The Importance of Vigilance In Protecting Your Trademarks

April 13, 2016

By Jennifer Hart and David Posteraro

The old saying “Never put off for tomorrow what you can do today” has new meaning for a Columbus, Ohio brewery whose delay in enforcing its intellectual property rights resulted in a competitor being allowed to use the brewery’s registered trademarks. On April 6, 2016, the federal district court in Columbus, Ohio held that District Brewing Company was not entitled to a preliminary injunction to prohibit a neighboring restaurant from using the brewery’s intellectual property, even though the brewery is likely to win if the case goes to trial. District Brewing Company, Inc. v. CBC Restaurant, LLC, No. 2:15-CV-3114, April 6, 2016.

In 1989, District Brewing Company registered its “Columbus Brewing Co.” trade name along with several trademarks for versions of “Columbus Brewing Company,” including the words “Columbus Brewing Co.” and various logos. Eight years later in 1997, CBC Restaurant began operating as a restaurant using the name “Columbus Brewing Company Restaurant”.

The two businesses, although separate, shared a common roof and worked together for years. Beginning in 1997, and with the brewery’s knowledge, the restaurant openly used the brewery’s registered name, marks, and logo. It was not until 2006 that the brewery objected to the restaurant’s use of the “Columbus Brewing Company” marks. Nevertheless, for the next nine years, and with the brewery’s knowledge, the restaurant continued to use the marks, even though the brewer disapproved. In 2015, the brewery served the restaurant with a cease-and-desist letter. However, the restaurant did not cease using the name “Columbus Brewing Company Restaurant.”

Eight months later the brewery sued the restaurant for trademark infringement, trade dress infringement, copyright infringement, deceptive trade practices, and unfair competition. According to the brewery, the restaurant had been infringing on the brewery’s intellectual property rights “for years” by: (1) using a logo that was nearly identical to the brewery’s copyrighted logo and (2) using the brewery’s trade dress designs, script, coloring, and marketing designs. The brewery sought a preliminary injunction in federal district court in Columbus, Ohio to prohibit the restaurant from continuing to use the brewery’s intellectual property. The court found that even though the brewery would likely succeed on the merits of its claims, it declined to issue the injunction.

For trademark owners, the case illustrates several points. First, the importance of timely objecting to an infringer. Second, that evidence of actual confusion will weigh heavily in favor of the trademark holder.

The brewery’s failure to object to the restaurant’s use of the marks ultimately proved fatal to its request for an order that the restaurant immediately stop using the brewery’s marks. The restaurant admitted that it had used the brewery’s logo since 2006, but argued that the brewery had allowed it to use that logo, without formal objection, until 2015, when the brewery sent the cease-and-desist letter. According to the restaurant, its reliance on the brewery’s actions (or lack thereof) prevented the brewery from asserting infringement. Given the facts and findings of record, the court concluded that: (1) the restaurant’s behavior was an active indication that the brewery would not assert its intellectual property rights against the restaurant; (2) the brewery’s nearly 20-year delay (from 1997 to 2015) in the assertion of its intellectual property rights was not excusable; and (3) the brewery’s delay prejudiced the restaurant. For those reasons, the court concluded that the brewery had acquiesced to the restaurant’s use of its trademarks and declined to issue an injunction because of the likely harm that a preliminary injunction would inflict upon the restaurant.

Nevertheless, the brewery’s acquiescence could be overcome if the court found that “inevitable confusion” had arisen from a defendant’s “continued dual use” of the marks at issue. In this case, the brewery provided numerous examples of actual confusion including Facebook posts, voicemail messages, email correspondence with customers, etc.). According to the court, that evidence showed that the general public did not know the difference between the brewery and the restaurant.

Consequently, the court found that the actual confusion about the brewery’s intellectual property would inevitably lead to public confusion regarding the source of that property. Given the evidence of actual public confusion, the court found that the public interest favored ruling for the brewery.

Yet, despite the paramount importance of “preventing confusion” and the likelihood that the brewery will ultimately win the case, the court held that the harm to the restaurant and the brewery’s “acquiescence” to the use of the marks outweighed these factors. Therefore the court denied the brewery’s request for an immediate order that the restaurant cease using the brewery’s marks.

The decision underscores the importance of trademark owners’ vigilance and quick action to protect their intellectual property. That being said, even in this case where immediate relief was not granted, the court has signaled that where trademark use results in consumer confusion, courts will ultimately favor clarity.