Wednesday, December 09, 2020

Pirate donut's TM claim against Dunkin X'ed out

Grazette v. Bitcoin of America, LLC, 2020 WL 6789352, No. 19-CV-4837 (MKB) (E.D.N.Y. Sept. 30, 2020)

Despite the main name here, the question presented is whether the design on a gift card sold by Dunkin’ Donuts “counterfeit[s]” the trademarked logo for Grazette’s doughnut shop in violation of the Lanham Act and NY’s GBL. The court dismissed the claims against the moving defendants (and ordered Grazette, pro se, to show cause why the remaining claims shouldn’t be dismissed).

Grazette makes and sells vegan doughnuts. In 2018, he designed a logo, “Sprinkle Roger,” consisting “of a circular face design shaped like a donut consisting of two x[-]shape[d] eyes and a smaller inner circular nose in the middle with sprinkles within the outer circle and cross bones underneath.” The “Sprinkle Roger” mark was designed to “appeal to an edgy, gritty and ethical crowd ... by signaling” that his product was gluten-free and vegan. He made business cards and stickers with the logo on them.

In 2019, Dunkin’ “advertised a brand new gift card on their ... [Instagram] page,” which allegedly“counterfeit[ed]” the trademark. That year, it also announced delivery and plant-based (vegan) options. The card depicts the brightly colored letters “XO,” with the “O” replaced by a doughnut with sprinkles. Grazette disputed whether the card was meant to be viewed horizontally.

Grazette's mark wasn’t fanciful because it included an image of a doughnut, but had “at least a moderate degree of inherent distinctiveness.” However, there were no allegations of significant sales using the mark, and it had only been alleged to be in commercial use for a short time (Oct. 2018).

Similarity strongly favored Dunkin’. There was no allegation that the colorful Dunkin’ card was intended to be “edgy,” and its colorful design “supports the conclusion that it is intended to give a different impression than Plaintiff’s mark.”

Proximity/no gap to bridge: favored Grazette.

Actual confusion: Grazette indicated that he showed two items to store employees, and at least one called them “the same.” The absence of actual confusion was neutral because of the short time on the market.

Bad faith: Even assuming Dunkin’ knew of the mark, “it is implausible that the Dunkin’ Defendants, a longstanding national brand, had any ‘intention of capitalizing on [P]laintiff’s reputation and goodwill and any confusion between his and the [Dunkin’ Defendants’] product,’ when Plaintiff markets and sells his products to a niche market.”

Quality: favors neither party, assuming that Grazette is correct that consumers consider vegan, gluten-free doughnuts to be entirely different products than those sold by Dunkin’.

Consumer sophistication: Dunkin’ contended that Grazette’s “allegations suggest that his buyers ... are sophisticated, since they likely have dietary restrictions around gluten and animal products.” But the products at issue are inexpensive, so this slightly favored Grazette.

On balance, likely confusion wasn’t plausible:

Both marks are associated with doughnut companies and include a sprinkle doughnut and crossed lines in the design, but the similarities end there. A comparison of the “Sprinkle Roger” mark and the “XO” mark (paired with Dunkin’s logo) reveals that they give starkly different impressions.

The other factors were neutral or weakly in favor of Grazette.

Also, there was no counterfeiting, which requires “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” A mark isn’t counterfeit when consumers would recognize the differences on cursory inspection; the differences here were enough.

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