Traeger Pellet Grills, LLC v. Dansons US, LLC, CV-19-04732-PHX-DLR

• Decision Date: 03 October 2019
• Docket Number: No. CV-19-04732-PHX-DLR,CV-19-04732-PHX-DLR
• Citation: 421 F.Supp.3d 876
• Parties: TRAEGER PELLET GRILLS, LLC, Plaintiff, v. DANSONS US, LLC, et al., Defendants.
• Court: U.S. District Court — District of Arizona

421 F.Supp.3d 876

TRAEGER PELLET GRILLS, LLC, Plaintiff,

v.DANSONS US, LLC, et al., Defendants.

No. CV-19-04732-PHX-DLR

United States District Court, D. Arizona.

Signed October 3, 2019

Alan Peter Block, Pro Hac Vice, Kirk D Dillman, Pro Hac Vice, Robert Johnston King, Pro Hac Vice, McKool Smith Hennigan PC, Los Angeles, CA, Dawn L Dauphine, William Dewitt Furnish, William J Maledon, Osborn Maledon PA, Phoenix, AZ, for Plaintiff.

Kenneth L Wilton, Pro Hac Vice, Seyfarth Shaw LLP, Los Angeles, CA, Lauren Martha Gregory, Pro Hac Vice, Seyfarth Shaw LLP, Atlanta, GA, Olivier Andre Beabeau, Galbut Beabeau PC, Scottsdale, AZ, Patrick T Muffo, Pro Hac Vice, Vincent Mark Smolczynski, Pro Hac Vice, Seyfarth Shaw LLP, Chicago, IL, for Defendants.

ORDER

Douglas L. Rayes, United States District Judge Before the Court is Plaintiff Traeger Pellet Grills, LLC's ("Traeger Grills") motion for preliminary injunction against Defendant Dansons US, LLC ("Dansons"), which is fully briefed. (Docs. 11, 31, 34.) The Court held a preliminary injunction hearing on September 12, 2019, and thereafter took this matter under advisement. For the following reasons, Trager's motion is granted.

I. Background

Traeger Grills manufactures and sells wood pellet grills, grill accessories, and wood pellets. The Traeger story originates with Joe Traeger, who is credited with inventing the wood pellet grill in the 1980s. Following this invention, Joe Traeger manufactured and sold wood pellet grills through Traeger Industries, Inc. ("TII"), a company owned and operated by Joe and his family. TII first used the name Traeger in commerce as a trademark for grills, grill accessories, and wood pellets on January 1, 1986.

On February 21, 2006, Traeger Grills, a limited liability company registered and headquartered in Tampa, Florida, entered the picture by means of two transactions. First, Traeger Grills entered into an Asset Purchase Agreement ("APA") with TII, The Joe Trager Charitable Trust, The Randy Traeger Charitable Trust, The Mark Traeger Charitable Trust, Brian Traeger, Joe Traeger, Randy Traeger, and Mark Traeger. (Doc. 11-1 at 22-67.) Pursuant to the APA, the sellers assigned to Traeger Grills all their rights, title and interest in and to the business, and all assets including but not limited to all accounts receivable, inventory, equipment and machinery, tools and goodwill associated with the business. (Id. at 23-24.) Traeger Grills paid $3,402,122 in consideration for these assets. (Id. at 27.) Second, Traeger Grills entered into an Intellectual Property Rights Assignment Agreement ("IPRAA") with Joe, Brian, Mark and Randy Traeger. (Id. at 69-91.) Pursuant to the IPRAA, the sellers assigned to Traeger Grills "all of their right, title and interest in and to the Intellectual Property rights," including but not limited to "[a]ll the patents, patent rights, proprietary info and projects, trade secrets, personal goodwill and IP assets and properties used or usable in the business[.]" (Id. at 70, 95.) Traeger Grills paid $9,000,000 in consideration for the seller's right, title and interest in and to the intellectual property rights assigned and transferred per the IPRAA. (Id. at 71.)

Since assuming these assets and rights, Traeger Grills has poured over $100 million into developing the Traeger brand. (Id. at 9.) On May 22, 2007, Traeger Grills obtained a Federal Trademark Registration for the trademark TRAEGER as used in connection with the sale of grills, grill accessories, and wood pellets, and Traeger Grills now owns nine other active federal trademark registrations. (Id. at 5-7.) In addition, Traeger Grills' marketing includes images of the Traeger Barn and promotion as the originator of the wood pellet grill. (Id. at 8.)

Traeger Grills competes in the wood pellet grill market with Dansons, which manufactures and sells wood pellet grills and grill accessories under the brand names Pit Boss and Louisiana Grills. The instant conflict between the companies arose on September 20, 2018, when Dansons issued a marketing release announcing that it had hired Joe and Brian Traeger to elevate the Louisiana Grills brand. (Doc. 11-3 at 32-33.) Dansons' marketing release features two photos of Joe and Brian alongside Danson executives, standing in front of the Traeger Barn with the Traeger name prominently displayed behind them, and a third photo of Joe and Dansons' CEO, Dan Theissen. (Id. ) On September 21, 2018, Traeger Grills sent Mr. Theissen a cease and desist letter, demanding that Dansons "discontinue all activities which suggest or create the impression of a connection between Dansons and Traeger Grills." (Doc. 31-10 at 4.) Counsel for Dansons responded by email, requesting a telephone call to discuss how Dansons might address Traeger Grills' concerns, but a resolution between the two parties was never reached. (Doc. 31-11.)

On March 14, 2019, Dansons announced that the Louisiana Grills brand planned to introduce a new series of grills in Fall 2019 called the Founders Series "brought to you proudly by Joe Traeger, the founder of the original pellet grill, and Dan Thiessen, an accomplished innovator in the pellet grill industry." (Doc. 11-3 at 36.) Following this announcement, Dansons began posting a series of advertisements on Instagram, Facebook and Twitter, including photos and statements featuring the names and likenesses of Joe and Brian Traeger and the Traeger mark and barn promoting Dansons, Danson's products, and the Founders Series. (Id. at 39-49; Doc. 11-4.) On July 16, 2019, Traeger Grills filed this action against Dansons and George Koster. (Doc. 1.) On the same date, Traeger Grills filed a separate lawsuit against Joe, Brian and Mark Traeger in the Middle District of Florida. (Doc. 31-4 at 3.)

On July 17, 2019, Traeger Grills filed its motion for preliminary injunction, which was fully briefed on August 28, 2019. (Docs. 11, 31, 34.) In its motion, Traeger Grills requests that the Court preliminarily enjoin Dansons from:

a. Using or assisting or consenting to others in using or publishing, in any manner, the TRAEGER name, images of the TRAEGER Barn location in Mt. Angel, Oregon, images of Joe or Brian Traeger, references to Joe as the founder or creator of the pellet grill (collectively the "Traeger Intellectual Property") in connection with the advertising, marketing, or sale of wood pellet grills and associated products.

b. Publishing, in any manner, any statement that affiliates in any way Joseph Traeger, Brian Traeger, or Traeger Grills with Dansons US LLC, LOUISIANA GRILLS, PIT BOSS, the FOUNDERS SERIES grills, Dan Thiessen, Jordan Thiessen, Jeff Thiessen or Dansons' products or endorses Dansons US LLC, LOUISIANA GRILLS, PIT BOSS, the FOUNDERS SERIES grills, or any Dansons grill-related product; [and]

c. Arranging any public appearance anywhere in the United States that communicates an endorsement by Joseph Traeger or Brian Traeger of Dansons' US LLC, LOUISIANA GRILLS, PIT BOSS, the FOUNDERS SERIES grills, or any other Dansons grill-related product[.]

(Doc. 11 at 25.) The motion is now ripe for decision.

II. Legal Standard

"A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest."

Winter v. Natural Res. Def. Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ; Am. Trucking Ass'n, Inc. v. City of Los Angeles , 559 F.3d 1046, 1052 (9th Cir. 2009). These elements may be balanced on a sliding scale, whereby a stronger showing of one element may offset a weaker showing of another. See Alliance for the Wild Rockies v. Cottrell , 632 F. 3d 1127, 1131, 1134-35 (9th Cir. 2011). But the sliding-scale approach does not relieve the movant of the burden to satisfy all four prongs for the issuance of a preliminary injunction. Id. at 1135. Instead, " ‘serious questions going to the merits’ and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Id. at 1135. The movant bears the burden of proof on each element of the test. Envtl. Council of Sacramento v. Slater , 184 F. Supp. 2d 1016, 1027 (E.D. Cal. 2000).

III. Discussion

Having carefully considered the parties' briefs, arguments, and presentations during the preliminary injunction hearing, the Court finds that Traeger has carried its burden on all four elements of the preliminary injunction test.

A. Likelihood of Success on the Merits

1. Trademark Claims

To prevail on its trademark infringement claims, Traeger Grills must establish (1) ownership of a valid trademark previously used in commerce and (2) that Dansons used in commerce a mark similar to Traeger Grills' trademark in a manner likely to cause confusion. 15 U.S.C. § 1114 ; Nelson-Ricks Cheese Co., Inc. v. Lakeview Cheese Co., LLC , 775 F. App'x. 350, 351 (9th Cir. 2019) ; Bosley Med. Inst., Inc. v. Kremer , 403 F.3d 672, 676 (9th Cir. 2005) ; Playboy Enters., Inc. v. Netscape Cmmc'ns Corp. , 354 F.3d 1020, 1024 (9th Cir. 2004). The Ninth Circuit assesses the second element, likelihood of confusion, by weighing the eight Sleekcraft factors: (1) the strength of the plaintiff's mark; (2) the proximity or relatedness of the goods; (3) the similarity of the parties' marks; (4) evidence of actual confusion; (5) marketing channels used; (6) the type of goods and degree of care likely to be exercised by the buyer; (7) the defendant's intent in adopting the junior mark; and (8) likelihood of expansion of the parties' product lines. AMF Inc. v. Sleekcraft Boats , 599 F.2d 341, 348 (9th Cir. 1979). "[T]his eight-factor test ... is pliant. Some factors are much more important than others, and the relative importance of each...