Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Stockade Companies, LLC v. Kelly Restaurant Group, LLC

United States District Court, W.D. Texas, Austin Division

May 31, 2017

STOCKADE COMPANIES, LLC and STOCKADE FRANCHISING, LP, Plaintiffs,
v.
KELLY RESTAURANT GROUP, LLC, Defendant.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE

         Before the Court in the above-entitled matter is Plaintiffs' Motion for Preliminary Injunction. (Dkt. 14). Having reviewed the instant motion, relevant law, and the entire case file, the Court finds that the motion should be GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND AND OVERVIEW

         Plaintiffs Stockade Companies, LLC and Stockade Franchising, LP (collectively, “Plaintiffs” or “Stockade”) own and license the trademarks for the Sirloin Stockade, Coyote Canyon, and Montana Mike's restaurants. (Compl., Dkt. 1, ¶ 1). On June 4, 2014, Stockade entered into fifteen franchise agreements with Defendant Kelly Restaurant Group (“KRG” or “Defendant”). (Id. ¶ 17). KRG defaulted on the royalty payments due under the franchise agreements in May 2016. (Id. ¶ 25). On January 30, 2017, Stockade sent KRG a Notice of Default, Demand for Payment, and Opportunity to Cure (collectively, “the Default Notice”) (Id. ¶ 27). The Default Notice stated that KRG was in default and gave KRG until February 10, 2017 to pay all amounts due. (Id.). KRG failed to cure the default by that date. (Id. ¶ 28). Stockade then sent KRG a Notice of Termination, which advised that the franchise agreements had terminated and that KRG “was to immediately cease use” of any proprietary marks. (Id. ¶ 29). KRG has continued to use Stockade's proprietary marks and to operate multiple Sirloin Stockade, Coyote Canyon, and Montana Mike's restaurants. (Id. ¶ 30).

         On February 24, 2017, Stockade filed suit in this Court. (Dkt. 1). It subsequently filed a Motion for Preliminary Injunction, which asks the Court to (1) immediately enjoin KRG from infringing on or otherwise using any of Stockade's proprietary marks, (2) immediately enjoin KRG from violating the noncompetition provisions in Section 7.04 of the franchise agreements, and (3) immediately enjoin KRG from using or transferring Stockade's confidential information. (Mot. Prelim. Inj., Dkt. 14, at 2-3).

         KRG does not dispute Stockade's allegations regarding KRG's default and ongoing use of Stockade's proprietary marks. (Resp., Dkt. 18). Instead, it argues that it “wants nothing more than to de-brand its operating restaurants” and “has, on multiple occasions, offered to de-brand pursuant to a reasonable de-branding schedule.” (Id. at 5). KRG is especially opposed to any suggestion by Stockade that the non-competition provisions of the franchise agreements should be interpreted to prevent KRG from operating the restaurants in question even after successful re-branding. (Id. at 9).

         The Court held a hearing on the Motion for a Preliminary Injunction on May 12, 2017. (Dkt. 22).

         II. LEGAL STANDARD

         A preliminary injunction is an extraordinary remedy, and the decision to grant such relief is to be treated as the exception rather than the rule. Valley v. Rapides Parish Sch. Bd., 118 F.3d 1047, 1050 (5th Cir. 1997). “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. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The party seeking injunctive relief must “carr[y] the burden of persuasion on all four requirements.” PCI Transp. Inc. v. W. R.R. Co., 418 F.3d 535, 545 (5th Cir. 2005).

         III. DISCUSSION

         Stockade requests three separate types of injunctive relief. Specifically, it asks the Court to enjoin KRG from (1) infringing on or otherwise using any of Stockade's proprietary marks; (2) violating the noncompetition provisions in Section 7.04 of the franchise agreements; and (3) using or transferring Stockade's confidential information. (Mot. Prelim. Inj., Dkt. 14, 2-3). The Court will apply the four-part rubric detailed above to each of these requests in turn.

         A. KRG's Use of Stockade's Proprietary Marks

         Stockade asserts that it is entitled, under both the Lanham Act and Texas law, to an injunction preventing KRG from infringing on or otherwise using any of Stockade's proprietary marks. (Id. at 2). The Court agrees.

         Stockade's proprietary marks are registered with the United States Patent and Trademark Office, (Mot. Prelim. Inj., Dkt. 14, at 4-5), and KRG does not dispute that it continues to operate restaurants using those proprietary marks. Where such infringement exists, “all that must be proven to establish liability and the need for an injunction against infringement is the likelihood of confusion-injury is presumed.” Abraham v. Alpha Chi Omega, 708 F.3d 614, 626-27 (5th Cir. 2013); see also Quantum Fitness Corp. v. Quantum Lifestyle Ctrs. L.L.C., 83 F.Supp.2d 810, 831 (S.D. Tex. 1999) (“When a likelihood of confusion exists, the plaintiff's lack of control over the quality of the defendant's goods or services constitutes an ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.