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.
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
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:
(Doc. 11 at 25.) The motion is now ripe for decision.
"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
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.
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 individual factor will be case-specific. Although some factors—such as the similarity of the marks and whether the two companies are direct competitors—will always be important, it is often possible to reach a conclusion with respect to the likelihood of confusion after considering only a subset of the factors." Brookfield Commc'ns, Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1054 (9th Cir. 1999) (citation omitted).
Here, Traeger Grills asserts trademark infringement claims regarding two marks: the Traeger mark and the Traeger Barn. The Court will address the merit of each of these claims in turn.
It is undisputed that Traeger Grills possesses valid ownership of and has previously used the Traeger mark in commerce. (Doc. 11 at 12-13; Doc. 31 at 7.) Further, Dansons does not dispute that nearly all the Sleekcraft factors support a finding that confusion is likely. Indeed, the Court's independent weighing of the Sleekcraft factors leads it to find a likelihood of confusion.
First, the Traeger mark is strong, having acquired distinctiveness through secondary meaning after use in commerce for over three decades in association with the
Dansons instead contends that Traeger Grills has not shown a likelihood of success on its Traeger mark trademark infringement claim because (1) the fourth Sleekcraft factor weighs against a finding that confusion is likely and (2) Dansons' use of the Traeger name constitutes fair use. (Doc. 31 at 8-12.)
To this first point, Dansons asserts that insufficient or no
Regardless, Traeger Grills is not required to provide proof of actual confusion for the Court to find a likelihood of confusion at the preliminary injunction stage. See Acad. of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1456 (9th Cir. 1991) (citation omitted) ("[I]n this circuit, actual confusion is not necessary to a finding of likelihood of confusion under the Lanham Act."). Therefore, the fact that Traeger Grills already has produced various examples of actual confusion is significant and weighs in favor of a finding that confusion is likely. Brookfield, 174 F.3d at 1050.
Dansons next asserts a "classic fair use" defense, contending that Dansons is not using "Traeger" as a trademark, but only "to identify individuals named Joe Traeger and Brian Traeger." (Id. at 9.) In order to succeed on the affirmative defense of classic fair use, "[a] defendant must show that its use is (1) other than as a trademark, (2) descriptive of the defendant's goods, and (3) in good faith." Marketquest Grp., Inc. v. BIC Corp., 862 F.3d 927, 935 (9th Cir. 2017) (citing 15 U.S.C. § 1115(b)(4)). Dansons' classic fair use defense is not likely to succeed. First, Dansons' use of images of the Traeger mark on the Traeger Barn (see, e.g., Docs. 11-3 at 29; 11-4 at 3, 7, 13, 17) seeks to attract attention rather than to describe the nature of its products.
Traeger Grills therefore has demonstrated that it likely will succeed on its Traeger mark trademark claim.
Traeger Grills also has shown a likelihood of success on the merits of its Traeger Barn
It is undisputed that Traeger Grills has never applied to federally register the Traeger Barn as a mark. Thus, in order to prove valid ownership of the Traeger Barn image, Traeger Grills must establish common law trademark rights to it. To make this showing, Trager Grills must demonstrate (1) prior adoption of the mark
Under this standard, Traeger Grills likely has common law trademark rights to the Traeger Barn image. Turning to the first prong, Traeger Grills has shown that TII adopted the Traeger Barn as a mark in association with its products as early as 2005.
Next, the Court concludes after weighing the Sleekcraft factors
Traeger Grills therefore has shown that it likely will succeed on its Traeger Barn trademark claim.
In its right of publicity claim, Traeger Grills asserts that Dansons' use of Joe and Brian Traeger's name, likeness and goodwill in connection with the manufacture, marketing, and sale of its grills and grill-related products violates Traeger Grills' exclusive right to such use. (Doc. 1 at 48-49.) Under Arizona law, a cause of action may be brought "against one who appropriates the commercial value of a person's identity for purposes of trade[] in
To determine whether these rights were likely assigned to Traeger Grills, the Court looks to the 2006 IPRAA. To begin, neither party disputes that the agreement is governed by Florida law. Under Florida law, "[w]here the language in a[] contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning[.]" Wash. Nat'l Ins. Corp. v. Ruderman, 117 So.3d 943, 948 (Fla. 2013) (citation omitted). However, "when the terms of the contract are ambiguous ... parol evidence is admissible to `explain, clarify or elucidate' the ambiguous term." Strama v. Union Fidelity Life Ins. Co., 793 So.2d 1129, 1132 (Fla. Dist. Ct. App. 2001). Having reviewed the IPRAA, the Court finds that Joe and Brian Traeger likely assigned the exclusive right of publicity to their names, likenesses, and goodwill to Traeger Grills.
In the IPRAA, Joe, Brian, Mark and Randy Traeger (the "Sellers") assign "all of their right title and interest in and to the Intellectual Property Rights[,]" "used or useful in the conduct of the business" to Trager Grills (the "Buyer") in exchange for $9,000,000. (Doc. 11-1 at 69-71.) The IPRAA confirms that "[a]ll the Intellectual Property Rights are valid and subsisting and will provide the Buyer right to exclude all others from the use thereof[.]" (Id. at 75.) To decide what rights were specifically assigned, the Court must determine the meaning of Intellectual Property Rights, per the agreement. The IPRAA's definition section explains,
(Id. at 86) (emphasis added.) Looking to the above section, the IPRAA likely assigned Brian and Joe Traeger's likenesses to Traeger Grills. Dansons argues that Brian and Joe only assigned rights to their likenesses that were previously used in advertising, citing to the list within Exhibit A. (Doc. 31 at 12) (transferring "likenesses of people and images used in advertising[.]") However, the IPRAA and Exhibit A, itself, make clear that Exhibit A is a non-exclusive list of the rights assigned in the agreement. The IPRAA's definition section reads much broader, assigning "likenesses or other intellectual property held by the Sellers ... used or useful... within the scope of the business... whether or not reduced to writing." (Doc. 11 at 86.)
The IPRAA also likely assigned to Traeger Grills the exclusive rights to Joe and Brian Traeger's personal goodwill. In doing so, the IPRAA necessarily assigned exclusive rights to the Traeger name. Exhibit A provides that the rights assigned by the agreement include "[a]ll of the patents,
Florida law "distinguishes between personal goodwill, which derives from a person's reputation, and enterprise goodwill,
Traeger Grills also has demonstrated that Dansons likely misappropriated those rights. This misappropriation began when Dansons issued a marketing release on September 20, 2018. (Doc. 11-3 at 32-33.) The release, which includes three images of Joe Traeger and two images of Brian Traeger, tells the story of Traeger family, references the Traeger Barn and explains the origin of the wood pellet grill. (Id.) The misappropriation continued when Dansons issued its March 14, 2019 release announcing the Founders Series Grills "brought to you proudly by Joe Traeger," and including an image of Joe next to Dan Thiessen. (Doc. 11-3 at 36-37.) Thereafter, the misappropriation continued through Dansons' social media activity and the Founders Series promotional events. (Doc. 11-3; Doc. 11-4.)
In sum, Traeger Grills likely will succeed on its right of publicity claim.
Irreparable injury is likely in the absence of an injunction where damage
The balance of equities factor "requires the court to `balance the competing claims of injury' and `consider the effect on each party of the granting or withholding of the requested relief.'" Mendoza v. Garrett, 358 F.Supp.3d 1145, 1181 (D. Or. 2018) (quoting Winter, 555 U.S. at 24, 129 S.Ct. 365.). Traeger Grills argues that the balance of hardships "tips sharply" in its favor. (Doc. 11 at 22.) Absent injunctive relief, Traeger Grills may suffer "further loss of control of and harm to its goodwill, exacerbated by additional customer confusion." (Id.)
Conversely, Dansons argues that a preliminary injunction should not issue in light of "Dansons' reliance on [Traeger Grills'] silence." (Doc. 31 at 16.) In doing so, Dansons appears to assert a laches argument of sorts, contending that Traeger Grills' failure to resolve its conflict informally with Dansons and thereby "allowing" over a year of alleged infringement to take place has made Dansons dependent on the allegedly infringing business strategy. (Id.) The Court disagrees. Traeger Grills sent Dansons' CEO a cease and desist letter on September 21, 2018, and its decision not to settle the conflict out of court does not equate with implicit consent to Dansons' behavior. In addition, in determining the merit of a laches argument, the Court considers the good faith of the junior user. E-Systems, Inc. v. Monitek, Inc., 720 F.2d 604, 607 (9th Cir. 1983). Dansons' argument—that it should be allowed to engage in possible infringement because Traeger Grills failed in preventing it—hardly supports the notion that Dansons is acting in good faith.
Furthermore, the Ninth Circuit has approved the entry of a preliminary injunction when the harm complained of resulted from a defendant's allegedly infringing conduct, even where the defendant presented evidence that the injunction would be fatal to its business. See 2Die4Kourt v. Hillair Capital Mgmt., LLC, 692 F. App'x 366, 369 (9th Cir. 2017) (citing Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330, 1338 (9th Cir. 1995)); Am. Rena Int'l Corp. v. Sis-Joyce Int'l Co., 534 F. App'x 633, 636 (9th Cir. 2013). Dansons has not shown that an injunction would be fatal to its business. In fact, it has made no pertinent allegation as to the extent that its business would suffer in the face of an injunction.
An injunction that seeks to prevent confusion to consumers in a trademark case is in the public interest. Internet Specialties West, Inc. v. Milon-DiGiorgio Enters., Inc., 559 F.3d 985, 993 (9th Cir. 2009); Inwood Labs., Inc. v. Ives Labs. Inc., 456 U.S. 844, 854 n.14, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982); Opticians Ass'n of Am. v. Indep. Opticians of Am., 920 F.2d 187, 197 (3d Cir. 1990) (defining the "public interest" for a preliminary injunction in a trademark case as "most often a synonym for the right of the public not to be deceived or confused"). However, Dansons contends that the "de minimus amount of confusion [in this case] should not outweigh the overwhelming public interest in favor of fair competition." (Doc. 31 at 18 (citing Monitek, 720 F.2d at 607.)
The Court must balance the public's interests on a case-by-case basis. Monitek, where the public's interest in fair competition outweighed its interest in preventing consumer confusion, is distinguishable. There, the Ninth Circuit reversed a judgment enjoining Monitek from using its trademark and tradename—because of its similarity to the plaintiff Montek's name and mark—where Monitek adopted its name in good faith ignorance of Montek, both companies operated for years without knowledge of the other, and the companies produced complementary products, leading to a reduced likelihood of consumers confusion. Monitek, 720 F.2d at 606-07. The Court found, on balance, that the public interest favored encouraging free competition. However, the factors supporting that finding are not present here. Rather, Dansons has used the Traeger name and barn and contracted with Joe and Brian Traeger, despite the APA and IPAA and with full knowledge of Traeger Grills' existence as its main competitor. Considering the higher risk of consumer confusion, lack of good faith usage on the part of Dansons, and effect of the APA and IPAA, the interest in preventing consumer confusion outweighs the interest in encouraging free competition. Consequently, an injunction is in the public interest.
For the foregoing reasons, Traeger Grills is entitled to the preliminary injunction it seeks. The Court will not require Traeger Grills to post bond, given that Dansons has not requested the Court do so or submitted evidence as to what kind of bond would be appropriate and adequate under these circumstances. See Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 883 (9th Cir. 2003) (affirming decision of the district court to not require plaintiffs to post bond where defendant did not "ask the court to set a bond or submit any evidence as to what damages she might incur as a result of the injunction.")
Dansons is hereby enjoined from: