Opinion
CIVIL ACTION NO. 4:19-cv-681-SDJ
2020-01-17
FLETCHER'S ORIGINAL STATE FAIR CORNY DOGS, LLC v. FLETCHER-WARNER HOLDINGS LLC, et al.
Christopher M. McDowell, McDowell Law PLLC, Coppell, TX, Steven E. Ross, Ross IP Group PLLC, Dallas, TX, for Fletcher's Original State Fair Corny Dogs, LLC. Jason Aaron Wietjes, Michael David Pegues, Polsinelli PC, Dallas, TX, Brandon Francis Renken, Janet E Militello, Locke Lord LLP, Houston, TX, for Fletcher-Warner Holdings LLC, et al.
Christopher M. McDowell, McDowell Law PLLC, Coppell, TX, Steven E. Ross, Ross IP Group PLLC, Dallas, TX, for Fletcher's Original State Fair Corny Dogs, LLC.
Jason Aaron Wietjes, Michael David Pegues, Polsinelli PC, Dallas, TX, Brandon Francis Renken, Janet E Militello, Locke Lord LLP, Houston, TX, for Fletcher-Warner Holdings LLC, et al.
MEMORANDUM OPINION & ORDER
SEAN D. JORDAN, UNITED STATES DISTRICT JUDGE
This trademark infringement case concerns a long-standing tradition at the State Fair of Texas—Fletcher's corny dogs. Fletcher's is a family business that has sold corn dogs for nearly 80 years, primarily at the State Fair. Plaintiff Fletcher's Original State Fair Corny Dogs, LLC ("Fletcher's") is the modern corporate entity that operates the family business. Defendants are two estranged family members, Victoria Jace Fletcher Christensen ("Jace Christensen") and Victoria Warner Fletcher ("Victoria Fletcher"), and their limited liability company, Fletcher-Warner Holdings LLC ("FWH").
Fletcher's asserts its trademark rights in the standard character mark "Fletcher's" as well as other related marks used by Fletcher's to identify its corn dogs, snack bar services, and restaurant services. (Dkt. #1 at 6–7). Fletcher's alleges that, without its consent, Defendants began using trademarks and service marks featuring the similar word "Fletch" to promote Defendants' products and services, in direct competition with Fletcher's. Fletcher's further contends that Defendants' use of allegedly confusingly similar trademarks and service marks, such as "Fletch," "Eat Fletch," and "EatFletch" (collectively referenced as the "Fletch marks"), has caused a substantial and growing amount of actual confusion among consumers and the public as to the source, affiliation, and sponsorship of Defendants' goods and services. Based on these allegations, Fletcher's has asserted a claim against Defendants for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1125, and a claim for trademark dilution under the Texas Anti-Dilution Act, TEX. BUS. & COM. CODE ANN. § 16.103. (Dkt. #1).
Before the Court is Fletcher's Motion for Preliminary Injunction (Dkt. #3) and Defendants' Motion to Dismiss (Dkt. #40). Fletcher's requests preliminary injunctive relief only as to the "Fletcher's" standard character mark, a word mark. Having considered the motions, the related briefing and evidence submitted by the parties, and the applicable law, the Court finds that the motion for preliminary injunction should be GRANTED and the motion to dismiss DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Fletcher brothers create a State Fair tradition
The Fletcher family's corny dog story begins at the time of the Second World War. Brothers Neil "Fletch" Fletcher Sr. and Carl Fletcher were vaudeville performers in Dallas in the 1930s. State Fair officials approached the brothers with an offer for a food booth. There was a baker that served a dish of hot dogs and corn meal baked in the shape of an ear of corn that the Fletcher brothers enjoyed and considered serving. Although the brothers liked the taste and combination of this dish, they found the preparation process was too time-consuming. Following a period of experimentation with frying methods and recipe development, the Fletcher brothers invented corn dogs, served on a stick, and began selling them on the fairgrounds at Dallas's Fair Park in the summer of 1942.
The Fletcher brothers' "corny dogs" were a success, and every year since 1942 Fletcher's has been selling corn dogs at the State Fair of Texas. Fletcher's now sells between 500,000 and 600,000 corn dogs at the State Fair each year. Fletcher's has also sold their corn dogs outside the State Fair. For a number of years, Fletcher's corn dogs were sold at the Byron Nelson Golf Tournament, and for several years in the 1960s, a drive-in location existed in Dallas. More recently, Fletcher's has sold its corn dogs at the Terrell Jubilee, the Weatherford Peach Festival, and University of North Texas football games.
Fletcher's has also remained a family business. After Neil and Carl Fletcher passed away, Neil's sons, Neil "Skip" Fletcher Jr. and Bill Fletcher, ran the enterprise. Skip Fletcher and Bill Fletcher's children, in turn, have participated in the business, as well as Skip's wife, Glenda "G.G." Fletcher. In 2011, Skip Fletcher formed the current corporate entity, Fletcher's Original State Fair Corny Dogs, LLC, to operate the family business. G.G. Fletcher has managed Fletcher's since Skip Fletcher passed away in 2017.
At the time Neil Fletcher passed away, Fletcher's was operating as Neil Fletcher and Sons Concessions. The company has since gone through several name changes and corporate restructurings, but it is undisputed that the current corporate entity, Fletcher's Original State Fair Corny Dogs, LLC, is the successor to all of its predecessors-in-interest. (Hr'g Tr. vol. 1 at 31:11–33:18) (testimony of G.G. Fletcher); (Hr'g Tr. vol. 1 at 237:12–24) (testimony of Defendant Jace Christensen). Throughout this opinion, for simplicity, "Fletcher's" will refer to both the Plaintiff, Fletcher's Original State Fair Corny Dogs, LLC, and where applicable to its predecessors-in-interest.
B. History of the Fletcher's trademarks and service marks
Over the years, Fletcher's has used the word mark "Fletcher's" and various other trademarks and service marks in conjunction with its corn dog business. For a time, Fletcher's lost ownership of its marks. Fletcher's encountered financial difficulties in the late 1980s and went through bankruptcy. In 1990, as a result of the bankruptcy, Fletcher's trademarks and service marks, including the "Fletcher's" word mark, were sold to Circle T Foods Co., Inc. d/b/a State Fair Foods, Inc. ("State Fair Foods").
In 1992, State Fair Foods granted Fletcher's a license to use the marks at the fairgrounds in Dallas, the Byron Nelson Golf Tournament in Dallas, and additional events and locations on written request. Since 2011, Fletcher's Original State Fair Corny Dogs, LLC has had the right to operate under the agreement. All of the marks made the basis of Fletcher's Complaint against Defendants, including the "Fletcher's" word mark, were part of the 1992 license agreement with State Fair Foods.
Through a series of corporate mergers between 1992 and 2014, the Fletcher's marks owned by State Fair Foods were acquired by Tyson's Foods, Inc. ("Tyson's"), which wholly owns Sara Lee Foods, L.L.C. On May 24, 2019, Tyson's and Sara Lee Foods assigned all of their rights, title, and interest in the "Fletcher's" word mark, and all of the other marks at issue in this case, back to Fletcher's.
In 2001, State Fair Foods merged into Bryan Foods, Inc., which was a wholly owned subsidiary of Sara Lee Corporation. (Dkt. #21, Ex. 5; Hr'g Tr. vol. 1 at 47:11–15, 53:15–25). Sara Lee Corporation eventually rebranded itself into Hillshire Brands, Co. and was acquired by Tyson's. (Hr'g Tr. at vol. 1, 54:16–22); see (Dkt. #30-7). Fletcher's paid royalties to each subsequent owner: State Fair Foods, Bryan Foods, Inc., Sara Lee, Hillshire Brands, Co., and, finally, Tyson's. (Hr'g Tr. vol. 1 at 50:12–17, 55:12–13) (testimony of G.G. Fletcher confirming royalty payments to Tyson's and all its predecessors).
C. Defendants launch Fletch, a company that sells corn dogs in the Dallas area
In February 2019, Defendant Jace Christensen, owner of Defendant FWH, and Defendant Victoria Fletcher, CEO of FWH, launched Fletch, a company owned and operated by FWH. Fletch sells corn dogs at various events, festivals, and at Fair Park.
Victoria Fletcher was married to Skip Fletcher's son, Craig Fletcher. Victoria Fletcher divorced Craig Fletcher, who is now deceased, but she has retained the Fletcher surname. Although Victoria Fletcher worked for Fletcher's, she never had an ownership interest in the business. Defendant Jace Christensen is Victoria Fletcher's daughter. Ms. Christensen has never had an ownership interest in Fletcher's, and she also never participated in Fletcher's operations.
Since February 2019, Defendants have operated "pop-up" restaurants and offered catering and snack bar services at special events in the Dallas area. Defendants sell corn dogs and have used the following standard character marks for their business: "Fletch," "EatFletch," and "Eat Fletch," in addition to the following words-plus-design marks, see (Dkt. #1), incorporating the word "Fletch":
D. Fletcher's files suit and seeks injunctive relief
On July 26, 2019, Fletcher's, through counsel, sent a cease-and-desist demand letter to Defendants, alerting them to instances of actual confusion in the marketplace by event venues and consumers. Fletcher's demanded that Defendants cease using the confusing Fletch marks. (Dkt. #1-18).
On August 16, 2019, Defendants, through counsel, replied stating that due to discussions between G.G. Fletcher and Defendant Jace Christensen, Defendants believed that they were operating within parameters such that Fletcher's would not take action against them. (Dkt. #1-19).
On September 19, 2019, Fletcher's filed its Complaint alleging trademark infringement and unfair competition under 15 U.S.C. § 1125, and trademark dilution under the Texas Anti-Dilution Act, TEX. BUS. & COM. CODE ANN. § 16.103. (Dkt. #1). Fletcher's also sought a temporary restraining order and preliminary injunction. (Dkt. #3). On September 20, 2019, the magistrate court held a hearing regarding the temporary restraining order. The parties were able to reach an agreement and the motion for a temporary restraining order was denied as moot. (Dkt. #7). Beginning on October 1, 2019, this Court held a two-day hearing on the preliminary-injunction motion. At the hearing the parties presented witnesses and documentary evidence, as well as legal argument. After the hearing, the parties submitted supplemental briefing addressing the evidence and issues of law relevant to the requested injunction.
Following the preliminary-injunction hearing, Defendants also filed their Motion to Dismiss (Dkt. #40), arguing that Fletcher's Unlimited, Inc., is a required party and the case should be dismissed for lack of subject-matter jurisdiction because Fletcher's Unlimited cannot be joined.
FLETCHER'S MOTION FOR PRELIMINARY INJUNCTION
Fletcher's preliminary-injunction motion is limited to the "Fletcher's" word mark. Invoking Federal Rule of Civil Procedure 65 and section 34 of the Lanham Act, Fletcher's requests that the Court enter a preliminary injunction prohibiting Defendants from using the "Fletcher's" mark, the Fletch marks, and all variations of the foregoing in any form of interstate commerce related to the food and beverage industry.
Legal Standard
Section 34 of the Lanham Act provides that district courts "shall have power to grant injunctions, according to the principles of equity, and upon such terms as the court may deem reasonable, ... to prevent a violation under subsections (a), (c), or (d) of section 1125 of this title." 15 U.S.C. § 1116(a) ; see also FED. R. CIV. P. 65 (providing procedural requirements for preliminary injunctions).
A litigant 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) that the threatened injury outweighs any damage that the injunction might cause the defendant; and (4) that the injunction will not disserve the public interest. Nichols v. Alcatel USA, Inc. , 532 F.3d 364, 372 (5th Cir. 2008). "Injunctive relief is a drastic remedy, not to be applied as a matter of course." ODonnell v. Harris Cty. , 892 F.3d 147, 155 (5th Cir. 2018) (quoting Marshall v. Goodyear Tire & Rubber Co. , 554 F.2d 730, 733 (5th Cir. 1977) ) (internal quotation marks omitted). But the party "is not required to prove its case in full at a preliminary injunction hearing." Fed. Sav. & Loan Ins. Corp. v. Dixon , 835 F.2d 554, 558 (5th Cir. 1985) (quoting Univ. of Tex. v. Camenisch , 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981) ) (internal quotation marks omitted). A district court has discretion to grant or deny a preliminary injunction. See House the Homeless, Inc. v. Widnall , 94 F.3d 176, 180 (5th Cir. 1996).
Analysis
A. Likelihood of success on the merits
The Lanham Act provides that a trademark may be "any word, name, symbol, or device, or any combination thereof" that is used or intended to be used "to identify and distinguish" a person's goods "from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. § 1127. "A mark need not be registered in order to obtain protection because ‘[o]wnership of trademarks is established by use, not by registration.’ " Bd. of Supervisors for La. State Univ. Agric. & Mech. Coll. v. Smack Apparel Co. , 550 F.3d 465, 475 (5th Cir. 2008) (alteration in original) (quoting Union Nat'l Bank of Tex., Laredo, Tex. v. Union Nat'l Bank of Tex., Austin, Tex. , 909 F.2d 839, 842 (5th Cir. 1990) ).
To succeed on a claim of trademark infringement under the Lanham Act, a plaintiff must show: (1) that it owns a "legally protectable trademark"; and (2) that a defendant's use of their mark "creates a likelihood of confusion as to source, affiliation, or sponsorship." Streamline Prod. Sys., Inc. v. Streamline Mfg., Inc. , 851 F.3d 440, 450 (5th Cir. 2017) ; see also All. for Good Gov't v. Coalition for Better Gov't , 901 F.3d 498, 505 (5th Cir. 2018) ; Viacom Int'l v. IJR Capital Invs., L.L.C. , 891 F.3d 178, 184–85 (5th Cir. 2018).
1. Protectable interest in the mark
A plaintiff must establish both that the mark is "eligible for protection" and that the plaintiff is the "senior user" of the mark to have a legally protectable interest in the mark. Union Nat'l Bank , 909 F.2d at 844.
The "Fletcher's" word mark is unregistered. The protectability of an unregistered mark is generally governed by the same principles that qualify a mark for registration under the Lanham Act. Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) ; see also Smack Apparel , 550 F.3d at 475 ("The protectability of unregistered marks is governed by the same principles that qualify a mark for registration under the Lanham Act."). "The key is whether the mark is ‘capable of distinguishing the applicant's goods from those of others.’ " Smack Apparel , 550 F.3d at 475 (quoting Two Pesos , 505 U.S. at 768, 112 S.Ct. 2753 ).
i. The "Fletcher's" word mark is eligible for protection
To be protectable, a mark must be "distinctive" in one of two ways. Nola Spice Designs, L.L.C. v. Haydel Enters., Inc. , 783 F.3d 527, 537 (5th Cir. 2015).
First, a mark is inherently distinctive if its intrinsic nature serves to identify a particular source.... Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs when, in the minds of the public, the primary significance of the mark is to identify the source of the product rather than the product itself.
Wal-Mart Stores, Inc. v. Samara Bros. , 529 U.S. 205, 210–11, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000) (internal quotation marks, citations, and alterations omitted).
To assess the distinctiveness of a word mark such as "Fletcher's," courts have "relie[d] on the spectrum set forth by Judge Friendly in Abercrombie & Fitch Co. v. Hunting World, Inc. " Nola Spice Designs , 783 F.3d at 537 (citing Abercrombie & Fitch Co. v. Hunting World, Inc. , 537 F.2d 4, 9 (2d Cir. 1976) ); see also Streamline , 851 F.3d at 451 (same). Abercrombie divides marks into five categories: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. 537 F.2d at 9. "While suggestive, arbitrary, and fanciful marks are inherently distinctive, generic marks cannot be distinctive, and descriptive marks are distinctive only if they have acquired ‘secondary meaning.’ " Nola Spice Designs , 783 F.3d at 537 (quoting Sugar Busters L.L.C. v. Brennan , 177 F.3d 258, 268 (5th Cir. 1999) ). When categorizing a mark, courts must "examine the context in which it is used," including " ‘how [the term] is used with other words,’ ‘the products or services to which it is applied,’ and ‘the audience to which the relevant product or service is directed.’ " Id. (alteration in original) (quoting Union Nat'l Bank , 909 F.2d at 847 ).
As the Fifth Circuit has noted, the Third Circuit has provided the following helpful examples of each type of mark: "(1) arbitrary or fanciful (such as ‘KODAK’); (2) suggestive (such as ‘COPPERTONE’); (3) descriptive (such as ‘SECURITY CENTER’); and (4) generic (such as ‘DIET CHOCOLATE FUDGE SODA’)." Nola Spice Designs , 783 F.3d at 537 n.2 (internal quotation marks omitted) (quoting Freedom Card, Inc. v. JPMorgan Chase & Co. , 432 F.3d 463, 472 (3d Cir. 2005) ).
Fletcher's has argued that the word mark "Fletcher's" is legally protectable because it is an arbitrary mark, and therefore does not require secondary meaning. (Dkt. #3 at 5). While the word "fletcher" has a meaning besides that of a surname and could be an arbitrary mark elsewhere, here, it is certainly not. "Fletcher's" is a reference to Neil "Fletch" Fletcher Sr.'s family name. The mark, therefore, is a descriptive mark and requires secondary meaning to be protectable. See Vais Arms, Inc. v. Vais , 383 F.3d 287, 292 n.6 (5th Cir. 2004) (citing Perini Corp. v. Perini Constr., Inc. , 915 F.2d 121, 124 (4th Cir. 1990) ) (noting that surnames are descriptive marks).
Oxford Dictionaries defines fletcher as "[a] person who makes and sells arrows." Fletcher , Oxford Dictionaries (Online, ed.), https://premium-oxforddictionaries-com.ezproxy.lib.ntust.edu.tw/us/definition/american_english/fletcher.
A mark develops secondary meaning "when, in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself." Samara Bros. , 529 U.S. at 210–11, 120 S.Ct. 1339. Courts consider the following to determine if a mark has acquired secondary meaning:
(1) length and manner of use of the mark or trade dress, (2) volume of sales, (3) amount and manner of advertising, (4) nature of use of the mark or trade dress in newspapers and magazines, (5) consumer-survey evidence, (6) direct consumer testimony, and (7) the defendant's intent in copying the [mark].
Test Masters Educ. Servs., Inc. v. Robin Singh Educ. Servs., Inc. , 799 F.3d 437, 445 (5th Cir. 2015) (quoting Smack Apparel , 550 F.3d at 476 ) (alteration in original); see also Viacom , 891 F.3d at 190. In conducting the secondary meaning analysis, "several ‘factors in combination may show that’ a mark has developed secondary meaning ‘even if each factor alone would not.’ " Viacom , 891 F.3d at 190 (quoting Test Masters , 799 F.3d at 445 ).
Fletcher's has provided substantial evidence of secondary meaning. First, in regard to the length and manner of use of the mark, it is undisputed that the "Fletcher's" word mark has been in use in some form since the 1940s and has been in use in its current form since at least the 1980s. The mark has been used in conjunction with the sale of corn dogs at multiple venues and locations, including the State Fair of Texas, operations in Arizona and Oklahoma, the Byron Nelson Golf Tournament, the Terrell Jubilee, the Weatherford Peach Festival, and University of North Texas football games. This factor supports finding that the mark has acquired secondary meaning.
Second, the volume of sales supports secondary meaning. Fletcher's has provided uncontroverted evidence that it sells hundreds of thousands of corn dogs each year and that its sales revenues in recent years have been between three and four million dollars annually. (Hr'g Tr. vol. 1 at 35:12–17). Its sales and annual revenues have been consistent over the last fifteen years. (Hr'g Tr. vol. 1. at 35:18–21). This factor also supports secondary meaning.
Third, the amount and manner of advertising has effectively altered the mark's meaning. "The relevant question with regard to factor three—the amount and manner of advertising—is not the extent of the promotional efforts, but their effectiveness in altering the meaning of [the mark] to the consuming public." Viacom , 891 F.3d at 191 (emphasis in original) (internal quotation marks omitted). Fletcher's advertises through a website, social media accounts, and signage at events, as well as through merchandise available for purchase on its website and worn by its employees. (Hr'g Tr. vol. 1 at 37:1–18); see also (Hr'g Tr. vol. 2 at 58:22) (Jace Christensen testified that Fletcher's has a "huge social media presence"). The uncontroverted evidence, including evidence from social media and press commentary, confirms that the corn-dog consuming public affiliates the "Fletcher's" word mark with Fletcher's business of selling corn dogs. Therefore, this factor weighs in favor of finding secondary meaning.
Fourth, the "Fletcher's" mark has been referenced in numerous local and national newspaper articles and in social media posts. D Magazine, The New York Times , Guidelive.com, and Flash Back Dallas have referred to Fletcher's as a "standby at the Texas State Fair" and its corn dogs as the "legendary Fletcher's Corny Dog." (Dkt. #21, Ex. 7–8; Dkt. #1-4). Likewise, in an article discussing the importance of corn dogs to football fans attending the annual Texas vs. Oklahoma rivalry game that takes place during the State Fair, Sports Illustrated described this popular food item as follows: "the corn dog—or more officially, Fletcher's Original State Fair Corny Dog—was introduced at the State Fair of Texas in 1942." Laken Litman, Oklahoma-Texas Has Playoff Implications, but Fried Fair Food Never Takes a Backseat to Football , SPORTS ILLUSTRATED , Oct. 9, 2019, https://www.si.com/college/2019/10/09/oklahoma-texas-state-fair. Eater , a food and dining website, featured a story entitled "The Story of Fletcher's, America's Original Corn Dog," describing Fletcher's "corny dog" as "undoubtedly one of the most iconic pieces of the State Fair of Texas' history." James Rambin, The Story of Fletcher's, America's ‘Original’ Corn Dog , EATER DALLAS (Jul. 10, 2014, 9:15 AM), https://dallas.eater.com/2014/7/10/6189947/the-story-of-fletchers-americas-original-corn-dog. This factor supports secondary meaning.
And, in an article entitled, "How to Fry Up a Batch of Corny Dogs," Texas Monthly described the Fletcher's approach to making corn dogs, calling the end product the "magnum opus of fair food." Andrea Valdez, How to Fry Up a Batch of Corny Dogs , TexasMonthly (Sept. 30, 2007), https://www.texasmonthly.com/food/how-to-fry-up-a-batch-of-corny-dogs.
Fifth, there is no survey evidence submitted by Fletcher's, but this factor is not dispositive. Viacom , 891 F.3d at 191 (quoting Nola Spice Designs , 783 F.3d at 546 ).
Sixth, direct consumer testimony supports that the mark has acquired secondary meaning. Fletcher's provided numerous instances in which consumers shared their "love" for the brand, the products, and their experiences with Fletcher's. (Dkt. #1-6; Dkt. #21, Ex. 16); (Hr'g Tr. vol. 1 at 130:12–20) (testimony of Amber Fletcher, Fletcher's Head of Marketing). The evidence also showed that consumers used the mark to identify the source of the goods they purchased. Id. Seventh, the record supports Fletcher's contention that Defendants intentionally copied the "Fletcher's" word mark. Defendants, as family members, plainly knew of the word mark and created the substantially similar mark, "Fletch." See (Hr'g Tr. vol. 1 at 90:10–92:13). Defendants' testimony at the preliminary-injunction hearing made clear that they chose the "Fletch" mark precisely because it would associate them with Fletcher's long-standing reputation for selling popular corn dogs. (Hr'g Tr. vol. 1 at 198:9–24, 200:15–201:2). Tellingly, prior to the launch of Fletch, Jace Christensen acknowledged that she believed she could use the "Fletcher's" word mark without danger of infringement for a catering company so long as the mark was changed by five percent. (Hr'g Tr. vol. 1 at 90:10–92:13). Accordingly, the intent factor weighs in favor of finding secondary meaning.
Overall, secondary meaning has clearly been established as to the "Fletcher's" word mark. The mark has been in use for a long period of time; there has been a consistent, substantial volume of sales; there has been effective advertising of the mark; the mark has been recognized in newspapers and on social media; testimony indicates consumer recognition of the mark; and Defendants intended to capitalize on the popularity, reputation, and goodwill associated with the mark. As such, the "Fletcher's" word mark has acquired secondary meaning and is, therefore, eligible for protection.
ii. Fletcher's is the senior user of the mark
Having determined that the mark is eligible for protection, the Court must now determine who is the "senior user" of the mark. "The first one to use a mark is generally held to be the ‘senior’ user." See Viacom , 891 F.3d at 186 (quoting Union Nat'l Bank , 909 F.2d at 842 ). Fletcher's alleges that it is the senior user of the marks at issue, based on its continuous use of the marks for nearly 80 years and through the recent assignment from Tyson's on May 24, 2019. (Dkt. #1 at 6).
Defendants advance two competing arguments. Defendants' first argument vaguely asserts "errors" in Tyson's assignment of the marks at issue to Fletcher's, including the "Fletcher's" word mark, without ever specifying or explaining the nature of such alleged assignment "errors." See (Dkt. #29 at 4). Defendants also contend that a third-party entity, Fletcher's Unlimited, Inc. ("Fletcher's Unlimited"), infringingly used the Fletcher's marks, including the "Fletcher's" word mark, in a manner that Defendants claim appropriated the goodwill associated with the mark and the right to use it outside of the State Fair. Neither argument withstands scrutiny.
Formed in 1994, Fletcher's Unlimited is a corporate entity that is majority-owned by G.G. Fletcher (80%). Minority ownership of Fletcher's Unlimited is equally split between Defendant Victoria Fletcher and the current owner of Neil "Skip" Fletcher, Jr.'s share of the company. The record is unclear as to who now owns Skip Fletcher's share.
Defendants first suggest that there were "errors" invalidating the assignment of rights by Tyson to Fletcher's but fail to identify any specific problems with the assignment. Defendants have also failed to point to any deficiencies in the substantial evidence submitted by Fletcher's demonstrating the history of ownership of the marks at issue in this lawsuit, culminating in the assignment of ownership of the marks from Tyson's to Fletcher's in May 2019.
In this regard, it is undisputed that the "Fletcher's" word mark has been in use by the Fletcher family since the 1940s. The mark was sold to State Fair Foods by Fletcher's, as a part of a bankruptcy proceeding in 1990. (Dkt. #21, Ex. 2; Hr'g Tr. vol. 1 at 39:2–41:15). State Fair Foods licensed the mark to Fletcher's for use at the State Fair of Texas fairgrounds and at the Byron Nelson Golf Tournament in 1992. (Dkt. #21, Ex. 3). Fletcher's maintained the right to use the marks until May 24, 2019, when Tyson's, State Fair Foods's successor, assigned the mark in its entirety to Fletcher's, along with all of the other marks at issue in this case. (Dkt. #21, Plaintiff's Ex. 6). Fletcher's also demonstrated that Tyson's legitimately acquired the "Fletcher's" word mark, as well as the other trademarks and service marks at issue in this case.
In 2001, State Fair Foods merged into Bryan Foods, Inc., which was a wholly owned subsidiary of Sara Lee Corporation. (Dkt. #21, Ex. 5; Hr'g Tr. vol. 1 at 47:11–15, 53:15–25). Sara Lee Corporation directly communicated with G.G. Fletcher and her husband regarding the marks and the licensing agreement in 2011. (Dkt. #30-5). Sara Lee Corporation later rebranded itself into Hillshire Brands Co. and was acquired by Tyson's. (Hr'g Tr. at vol. 1, 54:16–22); see (Dkt. #30-7). With each change in ownership, Fletcher's paid royalties owed under its licensing agreement to each subsequent owner—State Fair Foods, Bryan Foods, Inc., Sara Lee, Hillshire Brands Co., and, finally, Tyson's—until it purchased ownership from Tyson's. (Hr'g Tr. vol. 1 at 50:12–17, 55:12–13) (testimony of G.G. Fletcher).
For their part, Defendants failed to offer any evidence that rebuts Tyson's ownership of the marks prior to the recent assignment to Fletcher's. And, contrary to their written submissions to the Court, both Defendant Jace Christensen and Defendant Victoria Fletcher conceded in their testimony that Tyson's owned the marks at issue prior to the recent assignment to Fletcher's. (Hr'g Tr. vol. 2 at 31:20, 52:13–22, 110:11). Because both the evidence and the Defendants' own admissions show that Tyson's properly owned and assigned to Fletcher's the marks made the basis of this suit, including the "Fletcher's" word mark, the Court concludes that Defendants have failed to establish any "errors" invalidating the May 2019 assignment.
Next, Defendants contend that, through the infringing use of the "Fletcher's" word mark at locations outside the State Fair over a period of years, Fletcher's Unlimited appropriated the goodwill associated with the mark and the right to use it, at least as to any location outside of the State Fair. Defendants specifically point to evidence of Fletcher's Unlimited's repeated, nonconsensual, and infringing use of the "Fletcher's" word mark at locations outside the State Fair between 1994 and 2018. This argument also fails.
Defendants assert that there was "continued and unabated use [by Fletcher's Unlimited] for over 20 years," (Dkt. #29 at 5); however, the record does not support such an assertion. Fletcher's showed that in 1998 State Fair Foods sued Fletcher's Unlimited, along with Victoria Fletcher, for using the marks at issue. Fletcher's Unlimited returned to calling itself the Corny Dog Pit for a time and, although Victoria Fletcher did use the name Fletcher's again while with Fletcher's Unlimited, it was without any permission from Tyson's or its predecessors and was a source of contention. See (Hr'g Tr. vol. 1 at 67:23–69:8, 71:11–73:13).
Defendants' theory fails at the outset because it has no grounding in any legal authority. Two Supreme Court cases, Hanover Star Milling Co. v. Metcalf , 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916), and United Drug Co. v. Theodore Rectanus Co. , 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), establish "the general proposition that ‘a senior user has exclusive rights to a distinctive mark anywhere it was known prior to the adoption of the junior user and has enforceable rights against any junior user who adopted the mark with knowledge of its senior use.’ " C.P. Interests, Inc. v. Cal. Pools, Inc. , 238 F.3d 690, 700 (5th Cir. 2001) (quoting A.J. Canfield Co. v. Honickman , 808 F.2d 291, 295 n.4 (3d Cir. 1986) ) (emphasis added); see also 5 J. THOMAS MCCARTHY , TRADEMARKS & UNFAIR COMPETITION §§ 26:1–26:4 (5th ed. 2019) [hereinafter MCCARTHY ].
It is worth noting that, in addition to being legally unsound, Defendants' assertions regarding Fletcher's Unlimited are also factually inaccurate. Defendants contend that Fletcher's, and for that matter Tyson's and its predecessors-in-interest, never used the Fletcher's marks outside the State Fair. According to Defendants, only Fletcher's Unlimited ever used the Fletcher's marks outside the State Fair. The record demonstrates that Defendants are mistaken. Long before Fletcher's Unlimited ever existed, Fletcher's operated at locations outside the fairgrounds in Dallas. For example, in the 1960s Fletcher's operated a drive-in for some time. Fletcher's also offered concessions for 16 years at the Byron Nelson Golf Tournament in the 1970s and 1980s, and Fletcher's also operated kiosks at stores, malls, and other fairs, even franchising locations in the 1980s. More recently, Fletcher's has operated at the Terrell Jubilee, the Weatherford Peach Festival, and University of North Texas football games.
Further, Defendants provided no evidence showing that Tyson's or its predecessors-in-interest did not also use the Fletcher's marks outside the fairground in Dallas. In fact, the only evidence offered on this point was offered by Fletcher's and points to Tyson's and its predecessors using the marks outside the fairgrounds. See (Dkt. #30-3, Ex. 25B) (Bryan Foods Inc.'s assignment of a related Fletcher's mark for frozen corny dogs to Sara Lee Corporation).
The record shows that the "Fletcher's" word mark was distinctive and known, particularly in the Dallas area and throughout Texas, for decades prior to the formation of Fletcher's Unlimited. At most, Fletcher's Unlimited could have become a junior user of the mark during the time frame referenced by the Defendants. Defendants have not cited any authority, nor is the Court aware of any, supporting the odd geographical distinction suggested by Defendants: that is, that the State Fair fairgrounds, located within the City of Dallas, are somehow a separate territory for trademark use from the rest of the metropolitan area. Defendants' illusory geographic distinction is coupled with their remote junior user argument and premised on the theory that a good faith junior user in a remote territory and in a different market, purportedly Fletcher's Unlimited in this case, may use a mark and even prevent the senior user from entering the remote territory. See United Drug Co. , 248 U.S. at 100, 39 S.Ct. 48 ; 5 MCCARTHY § 26:3. But the City of Dallas is not a remote territory for Fletcher's—it has always been Fletcher's core territory. After all, no one lives inside the fairgrounds in Dallas. The consumers attending the State Fair, and purchasing Fletcher's products since 1942, have largely been residents of the greater Dallas area, as the social media exhibits and other evidence submitted by the parties amply demonstrate. Defendants' argument thus defies established law, the record in this case, and common sense.
The Court also notes that the Defendants operate within Fair Park, where the State Fair of Texas is held, in two different locations (Cotton Bowl Stadium and Dos Equis Pavilion). Thus, Defendants' odd territorial distinction seems not only disingenuous, but also one that the Defendants themselves do not observe.
The Court further notes that the evidence shows the "Fletcher's" word mark was well known not just in Dallas or in the State of Texas, but nationwide, having been highlighted in commentary from The New York Times, Sports Illustrated, The Oprah Winfrey Show , and other media outlets, with consumers throughout the country and even abroad recognizing the "Fletcher's" word mark. (Hr'g Tr. vol. 1 at 30:4–25). For this additional reason, Fletcher's, rather than Fletcher's Unlimited, was plainly the senior user of the "Fletcher's" word mark for all time periods and all geographic areas relevant to this suit. C.P. Interests , 238 F.3d at 700 ("a senior user has exclusive rights to a distinctive mark anywhere it was known prior to the adoption of the junior user.").
In vague support of their junior user argument, Defendants gesture towards a number of cases concerning the business expansion doctrine. Under this doctrine, a junior user may prevent a senior user from expanding into a new market in certain circumstances. 5 McCarthy § 26:20. Defendants' cited authorities all involve a company attempting to expand its business, and the use of its marks, into new industries. See, e.g., Physicians Formula Cosmetics, Inc. v. West Cabot Cosmetics, Inc. , 857 F.2d 80, 82 n.1 (2d Cir. 1988) (expansion of a bar-soap company into the greater skincare and cosmetic industry); Borg-Warner Corp. v. York-Shipley, Inc. , 293 F.2d 88, 94 (7th Cir. 1961), cert. denied , 368 U.S. 939, 82 S.Ct. 381, 7 L.Ed.2d 338 (1961) (expansion of an air-conditioning company into the heating industry); Champion Roofing, Inc. v. Champion Window Mfg. & Supply Co., L.L.C. , No. 13 C 5478, 2013 WL 6669476, at *5 (N.D. Ill. Dec. 16, 2013) (expansion of a window-supply company into the roofing industry); Patsy's Brand, Inc. v. I.O.B. Realty, Inc. , No. 99 CIV 10175 JSM, 2001 WL 170672, at *13 (S.D.N.Y. Feb. 21, 2001) (expansion of two restaurants into the retail industry). No such business expansion is at issue here. Fletcher's has always been in the same industry, selling corn dogs at the State Fair, festivals, and similar events.
To the extent Defendants' argument is an abandonment argument, it also fails. To succeed in arguing that a mark has been abandoned and is thereby unenforceable, a party must show that "due to acts or omissions of the trademark owner, the incontestable mark has lost its significance as a mark." Exxon Corp. v. Oxxford Clothes, Inc. , 109 F.3d 1070, 1079 (5th Cir. 1997) (internal quotation marks omitted). Here, Defendants have made no such showing. "[A] trademark owner's failure to pursue potential infringers does not in and of itself establish that the mark has lost its significance as an indicator of origin." Id. ; see also Sweetheart Plastics, Inc. v. Detroit Forming, Inc. , 743 F.2d 1039, 1046–47 (4th Cir. 1984) ("[A] plaintiff's failure to sue other infringers is totally irrelevant in an unfair competition case because ‘it is no excuse for [a defendant] to say that others have been guilty of the same wrong.’ ") (collecting cases).
Defendants' argument fares no better if it is construed as a jus tertii defense. The jus tertii defense is disfavored in trademark enforcement litigation and has not been recognized by the Fifth Circuit. See Neal Techs., Inc. v. Unique Motorsports, Inc. , No. 4:15CV385-RC-CMC, 2016 WL 3912988, at *3 (E.D. Tex. June 28, 2016), report and recommendation adopted , No. 4:15CV385-RC-CMC, 2016 WL 3902306 (E.D. Tex. July 16, 2016). A jus tertii defense arises in a trademark case when a defendant raises the rights of a third party, claiming the third party's rights are superior to the plaintiff's rights. 5 MCCARTHY § 31:157. However, "a third party's use of a trademark is not a defense in an infringement action." Comm. for Idaho's High Desert, Inc. v. Yost , 92 F.3d 814, 820 (9th Cir. 1996) (citing Del Monte Special Food Co. v. Cal. Packing Corp. , 34 F.2d 774, 777 (9th Cir. 1929) ); see also Ward Baking Co. v. Potter–Wrightington, Inc. , 298 F. 398, 402 (1st Cir. 1924) ("[E]ven if, for some purposes and in some territory, [a third party] may have a right in the trade-mark superior to that of the plaintiff, the defendant is not thereby exonerated from responsibility for an attempt to appropriate to itself a good will created by the plaintiff during a long course of business."). Moreover, even if it were assumed arguendo that Fletcher's Unlimited acquired a right of some kind to use the "Fletcher's" word mark, any such right would be inferior to Fletcher's rights in the mark and of no relevance here because Defendants have no relationship with Fletcher's Unlimited.
Indeed, as Defendants themselves have advised the Court, Fletcher's Unlimited is in the process of being dissolved as a corporate entity. (Dkt. #13 at 4; Dkt. #29 at 6 n.4).
[A third-party's rights] should not be allowed as a defense in any trademark case. So long as plaintiff proves rights superior to defendant, that is enough. Defendant is no less an infringer because it is brought to account by a plaintiff whose rights may or may not be superior to the whole world. The plaintiff's speculative dispute with a third party does not concern the defendant.
Yost , 92 F.3d at 821 (quoting J. THOMAS MCCARTHY , TRADEMARKS & UNFAIR COMPETITION § 31.39 (3d ed.)) (alterations in original). Defendants have not shown that they enjoy any right to the "Fletcher's" word mark, much less a right superior to Fletcher's, nor do Defendants have any privity with Fletcher's Unlimited. While Defendant Victoria Fletcher is a ten-percent owner of Fletcher's Unlimited, this does not create any privity of contract between Fletcher's Unlimited and Defendants. Further, this does not entitle Defendant Victoria Fletcher to any possible rights held by Fletcher's Unlimited. See Escamilla v. M2 Tech. , No. 4:11CV516, 2012 WL 4506081, at *4 (E.D. Tex. 2012 July 6, 2012) (holding that the shareholder of a corporation lacks standing to enforce trademark rights owned by corporation).
In sum, because the "Fletcher's" word mark is eligible for protection and Fletcher's has shown that it is the senior user, Fletcher's has a protectable right in the mark and an analysis of the likelihood of confusion is necessary to determine if Fletcher's is likely to succeed on its infringement claim.
2. Likelihood of Confusion
To determine whether use of a mark creates a likelihood of confusion as to affiliation, sponsorship, or source, courts consider the "digits of confusion." Viacom , 891 F.3d at 192 (citations omitted). The digits comprise a non-exhaustive list that includes the following seven factors:
(1) the type of mark allegedly infringed, (2) the similarity between the two marks, (3) the similarity of the products or services, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant's intent, and (7) any evidence of actual confusion.
Id. (citations omitted). "No one factor is dispositive, and a finding of a likelihood of confusion does not require a positive finding on a majority of the digits of confusion." Elvis Presley Enters., Inc. v. Capece , 141 F.3d 188, 194 (5th Cir. 1998). The Fifth Circuit has also, at times, added an eighth factor, "the degree of care exercised by potential purchasers." Viacom , 891 F.3d at 192 (citations omitted).
To establish a likelihood of confusion, Fletcher's must show "a probability of confusion, which is more than a mere possibility of confusion." Elvis Presley , 141 F.3d at 193. Fletcher's has shown a likelihood of success under this standard, demonstrating not only a probability of confusion, but a number of instances of actual confusion caused by Defendants' use of the Fletch marks.
The first digit analyzes the type of mark allegedly infringed. As discussed, the "Fletcher's" word mark is a descriptive mark that has acquired secondary meaning. See supra Part A(1)(i). Because the mark has acquired secondary meaning, it has acquired distinctiveness. The more distinctive the mark, the more likely it is that consumers will be confused by competing uses of the mark. Streamline , 851 F.3d at 454 (citing Smack Apparel , 550 F.3d at 479 ). A descriptive mark that has acquired secondary meaning weighs in favor of finding a likelihood of confusion under the first digit. See, e.g., Viacom , 891 F.3d at 193. Thus, the first digit weighs in favor of Fletcher's.
The second digit, which concerns the similarity between the two marks, involves consideration of the two marks' "appearance, sound, and meaning." Streamline , 851 F.3d at 454 (quoting Smack Apparel , 550 F.3d at 479 ). "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." Viacom , 891 F.3d at 193 (quoting Xtreme Lashes, L.L.C. v. Xtended Beauty, Inc. , 576 F.3d 221, 228 (5th Cir. 2009) ).
Here, the mark "Fletch" is merely a truncated version of "Fletcher's" word mark. They therefore sound very similar. They also appear to have the same meaning. Both marks refer to the "Fletcher" family name—a name shared by all parties—and corn dogs. (Hr'g Tr. vol. 2 at 59:5–8) (Defendant Jace Christensen, maiden name Fletcher, testified that "Fletch" is her nickname). Moreover, the context of this case confirms that a reasonable person could believe that Fletch's products and Fletcher's products have a common origin or association. See Elvis Presley , 141 F.3d at 201–02 (overturning the lower court's holding that "Velvet Elvis" and "Elvis Presley" were not similar because the lower court failed to consider the context of the marks).
Specifically, the Fletch marks and "Fletcher's" word mark are found in the same types of locations (stadiums, festivals, and special events); the companies' websites have the same layout; and the Defendants have emphasized the inspiration from "old family recipes," on their website as a part of their branding and used Fletcher family pictures. The Defendants and Fletcher's sell the same product: corn dogs. The Defendants also have chosen to use the family names "Vic and Jace Fletcher " even though "Jace Fletcher's" married name, and name as a party in this suit, is Victoria Jace Fletcher Christensen. While Defendants have also used the mark "EatFletch," the word "eat" does not create a substantial difference in the mark. The context created by the emphasis on the family legacy of corn dogs, the similar locations, and the product similarity, in combination with the similarity of the mark, could lead a reasonable consumer to believe the marks were associated or had a common origin. The third digit concerns the similarity of the products or services associated with the marks at issue. Here, the products and services offered by Fletcher's and the Defendants are essentially identical. Both businesses primarily sell corn dogs and beverages. Both offer catering, snack bar services, and restaurant services. In general, "[t]he greater the similarity between products and services, the greater the likelihood of confusion." Westchester Media v. PRL USA Holdings, Inc. , 214 F.3d 658, 666 (5th Cir. 2000) (quoting Exxon Corp. v. Tex. Motor Exch. of Hous., Inc. , 628 F.2d 500, 505 (5th Cir. 1980) ). Although Defendants offer training sessions and some different items on their menu, this is not enough to overcome the similarity of the services and the identical nature of the products which directly compete. See, e.g., Exxon , 628 F.2d at 505 (holding that two companies involved in car care had "a strong similarity between their wares and services" even though one sold car parts and the other did not). Thus, this digit also weighs in favor of Fletcher's.
Defendant Jace Christensen testified that Defendants do not sell corn dogs. Rather, they sell "artisanal corn battered franks." (Hr'g Tr. vol. 2 at 71:3–5). The word "artisanal," when applied to a food product, means "made in a traditional or non-mechanized way." Artisanal , Oxford Dictionaries (Online, ed.), https://premium-oxforddictionaries-com.ezproxy.lib.ntust.edu.tw/us/definition/american_english/artisanal. The Court understands Ms. Christensen's characterization to indicate that her company's "corn battered franks," i.e., corn dogs, are made in a traditional manner. They remain, however, corn dogs, as evidenced by the Defendants' logo, which is comprised of the outline of a corn dog with the words "Eat Fletch." Ms. Christensen's reference to "traditional" methods for preparing corn dogs is particularly unhelpful to her cause here, given her admission that Defendants reverse engineered their corn dog recipe from the Fletcher's family recipe. (Hr'g Tr. vol. 2 at 71:2–13).
In regard to the fourth digit, both the Defendants and Fletcher's have the same retail outlets and purchasers. "The greater the overlap between retail outlets and purchasers, the greater the likelihood of confusion." Viacom , 891 F.3d at 194. Here, both Defendants and Fletcher's have or have sought contracts with stadiums, fairs, concerts, and festivals. They both appeal to the corn-dog-consuming public in the same general geographic area. Fletcher's has shown that, in addition to competing against each other generally, Defendants and Fletcher's have directly competed against each other for vendor contracts at multiple events, including Dallas Pride and Southlake Stars & Stripes. See (Dkt. #1 at 21; Hr'g Tr. vol. 1 at 178:9–10). This digit also weighs in favor of Fletcher's.
As to the fifth digit, the parties use similar advertising media: social media platforms, websites, third-party press coverage, and signage at events. "The greater the similarity in the [advertising] campaigns, the greater the likelihood of confusion." Streamline , 851 F.3d at 455 (quoting Exxon , 628 F.2d at 506 ). However, this digit is "minimally probative" if there is not advertising beyond a website selling products. Id. at 455 (citing Smack Apparel , 550 F.3d at 481 ). This digit therefore weighs somewhat in Fletcher's favor.
The sixth digit considers Defendants' intent. Determining the Defendants' intent requires analysis from several angles. Knowledge of the senior user's mark, alone, does not create intent by itself. See id. at 456 (citing Conan Props., Inc. v. Conans Pizza, Inc. , 752 F.2d 145, 150 (5th Cir. 1985) ). But when there is awareness, the court should look for evidence of whether "the defendant made efforts ‘to pass off its product as that of [the plaintiff]’ through ‘imitation of packaging material’ or ‘adopting ... similar distribution methods’ " Id. (quoting Amstar Corp. v. Domino's Pizza, Inc. , 615 F.2d 252, 263 (5th Cir. 1980) ). Courts have found "an intent to confuse when the evidence indicates that the defendant, in choosing its mark, knew about the plaintiff's mark and intended to capitalize on the plaintiff's popularity." Id. (citing Smack Apparel , 550 F.3d at 481–83 ). The same has been true when the defendant did not choose the mark with intent to confuse but subsequently used the mark in a way that "evidenced an intent to trade on [the senior user's] reputation." Id. (quoting Westchester Media , 214 F.3d at 666 ) (internal quotation marks omitted).
In this case, it is uncontested that the Defendants were aware of the "Fletcher's" mark. The Court must, therefore, look to any (1) attempts by the Defendants to "pass off" their product as Fletcher's, including similarity in distribution methods, (2) attempts by Defendants to capitalize from Fletcher's popularity, and (3) use of the mark by Defendants that evidences intent to trade on Fletcher's reputation. Looking at each, Defendants clearly have, and have always had, intent. This digit weighs in favor of Fletcher's.
Defendants have used similar distribution methods and have "passed off" their product as Fletcher's product. Both businesses offer corn dogs for sale at Fair Park in Dallas. Both Defendants and Fletcher's sell their product through offering catering services at stadiums, fairs, festivals, and local events. See (Hr'g Tr. vol. 1 at 34:8–23; vol. 2 at 77:10–78:7, 112:23–113:2). The distribution methods are identical.
While there has been discrepancy about whether Fair Park and the Texas State Fair are distinguishable, this issue does not need to be decided to determine intent.
Further, Defendants have intentionally passed off their business as being affiliated with the Fletcher's mark. Defendants have failed to correct multiple venues that thought they were doing business with Fletcher's. See (Dkt. #21, Ex. 18). Further, Defendant Victoria Fletcher, who previously worked for both Fletcher's and Fletcher's Unlimited, instructed a venue to change the account affiliated with the email vic@fletcherscornydogs.com, her former work email, to FWH. (Dkt. #21, Ex. 12) ("Please discontinue using the name Fletchers Unlimited. The new corporate name is Fletcher-Warner Holdings L.L.C. The new brand is ‘Fletch purveyors of fine stick food.’ Vic & Jace Fletcher."). It is undisputed that neither Fletcher's nor Fletcher's Unlimited have any corporate relationship, affiliation, or contractual privity with FWH. Defendants demonstrably attempted to pass off their product as being affiliated with or replacing the Fletcher's brand. Defendants have even unabashedly acknowledged their desire to replace, and effectiveness in replacing, Fletcher's Unlimited, a company they allege is inseparable from the "Fletcher's" word mark. See (Hr'g Tr. vol. 1 at 239:1–6).
Finally, Defendants' attempts to disavow intent are unpersuasive. It is not a defense that "Fletcher" is a part of the Defendants' names. "A man [or woman] has no absolute right to use his [or her] own name, even honestly, as the name of his [or her] merchandise or his [or her] business." John R. Thompson Co. v. Holloway , 366 F.2d 108, 113 (5th Cir. 1966). Nor does the Defendants' attempted disclaimer excuse their infringing conduct. When Fletch was launched, the Defendants posted a disclaimer on their Facebook page: "Not Fletcher's from the fair, just the grandkids." (Hr'g Tr. vol. 1 at 195:13–22). Defendants also noted another disclaimer made shortly thereafter to clarify that their business is not associated with Fletcher's. (Dkt. #1-11). However, as the numerous documented instances of actual confusion prove, Defendants' use of the Fletch marks has nonetheless resulted in consumers believing that Fletch and Fletcher's are affiliated with each other in the sale of corn dogs. Courts have observed, "the mere presence of a disclaimer does not necessarily prevent consumer confusion." Pebble Beach Co. v. Tour 18 I, Ltd. , 942 F. Supp. 1513, 1550 (S.D. Tex. 1996), aff'd as modified , 155 F.3d 526 (5th Cir. 1998). To the contrary, a voluntary disclaimer, as here, is an acknowledgment of likely confusion among consumers. Id. at n.35. And disclaimers that are ineffective, like those issued by Defendants, weigh in favor of the plaintiff in a likelihood of confusion analysis. Id. at 1552 ("The Lanham Act is violated whenever there is confusion in the buying process. This is still true even if the purchaser's confusion is later dispelled through use or familiarization with the product.").
It is also not clear that Defendants have acted in good faith when instances of confusion have arisen. In the same week the disclaimer was issued on the Defendants' business social media account, Defendant Jace Christensen responded to a comment that alleged that the Defendants' corn dogs originated from Fletcher's but failed to correct the assumption made by the consumer. (Dkt. #1-5; Hr'g Tr. vol. 2 at 100:12–7).
Further, the way the Fletch marks have been used lends to an inference of intent. Specifically, the documented instances in which Defendants failed to correct venues that had mistaken Fletch for Fletcher's provides significant evidence of an intent to affiliate their business with Fletcher's. Even if the adoption of the mark was innocent, "[a]n innocent intent in adopting a mark does not immunize an intent to confuse in the actual use of the mark." Westchester Media , 214 F.3d at 666. Here, the adoption of the Fletch marks was not innocent, and Defendants' subsequent actions bear out an improper intent to pass off their own products as though they are Fletcher's products. This digit weighs in favor of Fletcher's.
Intent alone can determine the likelihood of confusion: "Although not necessary to a finding of likelihood of confusion, a defendant's intent to confuse may alone be sufficient to justify an inference that there is a likelihood of confusion." Smack Apparel , 550 F.3d at 481 (citing Elvis Presley , 141 F.3d at 203 ). Because actual confusion has been admitted by Defendants, the Court does not need to rely on this inference but notes that an inference of a likelihood of confusion is justified in this case.
The seventh digit concerns the question of actual confusion. "Evidence that consumers have been actually confused in identifying the defendant's use of a mark as that of the plaintiff may be the best evidence of a likelihood of confusion." Id. , at 483 (internal quotation marks and citation omitted). In this regard, testimony of a single instance of actual confusion caused by a defendant's representations can serve to prove actual confusion. La. World Exposition v. Logue , 746 F.2d 1033, 1041 (5th Cir. 1984). To rebut this, a Defendant must provide "overwhelming proof" of no actual confusion. Xtreme Lashes , 576 F.3d at 230.
In this case, there have been several instances of actual confusion documented by Fletcher's and admitted by Defendants. Consumers, venues, and events that solicit vendors have all been confused. Six events and their affiliated venues, either themselves or through press coverage, have wrongfully advertised to the public that Fletcher's would be selling corn dogs at the event when, in fact, Defendants' company, Fletch, had been contracted by the event or venue. These events and venues include: Red White and Boom, the Denton DMCA Pinewood Derby, Dos Equis Pavilion at Fair Park, Southlake Stars & Stripes, the University of Texas School of Law Mergers and Acquisitions Institute, and the National Hockey League Winter Classic at the Cotton Bowl Stadium in Fair Park. (Dkt. #21, Ex. 18; Dkt. #1-14; Dkt. #55-3). Further, the Dallas Stars, a professional hockey team, and the National Hockey League misidentified their partnership with the Defendants as a partnership with Fletcher's on its Facebook page, advertising "Funnel cake, Fletcher's, and Forechecks." (Dkt. #55-3).
At the preliminary-injunction hearing, Fletcher's provided many additional instances in which consumers have confused Defendants' products with Fletcher's and posted their misidentification on social media or shared their confusion with Fletcher's Head of Marketing and Event Operations. See (Dkt. #21 Ex. 16, 17, 19; Hr'g Tr. vol. 1 at 128:2–129:23, 130:25–131:5, 144:18–153:6, 155:13–164:16). The record also shows that, at various events, consumers have purchased Fletch corn dogs, under the impression they were buying a Fletcher's corn dog, and then expressed disappointment with the product. See (Dkt. #1-16) (MayFest); (Dkt. #21, Ex. 16 at 11) (Dos Equis Pavilion); (Dkt. #55-4) (Winter Classic at the Cotton Bowl). Further, when Fletcher's addressed some of the confusion on social media regarding its perceived affiliation with Defendants, at least one consumer expressed that he would have been confused but for seeing the post. (Dkt. #21, Ex. 16 at 9).
Defendants have pointed to a disclaimer that they posted on social media regarding the lack of affiliation between Fletch and Fletcher's. (Hr'g Tr. vol. 1 at 211:21–212:23). However, the record shows that the disclaimer was ineffective, as all of the documented confusion between Fletch and Fletcher's occurred after Defendants' disclaimer was made public in February 2019. Indeed, the confusion has continued even after the filing of this case. (Hr'g Tr. vol. 1 at 177:1–16) (testimony of Amber Fletcher that consumers sharing their confusion with her has been consistent since Defendants launched their company).
Finally, Defendant Jace Christensen conceded that there is actual confusion between the Fletch marks and the "Fletcher's" mark. She not only credited the instances of actual confusion presented by Fletcher's, but also, provided two more specific instances from her personal experience. (Hr'g Tr. vol. 1 at 215:16–19, 227:3–229:4). Given the substantial evidence of actual confusion among consumers between products from Fletch and Fletcher's, some of which has been expressly acknowledged by Defendants, the Court concludes that this digit weighs heavily in favor of confusion.
The eighth digit addresses the degree of care exercised by potential purchasers of the products at issue. "Where items are relatively inexpensive, a buyer may take less care in selecting the item, thereby increasing the risk of confusion." Smack Apparel , 550 F.3d at 483. Because corn dogs are a relatively inexpensive item, the Court concludes that consumers take less care when purchasing them, and that this digit contributes to an increased risk of confusion among consumers between Fletcher's and Defendants' products.
Taken together, the "digits of confusion" weigh conclusively in favor of Fletcher's. With actual confusion admitted, it is clear that, due to the Defendants' use of the Fletch marks, "[t]here is an impermissible likelihood of confusion as to source, affiliation, or sponsorship" of Defendants' products in relation to Fletcher's products. Viacom , 891 F.3d at 198. Accordingly, with a protectable interest in an eligible mark and actual confusion, Fletcher's has proven a high likelihood of success on the merits of its infringement claim.
B. Likelihood of irreparable harm
The Fifth Circuit twice has declined to clarify whether a finding of a likelihood of confusion in and of itself creates a presumption of irreparable harm. See Emerald City Mgmt., L.L.C. v. Kahn , 624 F. App'x 223, 224 (5th Cir. 2015) (unpublished); Paulsson Geophysical Servs., Inc. v. Sigmar , 529 F.3d 303, 313 (5th Cir. 2008). To the extent that this presumption applies, the Court presumes Fletcher's will suffer irreparable harm based on the established likelihood of confusion occurring among consumers and the public.
However, even if the presumption does not apply, irreparable harm has been shown in this case. "The absence of an available remedy by which the movant can later recover monetary damages may be sufficient to show irreparable injury." Emerald City , 624 F. App'x at 224 (citing Paulsson , 529 F.3d at 312 ). "Grounds for irreparable injury include loss of control of reputation, loss of trade, and loss of goodwill." Id. (quoting Kos Pharm., Inc. v. Andrx Corp. , 369 F.3d 700, 726 (3d Cir. 2004) ).
Fletcher's has shown that it has experienced a loss of control of reputation, a loss of goodwill, and a loss of trade. To show that it has lost control of its reputation, Fletcher's does not have to prove that the Defendants are offering inferior services, only that there is the possibility that the services or goods are not to the satisfaction of Fletcher's. Paulsson , 529 F.3d at 313. The evidence confirms that Fletcher's has developed goodwill in at least the Dallas community, that the Defendants are operating in that same community, that consumers are actually confused as to whether they are purchasing Fletch's products or Fletcher's products, and that Fletcher's has no control over the goods and services offered by the Defendants. Fletcher's has also demonstrated that some consumers have felt the Defendants' product was inferior. Thus, Fletcher's has shown that it has lost control of its reputation and affiliated goodwill. Finally, Fletcher's has also established a loss of trade. Specifically, Fletcher's submitted evidence showing that it has lost potential business at several venues because Fletch was selected when the venue thought it had hired Fletcher's. See (Hr'g Tr. vol. 1 at 131:17–132:16, 178:3–18). Based on all of this evidence, Fletcher's has met its burden of demonstrating irreparable harm resulting from Defendants' actions.
Defendants have argued that Fletcher's alleged delay in filing this lawsuit undercuts its argument that it is experiencing irreparable harm. The Court disagrees. Fletcher's filed suit and moved for a preliminary injunction on September 19, 2019, just under four months after it acquired the mark on May 24, 2019. During the intervening period, Fletcher's sent Defendants a cease-and-desist demand letter on July 26, 2019. After requesting additional time to respond to Fletcher's demand letter, Defendants replied on August 16, 2019, but the parties could not reach an agreement resolving their dispute. Under the circumstances, Defendants have failed to show that Fletcher's unreasonably delayed the filing of this suit.
Even if the alleged delay is measured from February 2019 (when Fletch was launched) until Fletcher's suit was filed in September 2019, this seven-month period does not constitute unreasonable delay. See, e.g., Elvis Presley , 141 F.3d at 205 (finding that eight months was not an inexcusable delay).
C. Balance of equities
The balance of equities lies with Fletcher's. Although Defendants will incur costs associated with ceasing to use the Fletch marks, the harm to Fletcher's outweighs such costs. The burden of losing control of its mark, the loss of customers, and the harm to Fletcher's reputation and goodwill are greater than the cost to Defendants, who have failed to identify any cost to them not created by their own likely infringing activities.
Defendants alleged that they could be held in breach of contract with third party venues if enjoined from using the name "Fletch," but Defendants failed to substantiate these claims. Although menus and signage must be approved by many of these venues, none of the contracts submitted by Defendants state that Defendants' name was material to the contracts, or that a change could not be approved. While some of these third parties have engaged in advertising or posting signs with the Defendants' company name, Fletch, on them, the Defendants only assert that they could be liable for the cost of the change. This possibility of harm is, at best, conjectural.
Further, Defendants' alleged hardship merits little consideration because it results directly from Defendants' decision to build their business around confusingly similar marks and to continue their efforts to do so after they received Fletcher's cease-and-desist letter. "Where the only hardship that the defendant will suffer is lost profits from an activity which has been shown likely to be infringing, such an argument in defense merits little equitable consideration." Lakedreams v. Taylor , 932 F.2d 1103, 1109 n.12 (5th Cir. 1991). Likewise, "[a]ny acts after receiving a cease-and-desist letter are at the defendant's own risk because it is on notice of the plaintiff's objection to such acts." Elvis Presley , 141 F.3d at 205. Three of the five contracts submitted into evidence by Defendants were entered into after Defendants received Fletcher's cease-and-desist letter. Thus, Defendants deliberately accepted the risk of harm when they decided to use the confusingly similar marks at issue in this case and to continue to use those marks following Fletcher's cease-and-desist letter.
Fletcher's has shown demonstrable harm as a result of Defendants' likely infringement, including loss of control of its reputation, loss of trade, and loss of goodwill. The speculative harm offered by the Defendants concerning their contractual obligations merits little consideration. The balance of equities, therefore, weighs in favor of issuing a preliminary injunction.
D. Public interest
A plaintiff must show that the requested preliminary injunction will not disserve the public interest. "The public interest is always served by requiring compliance with Congressional statutes such as the Lanham Act and by enjoining the use of infringing marks." Sparrow Barns & Events, L.L.C. v. Ruth Farm Inc. , No. 4:19-CV-00067, 2019 WL 1560442, at *10 (E.D. Tex. Apr. 10, 2019) (citing T-Mobile US, Inc. v. AIO Wireless L.L.C. , 991 F. Supp. 2d 888, 929 (S.D. Tex. 2014) ); see also Paulsson , 529 F.3d at 313 (affirming that enjoining an infringing user serves the public interest). Because Fletcher's has met its burden to show a likelihood of success on the merits concerning its infringement claim against Defendants, it has also shown that a preliminary injunction will serve the public interest.
* * *
For the foregoing reasons, the Court holds that a preliminary injunction is warranted. Defendants are, therefore, prohibited from using the marks "Fletcher's," "Fletch," "Eat Fletch," and "EatFletch," and all confusingly similar variations of the foregoing, either by themselves or with any other words or designs, in any form of interstate commerce related to the food and beverage industry. Further, Defendants must remove from commerce any advertisement or offer for sale in commerce of its services or products displaying the marks "Fletcher's," "Fletch," "Eat Fletch," and "EatFletch," as well as all confusingly similar variations of the foregoing, either by themselves or with any other words or designs, including but not limited to Defendants' website, social media, and accounts with third parties.
DEFENDANTS' MOTION TO DISMISS
Defendants filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(7), and, in turn, Rule 12(b)(1). (Dkt. #40). The dismissal motion is derived from the theory advanced by Defendants in response to Fletcher's preliminary-injunction motion: Fletcher's Unlimited is the actual owner of the marks at issue in this case as to any location outside the grounds of the State Fair of Texas and is therefore a necessary party that must be joined under Rule 19. Because Fletcher's Unlimited allegedly cannot be joined, the Defendants assert that the action should be dismissed for lack of subject-matter jurisdiction. The Court concludes that Fletcher's Unlimited is not a required party in this action, and therefore, Defendants' Motion to Dismiss is DENIED.
Legal Standard
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(7) alleges that a plaintiff has failed to join a required party under Rule 19. When deciding a motion to dismiss under Rule 12(b)(7), a court must make a two-step inquiry under Rule 19. First, the court must determine under Rule 19(a) if a person or entity is a required party. A person is a required party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or (B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may: (i) as a practical matter impair or impede the person's ability to protect the interest; or (ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
FED. R. CIV. P. 19(a). Second, "[i]f joinder is warranted, then the person will be brought into the lawsuit. But if such joinder would destroy the court's jurisdiction, then the court must determine under Rule 19(b) whether to press forward without the person or to dismiss the litigation." HS Res., Inc. v. Wingate , 327 F.3d 432, 439 (5th Cir. 2003).
The movant bears the burden of demonstrating that a missing party is necessary. Hood ex rel. Mississippi v. City of Memphis , 570 F.3d 625, 628 (5th Cir. 2009). But, "after ‘an initial appraisal of the facts indicates that a possibly necessary party is absent, the burden of disputing this initial appraisal falls on the party who opposes joinder.’ " Id. (quoting Pulitzer-Polster v. Pulitzer , 784 F.2d 1305, 1309 (5th Cir. 1986) ). When conducting any inquiry under Rule 12(b)(7), a court should consider "the allegations of the complaint and the affidavits and other proofs adduced in contradiction or support thereof." Estes v. Shell Oil Co. , 234 F.2d 847, 849 (5th Cir. 1956).
Analysis
Defendants argue that Fletcher's Unlimited is a required party that must be joined in this case because it purportedly used the "Fletcher's" word mark at locations outside the State Fair between 1994 and 2018. As discussed, alleged actions by Fletcher's Unlimited qualify it only as another infringing entity or, at most, a junior user of the mark. See supra Part A(1)(ii).
Contrary to Defendants' contentions, courts have consistently held that Rule 19 does not require the joinder of additional infringing entities or junior users of a mark in trademark enforcement litigation. See, e.g., Ass'n of Co-op. Members, Inc. v. Farmland Indus., Inc. , 684 F.2d 1134, 1144 (5th Cir. 1982) (holding that an injunction with regard to a composite mark owned by the plaintiff but in part by a third party would not cause inconsistent obligations for the defendant even if the owner of part of the mark later filed suit against the defendant); Dall. Cowboys Football Club, Ltd. v. Am.'s Team Props., Inc. , 616 F. Supp. 2d 622, 642 (N.D. Tex. 2009) (holding that although other teams had used the mark and may hold a right in the mark "America's Team," the plaintiff had priority over the defendant and defendant's infringing mark was canceled); Gen. Council of Assemblies of God v. Fraternidad de Iglesia de Asamblea de Dios Autonoma Hispana, Inc. , 382 F. Supp. 2d 315, 320 (D.P.R. 2005) (holding other potential infringers are not required parties under Rule 19 and that complete relief can be afforded); La.-Pac. Corp., Weather-Seal Div. v. Smith , No. 3-74-98, 1974 WL 20260, at *2 (S.D. Ohio Dec. 20, 1974) (holding that if the court found that all who claim a right in the trademark were indispensable parties, trademarks would become all but unenforceable).
Thus, Defendants cannot show that Fletcher's Unlimited, another possible infringer of the "Fletcher's" word mark or at best a junior user, is a required party under Rule 19. Likewise, Defendants have not shown how, under Rule 19(a), complete relief cannot be granted without Fletcher's Unlimited, how any interest of Fletcher's Unlimited may be impeded or impaired, or how Defendants could be at substantial risk for multiple or inconsistent obligations. Having found that Fletcher's Unlimited is not a required party, the Court need not address any of the other arguments raised by the Defendants in their dismissal motion. Defendants' Motion to Dismiss (Dkt. #40) is therefore DENIED.
CONCLUSION
It is, therefore, ORDERED that Plaintiff's Motion for a Preliminary Injunction (Dkt. #3) is GRANTED in accordance with the following:
Pursuant to Federal Rule of Civil Procedure 65, Defendants and all those in active concert or participation with Defendants, are ENJOINED from using the marks "Fletcher's," "Fletch," "Eat Fletch," and "EatFletch," and all confusingly similar variations of the foregoing, either by themselves or with any other words or designs, in any form of interstate commerce related to the food and beverage industry.
It is further ORDERED that Defendants must remove from commerce any advertisement or offer for sale in commerce its services or products displaying the marks "Fletcher's," "Fletch," "Eat Fletch," and "EatFletch," and all confusingly similar variations of the foregoing, either by themselves or with any other words or designs, including but not limited to Defendants' website, social media, and accounts with third parties.
Pursuant to Federal Rule of Civil Procedure 65(c), Plaintiff is ORDERED to post a bond in the amount of $1,000 , by depositing this amount with the Clerk of the Court within three business days of this order.
It is further ORDERED that Defendants' Motion to Dismiss is DENIED. (Dkt. #40).