Burger King Corporation v. Huynh et al
Filing
24
ORDER granting in part and denying in part 23 Motion for Default Judgment. Signed by Judge Cecilia M. Altonaga on 12/5/2011. (ps1)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 11-22602-CIV-ALTONAGA/Simonton
BURGER KING CORPORATION,
Plaintiff,
vs.
JOHN Q. HUYNH, et al.,
Defendants.
________________________________/
ORDER
THIS CAUSE came before the Court upon the Plaintiff, Burger King Corporation’s
(“BKC[’s]”) Motion for Default Final Judgment Against Defendants (“Motion”) [ECF No. 23],
filed on October 26, 2011. A Clerk’s Default [ECF No. 11] was entered against Defendants,
John Q. Huynh (“Huynh”), Parvez M. Sheikh (“Sheikh”), and Ahoa Group, Inc. (“Ahoa”)
(collectively “Defendants”), on September 12, 2011, as they failed to appear, answer, or
otherwise respond to the Complaint [ECF No. 1], despite having been served. (See Clerk’s
Default; Affs. of Serv. [ECF Nos. 5, 6, 8]). The Court has carefully considered the Motion, the
record and the applicable law.
I. BACKGROUND1
This case involves claims of federal and Florida common law trademark infringement,
federal false designations, Florida common law unfair competition, and breaches of the
following contracts: (a) franchise agreements; (b) personal guaranty agreements; and (c) a
1
See Priestley v. Headminder, Inc., 647 F.3d 497, 505 (2d Cir. 2011) (considering a motion for default
judgment requires the court to accept as true a plaintiff’s well-pleaded factual allegations); Nishimatsu
Constr. Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (same).
Case No. 11-22602-CIV-ALTONAGA/Simonton
limited license agreement.
Plaintiff, a Florida corporation, operates and franchises restaurants throughout the world.
(See Compl. ¶¶ 2, 6). For many years, “BKC has extensively employed, caused to be advertised
and publicized throughout the United States certain distinctive symbols as trademarks and
service marks” (“BKC Marks”). (Id. ¶ 17). BKC operates and franchises its restaurants using
the Marks “on signs, menu boards, posters, translights, uniforms, plates, cups, tray liners and
other items and in advertising to the public through television, radio and print media and the
internet.” (Id. ¶ 18).
The following is an abbreviated listing of the BKC Marks registered in the United States
Patent and Trademark Office:
Trademark
Registration No.
Registration Year
HOME OF THE WHOPPER
0782990
1965 (renewed through 2015)
BURGER KING
0869775
1969 (renewed through 2019)
WHOPPER
0899775
1970 (renewed through 2020)
BURGER KING logo
0901311
1970 (renewed through 2020)
BURGER KING logo
1057250
1977 (renewed through 2017)
WHOPPER JR.
1062368
1977 (renewed through 2017)
BURGER KING
1076177
1977 (renewed through 2017)
HAVE IT YOUR WAY
1081348
1978 (renewed through 2018)
CROISSAN’WICH
1550398
1989 (renewed through 2019)
CHICKEN TENDERS
1785694
1993 (renewed through 2013)
BURGER KING Crescent Logo
2428846
2001 (renewed through 2021)
“The registrations of the BKC Marks are currently in full force and effect and BKC has given
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notice to the public of the registration” of these Marks. (Id. ¶ 20). BKC grants its franchisees,
including Defendants, a limited license and authority to use and display the BKC Marks, subject
to express authorization by BKC. (See id. ¶ 21).
Defendant Ahoa, a California corporation, owned and operated the following two Burger
King restaurants: (1) Restaurant No. 4961, located at 1908 Avenida De Los Arboles, Thousand
Oaks, California 91362; and (2) Restaurant No. 10205, located at 245 N. Moorpark Road, Suite
B, Thousand Oaks, California 91360. (See id. ¶¶ 30–31). Each restaurant is governed by a
Franchise Agreement (collectively the “Franchise Agreements”). (See id. ¶ 30). The Franchise
Agreements required Ahoa “to make monthly payments to BKC for royalties, advertising and
other fees.” (Id. ¶ 32). In particular, Ahoa was obligated to pay BKC a certain percentage of
gross sales for the preceding calendar month. (See id.). Per the Franchise Agreements, all
royalty and advertising payments were to be payable to BKC in Miami, Florida. (See id.).
Consequently, “failure to make such payments constitutes an act of default under the Franchise
Agreements.”
(Id.).
In addition, Defendants Huynh and Sheikh “jointly and severally,
unconditionally and irrevocably personally guarantied to BKC the performance of each and
every obligation of Ahoa.” (Id. ¶ 33).
The Franchise Agreements contain provisions establishing the parties’ rights and
obligations in the event of default. (See id. ¶ 34). “[F]ailure to comply with any provision of the
Franchise Agreements is a default of the Franchise Agreements.” (Id. ¶ 35). Defendants are
given an opportunity to cure the default. (See id.). Nonetheless, per the Franchise Agreements,
“if an act of default occurs and Defendants fail to cure the default after any required notice and
within the cure period applicable, BKC may, at its option and without prejudice to any other
rights or remedies . . . terminate the Franchise Agreements.” (Id.).
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In April 2008, BKC required that Defendants “purchase and install certain POS Systems
by December 31, 2009.” 2 (Id. ¶ 39).
The POS Systems “provide a consistent base of
information allowing for better product sales analysis and more effective product and promotion
activities.” (Id.). Defendants did not install the required POS Systems by December 31, 2009.
(See id. ¶ 40). Thus, Defendants were not using equipment approved by BKC, as required by the
Franchise Agreements. (See id.).
On January 13, 2010, BKC informed Defendants “that they were in default of their
obligations” and demanded that Defendants cure the defaults within the applicable time period
detailed in the Franchise Agreements. (Id. ¶ 41; Mot. ¶ 23). Defendants never cured the
defaults. (See Compl. ¶ 42).
Thereafter, BKC notified Defendants via letter that the Franchise Agreements were
terminated, effective as of 11:59 p.m. on February 16, 2010. (See id. ¶ 43). Notwithstanding the
termination letter, BKC and Defendants entered into a Limited License Agreement, dated March
9, 2010, allowing Defendants to continue operating the restaurants for a brief time while
attempting to sell them.
(See id. ¶ 44).
In the Limited License Agreement, Defendants
acknowledged, agreed and confirmed the Franchise Agreements were terminated effective
February 16, 2010. (See id. ¶ 45). The Limited License Agreement terminated on March 31,
2011. (See id. ¶ 47).
Defendants did not timely sell the two Burger King restaurants. (See id. ¶ 49). In fact,
they failed to close the restaurants and comply with post-termination obligations 3 under the
Plaintiff refers to BKC’s “2008 POS Technology Policy[,]” but Plaintiff does not describe the meaning
of “POS.” (Compl. ¶ 39).
2
3
Terminated franchisees are prohibited from identifying themselves as current or former Burger King
Franchisees, using trade secrets, promotional materials, or the BKC Marks. (See id. ¶ 51). Further, they
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Franchise Agreements. (See id.). To date, Defendants have not paid BKC past-due amounts
under the Franchise Agreements and the Limited License Agreement. (See id. ¶ 50). Nor have
they returned their OPS Manual and other operational manuals, as required by the Franchise
Agreements. (See id. ¶ 53).
Plaintiff claims Defendants’ continued use of the BKC Marks “has caused or is likely to
cause mistake, confusion, or deception in the minds of the public.” (Id. ¶ 55). Moreover, BKC
no longer sponsors or endorses the restaurants, or the products and services provided therein.
(See id. ¶ 56). As a result, “BKC has suffered damages, in an amount presently unknown yet
substantial.” (Id.). In addition, because the restaurants are no longer under BKC’s control and
supervision, BKC contends it will suffer immediate and irreparable harm, notably in terms of
goodwill and reputation, if Defendants’ use of the BKC Marks is not immediately enjoined. (See
id. ¶ 58). Furthermore, “Defendants’ sale of products and services under the BKC Marks at the
Restaurants poses an immediate threat to the distinct, exclusive image BKC has created at great
expense for its franchisees.” (Id. ¶ 59).
In the present Motion, Plaintiff asks the Court to enter a judgment by default and a
permanent injunction, and grant equitable relief and the award of attorneys’ fees in favor of
Plaintiff and against Defendants. (See Mot. p. 18).
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court is authorized to enter a
final judgment of default against a party who has failed to plead in response to a complaint.
“‘[A] defendant’s default does not in itself warrant the court entering a default judgment.’”
DIRECTV, Inc. v. Huynh, 318 F. Supp. 2d 1122, 1127 (M.D. Ala. 2004) (quoting Nishimatsu
are required to remove signs “so as to effectively distinguish the building and premises from its former
appearance and from any other Burger King® Restaurant.” (Id.).
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Constr., 515 F.2d at 1206). Granting a motion for default judgment is within the trial court’s
discretion. See Nishimatsu, 515 F.2d at 1206. Because the defendant is not held to admit facts
that are not well-pleaded or to admit conclusions of law, the court must first determine whether
there is a sufficient basis in the pleading for the judgment to be entered. See id.; see also
Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987) (“[L]iability is well-pled in the
complaint, and is therefore established by the entry of default . . . .”).
III. ANALYSIS
Plaintiff’s Complaint contains seven claims for relief, all of which are alleged against
Defendants. The Court will first consider Defendants’ liability under each claim, and with any
surviving claims, discuss what relief Plaintiff is afforded.
A. Liability
1. Count I — Lanham Act Infringement
Under the Lanham Act, a defendant is liable for trademark infringement if, without
consent, he “use[s] 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” which “is likely to cause confusion, or to cause mistake, or to deceive.” 15
U.S.C. § 1114(1)(a). Accordingly, to prevail on a trademark infringement claim, a plaintiff must
demonstrate: (1) plaintiff’s mark has priority; (2) defendant used plaintiff’s mark in commerce;
and (3) defendant’s mark is likely to cause consumer confusion. See Lone Star Steakhouse &
Saloon, Inc. v. Longhorn Steaks, Inc., 122 F.3d 1379, 1382 (11th Cir. 1997); Davidoff & CIE,
S.A. v. PLD Int’l Corp., 263 F.3d 1297, 1300–01 (11th Cir. 2001). Here, Plaintiff’s allegations
satisfy these three elements and therefore establish Defendants’ liability for federal trademark
infringement.
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First, Plaintiff’s Marks have priority as Plaintiff has used the BKC Marks for decades and
has federal registration rights in those Marks. (See Compl. ¶¶ 19–20). The BKC Marks have
become identifiers of Plaintiff and its business throughout the United States. (See id. ¶ 17). In
contrast, Defendants began using Plaintiff’s marks in 2006.4 (See id. ¶ 31).
Second, Defendants have used the BKC Marks in commerce in connection with their two
Burger King restaurants. It is well-known that BKC’s products bearing the BKC Marks are sold
in interstate commerce. (See id. ¶ 22). Under the terms of the Franchise Agreements, BKC
allows its franchisees, such as Defendants, to use and display the BKC Marks in connection with
its restaurants. (See id. ¶ 21). But “[i]n no event is a franchisee authorized to use the BKC
Marks after the expiration or termination of its franchise.” (Id.). Here, BKC alleges Defendants
are using the BKC Marks in commerce after the Franchise Agreements have expired. (See id. ¶
49). Thus, Plaintiff meets the second element of a trademark infringement claim.
Lastly, Plaintiff’s allegations demonstrate the BKC Marks used by Defendants in
operating their restaurants are likely to cause consumer confusion. (See id. ¶¶ 54–55). In
assessing whether or not a likelihood of consumer confusion exists, courts in the Eleventh
Circuit generally consider the following seven factors: (1) type of mark; (2) similarity of mark;
(3) similarity of the products the marks represent; (4) similarity of the parties’ retail outlets (trade
channels) and customers; (5) similarity of advertising media; (6) defendant’s intent; and (7)
actual confusion. See Frehling Enters., Inc. v. Int’l Select Grp., Inc., 192 F.3d 1330, 1335 (11th
Cir. 1999).
Here, a labored analysis of these factors is unnecessary because the BKC Marks used by
Defendants are not just similar, they are one and the same — BKC expressly authorized the use
4
The dates of the Franchise Agreements for Restaurants No. 4961 and No. 10205 are June 12, 2006 and
November 6, 2006, respectively. (See Compl. ¶ 31).
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of its Marks while Defendants’ restaurants were validly operating. (See Compl. ¶ 21). The
Complaint does not suggest Defendants are using symbols or slogans similar to the BKC Marks;
rather, it states that Defendants are displaying the actual BKC Marks themselves. (See id. ¶¶ 17–
32).
As a result, the Court agrees with Plaintiff that Defendants’ use of the BKC Marks is
likely to cause the public to mistakenly believe Defendants’ restaurants are sponsored by, or are
in some way affiliated with, Plaintiff. Therefore, the Court concludes Plaintiff is entitled to
default judgment on Count I of the Complaint.
2. Count II — Lanham Act False Designation
The test for liability for false designation of origin under 15 U.S.C. § 1125(a) is the same
as for a trademark counterfeiting and infringement claim — i.e., whether the public is likely to
be deceived or confused by the similarity of the marks at issue. See Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 780 (1992). As discussed, consumers are likely to be confused by
Defendants’ use of the BKC Marks. Accordingly, since the test for trademark infringement is
the same as for false designation, Plaintiff is entitled to default judgment on Count II.
3. Count III — Common Law Trademark Infringement
“The analysis of liability for Florida common law trademark infringement is the same as
under the Lanham Act.” PetMed Express, Inc. v. MedPets.Com, Inc., 336 F. Supp. 2d 1213,
1218 (S.D. Fla. 2004) (citing Gift of Learning Found., Inc. v. TGC, Inc., 329 F.3d 792, 802 (11th
Cir. 2003)). Therefore, Plaintiff is entitled to default judgment on Count III, for common law
trademark infringement.
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4. Count IV — Common Law Unfair Competition
For a plaintiff to prevail on a Florida common law unfair competition claim, it
must prove (1) the plaintiff is the prior user of the trade name or
service mark, (2) the trade name or service mark is arbitrary or
suggestive or has acquired secondary meaning, (3) the defendant is
using a confusingly similar trade name or service mark to indicate
or identify similar services rendered (or similar goods marketed)
by it in competition with plaintiff in the same trade area in which
plaintiff has already established its trade name or service mark, and
(4) as a result of the defendant’s action or threatened action,
consumer confusion as to the source or sponsorship of the
defendant’s goods or services is likely.
PetMed, 336 F. Supp. 2d at 1219 (citation omitted).
Here, Plaintiff has established these elements. First, as indicated, Plaintiff is clearly the
prior user of the BKC Marks as it began using the registered marks as early as 1965, decades
before Defendants. (See Compl. ¶¶ 19, 31). Second, the BKC Marks are suggestive because
years of “advertising, promotion and publicity” have made the public understand that “[t]he
products and services associated with the BKC Marks are . . . produced, marketed, sponsored,
supplied by and/or affiliated with BKC.” (Id. ¶ 24). Third, Defendants are using Plaintiff’s
systems, names, service marks, and trademarks. (See id. ¶ 30). Thus, the Court concludes the
marks are similar (because they are the same). Finally, Plaintiff’s allegations establish that
consumer confusion as to the source or sponsorship of Defendants’ services is likely to result
from Defendants’ conduct. (See id. ¶¶ 54–55).
Accordingly, Plaintiff is entitled to default judgment on Count IV.
5. Breach of Contracts
a. Count V — Breach of Franchise Agreements (Against Ahoa)
Plaintiff alleges Defendant Ahoa breached the Franchise Agreements for a myriad of
reasons, including failure to close the restaurants and not complying with post-termination
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obligations. (See id. ¶¶ 49–53, 70). “[U]nder Florida law, franchise agreements are considered
personal service contracts.” Burger King Corp. v. Agad, 911 F. Supp. 1499, 1506 (S.D. Fla.
1995) (citing Burger Chef Sys., Inc. v. Burger Chef of Fla., Inc., 317 So. 2d 795, 797 (Fla. 4th
DCA 1975)). To state a claim for breach of contract a plaintiff must allege: “(1) the existence of
a contract; (2) a material breach of that contract; and (3) damages resulting from the breach.”
Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1272 (11th Cir. 2009) (citing Friedman v. N.Y. Life
Ins. Co., 985 So. 2d 56, 58 (Fla. 4th DCA 2008)).
First, Ahoa’s two Burger King restaurants are governed by two written Franchise
Agreements.
(See Compl. ¶¶ 30–31).
Second, Ahoa materially breached the Franchise
Agreements by: (a) failing to install certain POS Systems; (b) failing to timely sell the
restaurants; (c) failing to comply with post-termination obligations; (d) failing to pay past due
royalty, advertising and other receivables; (e) holding out to the public as operating genuine and
authorized Burger King restaurants after the Franchise Agreements terminated; (f) continuing to
use the BKC Marks; and (g) failing to return an OPS Manual and other operational manuals.
(See id. ¶¶ 38–39, 49–53, 70–76).
Finally, Plaintiff alleges damages.
BKC contends Defendants owe $9,592.90 for
attorneys’ fees and costs. (See Mot. ¶ 66; Decl. of Nina Greene ¶ 13 [ECF No. 23-2]). Plaintiff
also alleges “Defendants still owe BKC past due amounts under the Franchise Agreements and
Limited License” Agreement. 5 (Compl. ¶ 50). Finally, Plaintiff complains it has suffered
reputational and goodwill damages for Ahoa’s continued display of the BKC Marks and other
items associated with the Burger King name “in an amount presently unknown yet substantial.”
5
Plaintiff also seeks $64,048.99, comprised of past due royalties, investment spending and advertising.
(See Mot. ¶ 65; Decl. of Julie Hammon ¶¶ 11–12 [ECF No. 23-1]). As explained below, this amount is
unsubstantiated.
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(Id. ¶¶ 55–56). Taken as true — which the Court must do for purposes of this Motion —
Plaintiff has properly alleged damages. In sum, BKC has met all three elements for a breach of
contract claim.
Therefore, default judgment against Ahoa on Count V is appropriate.
b. Count VI — Breach of Guaranties (Against Huynh and Sheikh)
Plaintiff also alleges Huynh and Sheikh breached their guaranty agreements. Huynh and
Sheikh, in writing, “jointly and severally, unconditionally and irrevocably personally guarantied
to BKC the performance of each and every obligation of Ahoa . . . under the Franchise
Agreements.”
(Id. ¶¶ 33, 82).
BKC contends that because Ahoa breached the Franchise
Agreements, Huynh and Sheikh necessarily failed in their obligations. (See id. ¶¶ 82–83).
“A guaranty is a collateral promise to answer for the debt or obligation of another.”
FDIC v. Univ. Anclote, Inc., 764 F.2d 804, 806 (11th Cir. 1985) (citing Nicolaysen v. Flato, 204
So. 2d 547, 549 (Fla. 4th DCA 1967)). In Florida, “rules applicable to contracts generally apply
to guaranty contracts.” Palm Beach Strategic Income, LP v. 358 1276 Can. Inc., No. 08-80186CIV, 2009 WL 7466346, at *5 (S.D. Fla. Feb. 10, 2009) (citing Lockheed Martin Corp. v.
Galaxis USA, Ltd., 222 F. Supp. 2d 1315, 1325 (M.D. Fla. 2002)).
As discussed, Plaintiff satisfies the elements for a breach of contract claim against Ahoa.
Because Huynh and Sheikh personally guaranteed all of Ahoa’s obligations, they breached their
guaranty contracts. Therefore, Plaintiff is entitled to default judgment on Count VI of the
Complaint.
c. Count VII — Breach of Limited License (Against All Defendants)
On March 9, 2010, Plaintiff and Defendants entered into a Limited License Agreement
whereby Defendants were allowed to operate the restaurants for a limited time while attempting
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to sell them. (See Compl. ¶ 44). The Limited License Agreement, through various extensions,
terminated on March 31, 2011. (See id. ¶ 47).
As discussed under Count V, the Eleventh Circuit in Vega outlined three elements for a
breach of contract claim. Here, Plaintiff has established all three elements. First, the Limited
License Agreement is a contract between BKC and Defendants.
(See id. ¶ 44).
Second,
Defendants materially breached this contract by failing to close the restaurants after the Limited
License Agreement had expired and by failing to comply with post-termination obligations. (See
id. ¶¶ 49, 90). Third, Plaintiff was damaged because “Defendants still owe BKC past due
amounts under the . . . Limited License [Agreement].” (Id. ¶¶ 50, 87–88).
As a result, default judgment against Defendants on Count VII is appropriate.
B. Relief
1. Injunctive Relief
a. Use of BKC’s Trademarks
Plaintiff is also entitled to an order enjoining Defendants from infringing any of
Plaintiff’s federally registered trademarks in the future. (See Mot. ¶ 51); 15 U.S.C. § 1116(a). A
“plaintiff who seeks a permanent injunction must show (1) it has suffered irreparable injury; (2)
remedies at law are inadequate to compensate for that injury; (3) a remedy in equity is warranted
in light of balancing the hardships between the plaintiff and defendant; and (4) the public interest
would not be disserved by a permanent injunction.” Taverna Opa Trademark Corp. v. Ismail,
No. 08-20776-CIV, 2010 WL 1838384, at *3 (S.D. Fla. May 6, 2010) (citing eBay, Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 390 (2006)). Plaintiff has carried its burden on each of the
four factors, and thus, permanent injunctive relief is appropriate.
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In trademark cases, “a sufficiently strong showing of likelihood of confusion . . . may by
itself constitute a showing of a substantial threat of irreparable harm.” McDonald’s Corp. v.
Robertson, 147 F.3d 1301, 1310 (11th Cir. 1998); see also Levi Strauss & Co. v. Sunrise Int’l
Trading Inc., 51 F.3d 982, 986 (11th Cir.1995) (“There is no doubt that the continued sale of
thousands of pairs of counterfeit jeans would damage LS & Co.’s business reputation and might
decrease its legitimate sales.”). Here, the Complaint alleges “Defendants have not tendered to
BKC or removed all Burger King® signs, logos, menu boards, posters, translights, uniforms,
plates, cups, tray liners and other items bearing the BKC Marks, name, symbols and/or slogans.”
(Compl. ¶ 54). Therefore, consumers will be confused into concluding the restaurants are
supervised, sponsored and endorsed by BKC. (See id. ¶ 55). The Court agrees.
Plaintiff has no adequate remedy at law so long as Defendants continue to operate the
two restaurants because Plaintiff cannot ensure strict quality control over the management and
operation of the restaurants. (See id. ¶ 58). An award of money damages alone will not cure the
injury to Plaintiff’s reputation and goodwill that will result if Defendants are allowed to continue
operating the restaurants. By contrast, Defendants face no hardship if they are prohibited from
the infringement of Plaintiff’s trademarks, which is an illegal act. Finally, the public interest
supports the interest in the issuance of a permanent injunction against Defendants to prevent
consumers from being misled by Defendants’ actions. See Nike, Inc. v. Leslie, 227 U.S.P.Q. 574,
575 (1985) (“[A]n injunction to enjoin infringing behavior serves the public interest in protecting
consumers from such behavior.”).
The Court’s broad equity powers allow it to fashion injunctive relief necessary to stop the
Defendants’ infringing activities. See, e.g., Swann v. Charlotte-Mecklenburg Bd. of Educ., 402
U.S. 1, 15 (1971) (“Once a right and a violation have been shown, the scope of a district court’s
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equitable powers to remedy past wrongs is broad, for. . . the essence of equity jurisdiction has
been the power of the Chancellor to do equity and to mould each decree to the necessities of the
particular case.”); United States v. Bausch & Lomb Optical Co., 321 U.S. 707, 724 (1944)
(“Equity has power to eradicate the evils of a condemned scheme by prohibition of the use of
admittedly valid parts of an invalid whole.”).
Moreover, federal courts routinely grant injunctive relief to franchisors for trademark
infringement and unfair competition. See Agad, 911 F. Supp. 1499 at 1509–10 (entitling BKC to
the entry of a permanent injunction for franchisees’ continued unauthorized use of the BKC
Marks); Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988) (enjoining
the defendant’s use of the name “Century” as part of his dba); Baskin-Robbins Ice Cream Co. v.
D&L Ice Cream Co., Inc., 576 F. Supp. 1055, 1060 (E.D.N.Y. 1983) (granting a permanent
injunction following defendants’ continued use of Baskin-Robbins’s trademarks after
termination of the franchise agreement); Ky. Fried Chicken Corp. v. Old Ky. Home Fried
Chicken, Inc., 313 F. Supp. 1096, 1099 (W.D. Ky. 1970) (prohibiting defendant from using the
name “Old Kentucky Home Fried Chicken” because it too closely resembled the well-known
trademark name, “Kentucky Fried Chicken”).
Defendants continue to display the BKC Marks in their Burger King restaurants, long
after the Franchise Agreements and Limited License Agreement have expired. Accordingly, the
Court may fashion injunctive relief to eliminate the means by which Defendants are conducting
their unlawful activities. Ordering the removal and return of all of the BKC Marks or any items
associated with the Burger King name, symbols, or slogans from these restaurants is appropriate
to achieve this end.
Therefore, the Court grants the injunctive relief sought by Plaintiff.
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b. Non-Compete
In its prayer for relief, Plaintiff seeks “[a]n order enjoining Defendants from operating
any hamburger business within a two-mile radius of the Restaurants for a one-year period.”
(Compl. p. 19; Mot. p. 20). Plaintiff, however, has not attached the Franchise Agreements
showing the existence of a non-compete clause, nor has it alleged any facts to suggest such a
clause exists. By contrast, the presence of such a clause would give the Court a better basis to
conclude an injunction is appropriate. See Athlete’s Foot Brands, LLC v. Turner Phase IV, LLC,
581 F. Supp. 2d 1250, 1253 (S.D. Fla. 2008) (granting a preliminary injunction because the
defendants’ inability to sell similar goods within ten miles for a one-year period was not, on the
face of the non-compete provision of the franchise agreement, against public policy); Valpak
Direct Mktg. Sys., Inc. v. Hyde, No. 8:06-CV-347-T-26EAJ, 2007 WL 433365, at *2 (M.D. Fla.
Feb. 6, 2007) (issuing a permanent injunction against the defendants after they violated the
franchise agreement’s two-year non-compete clause).
In the absence of any supporting
documentation, an injunction enforcing a non-compete provision is not entered.
2. Money Damages
a. Past Due Amounts
Plaintiff alleges Defendants owe BKC $64,048.99 in past due royalties, investment
spending and advertising for the consecutive months of October 2010, through September 2011.
(See Mot. ¶ 65; Decl. of Julie Hammon ¶¶ 11–12). To support this number, Julie Hammon refers
the Court to “Ex. 1” to “reflect[] the past due amounts.” (Decl. of Julie Hammon ¶¶ 11–12).
Exhibit 1, however, is only a breakdown of attorneys’ fees and does not explain the $64,048.99
of alleged damages. (See Mot. Ex. 1). In fact, nothing in the record demonstrates how Plaintiff
has arrived at this number. As a result, a default judgment awarding past due amounts is denied.
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b. Attorneys’ Fees
Plaintiff also seeks an award of attorneys’ fees and costs pursuant to the Lanham Act.
(See Compl. p. 19; Mot. ¶¶ 66–67); 15 U.S.C. § 1117(a). The Lanham Act allows an award of
attorneys’ fees and costs for violations of sections 1125(a), (c), or (d) in “exceptional cases,”
which the Eleventh Circuit has interpreted to mean cases “where the infringing party acts in a
‘malicious,’ ‘fraudulent,’ ‘deliberate’ or ‘willful’ manner.” Burger King Corp. v. Pilgrim’s
Pride Corp., 15 F.3d 166, 168 (11th Cir. 1994) (citing H.R. Rep. No. 93-524. 93rd Cong., 1st
Sess. (1974)); see 15. U.S.C. § 1117(a).
Plaintiff is entitled to attorneys’ fees and costs under this statute. 6
Plaintiff has
established Defendants have acted willfully by continuing to operate Burger King restaurants
despite the expiration of both Franchise Agreements and a Limited License Agreement.
Moreover, “an award of attorney[]s[’] fees and costs will serve the important functions of
deterring future infringements, penalizing Defendants for their unlawful conduct, and
compensating Plaintiff for [its] fees and costs.” PetMed, 336 F. Supp. 2d at 1222.
c. Other Monetary Amounts
In its Motion, Plaintiff seeks a variety of monetary damages, but never requests an exact
numerical amount. For example, Plaintiff seeks “Money damages, plus three times additional
actual damages[,]” “[p]unitive damages[,]” “[p]re-judgment interest[,]” “[c]ompensatory
damages[,]” and “[m]oney damages for amounts owed.” (Mot. p. 20). Plaintiff does not attach a
precise dollar-figure to any of these requests. It is futile for the Court to opine on a prayer for
monetary relief, generally. Absent a proposed order and proposed final judgment — which the
Plaintiff agreed to submit yet has not done so to date (see id. ¶ 69) — or supporting
6
Plaintiff has provided a sworn detailed declaration with accompanying documentary evidence
indicating the appropriate amount of attorneys’ fees and costs is $9,592.90. (See Decl. of Nina Greene ¶
13).
16
Case No. 11-22602-CIV-ALTONAGA/Simonton
documentation, the Court cannot award Plaintiff other damages. Accordingly, default judgment
regarding these amounts is denied.
IV. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED AND ADJUDGED as follows:
1.
The Plaintiff’s Motion for Default Final Judgment [ECF No. 23] is GRANTED
in part and DENIED in part.
2.
The Motion is GRANTED with respect to Defendants’ liability under Counts I–
3.
The Motion is GRANTED with respect to permanent injunctive relief.
4.
The Motion is GRANTED with respect to ordering Defendants to remove and
VII.
return to BKC all identifying Burger King Marks from the restaurants.
5.
The Motion is GRANTED with respect to attorneys’ fees and costs.
6.
The Motion is DENIED with respect to Plaintiff’s request to enjoin Defendants
from working in any hamburger business within a two-mile radius of the restaurants for a oneyear period.
7.
The Motion is DENIED with respect to Plaintiff’s general prayers for monetary
damages.
The Clerk is directed to mark this case as CLOSED. In its October 26, 2011 Motion,
Plaintiff indicated it would be submitting a proposed final judgment, but to date it has not done
so. (See Mot. ¶ 69). Should Plaintiff wish the entry of a final default judgment, it is to submit
separately a proposed final judgment, as required by Local Rule 7.1(a)(2) and by the Court’s
previous instructions. (See [ECF No. 12]).
17
Case No. 11-22602-CIV-ALTONAGA/Simonton
DONE AND ORDERED in Chambers at Miami, Florida, this 5th day of December,
2011.
_________________________________
CECILIA M. ALTONAGA
UNITED STATES DISTRICT JUDGE
cc:
counsel of record
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