Firebirds International, LLC v. Firebird Restaurant Group, LLC et al
Filing
156
MEMORANDUM OPINION AND ORDER: (1) Plaintiff's partial motion for summary judgment as to liability (Doc. 71 ) is DENIED without prejudice to reasserting the same arguments after presentation of the evidence at trial; (2) Defendants' partial motion for summary judgment on damages (Doc. 72 ) is DENIED without prejudice to reasserting the same after presentation of the evidence at trial; and (3) Defendants' motion to strike (Doc. 100 ) is DENIED. (Ordered by Judge Jane J. Boyle on 8/15/2019) (zkc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
FIREBIRDS INTERNATIONAL, LLC,
Plaintiff,
v.
FIREBIRD RESTAURANT GROUP,
LLC, MICHAEL D. KARNS, and
FIREBIRD IP, LLC,
Defendants.
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CIVIL ACTION NO. 3:17-CV-2719-B
MEMORANDUM OPINION AND ORDER
This is a trademark infringement dispute. Plaintiff Firebirds International LLC owns and
operates restaurants under the mark “Firebirds.” Defendant Firebird Restaurant Group operates a
restaurant-management company, Firebird Restaurant Group. Plaintiff sued Defendants under
various trademark-infringement-related laws. Before the Court are the parties’ crossmotions for
summary judgment. Plaintiff seeks partial summary judgment on the issue of Defendants’ liability for
trademark infringement and the related claims. Doc. 71, Pl.’s Mot. Defendants seek partial summary
judgment on Plaintiff’s claim for damages and unjust enrichment. Doc. 72, Defs.’ Mot. Because fact
issues preclude both requests, the Court DENIES these motions (Docs. 71 & 72).
I.
BACKGROUND
Plaintiff Firebirds International LLC owns and operates a chain of nearly fifty restaurants in
nineteen states across the country. Doc. 77, Pl.’s Br., 3; Doc. 78, Pl.’s App., 31–32 (chart listing
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restaurants). The restaurants are steakhouses that offer “an upscale dining experience at a casual,
or affordable, price point.” Doc. 78, Pl.’s App., 2 ¶ 6 (Decl. Eason). All of Plaintiff’s restaurants
operate under the “Firebirds” mark. Id. at 2 ¶ 5. Some restaurants display only “Firebirds”:
While some restaurants display a sign that says “Firebirds Wood Fired Grill”:
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Id. at 41, 45. The mark puts emphasis on both the “F” and the “S” in the word “Firebirds.” There
are currently no Firebirds restaurants in Texas, but Plaintiff plans to expand into this market by
2020. Id. at 2 ¶ 4. And Plaintiff recently opened its first restaurant in Oklahoma. Id.
In 2001, the United States Patent and Trademark Office (“USPTO”) issued Plaintiff a
registration for the “Firebirds” mark to be used for restaurant services. Doc. 77, Pl.’s Br., 4 (citing
Doc. 78, Pl.’s App., 46–49). Additionally, Plaintiff owns four related registrations: (1) “Firebirds
Wood Fired Grill” for restaurant services; (2) “Firebirds Firebar” for restaurant and bar services;
(3) “Firebirds” for wine; and (4) “Firebirds” + design for restaurant and bar services, as well as wine.
Id. at 5 (citing Doc. 78, Pl.’s App., 59–66). Plaintiff also has a pending application for the mark
“Firebirds Inner Circle” used for a consumer-loyalty program. Id. (citing Doc. 78, Pl.’s App., 67–73).
Plaintiff uses these marks for commercial, promotional, and advertising purposes. Doc. 96-1, Pl.’s
Resp., 5–6. For example, they’re used on menus, flyers, print advertisements, and in television and
radio advertisements, internet promotions, social media, and event sponsorships. Id. at 6.
Defendant Firebird Restaurant Group (“FRG”) is a restaurant-management company that
owns various restaurants in north Texas. Doc. 73, Defs.’ Br., 5–6. FRG owns and operates restaurants
doing business under six brands: El Fenix Mexican Restaurant, Snuffer’s Restaurant & Bar, Village
Burger Bar, Meso Maya, Taqueria La Ventana, Tortaco, and Sunrise Mexican Foods. Doc. 98, Defs.’
Resp., 8. These brand restaurants, in turn, own around fifty restaurant locations. Id.1
1
Additionally, Defendant Karns directly owns El Fenix Oklahoma. Doc. 98, Defs.’ Resp., 8. The
Court notes that Plaintiff characterizes the ownership differently—it argues that FRG alone owns and
operates the approximately fifty restaurants as a single economic entity. Doc. 77, Pl.’s Br., 7–8.
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Defendant Michael Karns started FRG in 2008 as a holding company for the El Fenix
restaurants, the first of the brand restaurants he purchased. Doc. 77, Pl.’s Br., 6. Karns continued to
use the El Fenix mark for marketing and business purposes; FRG was merely used as a shell company
to acquire El Fenix. Id. It was not until 2012 that Karns decided to “rebrand”2 and start using the
“Firebrand Restaurant Group” mark as a logo. Id. Defendants commissioned someone to create a logo
for their FRG mark. Plaintiff contends that Karns “rebranded” FRG for several reasons. First, FRG
started adding new restaurant brands to the company. Id. Second, Plaintiff argues that “Karns felt
that he was having trouble looking cool as a restaurant group with El Fenix as the mother brand.”
Id. (internal quotations omitted). Then, in 2013, Plaintiff claims that Defendants started to use their
mark as a “motherbrand” to advertise and market the brand restaurants. Id. The mark can be seen
in the upper right-hand corner of this photo:
2
Defendants dispute that this change in usage was a “rebranding.” Doc. 98, Defs.’ Resp., 9.
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Id. at 7 (citing Doc. 78, Pl.’s App., 182). The type-written portion of the mark displays the word
“Firebird” in large print and “restaurant group” in smaller print. The mark is also typically featured
with the large flame, as displayed above. Plaintiff argues that, since 2012 or 2013, Defendants Karns
and FRG “advertise and promote the restaurants that they own and operate under the infringing
‘Firebird’ mark both locally and nationally within the restaurant industry.” Id. Plaintiff produces
evidence that shows that Defendants have used the FRG mark on, among other things, restaurant
menus, flyers, business cards, print advertisements, websites, promotional information, press releases,
social media, and in event and charity sponsorships. Id. at 6. Defendants dispute that they use the
FRG mark as a trademark or anything other than a “business name.” Doc. 98, Defs.’ Resp., 9. They
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also push back on Plaintiff’s characterization of their use of the FRG logo as a “motherbrand.” Id. at
6. On the other hand, Karns has expressed that he wanted to use the newly designed logo to “add
other restaurants underneath it.” Doc. 73, Defs.’ Br., 3.
In 2013, Defendant Firebird IP, LLC filed a trademark registration with the USPTO for the
FRG mark to be used for “[r]estaurant management for others.” Doc. 78, Pl.’s App., 249. Plaintiff
contends that at some point before or during this process Defendants became aware of the “Firebirds”
marks through a clearance search conducted by their attorneys. Doc. 77, Pl.’s Br., 7. Despite this,
Defendants proceeded with their trademark application. Id. The USPTO attorney assigned to the
application issued an initial refusal based on likelihood of confusion with the Firebirds mark. Id. at
8 (citing Doc. 78, Pl.’s App., 274–310). Ultimately, the examining attorney issued a Final Office
Action that maintained the initial refusal decision. Id. at 9. The examining attorney found that the
marks were very similar and that the parties’ services were closely related. Doc. 78, Pl.’s App., 316.
Then, Defendants filed a request for reconsideration in response to the Final Office Action, renewing
arguments and evidence they previously submitted and submitting additional evidence. Doc. 99-10,
Defs.’ App., 583–86. In a turn of events, the USPTO allowed Defendants’ application and published
the FRG mark in the Trademark Official Gazette. Doc. 99-11, Defs.’ App., 587. Plaintiff proceeded
to oppose Firebird IP’s application in the Trademark Trial and Appeal Board (“TTAB”). Doc. 77,
Pl.’s Br., 9. That proceeding was stayed pending the outcome of this litigation. Id. at 10.
On October 4, 2017, Plaintiff filed its original complaint in this case. Doc. 1, Orig. Compl.
The complaint brought claims for federal and common law trademark infringement and unfair
competition. Id. ¶¶ 47–66. It also brought a claim for unjust enrichment. Id. ¶¶ 67–71. As relief,
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Plaintiff sought: (1) a permanent injunction preventing Defendants from, inter alia, continuing to
use its allegedly infringing mark; (2) damages based on illicit profit, reasonable royalties, corrective
advertising, and other harm suffered as a result of the complained activity; and (3) attorneys’ fees and
costs under 15 U.S.C. § 1117. Id. ¶¶ A–J. Plaintiff demanded a jury trial on all issues of triable fact.
Id. at 15. Plaintiff filed an amended complaint on June 22, 2018, which made essentially the same
allegations and claims as the original, but included Michael Karns as a defendant and added
allegations specific to him. Doc. 38, First Am. Compl. The first amended complaint is currently the
operative complaint in this case.
Now, before the Court are the parties’ motions for summary judgment. Plaintiff seeks partial
summary judgment against Defendants on their liability for the trademark and unfair competition
claims. Doc. 71, Pl.’s Mot. Defendants seek partial summary judgment on Plaintiff’s claim for
damages and unjust enrichment. Doc. 72, Defs.’ Mot. Both motions have been fully briefed, so the
Court addresses them now.
II.
LEGAL STANDARD
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A dispute “is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a
verdict for the non-moving party.” Burrell v. Dr. Pepper/Seven Up Bottling Grp., 482 F.3d 408, 411
(5th Cir. 2007). And a fact “is ‘material’ if its resolution could affect the outcome of the action.” Id.
In reviewing crossmotions for summary judgment, courts examine “each party’s motion
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independently” and view “the evidence and inferences in the light most favorable to the nonmoving
party.” JP Morgan Chase Bank, N.A. v. Data Treasury Corp., 823 F.3d 1006, 1011 (5th Cir. 2016)
(quoting Morgan v. Plano Indep. Sch. Dist., 589 F.3d 740, 745 (5th Cir. 2009)). “A genuine issue of
material fact exists if a reasonable jury could enter a verdict for the non-moving party.” Am. Family
Life Assurance Co. of Columbus v. Biles, 714 F.3d 887, 896 (5th Cir. 2013) (per curiam).
III.
ANALYSIS
A.
Plaintiff’s Motion for Partial Summary Judgment on Liability
In its motion for partial summary judgment, Plaintiff asks the Court to find that there is no
genuine dispute that Defendants are liable for trademark infringement, false designation of origin,
and unfair competition. Doc. 77, Pl.’s Br., 1. The dispositive inquiry for these claims is whether there
is a likelihood of confusion between the parties’ marks.3 Thus, the Court’s likelihood of confusion
analysis below for Plaintiff’s federal trademark infringement claim applies also to Plaintiff’s federal
claims for unfair competition and false designation of origin and common law claims for trademark
infringement and unfair competition. And because a reasonable jury could find no likelihood of
confusion between the parties’ marks, the Court denies Plaintiff’s request for summary judgment as
to liability on each of these claims.
To establish trademark infringement, a plaintiff must demonstrate ownership of a legally
3
“Plaintiff’s claims of false designation of origin, federal and common law unfair competition, and
common law trademark infringement are all governed by the same likelihood of confusion inquiry used to
determine whether [federal] trademark infringement has occurred.” See U.S. Risk Ins. Grp., Inc. v. Risk Mgmt.,
LLC, 2013 WL 4504754, at *19 (N.D. Tex. Aug. 20, 2013) (citing Scott Fetzer Co. v. House of Vacuums Inc.,
381 F.3d 477, 483–84 (5th Cir. 2004) and Philip Morris USA Inc. v. Lee, 547 F. Supp. 2d 667, 674 (W.D. Tex.
2008)).
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protectable mark and a likelihood of confusion between the marks. Amazing Spaces, Inc. v. Metro Mini
Storage, 608 F.3d 225, 235–36 (5th Cir. 2010). First, the Court considers whether Plaintiff has a
legally protectable interest in the Firebirds mark. Proof of registration with the United States Patent
and Trade Office is “prima facie evidence that the mark is valid and that the registrant has the
exclusive right to use the registered mark in commerce with respect to the specified goods or
services.” Id. at 237. Plaintiff owns five related and valid United States trademark registrations for
the Firebirds mark. Doc. 77, Pl.’s Br., 4–5. The first registration was issued on December 18, 2001.
Id. at 4. Defendants do not challenge the registrations, the ownership, or the incontestible status of
the Firebirds marks. Doc. 98, Defs.’ Resp., 20. Plaintiff has also used the mark in commerce since
around the time it was first registered.4 From this, the Court can conclude that Plaintiff has
established that it owns a legally protectable mark.
Next, to show a “likelihood of confusion,” Plaintiff must show that Defendants’ use of their
mark “create[d] a likelihood of confusion in the minds of potential consumers as to the source,
affiliation, or sponsorship” of Defendants’ products or services. Springboards to Educ., Inc. v. Hou.
Indep. Sch. Dist., 912 F.3d 805, 811–12 (5th Cir. 2019) (quoting Elvis Presley Enters., Inc. v. Capece,
141 F.3d 188, 193 (5th Cir. 1998)). “Likelihood of confusion is synonymous with a probability of
confusion, which is more than a mere possibility of confusion.” Elvis Presley Enters., 141 F.3d at 193.
Courts consider a non-exhaustive list of eight factors to determine whether a party has established
likelihood of confusion. The factors include: “(1) strength of the plaintiff’s mark; (2) similarity of
design between the marks; (3) similarity of the products [or services]; (4) identity of retail outlets and
4
Defendants dispute whether Plaintiff started using the mark in commerce in 2001 or 2002. Doc. 98,
Defs.’ Resp., 20. This discrepancy does not affect the analysis here.
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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. v. Producers Rice Mill, Inc.,
518 F.3d 321, 329 (5th Cir. 2008). “The absence or presence of any one factor ordinarily is not
dispositive; indeed, a finding of likelihood of confusion need not be supported even by a majority of
the . . . factors.” Id. (quoting Conan Props., Inc., v. Conans Pizza, Inc., 752 F.2d 145, 150 (5th Cir.
1985)). Word association between the marks is, in itself, insufficient to establish a probable
likelihood of confusion. Viacom Int’l v. IJR Capital Inv., L.L.C., 891 F.3d 178, 192 (5th Cir. 2018).
And “the court must consider the marks in the context that a customer perceives them in the
marketplace.” Id. (internal quotations omitted) (quoting Scott Fetzer, 381 F.3d at 485).
Plaintiff asserts that each of the eight digits weighs in favor of finding a likelihood of
confusion and, thus, that the Court should rule for it as a matter of law. “Likelihood of confusion is
a question of fact.” Id. “However, summary judgment is proper if the record compels the conclusion
that the movant is entitled to judgment as a matter of law.” Id. (internal quotations omitted)
(quoting Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 227 (5th Cir. 2009)). The Court
analyzes each factor in turn.
(1) Strength of Plaintiff’s Mark—The focus here is on Plaintiff’s “Firebirds” mark because
Plaintiff is the senior user. See Elvis Presley Enters., 141 F.3d at 201. The stronger Plaintiff’s mark, the
greater the protection it receives “because the greater the likelihood that consumers will confuse the
junior user’s use with that of the senior user.” Id. Two separate considerations are relevant—the
conceptual strength and the commercial strength of the mark. Conceptual strength “considers where
the mark falls on a spectrum: ‘Marks may be classified as generic, descriptive, suggestive, or arbitrary
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and fanciful. . . . Within this spectrum the strength of a mark, and of its protection, increases as one
moves away from generic and descriptive marks toward arbitrary marks.” Am. Rice, 518 F.3d at 330
(alterations incorporated) (quoting Falcon Rice Mill, Inc. v. Cmty. Rice Mill, Inc., 725 F.2d 336, 346
(5th Cir. 1984)). Commercial strength is the standing of the mark in the marketplace. Id. Plaintiff
argues there is no fact issue that its mark is strong based on both of these considerations.
Starting with the conceptual strength, Plaintiff argues its mark is arbitrary and thus inherently
distinctive. Doc. 77, Pl.’s Br., 18. Marks that are suggestive, arbitrary, or fanciful are deemed
“inherently distinctive and are entitled to protection.” Xtreme Lashes, 576 F.3d at 227 (quoting Two
Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). Arbitrary marks have no relation to the
product or service with which they are used. Springboards, 912 F.3d at 814. For example, the mark
“APPLE” is arbitrary when used for computers because it neither describes nor suggests anything
about the nature of the computers. J. Thomas McCarthy, 2 McCarthy on Trademarks and Unfair
Competition § 11:11 (5th ed. 2019) (hereinafter “McCarthy on Trademarks”). Defendants dispute that
the Firebirds mark is arbitrary. Doc. 98, Defs.’ Resp., 21.5 Defendants argue that the mark should not
be afforded the same degree of protection as “coined and fanciful terms such as Kodak or Xerox.” Id.
(quoting Amstar Corp v. Domino’s Pizza Inc., 615 F.2d 252, 260 (5th Cir. 1980) (holding that the
mark “Domino,” while it may be arbitrary, was not coined or fanciful and thus was entitled to less
protection)). Rather, the name “Firebirds,” Defendants argue, comes from the method of cooking
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Plaintiff asserts that Defendants conceded the Firebirds mark is arbitrary. Doc. 114, Pl.’s Reply, 12.
The Court agrees that Defendants have not formulated a serious response to rebut the argument that the
mark is arbitrary. See Doc. 98, Defs.’ Resp., 21. But the Court is unwilling to go so far as to find that
Defendants conceded the point. They merely argued that “its application to restaurant services may be
arbitrary . . . .” Id.
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in wood-fired grills, which is done in all of Plaintiff’s restaurants, and is thus descriptive. Id.
The Court can rule out a finding that the mark is generic or descriptive. Generic marks refer
to the class of which a good is a member. Xtreme Lashes, 576 F.3d at 227. Firebirds is clearly not
generic when used as a mark for a restaurant (e.g., “Steakhouse”). Nor is it descriptive. A descriptive
term provides an attribute or quality of a good. Id. While “Fire” taken alone may be descriptive of
the restaurant’s grill, the term “Firebirds” is not obviously descriptive of Plaintiff’s services. Thus, the
mark is at the very least suggestive. A suggestive mark “suggests, but does not describe, an attribute
of the good; it requires the consumer to exercise his imagination to apply the trademark to the good.”
Xtreme Lashes, 576 F.3d at 227; see also Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc., 851 F.3d
440, 452 (5th Cir. 2017) (“Examples of suggestive terms include ‘Penguin’ for a refrigerator brand,
and ‘Coppertone’ for sun tanning products.”) (internal citations omitted). As Plaintiff points out,
“Firebirds” is a common linguistic term used in various cultural and commercial categories, such as
mythology, film, print, and sports. Doc. 77, Pl.’s Br., 18 (citing 78-1, Pl.’s App., 619–22). There is
no evidence before the Court that suggests the term is commonly used in connection with restaurant
services. Thus, any association between the mark and the service is not “intrinsic,” but requires some
imagination on the part of the customer. See, e.g., All. for Good Gov’t v. Coal. for Better Gov’t, 901
F.3d 498, 509 (5th Cir. 2018) (finding that the image of a bird was not “intrinsic” to the services of
a good-government organization as a generic or descriptive mark would be); Am. Rice, 518 F.3d at
330 (finding that “image of a girl icon being used to sell rice is not intrinsic to rice as a product”).
The Court thus finds that the mark is, at least, suggestive and deserving of the inherently distinctive
status. The mark may even be arbitrary because it is unclear if an ordinary customer could even
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imagine what type of services Plaintiff provides from the word “Firebirds,” see Brown v. Bridges, 2016
WL 3660666, at *8 (N.D. Tex. Jan. 26, 2016), but that is an issue better left to the jury.
The Court also recognizes that the strength of the Firebirds mark is enhanced because of its
PTO registration. A mark that is “incontestable” is afforded more weight under this digit. See Am.
Rice, 518 F.3d at 330. As the Court discussed above and as Defendants do not dispute, the Firebirds
mark is incontestable and thus “protected from challenge by a presumption of validity.” Id. This
evidence can be considered when determining strength. Id.; US Risk Ins. Grp., 2013 WL 4504754,
at *8 (N.D. Tex. Aug. 20, 2013). The conceptual strength of the mark tilts the scale in Plaintiff’s
favor.
Next is the commercial strength of the mark. This is based on the mark’s standing in the
marketplace. Am. Rice, 518 F.3d at 330 (citing Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass’n,
651 F.2d 311, 315 (5th Cir. 1981)). Duration of use and advertising are considered in assessing the
commercial strength. All. for Good Gov’t, 901 F.3d at 510 (citing Sun-Fun Prods., 656 F.2d at
190–91). Some courts in this circuit also consider public recognition and uniqueness. See RE/MAX
Int’l, Inc. v. Trendsetter Realty, LLC, 655 F. Supp. 2d 679, 698–98 (S.D. Tex. 2009) (citing Century
21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1179 (9th Cir. 1988)). Further, “[e]xtensive thirdparty use of a term throughout the market suggests that consumers will not associate the junior
mark’s use with the senior mark user.” Springboards, 912 F.3d at 815 (citing Oreck Corp. v. U.S. Floor
Sys., Inc., 803 F.2d 166, 170 (5th Cir. 1986)).
Plaintiff argues that the Firebirds mark is commercially strong for a few reasons. First, it notes
that the mark has been in use for eighteen years and used at almost fifty restaurant locations across
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nineteen states. Doc. 77, Pl.’s Br., 19. Second, Plaintiff argues that its brand has national reach,
citing to news articles and restaurant rankings from national restaurant-industry publications that
recognize Firebirds as a top emerging restaurant and brand. Id. (citing Doc. 78-1, Pl.’s App., 114–41).
Third, Plaintiff provides evidence from customers that indicates that the Firebirds’ brand has an
extended geographic reach. Id. Fourth, Plaintiff shows that it has spent over $12.5 million in
advertising its restaurants in various media sources. Id. at 19–20 (citing Doc. 78-1, Pl.’s App., 5,
74–113, 628–29). And finally, Plaintiff argues its mark is commercially strong because it owns an
entire family of Firebirds marks, such as “Firebirds Firebar” and “Firebirds: Firebirds Wood Fired
Grill,” which are also incontestable (or, in the case of one mark, pending registration). Id. at 20.
Defendants attempt to undercut this evidence by focusing on two points. First, they respond
that the Firebirds mark is unknown in Texas and Oklahoma, which, they stress, are the only relevant
marketplaces for this case. Doc. 98, Defs.’ Resp., 22. Second, Defendants assert that the Firebirds
mark is commercially weak because the term “Firebird” is used extensively in other trademarks. Id.
at 22–23 (for example, the Pontiac Firebird and Firebird Food Store).
Starting with Defendants’ geographic argument, the Court finds that Defendants stretch the
law too far in arguing that the only relevant marketplaces are Texas and Oklahoma. Admittedly,
“[c]ontext is critical to a likelihood-of-confusion analysis.” Viacom Int’l, 891 F.3d at 192. But when
determining the commercial strength of a mark, the law does not strictly limit consideration to the
geographic operating area of the junior user, as Defendants argue. Indeed, the cases Defendants cite
do not impose any such limit. For example, in a trademark dispute between the University of
Houston and the Houston College of Law, a district court found that the University of Houston’s
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trademarks were “somewhat strong—particularly in the markets relevant to this litigation.” Bd. of
Regents of the Univ. of Hous. Sys. v. Hous. College of Law, Inc., 214 F. Supp. 3d 573, 587 (S.D. Tex.
2016). The court defined the relevant markets as the legal industry, and Texas and Florida, from
where the two law schools “overwhelmingly” targeted prospective students. Id. at 586. But the court
also relied on evidence of the university’s national reputation, such as the U.S. News and World
Report ranking of the law school and the football team’s national acclaim. Id. Thus, while the
similarity of the geographic areas the schools operated in was a factor that bolstered the University
of Houston’s commercial strength, nowhere did the district court hold that this consideration is
dispositive or required. Id. Further, the court relied on another case from the Southern District of
Texas (the second case cited by Defendants) for the proposition that courts look to the strength of
the senior user’s mark in the relevant market. Id. at 586 n.45 (citing Quantum Fitness Corp. v.
Quantum LifeStyle Ctrs., L.L.C., 83 F. Supp. 2d 810, 819, 830 (S.D. Tex. 1999)). But the Quantum
court focused on the relevant industry involved—the fitness industry. The court noted that “while
weak in the overall market for goods and services, [the mark] is sufficiently strong in the fitness
industry to create a likelihood of confusion.” Quantum, 83 F. Supp. 2d at 822. Thus, in determining
commercial strength, that court focused on the relevant industry involved as opposed to the
geographic proximity of the senior and junior users.6
From this, the Court finds that the relevant marketplaces here are both the restaurant
industry and Texas/Oklahoma. But, evidence of national reputation may be probative of commercial
strength in these specific marketplaces. As discussed above, Plaintiff provides a significant amount
6
The Quantum court did discuss the geographic location of third-party businesses with Quantum in
the name. 83 F. Supp. 2d at 821. But that is not at issue here.
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of evidence related to its commercial strength. But this evidence is almost exclusively limited to the
recognition of the Firebirds mark on a national scale or in the restaurant industry generally. Notably
lacking from Plaintiff’s evidence is any indication of commercial recognition in Texas or Oklahoma.
See Doc. 77, Pl.’s Br., 19–20. It then makes sense why Defendants focus their response on this gap
in Plaintiff’s case, and the Court finds this point well-taken. Additionally, the Court finds merit in
Defendants’ argument that extensive third-party usage of the term “Firebird” in related and
unrelated industries militates against finding Plaintiff’s mark commercially strong. See Doc. 98, Defs.’
Resp., 22–23; see also Springboards, 912 F.3d at 815 (“Extensive third-party use of a term throughout
the market suggests that consumers will not associate the junior mark’s use with the senior mark
user.”). Plaintiff’s argument that this evidence is insufficient because Defendants have not cited
third-party federal trademark registrations is unavailing; other courts have accepted evidence similar
to what Defendants have shown here. See Quantum Fitness, 83 F. Supp. 2d at 821–22 (accepting
evidence of phonebook and internet searches showing third-party usage of the word “quantum”).
Other USPTO applications or registrations containing the word “Firebirds” may be relevant to this
inquiry, but the Court is not convinced that they are necessary to survive summary judgment.
Thus, in determining the strength of the Firebirds mark, the Court finds that while Plaintiff
has presented substantial evidence that its mark is conceptually strong, Plaintiff’s evidence of
commercial strength is more uncertain. A reasonable factfinder could then find that this factor, on
the whole, does not weigh in Plaintiff’s favor.
(2) Similarity of the Marks—When considering the similarity of the parties’ marks, courts
look at “the mark’s appearance, sound, and meaning.” Bd. of Supervisors for La. State Univ. Agric. &
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Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 479 (5th Cir. 2008). “The more similar the marks,
the greater likelihood of confusion.” Streamline Prod., 851 F.3d at 454. “Even if two marks are
distinguishable, we ask whether, under the circumstances of use, the marks are similar enough that
a reasonable person could believe the two products have a common origin or association.” Id.
(quoting Xtreme Lashes, 576 F.3d at 228). “In assessing mark similarity, we ‘give more attention to
the dominant features of a mark.’” Id. Courts also consider the context in which the marks appear,
as well as the color schemes and design elements of the marks. Id. (citing Smack Apparel, 550 F.3d
at 480).
Here, the Court agrees with Plaintiff that the “dominant feature” of the marks is the word
“Firebird(s).” See Doc. 77, Pl.’s Br., 22. This requires the Court to focus on the use of the word
“Firebird(s)” in the parties’ marks, as the other words used in the marks are generic. See Streamline,
851 F.3d at 454 (focusing on the word “Streamline” in both marks). The words are essentially
identical—“Firebirds” versus “Firebird”—and are used in the same context (i.e. the parties’ logos).
On the other hand, as Defendants note, Plaintiff’s mark places emphasis on the “F” and “S” in
“Firebirds,” and sometimes appears alongside different words (e.g. Wood Fired Grill versus Restaurant
Group). Doc. 98, Defs.’ Resp., 23. Additionally, Defendants’ mark includes a “prominent flame,”
while Plaintiff’s does not. Id. Giving more attention to the dominant features of these marks, the
Court finds that the marks are similar and that this factor weighs in favor of finding a likelihood of
confusion. The emphasis and prominence of the word “Firebird” and the circumstances of use
convince the Court that a reasonable person could believe the two services have a common origin
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or association. This factor weighs in favor of granting summary judgment for Plaintiff.7
(3) Similarity of the Products or Services—“The greater the similarity between the products
and services, the greater the likelihood of confusion.” Streamline, 851 F.3d at 454 (quoting Xtreme
Lashes, 576 F.3d at 229). Plaintiff provides restaurant services at around fifty restaurant locations,
which display the signs “Firebirds” or “Firebirds Wood Fired Grill.” Doc. 77, Pl.’s Br., 23. Defendants
operate a restaurant group that owns six brand restaurants at forty-eight locations. Doc. 98, Defs.’
Resp., 28. But each of these restaurants has its own logo and trademark different from the FRG mark
(e.g., El Fenix, Snuffer’s, Meso Maya). Id. Defendants argue that they provide “restaurant
management services” and not “restaurant services,” like Plaintiff provides. Therefore, they argue,
the parties’ services do not share similar consumers and thus there is no risk of confusion between
the two marks. Id. 28–30. Plaintiff argues that, even if it is assumed the services differ, the distinction
is immaterial. Doc. 77, Pl.’s Br., 23. It cites to case law that holds “[d]irect competition between the
parties’ services or products is not required in order to find a likelihood of confusion. . . . When
products or services are noncompeting, the confusion at issue is one of sponsorship, affiliation, or
connection.” Elvis Presley Enters., 141 F.3d at 202. In other words, Plaintiff argues that consumers
of Firebird Restaurant Group are likely to assume that Firebirds is the source of those services, and
vice versa. Plaintiff also attempts to minimize this distinction by arguing that the services are
7
Defendants complain also that Plaintiff’s mark is not similar to their mark because Plaintiff has not
clearly identified its mark or its family of marks. Doc. 98, Defs.’ Resp., 23–25. The Court finds no merit in
this argument. Plaintiff has plainly identified its mark in numerous places. See, e.g., Doc. 38, Am. Compl.,
¶¶ 14–21; Doc. 77, Pl.’s Br., 7, 12–14, 16–19, 26–32; Doc. 78, Pl.’s App., 41, 43, 45. Plaintiff has also
provided the USPTO trademark applications and registrations for the marks in question. Doc. 78, Pl.’s App.,
46–49, 59–73 (trademark registrations for associated marks). Thus, as they relate to similarity, Defendants’
complaints are unavailing.
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advertised in the same manner. Doc. 114, Pl.’s Reply, 14 (comparing screenshots of the Firebirds
Wood Fired Grill website and Firebird Restaurant Group).
The similarity of the services may be limited to the fact that both sides are involved in the
restaurant industry. Defendants do not have brick-and-mortar restaurants that display their FRG
mark; Plaintiffs do. While courts in this circuit sometimes overlook minor distinctions when services
are related, it is unclear at this stage whether this distinction is minor. Often times, courts will do so
when the “junior user’s services are in a market that is one into which the senior user would naturally
expand.” Elvis Presley Enters., 141 F.3d at 202. The actual intent to expand is irrelevant in this
inquiry; instead, the focus is on whether a consumer would believe such an expansion is natural, even
if this belief is false. Id. Plaintiff does not make this argument here, however. Rather, Plaintiff argues
that because there has been actual confusion between the two marks, the services must be similar.
But that’s not the point of this inquiry. The Court finds that fact issues exist as to the differences in
the parties services that cannot be resolved at this stage. As such, this factor favors neither party.
(4) Outlet and Purchaser Identities—“The greater the overlap between the outlets for, and
consumers of, the services, the greater the potential for confusion.” All. for Good Gov’t, 901 F.3d at
512. This factor seems to be affected by the same factual dispute as the third factor—Plaintiff’s main
consumers are restaurant goers; Defendants’ are purportedly the brand restaurants they operate.
There is evidence that the parties share similar vendors and suppliers, but Defendants argue that is
irrelevant to this factor. Plaintiff does not respond. Further, even if the restaurant goers of
Defendants’ brand restaurants can be characterized as Defendants’ consumers, fact issues remain
because the food types these brand restaurants offer do not appear to be similar and the locations of
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the parties’ restaurants have little overlap. If anything, this factor weighs in Defendants’ favor at this
stage.
(5) Advertising Media Identities—“The greater the degree of overlap in the marketing
approaches of the two entities, the greater the likelihood of confusion.” Dallas Cowboys Football Club,
Ltd. v. Am.’s Team Props., Inc., 616 F. Supp. 2d 622, 639 (N.D. Tex. 2009) (alterations incorporated)
(quoting Quantum Fitness, 83 F. Supp. 2d at 827). Plaintiff advertises its goods and services under
the Firebirds mark through in-restaurant marketing, internet marketing (e.g., website, social media,
online review websites), magazines, press releases, and sponsorship of events and charities. Doc. 77,
Pl.’s Br., 25. Defendants dispute that their advertising media is similar. They start by arguing that
they do not advertise with their FRG mark. Doc. 98, Defs.’ Resp., 32. Their claim is that because
Firebird Restaurant Group does not offer any goods or services that can be purchased, there is
nothing for Defendants to advertise. Id. Defendants seem to argue, in the alternative, that even if
their use of the FRG mark could be considered advertising, the ways in which they use it in
advertising do not resemble the ways in which Plaintiff uses its mark. Id. at 32–35.
The Court finds that this factor leans slightly in Plaintiff’s favor. First, the Court does not put
much stock into Defendants’ argument that they do not advertise under the FRG mark—Plaintiff
has provided ample evidence both that the mark is used in connection with Defendants’ advertising
of their restaurant group and that Defendants have contracted with third-party marketing companies
to advertise its mark. Doc. 77, Pl.’s Br., 25 (citing Doc. 78, Pl.’s App., 180–226 (collecting examples
of FRG mark use in online, social media, and in-restaurant ads), 238–47 (use in connection with
charity event), 587–88 & 589–94 (use on Glassdoor and Indeed)). Defendants counter that this
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advertising evidence is “minimal” and that they have discontinued use of the mark with charity
events and on brand restaurant menus. Doc. 98, Defs.’ Resp., 33–34. Even if this evidence were
considered minimal, it is some evidence that the parties advertise their marks in similar ways, and
thus pushes this factor in Plaintiff’s favor.
(6) Defendants’ Intent to Confuse—“Proof of an intent to confuse the public is not necessary
to a finding of a likelihood of confusion, but if a mark was adopted with the intent to confuse the
public, that alone may be sufficient to justify an inference of likelihood of confusion.” Houston Coll.
of Law, 214 F. Supp. 3d at 590 (cleaned up) (quoting Elvis Presley Enters., 141 F.3d at 203). “If there
is no evidence of intent to confuse, then this factor is neutral.” Viacom Int’l, 891 F.3d at 195. Courts
in this circuit focus “on whether the defendant intended to derive benefits from the reputation of the
plaintiff.” Streamline, 851 F.3d at 455. “But mere awareness of the senior user’s mark does not
establish bad intent.” Id. at 456 (cleaned up) (quoting Conan Props., 752 F.2d at 150).
Here, Plaintiff argues that Defendants “knew of Firebirds’ well established trademark rights
before adopting and using their infringing ‘Firebird’ marks, and yet they decided to proceed anyway.”
Doc. 77, Pl.’s Br., 27. Other courts have found similar evidence insufficient to support a finding in
favor of a plaintiff at the summary-judgment stage. See Viacom Int’l, 891 F.3d at 196; Ultimate Living
Int’l, Inc. v. Miracle Greens Suppl., Inc., 2007 WL 14258 (N.D. Tex. Jan. 3, 2007). This Court does
the same and finds that Defendants’ awareness of the Plaintiff’s mark, coupled with continued use
after awareness, is not sufficient to establish bad intent at this stage. This factor is thus neutral.
(7) Evidence of Actual Confusion—Actual confusion is the “best evidence of a likelihood
of confusion.” Viacom Int’l, 918 F.3d at 197 (quoting Elvis Presley Enters., 141 F.3d at 203–04). “Even
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if initial consumer confusion is quickly dispelled, this initial misunderstanding is evidence of
confusion.” Id. “To show actual confusion, a plaintiff may rely on anecdotal instances of consumer
confusion or consumer surveys.” Id. Importantly, “very little proof of actual confusion” is needed to
establish a likelihood of confusion. Streamline, 851 F.3d at 457 (quoting Xtreme Lashes, 576 F.3d at
229). “Testimony of a single known incident of actual confusion by a consumer has been found to
be sufficient evidence to support the district court’s finding of actual confusion.” Id. (citing La. World
Exposition v. Logue, 746 F.2d 1033, 1041 (5th Cir. 1984)). “However, not all confusion counts:
evidence of actual confusion must show more than a fleeting mix-up of names; rather it must show
that the confusion was caused by the trademarks employed and it swayed consumer purchases.” Id.
(internal quotations omitted and alterations incorporated) (quoting Xtreme Lashes, 576 F.3d at 230).
This does not mean that a proponent of such evidence is required to show lost profit associated with
the instances of confusion. Id. at 457–58.
Plaintiff brings forth both anecdotal evidence of confusion and consumer surveys. Starting
with the anecdotal evidence, Plaintiff points to twenty instances of alleged confusion. Most of these,
as Defendants repeatedly stress, are not instances of consumer confusion but vendor, supplier, or
third-party confusion. Doc. 77, Pl.’s Br., 28–31 (listing instances of actual confusion). For example,
the first few examples of confusion are from: (1) headhunters contacting Plaintiff in attempts to
contact Defendants’ executives; (2) sales associates at Adobe emailing Plaintiff about Defendants’
marketing strategies; (3) Glassdoor posting Plaintiff’s mark on Defendants’ job posting; and (4)
industry professionals questioning whether the companies were associated. Id. at 28–29. Other
examples include purported confusion from marketing agencies, collections agents, real estate agents,
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vendors, and employees. Id. at 29–31. It seems like the only noted instances of consumer confusion
were two customer reviews, one mistakenly sent to FRG and one to Firebirds. Id. at 30. Both of these
occurred through the parties’ respective websites. Id.
Plaintiff first argues that its evidence of confusion from vendors and other nonpurchasing
third parties should still weigh in its favor. While there is support for this proposition in this circuit,
courts discount this nonpurchaser confusion in their weighing of this factor. Take Healix Infusion
Therapy, Inc. v. Healix, Inc., 2018 WL 1801149, at *19 (S.D. Tex. Apr. 16, 2018), for example. In
this case, the plaintiff (very similarly) complained of instances of confusion stemming from Glassdoor
and Indeed posting the incorrect logos on its website; job recruiters soliciting the wrong company’s
executive; and a company asking to clarify its vendor number. Id. The defendant argued that this
evidence was irrelevant because it showed only nonconsumer confusion. Id. The district court
disagreed, holding that “[a]lthough this evidence may not weigh as heavily as evidence of confusion
by customers that affected purchases, it is a factor of finding a likelihood of confusion.” Id.; see also
id. at *18 (collecting Fifth Circuit cases supporting this holding). The court went on to find that this
factor weighed, at best, slightly in the plaintiff’s favor, and it denied plaintiff’s motion for summary
judgment on its trademark claim. Id. at *20–21.
The Court finds Healix’s analysis directly applicable here. While Plaintiff’s anecdotal evidence
cannot be completely discounted, the Court will give it less weight than evidence of consumer
confusion. Moreover, the Court agrees with Defendants that the examples Plaintiff has given of
purported consumer confusion do not seem to indicate consumer purchases were swayed; rather,
these incidents more closely resemble “fleeting mix-ups” of names in attempting to contact Firebirds.
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In sum, although Plaintiff has amassed a not-insubstantial amount of actual confusion evidence, it
does not push Plaintiff over its summary-judgment burden. At this point, looking at this evidence
in a light most favorable to Defendants, it seems that this anecdotal evidence tips the scales only
slightly in Plaintiff’s favor.
As for the survey evidence, Plaintiff claims its expert’s survey “corroborates what common
sense and the numerous instances of actual confusion prove.” Doc. 114, Pl.’s Reply, 16. Defendants
respond that Plaintiff’s survey is riddled with errors, rendering it inadmissible. Doc. 98, Defs.’ Resp.,
41. These arguments are developed in greater detail in the parties’ briefing on Defendants’ motion
to exclude testimony from Plaintiff’s expert. See Doc. 92, Defs.’ Br. Mot. to Exclude Testimony of
Dr. Klein. The Court will address the admissibility of Dr. Klein’s testimony and survey in deciding
that motion. With respect to deciding this motion, the Court finds that Plaintiff’s argument that the
survey corroborates actual confusion is somewhat muffled by the fact that Plaintiff has pointed to
zero instances of consumer confusion that swayed purchases. Therefore, the survey does not actually
corroborate any consumer confusion. And the survey group, which was designed to target potential
customers of Defendants’ brand restaurants, does not seem to overlap with any of the categories of
persons Plaintiff identifies as being actually confused by the marks. Finally, the persistent fact issue
related to the distinction between the parties’ customer bases and services also comes into play here.
See Doc. 92, Defs.’ Br. Mot. to Exclude, 8–10 (arguing Klein sampled the wrong universe because
he sampled consumers of the brand restaurants, as opposed to Defendants’ consumers, i.e.
restaurants). Construing this evidence in favor of the nonmovant Defendants, the Court concludes
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that it cannot weigh this contested survey evidence in Plaintiff’s favor here.8
To conclude, the Court finds that this factor weighs slightly in Plaintiff’s favor based on the
instances of actual confusion amongst nonconsumers.
(8) Care Exercised by Potential Customers—“Where items are relatively inexpensive, a buyer
may take less care in selecting the item, thereby increasing the risk of confusion.” Xtreme Lashes, 576
F.3d at 231 (quoting Smack Apparel, 550 F.3d at 483). Plaintiff argues this factor weighs in its favor
because the concept of its restaurants is to provide upscale dining at an affordable price point.
Doc. 77, Pl.’s Br., 35. Defendants continue to rely on the argument that their customers are not
restaurant goers but restaurant businesses needing management services, and thus their customers
are making informed, deliberative decisions when contracting with them. Doc. 98, Defs.’ Resp., 42.
The Court believes that this reoccurring fact issue is best resolved at trial. Thus, this factor is neutral.
(9) Weighing the Digits of Confusion—Weighing all of the factors together, the Court
concludes that fact issues preclude the Court from granting summary judgment in Plaintiff’s favor.
Only a few factors—the conceptual strength of Plaintiff’s mark, the similarity of the marks, and the
advertising similarity—seem to definitively point to a likelihood of confusion. Other factors—e.g.,
commercial strength, actual confusion, similarity of the services—have factual disputes that the
Court finds are material and unresolvable at this stage. This includes the factual issue over whether
the parties actually compete with one another, which touches almost all the likelihood-of-confusion
digits. In all, while the weighing tilts slightly in Plaintiff’s favor, the Court finds that there are
8
It may be that Plaintiff’s expert’s testimony and survey evidence ultimately supports this factor at
trial. The Court makes this note to clarify that nothing in this Order should be construed as affecting the
admissibility or weight of that study (if it is found admissible)—such determinations will be made by the Court
on Defendants’ motion to exclude and, if appropriate, by the factfinder at trial.
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sufficient issues of material fact related to the likelihood-of-confusion test to proceed to trial.9
Plaintiff’s motion is denied.
B.
Defendants’ Motion for Partial Summary Judgment
Defendants seek summary judgment on (1) Plaintiff’s claim to recover an award of profits and
actual damages under the Lanham Act and (2) Plaintiff’s unjust enrichment claim. Doc. 73, Defs.’
Mot. The Court addresses each in turn, viewing the evidence and inferences in a light most favorable
to Plaintiff.
1.
Lanham Act Remedies
The Court starts with Defendants’ arguments related to damages. Under the Lanham Act,
a plaintiff who established infringement “shall be entitled . . . subject to the principles of equity, to
recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the
action.” 15 U.S.C. § 1117(a). “[S]uch monetary damages ‘shall constitute compensation and not a
penalty.’” Streamline, 851 F.3d at 459 (quoting 15 U.S.C. § 1117(a)). “[M]onetary damages are not
warranted in trademark infringement cases if ‘[a]n injunction alone . . . fully satisfies the equities of
a given case.’” Id. (some alterations in original) (quoting Seatrax, Inc. v. Sonbeck Int’l, Inc., 200 F.3d
358, 369 (5th Cir. 2000)). “This is ‘particularly [true] in the absence of a showing of wrongful
9
Defendants requested that the Court strike portions of affidavits submitted as evidence in support
of Plaintiff’s motion for summary judgment. See Doc. 100, Mot. to Strike. In this motion, Defendants argue
that portions of Mark Eason and Dennis Thompson’s affidavits contradict statements they previously made
in depositions. Doc. 101, Defs.’ Br. Mot. to Strike, 2. The challenged portions relate to when the first
Firebirds restaurant opened. Id. Even though the Court’s Order does not hinge on these specific statements,
the Court finds Defendants’ motion meritless. It is apparent that Defendants have selectively cited (or even
failed to cite) to portions of the affiants’ depositions that seemingly conflict with the statements made in their
affidavits. Upon review of the affidavits and the witnesses’ earlier testimony, the Court finds no meaningful
conflict with the statements. Defendants’ motion to strike (Doc. 100) is DENIED.
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intent,’ or if there is a ‘lack of sufficient proof of actual damages.’” Id. (alterations in original)
(quoting Bandag, Inc. v. Al Bolser’s Tire Stores, 750 F.2d 903, 917 (Fed. Cir. 1984) and Seatrax, Inc.,
200 F.3d at 372). “Though the district court has discretion in determining an equitable damages
award, genuine disputes concerning material facts, such as the actual amount of damages or the
willfulness of infringement may still preclude a summary judgment award of damages.” Choice Hotels
Intern., Inc. v. Patel, 940 F. Supp. 2d 532, 543–44 (S.D. Tex. 2013). The Court first addresses
Plaintiff’s claim for Defendants’ profits, then Plaintiff’s claim for actual damages.
i.
Fact Issues Preclude Summary Judgment as to Defendants’ Profits
Defendants spend the majority of their summary judgment brief contesting Plaintiff’s claim
for profits. The Lanham Act expressly provides for recovery of a defendant’s profits. It also provides
a formula for recovery of such profits: “In assessing profits the plaintiff shall be required to prove
defendant’s sales only; defendant must prove all elements of cost or deduction claimed.” 15 U.S.C.
§ 1117(a). Courts interpret this to mean that “a plaintiff must prove defendant’s sales in order to
determine a defendant’s profits, and if a plaintiff can prove a defendant’s sales, then the defendant
has the burden to prove any costs or deductions it claims.” ClearChoice Holdings, LLC v. Clear Choice
Dental, PLLC, 2016 WL 8136622, at *6 (S.D. Tex. Dec. 23, 2016) (citing Am. Rice., 518 F.2d at
337).
Additionally, the Fifth Circuit has held that “the remedies under Section 1117(a) ‘are
awarded subject to the principles of equity, and thus, an award of the defendant’s profits is not
automatic.’” Id. (quoting Am. Rice, 518 F.3d at 338). To decide whether an award of profits is
equitable, courts in this circuit look to the following six factors:
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(1) Whether the defendant had the intent to confuse or deceive, (2) whether sales
have been diverted, (3) the adequacy of other remedies, (4) any unreasonable delay
by the plaintiff in asserting his rights, (5) the public interest in making the
misconduct unprofitable, and (6) whether it is a case of palming off.
Quick Techs., Inc. v. Sage Grp., PLC, 313 F.3d 338, 347 (5th Cir. 2002) (acknowledging adoption
of factors in Pebble Beach Co. v. Tour 18 Ltd., 155 F.3d 526 (5th Cir. 1998)). These factors are “nonmandatory and non-exclusive: the district court is free to consider other facts in assessing whether
disgorgement of profits would be equitable, just as it may exercise discretion in weighing the
individual factors.” Retractable Tech., Inc. v. Becton Dickinson & Co., 919 F.3d 869, 876 (5th Cir.
2019) (citing Quick Techs., 313 F.3d at 347). However, even if these factors favor disgorgement, a
“plaintiff is ‘entitled to only those profits attributable to the unlawful use of its trademark.’”
ClearChoice, 2016 WL 8136622, at *6 (quoting Seatrax, 200 F.3d at 369).
The Court need not wade through all the evidence related to each of the above factors to
determine that a fact issue precludes summary judgment on this issue. One of the key factors here
is whether Defendants willfully infringed on Plaintiff’s mark—i.e. whether they intended to confuse
or deceive. See Quick Techs., 313 F.3d at 349 (“It is obvious from our cases that willful infringement
is an important factor which must be considered when determining whether an accounting of profits
is appropriate.”). Above, the Court considered Defendants’ intent in the context of likelihood of
confusion—the Court found that when the evidence was considered in the light most favorable to
Defendants, it did not weigh in favor of finding a likelihood of confusion. Here, by comparison, the
Court must draw all inferences in Plaintiff’s favor.
Defendants argue that there is no evidence that shows they intended to confuse or deceive.
Doc. 73, Defs.’ Br., 20–21. Specifically, they assert that Plaintiff’s evidence shows only that they were
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aware of Plaintiff’s mark yet continued to use the FRG mark despite this awareness. Id. at 20–24.
Defendants claim that the Fifth Circuit has found, as a matter of law, that such evidence is
insufficient to prove bad intent. Id. at 22–23 (citing Streamline, 851 F.3d at 455–56, 465). Plaintiff
responds that the evidence of constructive and actual notice is sufficient, in this case, to show
Defendants’ intent to infringe. Doc 96-1, Pl.’s Resp., 19–22. Plaintiff also argues that other
evidence—e.g., purported misrepresentations to the USPTO and recent marketing of a new
restaurant that is similar to Plaintiff’s—would also support a jury’s verdict on this issue. Id. at
22–25.10
The Court first notes that Defendants have not pointed to a case where a court in this circuit
granted summary judgment against a nonmovant’s claim for profits or damages when presented with
similar evidence. This makes sense as Lanham Act damages are based on principles of equity that
are better fit for resolution after trial. Instead, Defendants rely on Streamline. But both the facts and
procedural posture of that case differ from those here. In Streamline, the Fifth Circuit vacated a jury’s
damages award after a full trial on the merits. 851 F.3d at 463–64. The court did not review an
award for profits, but instead awards for royalties, unjust enrichment, and exemplary damages. Id.
at 459. The court held that the evidence presented at trial did not support a finding that the
10
Additionally, Plaintiff makes an argument that because it owns an incontestable registration for
its mark, the burden of proof on wrongful intent shifts to Defendants—i.e. Defendants must prove that they
did not have the intent to infringe. Doc. 96-1, Pl.’s Resp., 19–20. Plaintiff relies on one case for this
proposition: Waples-Platter Companies v. General Foods Corp., 439 F. Supp. 551 (N.D. Tex. 1977). But that
case stated that “where the allegedly infringing mark is shown to be confusingly similar to the registered mark,
and its use began subsequent to registration, the defendant must carry the burden of explanation and
persuasion.” Waples-Platter, 439 F. Supp. at 574. That is not the situation here, however, where Plaintiff has
not yet shown that the marks are confusingly similar. Moreover, this burden-shifting rule seems to be derived
from a Second Circuit case. See id. (citing Kiki Undies Corp. v. Promenade Hosiery Mills, Inc., 411 F.2d 1097
(2d Cir. 1969)). Based on this Court’s research, no other court in this circuit has relied on these cases for this
rule. The Court thus rejects Plaintiff’s argument that it applies here.
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defendant intended to infringe on the plaintiff’s mark. Id. at 464. But the evidence in question was
limited to “[defendant’s] conduct after learning about [plaintiff’s] existence and [defendant’s] failure
to change its name until [plaintiff] filed suit.” Id. at 456. No evidence was presented that the
defendant was aware of plaintiff’s mark at the time it choose its name or that the plaintiff’s mark was
registered at that time. Id. Further, there was no evidence that after the defendant learned of the
plaintiff that it did anything differently in an attempt to “pass off” its product as the plaintiff’s. Id.
Thus, the court held that this factor weighed against finding a likelihood of confusion. Id. at 456–57.
So, Streamline is not directly applicable to the Court’s resolution of this motion because here
the Court must draw all inferences in Plaintiff’s favor and because the available evidence on intent
differs. Specifically, Plaintiff had a valid federal trademark registration seven years before Defendants
chose the name Firebird Restaurant Group. Doc. 96-1, Pl.’s Resp., 20. And, in 2008, Plaintiff’s
founder, Dennis Thompson, sent a letter to Karns informing him of the similarity of the marks and
potential confusion between them. Doc. 96-2, Pl.’s App., 130. In 2013, Defendants started using the
FRG mark as a logo (as discussed above, Plaintiff argues this was a “rebranding”), and sought to
register the mark with the USPTO. Doc. 96-1, Pl.’s Resp., 21. Additionally, during the application
process for the registration, Defendants’ attorney notified them of the Firebirds mark. Id. Plaintiff
argues that this “rebranding” is evidence of intent because Defendants were on constructive notice
based on Plaintiff’s registration and actual notice from Thompson’s letter and their attorney. Id. at
21–22. Thus, if looked at in the light most favorable to Plaintiff, the evidence seems to show that
Defendants decided to start using the FRG mark as a trademark in 2013 with full awareness that it
was similar to, and maybe even confusingly similar to, the Firebirds mark. This kind of evidence is
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specifically what the Streamline court noted was lacking from the intent evidence there. See 851 F.3d
at 456. While “mere awareness” of the senior user’s mark is not always sufficient to establish bad
intent, “[i]n some situations, the defendant’s use of the mark with ‘knowledge’ of the senior user’s
mark ‘may give rise to a presumption that the defendant intended to cause public confusion.’” Id. at
455–56 (quoting Conan Props., 752 F.2d at 150 and Scott Fetzer, 381 F.3d at 486 ). A reasonable
juror could find such is the case here.
Turning to the other five factors, the Court finds none are fatal to Plaintiff’s claim for profits.
The factor that seems to be the most trouble for Plaintiff is whether sales have been diverted. As
Defendants point out, Plaintiff has presented no evidence that is has lost any sales, let alone that its
sales have been diverted to Defendants. Doc. 110, Defs.’ Reply, 5. Instead, Plaintiff argues that its
evidence of actual confusion is relevant in determining diverted sales. Doc. 96-1, Pl.’s Resp., 26. The
problem with this argument, as detailed above, is that almost all of Plaintiff’s actual-confusion
evidence stems from third-party confusion, not consumer confusion. Further, the few instances of
consumer confusion do not appear to be instances of purchaser confusion. Thus, even when viewed
in Plaintiff’s favor, this evidence does not seem to show sale diversion. All that to say, this is not fatal
to a claim for damages. The Pebble Beach factors are “non-mandatory” and “non-exclusive.”
Retractable Tech., 919 F.3d at 876. It may still be that a reasonable jury could find that other factors
support an award of profits even if this factor is not shown. And the remaining four factors could cut
in either side’s favor depending on what evidence comes out at trial. Thus, resolution of this issue
is best left to jurors.
ii.
Fact Issues Preclude Summary Judgment as to Actual Damages
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Turning to actual damages, Plaintiff seeks compensation in the form of a reasonable royalty
and corrective advertising costs. Doc. 96-1, Pl.’s Resp., 25. The Court starts with the request for
royalty damages. “While not explicitly provided for in the Lanham Act, [the Fifth Circuit has]
permitted trademark infringement damages on the basis of the royalty rate normally charged for
licensing the unauthorized use of the mark, on the logic the plaintiff sustained damages equal to the
profit they could have made from such a license.” Streamline, 851 F.3d at 459. “Usually, when the
courts have awarded a royalty for past acts of infringement, it was for continued use of a mark after
a license ended and damages were measured by the royalty rate the parties had agreed on.” Id.
(quoting Choice Hotels, 940 F. Supp. 2d at 546).
Defendants argue that a reasonable royalty is not permissible here because the parties had no
licensing agreement nor negotiations for one. Doc. 73, Defs.’ Br., 32. But that is not a rule in this
circuit. Choice Hotels Int’l, Inc. v. Goldmark Hosp., LLC, 2014 WL 642731, at *14 (N.D. Tex. Feb.
19, 2014) (holding that a prior licensing agreement between the parties was not a prerequisite to a
claim for reasonable royalty damages for trademark infringement); see also Streamline, 851 F.3d at
460–61 (declining to address whether royalty awards are limited to cases where the parties had prior
licensing negotiations or agreements). The rule is that a “royalty-based damages award must be
rationally related to the scope of the defendant’s infringement.” Streamline, 851 F.3d at 461 (citing
Boston Prof’l Hockey Ass’n, Inc. v. Dall. Cap & Emblem Mfg., Inc., 597 F.2d 71, 75–76 (5th Cir.
1979)).
Defendants also argue that a royalty-based reward is not appropriate because Plaintiff has not
suffered actual damages. However, as stated above, the damages for a royalty award are based on “the
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logic that the plaintiff sustained damages equal to the profit they could have made from such a
license.” Id. at 459 (citing Boston Prof’l, 597 F.2d at 75–76). The Streamline court held that royaltybased damages were inappropriate because: (1) the plaintiff’s expert did not discuss what portion of
the defendant’s profits was attributable to the infringing use or the scope of the defendant’s use
relative to the rights it would have received with a license; and (2) the jury found that the plaintiff
failed to show that the defendant profited from the infringing use. Id. at 461. Here, starting with the
latter reason, the Court has already held that a fact issue exists as to Plaintiff’s claim for Defendants’
profits. And as for the former, unlike the expert in Streamline, Plaintiff’s expert has tied his opined
royalty rate to Defendants’ financials and to the portion of their profit attributable to the allegedly
infringing conduct. Doc. 96-2, Pl.’s App., 607–09. While these figures are based on the assumption
that Defendants operate as a single economic entity, the Court does not resolve that fact issue here.
Nor does the Court opine on whether the expert’s estimation is appropriate. The Court simply holds
that summary judgment is not warranted on Plaintiff’s claim for royalty-based damages.
As for corrective advertising costs, the purpose of this award is to “counteract the public
confusion resulting from a defendant’s trademark infringement.” ClearChoice Holdings, 2016 WL
8136622, at *5 (alterations incorporated) (quoting Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber
Co., 561 F.2d 1365, 1374–75 (10th Cir. 1977)). Corrective advertising damages can include costs
spent pre-trial or prospective costs. Id. at *6. Both parties fleetingly discuss this damages category.
While the Court is skeptical that Plaintiff has any evidence of prior or prospective corrective
advertising costs, the Court reserves a ruling on this issue until after the evidence is presented.
Defendants’ request for summary judgment on Plaintiff’s claim for actual damages is denied.
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2.
Unjust Enrichment Claim Is Not an Improper Recasting of Lanham Act Claim
Finally, Defendants seek summary judgment on Plaintiff’s unjust enrichment claim. Doc. 73,
Defs.’ Br., 33. Defendants rely on a case from this district that granted summary judgment on an
unjust enrichment claim because the plaintiff in that case had “other, more specific theories of
recovery available,” including a claim for trademark infringement. Mary Kay, Inc. v. Weber, 601 F.
Supp. 2d 839, 864 (N.D. Tex. 2009). However, such awards have been permitted by the Fifth
Circuit. See Maltina Corp. v. Cawy Bottling Co., 613 F.2d 582, 585 (5th Cir. 1980) (affirming district
court’s unjust enrichment award on the basis of defendant’s willful infringement). The Fifth Circuit
has also rejected unjust enrichment claims in trademark infringement cases for insufficient evidence,
but not because the claims were inappropriate as a matter of law when a Lanham Act claim was
brought. See Streamline, 851 F.3d at 462–63 (vacating unjust enrichment award where there was no
evidence that the defendant attempted to “palm off” its goods as the plaintiff’s or that the
defendant’s infringement was willful); see also Texas Pig Stands, Inc. v. Hard Rock Cafe Int’l, Inc., 951
F.2d 684, 694–96 (5th Cir. 1992). It may be that Plaintiff will not be able to present sufficient
evidence of unjust enrichment or that Plaintiff will not be able to recover under all its damages
theories. But the Court finds that a claim for unjust enrichment does not fail, as a matter of law, at
this stage simply because Plaintiff brings a Lanham Act claim.
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IV.
CONCLUSION
For the aforementioned reasons, the Court rules as follows:
(1)
Plaintiff’s partial motion for summary judgment as to liability (Doc. 71) is DENIED
without prejudice to reasserting the same arguments after presentation of the
evidence at trial;
(2)
Defendants’ partial motion for summary judgment on damages (Doc. 72) is DENIED
without prejudice to reasserting the same after presentation of the evidence at trial;
and
(3)
Defendants’ motion to strike (Doc. 100) is DENIED.
SO ORDERED.
SIGNED: August 15, 2019.
_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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