BBC Grp. NV v. Island Life Rest. Grp.
| Decision Date | 06 December 2019 |
| Docket Number | Case No. C18-1011-RSM |
| Parties | BBC GROUP NV LLC, a Nevada Limited Liability Company, Plaintiff, Counterclaim Defendant, v. ISLAND LIFE RESTAURANT GROUP LLC, et al., Defendants, Counterclaim Plaintiffs. |
| Court | U.S. District Court — Western District of Washington |
This matter comes before the Court on Counterclaim Plaintiff Island Life Restaurant Group, LLC ("Island Life")'s Motion for Permanent Injunction. Dkt. #77. Counterclaim Defendant BBC GROUP NV LLC ("BBC") opposes. Dkt. #80. The Court held oral argument on this motion on December 4, 2019. Dkt. #83. Having reviewed the relevant briefing, the exhibits attached thereto, and the remainder of the record, the Court GRANTS IN PART Island Life's Motion for Permanent Injunction.
A full background of this case is not necessary given this Court's previous order ruling on the merits of Island Life's claims against BBC. Dkt. #65.
On March 28, 2019, this Court partially granted Island Life's motion for preliminary injunction and enjoined BBC from expanding into western Washington during the pendency of this action. Dkt. #35. The Court found that Island Life would likely suffer substantial and irreparable harm in the form of customer confusion, loss of goodwill, vendor confusion and lost profits unless BBC was enjoined from using the name "BOK BOK" in western Washington. Id. at 8.
On September 20, 2019, this Court dismissed all of BBC's claims against Island Life and granted summary judgment on Island Life's counterclaims under the Lanham Act, 15 U.S.C. §§ 1114, 1125. Dkt. #65 at 2. In finding actual confusion between the "BOK BOK" and "Bok a Bok" marks, the Court acknowledged that both parties maintain an active Internet presence that "has led to misdirected emails from marketers, vendors, and potential employees." Id. at 18-19. The Court also noted BBC's repeated intention to expand its restaurant chain nationwide, including into California and Washington. Id. at 19. However, the Court declined to address the issue of a permanent injunction against BBC without further briefing from the parties. Id. at 21-22. The Court will now consider the issue.
Island Life requests a permanent injunction that enjoins BBC from three activities: (1) nationwide use of the unlicensed "BOK BOK" mark and "any other name that includes this chicken sound," including but not limited to "BOC BOC" and "BOQ BOQ"; (2) use of "bokbokchicken" as a domain name for websites or for email or social media accounts; and (3) acquiring any rights to use the third-party "BOCBOC Chicken Delicious" mark, includingrequesting or accepting help from the current owner of the third-party mark, Mr. Guang Li. Dkt. #77 at 18.
Under 15 U.S.C. § 1116(a) of the Lanham Act, district courts may "grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under subsection (a), (c), or (d) of section 1125 of this title." In deciding whether to grant permanent injunctive relief, district courts apply traditional principles of equity. Herb Reed Enters., LLC v. Fla. Entm't Mgmt., 736 F.3d 1239, 1249 (9th Cir. 2013) (quoting eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)).
A plaintiff seeking a permanent injunction must demonstrate four factors: (1) it has suffered an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction. Reno Air Racing Ass'n., Inc. v. McCord, 452 F.3d 1126, 1138 (9th Cir. 2006). The court must conduct "a fair weighing of the factors listed above, taking into account the unique circumstances of each case," and "consider the totality of circumstances bearing on whether a permanent injunction is appropriate equitable relief." La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V., 762 F.3d 867, 880 (9th Cir. 2014).
Circuits are split on whether a finding of infringement automatically presumes irreparable harm. See Dkt. #77 at 11. However, the Ninth Circuit's controlling precedent in Herb Reed makes clear that in this Circuit, the fact of infringement itself is not sufficient to show irreparableharm—the infringement must somehow cause injury. Active Sports Lifestyle USA, LLC v. Old Navy, LLC, No. SACV 12-572 JVS EX, 2014 WL 1246497, at *2 (C.D. Cal. Mar. 21, 2014) (citing Herb Reed Enters., 736 F.3d at 1250-51); see also San Miguel Pure Foods Co. v. Ramar Int'l Corp., 625 F. App'x 322, 327 (9th Cir. 2015) (). Conclusory and factually unsupported allegations are insufficient to establish irreparable harm. Herb Reed Enters., 736 F.3d at 1250.
Here, Island Life's asserted harm falls into three general categories: (i) costs from the litigation; (ii) loss of business reputation and goodwill from vendor confusion; and (iii) lost goodwill from customer confusion. First, Island Life argues that this lawsuit caused it to forfeit properties because of the pending litigation, resulting in lost profits and lost expansion opportunities. Dkt. #77 at 8-9. It also discusses personal injuries to Brian O'Connor, co-owner of Island Life, who was denied a refinance on his home because of the pending litigation and lost his family's insurance coverage. Id. at 13. At oral argument, counsel for Island Life argued that the harm from trademark infringement is directly related to harm caused by this lawsuit because BBC's trademark infringement was what caused its lawsuit against Island Life.
This Court finds an important distinction between harm caused by litigation over trademark infringement versus harm caused by the infringement itself. In deciding whether to grant a permanent injunction, courts typically consider only the latter as "irreparable harm" warranting equitable relief. See, e.g., Herb Reed Enters., 736 F.3d at 1249 (). Moreover, Island Life has failed to adequately explain how monetary damages or attorney's fees would be insufficient to compensate for these damages. For these reasons, the Court finds that harm to Island Life or its co-founders because of the litigation does not constitute irreparable harm from trademark infringement warranting a permanent injunction.
Next, Island Life argues that confusion by vendors between "Bok a Bok" and "BOK BOK" has damaged its business reputation and resulted in lost goodwill from vendors. Courts recognize loss of control over business reputation and damage to goodwill as irreparable harm warranting an injunction. Herb Reed, 736 F.3d at 1250; Stuhlbarg Intern. Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 841 (9th Cir. 2001). In demonstrating vendor confusion, Island Life points to one instance where a California-based vendor, Tito's Transport, confused Island Life with BBC and accused Island Life of failing to pay its bills. Id. (citing Dkt. #68-1 at 1). As a result, Island Life argues, it lost goodwill and reputation because of confusion with the "BOK BOK" mark.
This evidence of vendor confusion provides a reasonable basis to preserve the status quo and enjoin BBC from expanding into Washington state, given that confusion by vendors used or potentially used by Island Life would damage Island Life's business reputation and goodwill. However, Island Life has provided no evidence in its briefing or at oral argument that it relies on vendors located outside of the state where all "Bok a Bok" locations operate. As a result, it has failed to demonstrate that it would suffer irreparable harm in the form of lost goodwill or damaged reputation from confusion by vendors located outside of Washington. Although Island Life stated at oral argument that it intends to expand its business outside of Washington, it has provided no indication to the Court of when or where this expansion will occur. For that reason, any future harm suffered by Island Life when it expands outside Washington is merely speculative and therefore insufficient to establish irreparable harm. Herb Reed Enters., 736 F.3d at 1250.
Third, Island Life argues that confusion by customers between "Bok a Bok" and "BOK BOK" will lead customers away from the Washington "Bok a Bok" and damage its goodwill and reputation. Island Life has worked hard to build a positive reputation for "Bok a Bok," which includes a feature on the Food Network's show "Diners, Dives and Drive-In's" that has attractedvisitors from around the country and the world. See Dkts. ##68-4, 68-5, 68-6. After the Food Network feature, a Las Vegas food journalist erroneously announced that Seattle's "Bok a Bok" was coming to Las Vegas. Dkt. #28-5 at 10. Because of this exposure, Island Life argues, potential customers will try to seek out "Bok a Bok" but will instead be led to the Las Vegas location. Dkt. #77 at 9. At the same time, it claims that negative reviews or experiences by customers at a Nevada or California "BOK BOK" will deter potential customers from patroning a Washington "Bok a Bok" and cause Island Life to lose customer goodwill. Id. Although parties disagree on which restaurant chain has better customer reviews, compare Dkt. #77 at 11 with Dkt. #80 at 11, there is no dispute that Nevada-based "BOK BOK" has earned some negative online reviews. See Dkt. #68-7. Parties also attempt to predict whether customers outside of Washington are more likely led to "BOK BOK" instead of "Bok a Bok," compare Dkt. #68 at ¶¶ 4-6 with Dkt. #81 at 2-3, but the Court finds neither...
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