165 PARK ROW INC v. JHR DEVELOPMENT LLC

Filing 152

ORDER AND OPINION By JUDGE NANCY TORRESEN. (dfr)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
165 PARK ROW, INC.,
d/b/a THE BRUNSWICK INN,
Plaintiff,
v.
JHR DEVELOPMENT, LLC and
MAINE AND NOBLE, LLC,
Defendants.

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ORDER AND OPINION
Before the Court in this trademark infringement case are various issues not
resolved during a three-day jury trial conducted in December of 2013, including: (1)
the Plaintiff’s and Defendants’ competing requests that the Court rule in their favor
with respect to Counts IV and V and the Defendants’ counterclaim; Pl.’s Post-Trial
Br. 1-3 (ECF No. 149), Defs.’ Post-Trial Br. 1-3 (ECF No. 147); (2) the Plaintiff’s
request that the Court permanently enjoin the Defendants from continuing to use
the name “The Inn at Brunswick Station,” Pl.’s Post-Trial Br. 1, 3-10, Defs.’ PostTrial Br. 1-6; and (3) the Plaintiff’s request that the Court grant declaratory
judgment in its favor. Pl.’s Post-Trial Br. 2; Defs.’ Post-Trial Br. 1-2. For the reasons
stated below, the Court ORDERS judgment be entered in favor of the Plaintiff with
respect to Counts IV and V and the Defendants’ counterclaim, GRANTS IN PART
the Plaintiff’s request for a permanent injunction, and DENIES the Plaintiff’s
request for declaratory judgment.

BACKGROUND
The Plaintiff operates a small inn (the “Plaintiff’s Inn”) in a historic
building in Brunswick, Maine, under the name “The Brunswick Inn.” In June 2011,
the Defendants opened a larger inn (the “Defendants’ Inn”) in a newly constructed
building nearby under the name “The Inn at Brunswick Station.” On March 23,
2012, the Plaintiff filed an application with Maine’s Secretary of State to register
the name “The Brunswick Inn” as a state trademark.1 Pl.’s Ex. 85. The Secretary of
State granted the application on March 27, 2012. Id. On March 29, 2012, the
Plaintiff filed this lawsuit. Pl.’s Compl. (ECF No. 1). The Defendants responded by
answering the Plaintiff’s claims and bringing a counterclaim seeking the
cancellation of the Plaintiff’s state trademark registration. Defs.’ Answer to Am.
Compl. & Countercl. (ECF No. 9).
The Plaintiff’s First Amended Complaint includes five counts. Pl.’s First Am.
Compl. (ECF No. 6). Count I seeks declaratory relief. Id. at 4-5. Count II states a
trademark infringement claim under the common law of Maine and 10 M.R.S
§ 1529, a Maine statute which provides a cause of action for the holders of
trademarks registered with the state. Id. at 5-6. Count III states a trademark
infringement claim under 15 U.S.C. § 1125(a), a provision of the Lanham Act which
provides a cause of action for the holders of trademarks that are not federally
registered but are nonetheless entitled to trademark protection. Id. at 6-7. Count IV
states a claim under 10 M.R.S. §§ 1212 and 1213, provisions of the Maine Deceptive

Technically, the Plaintiff applied to register its name as a “service mark,” a mark which
designates services as opposed to goods.
1

2

Trade Practices Act, which provide a cause of action for individuals “likely to be
damaged by a deceptive trade practice,” 10 M.R.S. § 1213, including engaging in
business behavior that “[c]auses likelihood of confusion or misunderstanding as to
the source . . . of goods or services.” 10 M.R.S. § 1212(1)(B); Pl.’s First. Am Compl. 7.
Count V states a claim under 10 M.R.S. § 1530, Maine’s anti-dilution statute, which
provides a cause of action for the holders of trademarks registered with the state or
otherwise valid under the common law of Maine. Id. at 7-8.
The Defendants brought their counterclaim under 10 M.R.S. § 1522, which
prohibits Maine’s Secretary of State from registering a mark that is “merely
descriptive” or “primarily geographically descriptive” unless the mark has “become
distinctive,” and 10 M.R.S. § 1527, which requires Maine’s Secretary of State to
cancel a state trademark registration when “a court of competent jurisdiction shall
find . . . [t]hat the registration was granted improperly.”
A three-day trial was held in December of 2013. Two of the Plaintiff’s five
counts were submitted to the jury via a special verdict form: Count II, the Plaintiff’s
state trademark infringement claim, and Count III, the Plaintiff’s Lanham Act
claim.2 Specifically, the jury was asked to return yes or no answers to the following
questions:
1. Did the Plaintiff prove that the Plaintiff’s mark, “The Brunswick
Inn,” acquired distinctiveness before the Defendants began using
the name “The Inn at Brunswick Station”?

In general, trademark claims brought under Maine law are treated the same as trademark
claims brought under the Lanham Act. Compare 15 U.S.C. § 1125(a) with 10 M.R.S.A. § 1529; see
also Pl.’s Trial Br. 4 n.1 (ECF No. 105); Defs.’ Mot. for Directed Verdict 2 n.1 (ECF No. 135).
2

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2. Did the Plaintiff prove that the Defendants used the name ‘The Inn
at Brunswick Station” in a manner likely to confuse an appreciable
number of reasonably prudent people exercising ordinary care
whose behavior affects the Plaintiff’s business interests?
Special Verdict Form 1 (ECF No. 141). The jury answered “yes” to both questions,
which amounted to a determination of liability in the Plaintiff’s favor on Counts II
and III.
The jury was also charged with determining four further issues: (1) what
actual damages, if any, the Plaintiff was entitled to; (2) whether the Defendants and
the Plaintiff are in direct competition; (3) if so, what portion of the Defendants’
profits, if any, the Plaintiff was entitled to as a rough measure of its uncompensated
lost sales; and (4) whether the Defendants infringed the Plaintiff’s trademark
willfully. The jury awarded the Plaintiff $10,000 in actual damages, determined
that the Plaintiff and the Defendants are in direct competition but declined to
award the Plaintiff any portion of the Defendants’ profits, and decided that the
Defendants had not willfully infringed the Plaintiff’s trademark. Special Verdict
Form 2-3.
The Defendants timely filed a motion seeking to overturn the jury’s verdict
under Federal Rule of Civil Procedure 50(b). Defs.’ Mot. for J.N.O.V. (ECF No. 148).
The Court denies that motion in another order issued today. Order on Defs.’ Mot. for
J.N.O.V. (ECF No. 151).
Both parties also filed post-trial briefs dealing with the remaining counts and
requests for relief. In its brief, the Plaintiff requested that a finding be entered in
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its favor with respect to Counts IV, V, and the Defendants’ counterclaim. Pl.’s PostTrial Br. 1-3. The Plaintiff also requested that the Court issue a permanent
injunction requiring the Defendants to cease using their name immediately and to
turn over any goods or marketing materials bearing the Defendants’ name to the
Plaintiff’s attorney within thirty days. Pl.’s Post-Trial Br. 3-10; Pl.’s Proposed J. &
Final Inj. 2 (ECF No. 149-1). Finally, the Plaintiff requested that the Court issue a
declaratory judgment that the Plaintiff “is the senior user and owner of exclusive
rights in the mark THE BRUNSWICK INN.” Pl.’s Post-Trial Br. 2. The Defendants’
brief requested a finding be entered in the Defendants’ favor with respect to Counts
IV, V and their counterclaim, on the same basis asserted in their motion for
judgment notwithstanding the verdict. Defs.’ Post-Trial Br. 1-2. In the alternative,
the Defendants requested that any permanent injunction issued by the Court allow
them six months to adopt a new name before taking effect. Defs.’ Post-Trial Br. 5.
The Defendants also requested that they be allowed to continue using the domain
name “innatbrunswickstation.com” notwithstanding any injunction, so that users
who enter that domain name into their browsers or search engines can be redirected
to the Defendants’ new website. Defs.’ Post-Trial Br. 6.
REMAINING CLAIMS
I.

Counts IV and V: Maine Deceptive Trade Practices Act Claim and
Maine Dilution Claim
Where some claims in a case are tried to a jury and other claims tried to the

court, the court is “normally bound by earlier jury findings in the same case on
common issues.” Troy v. Bay State Computer Grp., Inc., 141 F.3d 378, 382-83 (1st
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Cir. 1998). Here, the jury’s findings with respect to the first two questions on the
special verdict form completely resolve Counts IV and V in the Plaintiff’s favor.3 The
Court therefore orders the Clerk of Court to enter judgment in favor of the Plaintiff
with respect to both of those counts.
II.

The Defendants’ Counterclaim Seeking Cancellation of Plaintiff’s
State Trademark Registration
The Defendants’ counterclaim, seeking a declaration that Maine’s Secretary

of State improperly registered the Plaintiff’s mark, is based on two provisions in the
chapter of the Maine Revised Statutes dealing with state trademark law. The first
provision, 10 M.R.S. § 1522, is titled “Registration.” It provides, in relevant part,
that “[a] mark shall not be registered if” it is “merely descriptive . . . or . . . is
primarily geographically descriptive . . . , provided that nothing in this paragraph
may prevent the registration of a mark . . . that has become distinctive of the
applicant’s goods or services.” 10 M.R.S. § 1522(1)(E). In other words, the state may
not

register

a

descriptive

trademark

until

and

unless

it

has acquired

distinctiveness. The second provision, 10 M.R.S. § 1527, is titled “Cancellation . . . .”
It provides, in relevant part, that “[t]he Secretary of State shall cancel from the
register . . . [a]ny registration which a court of competent jurisdiction shall find . . .
was granted improperly.” 10 M.R.S. § 1527(1)(D)(3).

The parties have treated Count IV, the Plaintiff’s Maine Deceptive Trade Practices Act claim
under 10 M.R.S. § 1212, and Count V, the Plaintiff’s “dilution by confusion” claim under 10 M.R.S.
§ 1530, Maine’s anti-dilution statute, as identical to the Plaintiff’s Lanham Act claim. See, e.g., Pl.’s
Post-Trial Br. 2-3; Defs.’ Post-Trial Br. 2. The Court follows suit. See Butcher Co. v. Bouthot, 124 F.
Supp. 2d 750, 762 (D. Me. 2001) (regarding 10 M.R.S § 1212); Best Flavors, Inc. v. Mystic River
Brewing Co., 886 F. Supp. 908, 918 (D. Me. 1995) (regarding “dilution by confusion”).
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Here, the mark in question, “The Brunswick Inn,” is “merely descriptive.” See
W.R. Lynn Shoe Co. v. Auburn-Lynn Shoe Co., 62 A. 499, 503-504 (Me. 1905)
(holding that a “geographical name . . . affixed” to a generic term for a product is
“merely descriptive,” not inherently distinctive). Accordingly, it is entitled to
registration under Maine law only if it acquired distinctiveness as of the end of
March of 2012, when the Plaintiff applied for and received its registration.
The Court is bound by the jury’s determination that the Plaintiff’s mark,
“The Brunswick Inn,” acquired distinctiveness before the Defendants began using
their competing mark, “The Inn at Brunswick Station.” Troy, 141 F.3d at 382. The
evidence presented at trial indicates the Defendants began using their mark by at
least June of 2011. There is no evidence that the Plaintiff’s mark somehow lost its
previously acquired distinctiveness between that time and March of 2012. In fact,
the evidence is to the contrary. During that interval, the Plaintiff continued to
promote its mark and grow its business. Accordingly, there are no substantive
grounds to rule that Maine improperly registered the Plaintiff’s mark.
The Defendants also urge this Court to find that the state registration was
improperly granted because the Secretary of State merely rubber-stamped the
Plaintiff’s application, regardless of it merits. The problem with this theory is that
the Defendants, who bear the burden of proof on their counterclaim, failed to join
the state or call anyone from the Secretary of State’s office to testify about the
process it used to reach its determination. Therefore, the Court would have to

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speculate in order to conclude that the Secretary of State improperly granted the
registration. For these reasons, the Defendants’ counterclaim fails.
FURTHER RELIEF
I.

Permanent Injunctive Relief
Under the Lanham Act, the Court may permanently enjoin a party found

liable for trademark infringement where the “principles of equity” warrant.
15 U.S.C. § 1116 (providing that courts with jurisdiction to hear Lanham Act cases
“shall have power to grant injunctions, according to the principles of equity”);
Purolator, Inc. v. EFRA Distribs., Inc., 687 F.2d 554, 561-62 (1st Cir. 1982)
(upholding grant of permanent injunctive relief in claim brought under 15 U.S.C.
§ 1125(a)). Under equitable principles applied in federal court, a permanent
injunction is justified only if the plaintiff demonstrates: (1) “actual success on the
merits of the claim”; (2) “that [the plaintiff] would suffer irreparable injury if
injunctive relief were not issued”; (3) “that such injury outweighs any harm that
would stem from granting injunctive relief”; and (4) “that the public interest weighs
in [the plaintiff’s] favor.” Largess v. Supreme Judicial Court of Mass., 373 F.3d 219,
223 n.2 (1st Cir. 2004) (internal citations and quotation marks omitted). “The
decision whether to grant relief is based on a balancing of the different factors.” Id.
Where an injunction is warranted, the court “must closely tailor [it] to the
harm that [it] address[es].” Tamko Roofing Prods., Inc. v. Ideal Roofing Co., 282
F.3d 23, 40 (1st Cir. 2002) (internal citations and quotation marks omitted). Any
injunction “should be no more burdensome to the defendant than necessary to
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provide complete relief to the plaintiff[ ].” Id. (quoting Califano v. Yamasaki, 442
U.S. 682 (1979)). For instance, a court may temporarily delay implementing an
injunction to allow the infringer time to adopt a new mark. Attrezzi, LLC v. Maytag
Corp., 436 F.3d 32, 42 (1st Cir. 2006) (affirming order allowing appliance maker 12month period to sell existing stock bearing infringing mark); 5 J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competition § 30:3 (4th ed. 2013).
A.

Actual Success on the Merits

It is clear that the Plaintiff achieved “actual success on the merits” on its
Lanham Act claim.
B.

Irreparable Injury

Regarding the irreparable injury factor, existing First Circuit precedent
creates a presumption of irreparable harm where the defendant infringed another’s
trademark. Am. Bd. of Psychiatry & Neurology, Inc. v. Johnson-Powell, 129 F.3d 1,
3 (1st Cir. 1997); Societe Des Produits Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d
633, 640 (1st Cir. 1992) (“[I]irreparable harm flows from an unlawful trademark
infringement as a matter of law.”). However, a recent patent law case decided by the
Supreme Court, eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), calls the
propriety of that presumption into question. eBay, Inc. 547 U.S. at 393 (rejecting
presumption that permanent injunction should issue when patent infringement is
established); Swarovski Aktiengesellschaft v. Bldg. No. 19, Inc., 704 F.3d 44 (1st Cir.
2013) (noting that the Supreme Court’s eBay, Inc. decision “threaten[s] the
continuing viability of [the] presumption” of irreparable harm in trademark cases).
Even if the presumption no longer applies, various rationales may support a finding
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of irreparable injury in a trademark infringement case, such as: (1) the difficulty of
quantifying the continuing harm caused by trademark infringement, see Societe Des
Produits Nestle, 982 F.2d at 640; (2) the trademark holder’s “loss of control” over its
“reputation and goodwill,” even absent any quantifiable economic harm, see 5
McCarthy § 30:2 (4th ed. 2013); and (3) the danger that the trademark holder will
have to file additional lawsuits in the future to vindicate its rights. See Greene v.
Ablon, Civil Action No. 09-10937-DJC, 2013 WL 4714344, at *2 (D. Mass. Aug. 28,
2013).
If the First Circuit’s presumption of irreparable injury survived the Supreme
Court’s decision in eBay, Inc., then the irreparable injury factor is satisfied on the
basis of the jury’s decision that the Defendants infringed the Plaintiff’s valid
trademark. However, even if eBay, Inc. overturned the presumption of irreparable
harm, the Court independently finds that the Plaintiff would suffer an irreparable
injury if no permanent injunction issued. Three of the Plaintiff’s witnesses—Eileen
Hornor, Wendy Flynn, and Alane Callahan—testified that instances of confusion
persist. It is difficult to measure how many sales the Plaintiff might lose because of
this confusion, but the evidence suggests it would be significant. For instance, the
Plaintiff’s witnesses testified about numerous incidents where an individual who
was familiar with the Plaintiff’s Inn recommended “The Brunswick Inn” to a family
member or friend, only to have that person accidentally book a room at the
Defendants’ Inn instead. Furthermore, if the Court does not enjoin the Defendants,
the Plaintiff will continue to be unable to retain control over its goodwill and

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reputation and to share consumers’ blame and approbation when the similarity
between the Plaintiff’s and Defendants’ names causes time-wasting mix-ups.
Finally, without a permanent injunction, the Plaintiff will likely be forced to file
more lawsuits in the future to vindicate its rights.
C.

Balancing the Hardships

Regarding the balancing of the hardships factor, the loss of profits a
defendant might suffer because it has built up its business around infringing
another’s trademark “merits little equitable consideration.” See Concrete Mach. Co.
v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 612 (1st Cir. 1988) (internal
citations and quotation marks omitted) (copyright case).
Richard Martin, the general manager of the Defendants’ Inn, testified at trial
that the Defendants would incur significant costs if they are required to change the
name of their business, including the expense of procuring new signs, employee
uniforms, and promotional materials. Martin also testified that a name change
would confuse the tens or hundreds of thousands of people the Defendants’
marketing efforts have already reached.
However, these likely costs must be understood in context. The testimony of
Hilary Rockett, the developer of the Defendants’ Inn, establishes that the
Defendants were aware of the existence of the Plaintiff’s Inn when they chose the
name for their business. Rockett himself had stayed at the Plaintiff’s Inn many
times. Futhermore, the testimony of Michael Lyne, the project manager for the
construction of the Defendants’ Inn, establishes that he likely warned the
Defendants during the naming process that customers might confuse the name “The
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Inn at Brunswick Station” with the name “The Brunswick Inn.” Though the
Defendants did not willfully infringe the Plaintiff’s trademark, they ran a
significant risk of consumer confusion by electing a name so similar to the
Plaintiff’s. In short, the hardships the Defendants point to are hardships of their
own making. If the Defendants had not chosen a name so similar to the Plaintiff’s,
they would not now be facing the possibility of having to incur the costs of changing
their name. While the Court considers these costs in tailoring appropriate equitable
relief, they do not preclude granting the permanent injunction the Plaintiff
requests.
D.

The Public Interest

Regarding the public interest factor, the public is generally served by
reducing consumer confusion. Mercado-Salinas v. Bart Enters. Int’l, Ltd., 671 F.3d
12, 24 (1st Cir. 2011); see also Fritz v. Arthur D. Little, Inc., 944 F. Supp. 95, 97 (D.
Mass. 1996) (“In . . . trademark cases, the public interest almost always favors the
granting of otherwise appropriate injunctions.”)
The Plaintiff’s evidence makes clear that many guests have booked
reservations at the wrong hotel, arrived at the wrong building after long trips, been
forced to wait for taxis that went to the wrong location to pick them up, and suffered
various other harms and annoyances due to the confusion engendered by the
Defendants’ infringing behavior. Given the similarity between the names of the
businesses and their close proximity to one another, it is likely that similar
incidents would persist. The evidence suggests that an injunction would reduce
consumer confusion and thereby serve the public interest.
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E.

Balancing the Factors

Here, the balance of the above equitable factors weighs in favor of granting a
permanent injunction under the authority of the Lanham Act,4 although the Court
agrees that the Defendants should be allowed some flexibility in making the
transition to a new name. In the injunction entered in the conclusion of this order,
the Court attempts to strike the appropriate balance.
II.

Declaratory Judgment
The Declaratory Judgment Act allows district courts discretion to grant

declaratory relief. 28 U.S.C. § 2201 (“In a case of actual controversy within its
jurisdiction . . . , any court of the United States . . . may declare the rights and other
legal relations of any interested party seeking such declaration . . . .” (emphasis
added)). As the Supreme Court explained in Wilton v. Seven Falls Co., 515 U.S. 277
(1995), the Act “create[s] an opportunity, rather than a duty” on the part of the
court. Wilton, 515 U.S. at 288. If declaratory judgment “will serve no useful
purpose,” or if “considerations of practicality and wise judicial administration”
advise against it, the court may choose, in its discretion, not to grant declaratory
judgment. Id.
Here, the Plaintiff seeks a declaration that “it is the senior user and owner of
exclusive rights in the mark THE BRUNSWICK INN.” Pl.’s Post-Trial Br. 2. The
jury’s order and this order make clear that the “The Brunswick Inn” is a legally
enforceable trademark in which the Plaintiff’s rights are superior to those of the

As 15 U.S.C. § 1116 and 15 U.S.C. § 1125(a) entitle the Plaintiff to a permanent injunction,
the Court need not consider under what circumstances Maine law would justify an injunction.
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Defendants. No additional decree from the Court is necessary on that point.
Furthermore, the Court heard no evidence concerning whether the Plaintiff is the
owner of “exclusive” rights in the mark “The Brunswick Inn.” It is at least
theoretically possible that a third party not involved in this case also has valid
rights to the mark, so a decree as to the exclusivity of the Plaintiff’s rights would
not be appropriate. For these reasons, the Court denies the Plaintiff’s request for
declaratory judgment.
CONCLUSION
For the reasons discussed above, the Court ORDERS judgment be entered in
favor of the Plaintiff with respect to Counts IV and V and the Defendants’
counterclaim, DENIES the Plaintiff’s request for declaratory judgment, and
ENJOINS the Defendants as follows:
1)

No later than 5:00 p.m. EST on April 4, 2014, the Defendants
shall permanently cease using the name “The Inn at Brunswick
Station” or any similar name which uses both the word
“Brunswick” and the word “Inn,” except as provided in
Paragraph 2 of this injunction.

2)

The
Defendants
may
continue
to
maintain
the
“innatbrunswickstation.com” domain name until 5:00 p.m. EST
on February 4, 2015, but only in a manner that automatically
redirects users who enter that domain name into their web
browsers to a new non-infringing website with a different, noninfringing domain name.

SO ORDERED.
/s/ Nancy Torresen
United States District Judge
Dated this 4th day of February, 2014
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