Low Tide Brewing, LLC v. Tideland Mgmt. LLC

• Decision Date: 12 April 2021
• Docket Number: No. 2:21-cv-0775-DCN,2:21-cv-0775-DCN
• Parties: LOW TIDE BREWING, LLC, Plaintiff, v. TIDELAND MANAGEMENT LLC and HUNTER EISELE, Defendants.
• Court: U.S. District Court — District of South Carolina

LOW TIDE BREWING, LLC, Plaintiff, v. TIDELAND MANAGEMENT LLC and HUNTER EISELE, Defendants.

No. 2:21-cv-0775-DCN

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION

April 12, 2021

ORDER

The following matter comes before the court on plaintiff Low Tide Brewing, LLC's ("Low Tide") motion for preliminary injunction, ECF No. 6. For the reasons set forth below, the court denies the motion.

I. BACKGROUND

This is a trademark dispute between two local breweries that produce, sell, and distribute craft beer.¹ Low Tide opened its brewery and taproom on Johns Island in March 2016. Prior to opening, Low Tide's owner, Michael Fielding ("Fielding") registered the domain name, lowtidebrewing.com, and established Low Tide as a limited liability company with the South Carolina Secretary of State. Shortly thereafter, in 2016, Low Tide registered the word mark LOW TIDE BREWING with the United States Patent and Trademark Office ("USPTO"). Low Tide has also federally registered theword mark TIDE CHASER to denote a particular beer that it brews and the following trademark logos:

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Additionally, Low Tide claims ownership of several other nonregistered word marks containing the words "tide" and "tidal"—for example, TIDAL BRAU and WEIZEN TIDE—as the names of various Low Tide beers.

Defendant Tideland Management LLC ("Tideland") is a South Carolina limited liability company established in August 2019 that began operating as a craft brewery and taproom in North Charleston in March 2021 under the name "Tideland Brewing." Tideland is owned and operated by defendant Hunter Eisele ("Eisele") (together with Tideland, "defendants"). Because of both men's presence in the local craft beer industry, Eisele and Fielding have been familiar with one another for some time. Before either opened his own brewery, Eisele considered the name "Low Tide" for his first brewery. Unbeknownst to Eisele, Fielding had already selected "Low Tide" for the name of his brewery and registered the "Low Tide" domain name. After noticing that the "Low Tide" domain name had been registered, Eisele abandoned it and settled for the name "Twisted Cypress." In 2017, Eisele opened Twisted Cyprus Brewing Company ("Twisted Cypress"), which operated in Charleston until its closure in 2019. Eisele began working on the Tideland project shortly thereafter.

The parties offer differing accounts of the events leading up to the filing of this lawsuit. According to Low Tide, in February 2020 Eisele visited Low Tide's taproom where he encountered "two Low Tide representatives" and "volunteered to both representatives that he was considering ["Tideland Brewing"] for his new brewery's name, going so far as to ask one Low Tide representative what Low Tide's ownership team would think about his proposed name." ECF No. 6-1 at 6. Low Tide claims that its "co-owner who discussed ["Tideland Brewing"] with [] Eisele suggested to him that he choose an alternative name . . . ." Id. Eisele acknowledges discussing his new brewery plans at Low Tide's taproom but gives a different account of his conversation with Low Tide employees: "[A Low Tide employee] asked what my plans [we]re in reference to the name . . . . I told him that we'd selected Tideland Brewing. I certainly don't believe I asked if [Low Tide's owners] would have a problem with it." ECF No. 12-20, Eisele Decl. ¶¶ 9-12. And Eisele claims the encounter happened "much earlier" than February. Id. ¶ 10. In a second interaction between Eisele and Low Tide, which both parties agree occurred in February 2020, Eisele and a business partner visited Low Tide to look at some brewing equipment. According to Eisele, a Low Tide employee asked if Eisele had received a cease-and-desist letter from Low Tide related to Eisele's use of the name "Tideland Brewing." When Eisele stated that he had not, the employee "sort of shrugged it off, stating that if [Eisele] hadn't heard anything then maybe [Fielding] had gotten over it." Id. ¶ 8.

The parties did not discuss defendants' plan to use the name "Tideland Brewing" thereafter until October 2020, when defendants announced the opening of Tideland Brewing from Twisted Cypress's Facebook page. Shortly thereafter, Low Tide sentdefendants a cease-and-desist letter, which spurred attempts to resolve the dispute without resort to litigation. When those attempts failed, Low Tide filed this action on March 18, 2021, asserting claims for (1) federal trademark infringement, (2) federal unfair competition and false designation of origin, (3) violation of the South Carolina Deceptive Trade Practices Act, (4) common law unfair competition, and (5) common law trademark infringement. ECF No. 1, Compl. The same day, Low Tide filed the instant motion for a preliminary injunction. ECF No. 6. On March 31, 2021, defendants responded in opposition, ECF No. 12, and on April 7, 2021, Low Tide replied, ECF No. 22. The court held a hearing on the motion on April 8, 2021. Thus, the motion has been fully briefed and is now ripe for the court's review.

II. STANDARD

"The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." United States v. South Carolina, 840 F. Supp. 2d 898, 914 (D.S.C. 2011) (quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)). "A plaintiff seeking a preliminary injunction must establish that [1] he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of the equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). "To obtain a preliminary injunction under the Winter test, a movant must make a 'clear showing' of [the] four requirements." Alkebulanyahh v. Nettles, 2011 WL 2728453, at *3 (D.S.C. July 13, 2011); see also Dewhurst v. Century Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011) ("Winter thus requires that a party seeking a preliminary injunction . . . must clearly show that it islikely to succeed on the merits.") (internal quotation marks omitted). As the Supreme Court has noted, a preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22.

III. DISCUSSION

Low Tide seeks a prohibitory injunction to maintain the status quo until this action can be resolved on its merits.² Specifically, Low Tide asks that the court enjoin defendants "from continuing to infringe upon and violating Low Tide's distinctive and well-known trademarks." ECF No. 6-1 at 1. For such an injunction to issue, Low Tide must make a clear showing as to each of prong of the Winter test. The court discusses each prong in turn.

1. Likelihood of Success on the Merits

Low Tide bases its injunction request on its claims of trademark infringement and unfair competition. Therefore, for an injunction to issue, it must make a clear showingthat it is likely to succeed on the merits of those claims. See Winter, 555 U.S. at 20. "Although [the likelihood-of-success] inquiry requires [a plaintiff] . . . to make a clear showing that [it is] likely to succeed at trial, [the plaintiff] need not show a certainty of success." Pashby, 709 F.3d. at 321 (internal citations omitted). To succeed in a trademark infringement action under the Lanham Act,³ a plaintiff must establish:

(1) that it owns a valid mark; (2) that the defendant used the mark in commerce and without plaintiff's authorization; (3) that the defendant used the mark (or an imitation of it) in connection with the sale, offering for sale, distribution, or advertising of goods or services; and (4) that the defendant's use of the mark is likely to confuse customers.

Rosetta Stone, Ltd. v. Google, Inc., 676 F.3d 144, 152 (4th Cir. 2012); see also 15 U.S.C. § 1114(1)(a). The court addresses each element in turn.

a. Valid Trademark

Low Tide has federally registered two words marks, LOW TIDE BREWING and TIDE CHASER, as well as two logo marks with the USPTO. Low Tide also claims rights to a bevy of other TIDE-related marks, although it has not applied for federal registration of those marks. "In general, the party claiming ownership of a mark must be the first to use the mark in the sale of goods." George & Co. LLC v. Imagination Entm't Ltd., 575 F.3d 383, 400 (4th Cir. 2009) (citing 2 McCarthy on Trademarks and Unfair Competition § 16:1 (5th ed.)). When parties compete for the legal use of the same or similar mark, "the rule of priority is that ownership and priority of a trademark go to theparty who was first-to-use." 2 McCarthy on Trademarks and Unfair Competition § 16:1.50 (5th ed.)). As the Fourth Circuit explained,

so long as a person is the first to use a particular mark to identify his goods in a given market, and so long as that owner continues to make use of the mark, he is 'entitled to prevent others from using the mark to describe their own goods' in that market.

George & Co., 575 F.3d at 400.

A party's registration of a mark with the USPTO is "prima facie evidence of the validity of the registered mark, . . . of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the registration . . . ." 15 U.S.C. § 1115(a). "Registration grants a presumption of ownership, dating ownership to the filing date of the federal registration application, and the party challenging the registrant's ownership must overcome this presumption by a preponderance of the evidence." George & Co., 575 F.3d at 400 n.15. Low Tide has presented evidence that it has four federally registered trademarks. Further, Low Tide has presented evidence that it began using both its federally registered and unregistered marks as early as 2015 and prior to defendants' use of the...