Dickey's Barbecue Pit, Inc. et al v. Celebrated Affairs Catering, Inc. et al

Filing 24

MEMORANDUM OPINION AND ORDER - Pending before the Court is Plaintiffs' First Amended Application for Temporary and Preliminary Injunctive Relief (Dkt. 11 ). After considering the complaint, the application, and the arguments of counsel, the Co urt finds the motion should be granted. It is further ORDERED that unless terminated earlier, this preliminary injunction shall expire upon the issuance of a final decision by the Court in this case. Signed by Judge Amos L. Mazzant, III on 3/22/2017. (baf, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DICKEY'S BARBECUE PIT, INC.,
DICKEY'S BARBECUE RESTAURANTS,
INC.
v.
CELEBRATED AFFAIRS CATERING,
INC., DAVID WIRTH, PAMELA WIRTH

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Civil Action No. 4:17-CV-00127
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs’ First Amended Application for Temporary and
Preliminary Injunctive Relief (Dkt. #11). After considering the complaint, the application, and
the arguments of counsel, the Court finds the motion should be granted.
BACKGROUND
This dispute centers around Defendants’ unauthorized production, manufacture,
distribution, advertisement, promotion, marketing, offering for sale, and sale of Plaintiffs’
trademarked barbeque, sides, rub, and sauce. Plaintiffs are the owners of the following
trademarks:
Reg. Number
1980072
2878761
3205121
3237281
4249206
4249207
4249263
4579035
4631706
5086496
87002549

Trademark
Dickey’s Barbecue Pit A Texas Tradition Since 1941
(Design plus words)
A Texas Tradition Since 1941 Dickey’s Barbecue Pit
(Design plus words)
Dickey’s Barbecue Pit Since 1941 (Design plus words)
Dickey’s
Dickey’s Barbecue Pit Original Barbecue Sauce
Dickey’s Barbecue Pit Original Barbecue Rib Rub
Dickey’s Barbecue Pit
Big Yellow Cup Club
Dickey’s Barbecue Pit (Design plus words)
We Speak Barbecue
Dickey’s Barbecue Pit (Design plus words - pending)

1202218
1183816

Dickey’s Barbecue Pit (Design plus words - international)
Dickey’s (International)

(Dkt. #14, Exhibit D).
On May 22, 2013, and July 23, 2015, Defendants entered into franchise agreements with
Dickey’s Barbeque Restaurants, Inc. (collectively, the “Franchise Agreements”). As part of these
agreements, Defendants operated two Dickey’s Barbeque Pit Restaurants at 7850 N. Oracle,
Tucson, Arizona 85704 and 5250 E. 22nd Street, Tucson, Arizona 85711.
On February 2, 2017, Defendants terminated the Franchise Agreements. Upon
termination, the “Obligations Upon Termination or Expiration” clause in the Franchise
Agreements prohibit Defendants from (1) reopening the franchise restaurants; (2) opening a
barbeque restaurant within a five-mile radius of the Dickey’s Barbeque franchise restaurants; and
(3) using any of the confidential methods, procedures, and trade secrets associated with the
Dickey’s Restaurants’ System. Termination also required Defendants to immediately and
permanently cease use of all signs, advertising materials, displays, stationary, forms, and any
other articles which display Plaintiff’s marks.
On February 5, 2017, a representative for Plaintiffs visited each of Defendants’ locations
and documented the continued use of Plaintiff’s trademarks.
On February 20, 2017, Plaintiffs filed a complaint (Dkt. #1). That same day, Plaintiffs
filed an Application for Temporary Restraining Order and Temporary Injunctive Relief
(Dkt. #2). The Court denied the application for lack of notice to Defendants (Dkt. #4). On
February 28, 2017, Plaintiffs filed an Amended Complaint and their First Amended Application
for Temporary and Preliminary Injunctive Relief (Dkt. #6; Dkt. #11). The Court granted a
temporary restraining order on March 6, 2017, and set a hearing for the preliminary injunction on
March 21, 2017 at 12:00 p.m. (Dkt. #21).
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The Court held a preliminary injunction hearing on March 21, 2017 at 12:00 p.m.
Defendants did not appear. At the hearing, Plaintiffs requested that the Court convert the
Application for Temporary Restraining Order and Temporary Injunctive Relief into an
application for preliminary injunction. The Court agreed.
As of the date of this order, Defendants continue to operate stores at 7850 N. Oracle,
Tucson, Arizona 85704 and 5250 E. 22nd Street, Tucson, Arizona 85711.
LEGAL STANDARD
Under Rule 65 of the Federal Rules of Civil Procedure, “[e]very order granting an
injunction and every restraining order must: (a) state the reasons why it issued; (b) state its terms
specifically; and describe in reasonable detail . . . the act or acts restrained or required.” Fed. R.
Civ. P. 65(d). A plaintiff seeking a preliminary injunction must show: (1) a substantial likelihood
of success on the merits; (2) a substantial threat that plaintiff will suffer irreparable harm if the
injunction is not granted; (3) the threatened injury outweighs any damage that the injunction
might cause the defendant; and (4) the injunction will not disserve the public interest. Nichols v.
Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008).
“A preliminary injunction is an extraordinary remedy and should only be granted if the
plaintiffs have clearly carried the burden of persuasion on all four requirements.” Id. “The denial
of a preliminary injunction will be upheld where the movant has failed sufficiently to establish
any one of the four criteria.” Black Fire Fighters Ass’n v. City of Dall., 905 F.2d 63, 65 (5th Cir.
1990) (emphasis in original) (citation omitted). Injunctive relief requires the applicant to
unequivocally show the need for its issuance. Valley v. Rapides Par. Sch. Bd., 118 F.3d 1047,
1050 (5th Cir. 2005). The movant has the burden of introducing sufficient evidence to justify the
grant of a preliminary injunction. PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535,

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545 (5th Cir. 2005). The party seeking relief must satisfy a cumulative burden of proving each of
the four elements enumerated before a court can grant preliminary injunction. Miss. Power &
Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985).
ANALYSIS
Plaintiffs seek a temporary restraining order to restrain the Defendants from infringing on
Plaintiff’s trademarks. The Court finds that Plaintiffs have established all four elements
necessary for a preliminary injunction on their trademark infringement claim.
a. Likelihood of Success on the Merits
To demonstrate a likelihood of success on the merits Plaintiff must present a prima facie
case. Daniels Health Scis., LLC v. Vascular Health Scis., 710 F.3d 579, 582 (5th Cir. 2013)
(citing Janvey v. Alguire, 647 F.3d 585, 595–96 (5th Cir. 2011)). A prima face case does not
mean Plaintiffs must prove they are entitled to summary judgment. Byrum v. Landreth, 566 F.3d
442, 446 (5th Cir. 2009).
Plaintiffs are likely to succeed on their trademark infringement claim. To prevail on a
claim for trademark infringement, the registrant must show: (1) its mark was used in commerce
by the defendant without the registrant’s consent; and (2) the unauthorized use was likely to
cause confusion, or to cause mistake or to deceive. See 15 U.S.C. § 1114(1)(a); Am. Rice, Inc. v.
Producers Rice Mill, Inc., 518 F.3d 321, 329 (5th Cir. 2008). A franchisor may show that it
properly terminated the contract purporting to authorize the trademarks’ use, thereby resulting in
the unauthorized use of the trademarks by the former franchisee. See Burger King Corp. v.
Mason, 710 F.2d 1480, 1491–92 (11th Cir. 1983) (“[M]any courts have held that continued
trademark use by one whose trademark license has been cancelled . . . constitutes trademark
infringement.”); Petro Franchise Sys., LLC v. All Am. Props., Inc., 607 F. Supp. 2d 781, 788

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(W.D. Tex. 2009) (same); 7-Eleven, Inc. v. Puerto Rico-7, Inc., No. 3:08-CV-0140-B, 2009 WL
4723199, at *9 (N.D. Tex. Dec. 9, 2009) (same). “Registration of a mark with the PTO
constitutes prima facie evidence of the mark’s validity and the registrant’s exclusive right to use
the registered mark in commerce with respect to the specified goods or services.” Amazing
Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225, 237 (5th Cir. 2010) (citations omitted).
Plaintiffs have demonstrated that they have valid and protectable trademarks. Plaintiffs
have registered their marks and can thus establish a valid and protectable trademark (Dkt. #13,
Exhibit 3).
Plaintiffs have provided direct evidence that Defendants are using marks identical to
Plaintiffs’ marks without Plaintiffs permission (Dkt. #14, Exhibit C). Plaintiffs terminated the
Franchise Agreements and thus revoked permission to use the marks in its February 2, 2017
termination letter (Dkt. #13, Exhibit 4a, 4b). “The Fifth Circuit follows a comprehensive ‘digits
of confusion’ test to determine whether confusion is likely.” Petro Franchise, 607 F. Supp. 2d at
788 (citing Rolex Watch USA, Inc. v. Meece, 158 F.3d 816, 829–30 (5th Cir. 1998)).1 “However,
a district court may confine its digits-of-confusion analysis to the determination that the marks
used by the allegedly infringing party are the exact marks owned by the plaintiff and, if they are,
find that confusion is likely.” Id. (citing Paulsson Geophysical Servs., Inv. v. Sigmar, 529 F.3d
303, 310 (5th Cir. 2008)); see also Mason, 710 F.2d at 1492 (“Common sense compels the
conclusion that a strong risk of consumer confusion arises when a terminated franchisee

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The Fifth Circuit considers the following “digits of confusion” in examining this issue: “(1) strength of the
plaintiff's mark; (2) similarity of design between the marks; (3) similarity of the products; (4) identity of retail
outlets and purchasers; (5) similarity of advertising media used; (6) the defendant's intent; (7) actual confusion; and
(8) degree of care exercised by potential purchasers.” Am. Rice, Inc., 518 F.3d at 329. No one factor is dispositive,
and a finding of likelihood of success does not even require a positive finding on a majority of these “digits of
confusion.” Id. (citing Conan Props., Inc. v. Conans Pizza, Inc., 752 F.2d 145, 150 (5th Cir. 1985)).

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continues to use the former franchisor’s trademarks.”). Here, Defendants are using identical
marks to Plaintiffs’ marks. The consumer is likely to be confused.
The Court will now turn to the question of whether Defendants’ use of the marks is
unauthorized, a question that “necessitates some type of showing that the franchisor properly
terminated the contract purporting to authorize the trademarks’ use.” Robertson, 147 F.3d at
1038; see also 7-Eleven, Inc., 2009 WL 4723199, at *9–10.
Plaintiffs terminated the Franchise Agreements on February 2, 2017 (Dkt. #13,
Exhibit 4a, 4b). On January 24, 2017, Plaintiffs gave Defendants notice of default for failing to
pay franchise fees under the Franchise Agreements (See Dkt. #13, Exhibit 4a at p. 1; Dkt. #13,
Exhibit 4b at p. 2). Under the Franchise Agreements, Plaintiffs were required to cure within
seven days following the date of written notice (Dkt. #12, Exhibit 1 at p. 33, Dkt. #13, Exhibit 2
at p. 35–36). Defendants did not cure, and Plaintiffs sent notice of termination on February 2,
2017. Plaintiffs validly terminated the Franchise Agreements, which authorized use of the
trademarks.
The Court finds that Plaintiffs have shown a substantial likelihood of success on their
trademark infringement claim.
b. Substantial Treat of Irreparable Injury
Plaintiffs must demonstrate they are “likely to suffer irreparable harm in the absence of
preliminary relief.” Winter v. Nat. Res. Def. Council, 555 U.S. 7, 20 (2008). “[H]arm is
irreparable where there is no adequate remedy at law, such as monetary damages.” Janvey,
647 F.3d at 600. An injunction is appropriate only if the anticipated injury is imminent and not
speculative. Winter, 555 U.S. at 22.

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Plaintiffs are likely to suffer immediate and irreparable harm to their goodwill and
reputation by Defendants’ use of Plaintiffs’ trademarks and systems. Plaintiffs cannot be
adequately compensated for the loss of control over its marks resulting in loss of goodwill,
reputation, or customer confusion. Further, the harm is actual and imminent in that Defendants
are using Plaintiffs’ marks without authorization. Plaintiffs have satisfied this element.
c. Balance of Hardships
When deciding whether to grant an injunction, “courts ‘must balance the competing
claims of injury and must consider the effect on each party of the granting or withholding of the
requested relief.’” Winter, 555 U.S. at 24 (citation omitted).
The threatened injury of loss of goodwill, reputation, and customer confusion to Plaintiffs
greatly outweighs any damage to Defendants. Plaintiffs revoked Defendants’ rights to use the
Dickey’s trademarks. Plaintiffs face immediate and irreparable harm to their goodwill and
reputation by virtue of customer confusion. This harm cannot be fixed by monetary damages. On
the other hand, Defendants have no apparent right to use Plaintiffs’ marks. If Plaintiff is harmed,
its only harm will be monetary, which can be remedied by Plaintiffs.
d. Public Interest
‘“In exercising their sound discretion, courts of equity should pay particular regard for
the public consequences in employing the extraordinary remedy of injunction.”’ Winter,
555 U.S. at 24 (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982)). This factor
overlaps substantially with the balance-of-hardships requirement. Id.
The public has an interest in not being deceived or confused and for persons to comply
with federal statutes and regulations regarding trademarks. See S & R Corp. v. Jiffy Lube Int’l,

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Inc., 968 F.2d 371, 379 (3d Cir. 1992); TGI Friday’s Inc. v. Great Nw. Rests., Inc., 652 F.
Supp. 2d 763, 773 (N.D. Tex. 2009). Plaintiffs have satisfied this element.
CONCLUSION
It is therefore ORDERED that Plaintiffs’ First Amended Application for Temporary and
Preliminary Injunctive Relief (Dkt. #11) is hereby GRANTED.
It is further ORDERED that Defendants Celebrated Affairs Catering, Inc., David Wirth,
and Pamela Wirth, their agents, servants, employees, officers, associates, attorneys, and those in
active concert or participation with Defendants, are hereby ENJOINED from:
(1) manufacturing, importing, advertising, marketing, promoting, supplying, distributing,
offering for sale, or selling any products which bear the Dickey’s trademarks or any
marks/designs identical thereto, substantially indistinguishable from, substantially similar
thereto, or confusingly similar thereto;
(2) engaging in any other activity that will dilute the distinctiveness of the Dickey’s
trademarks;
(3) committing any other act which falsely represents or has the effect of falsely
representing that the goods and services of Defendants are licensed by, authorized by, offered by,
produced by, sponsored by, endorsed by, or in any other way associated with Dickey’s Barbecue
Pit, Inc. or Dickey’s Barbecue Restaurants, Inc.; and
(4) from using, disposing of, alienating or doing or failing to do anything that would
affect (a) the delivery to Dickey’s Barbecue Restaurants, Inc. for destruction or other disposition
all remaining inventory of the Dickey’s Barbecue Restaurants, Inc. stores Defendants operated,
or other merchandise bearing the Dickey’s trademarks, or any marks confusingly or substantially
similar thereto, including all advertisements, promotional and marketing materials therefore, as

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well as means of making same including signs; and (b) the preservation of the equipment,
furniture, and fixtures at the Dickey’s Barbecue Restaurants, Inc. stores operated by Defendants.
It is further ORDERED that Defendants Celebrated Affairs Catering, Inc., David Wirth,
and Pamela Wirth, their agents, servants, employees, officers, associates, attorneys, and those in
active concert or participation with Defendants:
(1) Deliver to Plaintiffs for destruction or other disposition all remaining inventory of
Defendants’ restaurants, or other merchandise bearing the Dickey’s Pit’s trademarks,
Dickey’s Restaurants’ system, or any marks confusingly or substantially similar
thereto, including all advertisements, promotional and marketing materials therefore,
as well as the means of making these items, including signs;
(2) To supply Plaintiffs a list of all downstream purchasers of the product from
Defendants’ restaurants and provide all documents, including correspondence,
invoices, and receipts, related to Defendants purchase of the product for Defendants’
restaurants;
(3) To file with this Court and serve on Plaintiffs within ten (10) days after entry of the
injunction a report in writing, under oath setting forth in detail the manner and form
in which Defendants have complied with the injunction; and
(4) To submit an accounting to Plaintiffs of all of Defendants’ gains, profits, and
advantages derived from the unauthorized use of Plaintiffs’ trademarks, if any.
The Court finds that $500 security posted by Plaintiffs in order to secure a temporary
restraining order is adequate to pay the costs and damages sustained by Defendants if found to be
wrongfully enjoined. This bond shall remain in the registry of the Court until further order.

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.
It is further ORDERED that unless terminated earlier, this preliminary injunction shall
expire upon the issuance of a final decision by the Court in this case.
IT IS SO ORDERED.
SIGNED this 22nd day of March, 2017.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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