of care reasonably expected of potential customers in light of the kind of product,
its costs and the conditions of purchase.
A mark’s strength is determined by its distinctiveness. “A distinctive trademark is one
that is capable of identifying the source of goods because it is either inherently distinctive
or, if not inherently distinctive, has acquired distinctiveness by acquiring secondary
meaning.” Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 869 (8th Cir. 1994). Further,
“[r]egistered trademarks . . . are presumed to be distinctive and nonfunctional.” Id. at 869.
Plaintiff’s word marks and service marks have been in use since 1993 and registered since
2000. There is therefore a presumption that they are distinctive.
Plaintiff’s marks and defendants’ marks are very similar. The word marks are
practically identical. In plaintiff’s word marks, “chipotle” is singular, and in defendants’

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word marks, “chipotle” is plural. Plaintiff’s word marks describe “Chipotle” as a “Mexican
Grill.” Defendants’ word marks describe “Chipotles” as a “Mexican Restaurante.” The
composite marks of plaintiff and defendants’ restaurants are both a circle surrounding a
pepper with the name of the restaurant wrapping around the circle. The only difference is that
the pepper is inverted in defendants’ composite mark.
There is not direct competition between plaintiff and defendants because plaintiff does
not operate a Chipotle in Beebe or Jonesboro. The analysis, however, does not stop there
because “[a] showing of direct competition . . . is not required, and the factor ‘degree of
competition’ requires a broader examination of the products’ relationship in the market.”
Kemp v. Bumble Bee Seafoods, Inc., 398 F.3d 1049, 1056 (8th Cir. 2005). Indeed, plaintiff
markets competing products because plaintiff operates several Chipotle restaurants in the
region and has recently opened a restaurant in Arkansas. Further, plaintiff’s and defendants’
restaurants both serve Mexican food at similar prices.
Plaintiff argues that due to the similarity of the marks, it can be presumed that
defendants intended to confuse the public. Although the marks are almost identical, this is
not enough to establish intent to confuse.
The evidence submitted by plaintiff of actual confusion, however, is substantial. The
items submitted included a number of e-mails sent to plaintiff’s customer service website.
In these e-mails, customers question whether the defendants’ restaurants are associated with
plaintiff. A few e-mails inform plaintiff of the defendants’ restaurants, and state that it is
confusing to other customers whether defendants’ restaurants are part of plaintiff’s brand.
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Those customers that assume the defendants’ restaurants are associated with plaintiff,
complain of the poor service and food at defendants’ restaurants. Also submitted are
restaurant forum webpages. These reflect confusion as to the ownership of defendants’
restaurants. One website, www.urbanspoon.com, even lists plaintiff’s website as the website
of defendants’ restaurants. A restaurant review on www.associatedcontent.com also seems
to link defendants to plaintiff. There is actual confusion.
Even if potential customers exercise reasonable care, it would be difficult to eliminate
the confusion. The type of products marketed by plaintiff and defendants are similar; they
are both Mexican grills. Plaintiff maintains that the price of a meal at its restaurants and
defendants’ restaurants is comparable. Further, the e-mails and websites attached to
plaintiff’s motion demonstrate that even after inquiry to outside sources, potential customers
are still confused.
Plaintiff has sufficiently established that it is likely to succeed on the merits of its
Lanham Act claims and similar state claims.
D.

Public Interest
This factor supports the entry of a preliminary injunction. “The public interest weighs

in favor of protecting intellectual property and protecting consumers from fraud in all forms.”
Nokota Horse Conservancy, Inc. v. Bernhardt, 666 F.Supp.2d 1073, 1081 (D.N.D. 2009)
(quoting Nw. Airlines, Inc. v. Bauer, 467 F.Supp.2d 957, 964 (D.N.D. 2006)).
IV. CONCLUSION
Plaintiff’s motion for preliminary injunction is granted. Defendants are hereby ordered
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to immediately cease and desist using the trademark, service mark, trade name, logo or any
other identifying information such as “Chipotles,” “Chipotles Grill,” “Chipotles Mexican
Grill,” “Chipotles Grill Mexican Restaurante” or any other similar mark that would likely
cause confusion between defendants and plaintiff.
IT IS SO ORDERED this 9th day of June, 2011.

________________________________
UNITED STATES DISTRICT JUDGE

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