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Bbc Group Nv LLC v. Island Life Restaurant Group LLC

United States District Court, W.D. Washington, Seattle

September 20, 2019

BBC GROUP NV LLC, a Nevada Limited Liability Company, Plaintiff, Counterclaim Defendant,
v.
ISLAND LIFE RESTAURANT GROUP LLC, et al., Defendants, Counterclaim Plaintiffs.

          ORDER GRANTING IN PART DEFENDANT ISLAND LIFE’S MOTION FOR PARTIAL SUMMARY JUDGMENT

          RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This matter comes before the Court on Defendant Island Life Restaurant Group, LLC and co-owners Alex Prindle and Brian O’Connor (collectively, “Island Life”)’s Motion for Partial Summary Judgment. Dkt. #46. Plaintiff BBC Group NV LLC (“BBC”) opposes Island Life’s Motion. Dkt. #50. The Court has determined that oral argument is not necessary. Having reviewed the Motion, Plaintiff’s Response, Defendant’s Reply, and all documents submitted in support thereof, the Court GRANTS IN PART Defendant’s Motion for Partial Summary Judgment. For the reasons set forth below, the Court dismisses all of BBC s claims against Island Life and grants summary judgment on Island Life’s counterclaims under 15 U.S.C. §§ 1114, 1125.

         II. BACKGROUND

         In 2015, Alex Prindle and Brian O’Connor co-founded Island Life as a restaurant operation business in Washington state. Dkt. #28 at ¶¶ 1-3. The first “Bok a Bok” restaurant opened in June 2016, and there are now three “Bok a Bok” restaurants in Washington: one in Burien and two in Seattle. Id. at ¶¶ 4-5. The restaurants sell fast food including fried chicken, macaroni and cheese, biscuits and tacos. Id. at ¶ 6.

         On March 17, 2017, Island Life applied for a service mark for the name “BOK A BOK” with the United States Patent and Trademark Office. Id. at ¶ 8. The trademark was published for opposition on July 18, 2017 and registered on October 3, 2017 under U.S. trademark number 5301484. Dkt. #28-1 at 4-6. The logo shows the words “Bok a Bok” in lower case letters with a minimalistic depiction of a chicken head in yellow, red and black:

         (Image Omitted)

         In February 2018, Island Life received employment applications for a “BOK BOK” restaurant in Nevada owned by BBC. Dkt. #28 at ¶ 10. The logo used by the Nevada restaurant features the words “BOK BOK” in upper case yellow letters and, as described by BBC, “a full chicken cartoon silhouette” between the last two letters. Dkt. #50 at 10.

         (Image Omitted)

         On February 16, 2018, Mr. Prindle notified BBC that Island Life had trademarked the “Bok a Bok” name and asked that BBC cease and desist from using the “Bok Bok” name. Dkt. #28-2 at 2. On March 27, 2018, BBC’s Chief Financial Officer replied to Mr. Prindle’s letter asking if Island Life would allow them to use “Boq Boq Chicken” or “Boc Boc Chicken” or whether “there would be confusion between these proposals and your BOK A BOK trademark[.]” Dkt. #28-3 at 2. BBC explained that it planned to sell “Mediterranean and Levantine inspired cuisine” and intended to open “at least 5 different locations” within the next year. Id. BBC’s reply letter also noted its belief that “it is in everyone’s interest to work something out amicably.” Id.

         However, BBC did not change its restaurant’s name or reach an amicable agreement with Island Life. Instead, on March 30, 2018, BBC acquired a third-party mark “BOCBOC Chicken Delicious” from a New York restaurant. Dkt. #29-2 at 2. This mark is registered under U.S. trademark number 4768903 and features the words “BOCBOC Chicken Delicious” and three stylized feathers in orange-brown and rusty red colors.

         (Image Omitted)

         The agreement between BBC and Mr. Guang Yang Li, the Assignor of the third-party mark, states that BBC received the “BOCBOC Chicken Delicious and Design” trademark and associated goodwill in exchange for $50, 000. Dkt. #29-2 at 2. The agreement licenses the trademark back to the restaurant in New York, id. at 3, and requires the New York restaurant to “operate its business in accordance with the same requirement of production and service . . . as in the past” and to “maintain the quality of the Goods and Services or such related or similar goods and services sold under or in connection with the Trademarks . . . .” Id. at 5.

         On April 11, 2018, counsel for BBC notified Island Life that BBC “recently acquired the rights to trademark 4768903 for Bocboc Chicken Delicious” and demanded that Island Life cease and desist from using the “Bok a Bok” mark. Dkt. #28-4 at 2. Counsel for BBC claimed that BBC’s “BOCBOC” mark predated Island Life’s “Bok a Bok” mark, making BBC a senior rights holder. Id. In addition to threatening legal action, BBC explained it would allow Island Life to operate as “Bok a Bok” “for the time being” under the condition that Island Life did not open additional locations or transfer rights to anyone else. Id. at 3.

         On July 11, 2018, BBC filed this suit against Island Life and its owners seeking damages and permanent injunctive relief for trademark infringement violations, unfair competition, trademark counterfeiting, alter ego theory, civil conspiracy, and cancellation of the “Bok a Bok” trademark registration. See Dkt. #1. On September 10, 2018, Island Life answered BBC’s complaint with counterclaims asserting trademark infringement, unfair competition, dilution by tarnishment, trademark counterfeiting, and cyber piracy. See Dkt. #19.

         On March 28, 2019, this Court partially granted Island Life’s motion for preliminary injunction and enjoined BBC from expanding into western Washington. Dkt. #35. Island Life now moves for summary judgment dismissal of BBC’s claims and seeks summary judgment on certain counterclaims. Dkt. #46. Specifically, Island Life seeks summary judgment on its counterclaims for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and trademark infringement under Washington state law, RCW 19.77. Island Life also seeks a permanent injunction and attorney’s fees.

         III. DISCUSSION

         A. Legal Standard for Summary Judgment

         Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Material facts are those which might affect the outcome of the suit under governing law. Id. at 248. In ruling on summary judgment, a court does not weigh evidence to determine the truth of the matter, but “only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing Federal Deposit Ins. Corp. v. O’Melveny & Meyers, 969 F.2d 744, 747 (9th Cir. 1992)).

         On a motion for summary judgment, the court views the evidence and draws inferences in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255; Sullivan v. U.S. Dep't of the Navy, 365 F.3d 827, 832 (9th Cir. 2004). The Court must draw all reasonable inferences in favor of the non-moving party. See O’Melveny & Meyers, 969 F.2d at 747, rev’d on other grounds, 512 U.S. 79 (1994). However, the nonmoving party must make a “sufficient showing on an essential element of her case with respect to which she has the burden of proof” to survive summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         B. Trademark Counterfeiting Claims

         As an initial matter, both parties brought trademark counterfeiting claims under 18 U.S.C. § 2320. Dkt. #1 at ¶¶ 39-43; Dkt. #19 at ¶¶ 50-54. Because this is a criminal statute with no civil remedy provision, neither party has a cognizable claim. Accordingly, the Court dismisses both parties’ trademark counterfeiting claims under § 2320.

         C. BBC’s Claims against Island Life

         The Court will first address BBC’s claims against Island Life. For the foregoing reasons, summary judgment is appropriate as to all of BBC’s claims against Island Life.

         1. BBC’s Lanham Act Claims

         BBC claims that Island Life’s use of the “Bok a Bok” mark constitutes trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114, 1125, due to its likeness to BBC’s “BOCBOC Chicken Delicious” trademark. Dkt. #1 at ¶¶ 23-29; ¶¶ 34-38. The Court finds that BBC did not acquire rights to the “BOCBOC Chicken Delicious” mark and therefore has no basis for its Lanham Act claims.

         As a matter of law, BBC failed to acquire the rights to “BOCBOC Chicken Delicious” through assignment. When a trademark is acquired through assignment, “[t]he law is well settled that there are no rights in a trademark alone and that no rights can be transferred apart from the business with which the mark has been associated.” E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1289 (9th Cir. 1990) (citing Mister Donut of America, Inc. v. Mr. Donut, Inc., 418 F.2d 838, 842 (9th Cir. 1969)). Goodwill must accompany the assigned mark in order to maintain the continuity of the product or service symbolized by the mark. Gallo Winery, 967 F.2d at 1289 (citing 1 J. McCarthy, Trademarks and Unfair Competition § 18:1(C) (2d ed. 1984)).

         In analyzing whether goodwill was acquired, courts consider “whether the goods offered under the mark post-assignment are ‘substantially similar, ’ to those previously associated with it, or at least ‘sufficiently similar to prevent customers from being misled from established associations with the mark.’” Glow Indus., Inc. v. Lopez, 273 F.Supp.2d 1095, 1107 (C.D. Cal. 2003) (quoting Sugar Busters LLC v. Brennan, 177 F.3d 258, 266 (5th Cir. 1999)). An assignment without the associated goodwill, i.e. an assignment in gross, is invalid. BBC contends that the assignment was valid because (1) the restaurant services and menu selection are indeed “substantially similar”; and (2) BBC acquired the mark for legitimate business reasons and displays the “BOCBOC” mark in its restaurants.

         First, no reasonable juror could find that the restaurant services and menu selection at “BOK BOK” and “BOCBOC Chicken Delicious” are “substantially similar” so as to transfer goodwill. “Substantially similar” products must have more in common besides belonging to the same general category of products-they must also appeal to similar customer groups. Lopez, 273 F.Supp.2d at 1113; see also Clark & Freeman Corp. v. Heartland Co., 811 F.Supp. 137 (S.D.N.Y. 1993) (Finding that women’s pixie boots are not “substantially similar” to men’s shoes and/or men’s hiking boots and goodwill therefore did not transfer). BBC argues that both restaurants sell “specially prepared chicken, ” Dkt. #50 at 17, yet the trademarked product is not chicken-it is the restaurant selling it. “BOCBOC Chicken Delicious” restaurants serve Korean-style fried chicken in mall food courts, Dkt. #52-2 at 2, while “BOK BOK” restaurants in Nevada are stand-alone restaurants selling a variety of Mediterranean food. Dkt. #52-4; Dkt. #31-1. Because no reasonable juror could find continuity between restaurant chains selling two different cuisines in two different contexts, the Court finds the assignment was an “assignment in gross” and therefore invalid as a matter of law.

         BBC’s remaining argument is irrelevant to the question of whether goodwill was acquired. BBC claims that the assignment was valid because BBC acquired the mark for sound business reasons and displays the “BOCBOC” mark in its restaurants. Dkt. #50 at 18. A company’s reasons for acquiring a mark and its public display of the mark have no bearing on whether the products or services sold are “substantially similar” to transfer goodwill, and therefore do not change the analysis that the assignment was invalid.

         Because the Court finds the assignment of “BOCBOC Chicken Delicious” to BBC invalid as a matter of law, BBC has no basis for its infringement and unfair competition claims under the Lanham Act. Accordingly, the Court GRANTS summary ...


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