STANLEY A. BOONE, District Judge.
On June 25, 2014, Plaintiff E. & J. Gallo Winery ("Plaintiff") and Defendant Grenade Beverage LLC ("Defendant") filed cross motions for summary judgment. (ECF Nos. 56, 65.) The motions were referred to the undersigned magistrate judge for Findings and Recommendations pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 72.
The hearing on the motions for summary judgment took place on August 13, 2014. Steven Weinberg and Michael Salvatore appeared on behalf of Plaintiff and Steven Yuen appears on behalf of Defendant. For the reasons set forth below, the Court finds that Plaintiff is entitled to summary judgment and recommends that Plaintiff's motion be partially granted and Defendant's motion be denied.
Plaintiff filed this action on May 22, 2013. (ECF No. 1.) Plaintiff asserts trademark infringement and other related claims against Defendant arising from Defendant's marketing of an energy drink called "El Gallo" and the potential marketing of an energy drink called "El Gallito." Plaintiff claims Defendant's "El Gallo" products violate Plaintiff's "Gallo" trademark for wines.
The following facts were jointly submitted by both Plaintiff and Defendant as undisputed in their Joint Stipulation of Undisputed Facts in Support of Plaintiff E. & J. Gallo Winery's Motion for Summary Judgment, filed on June 25, 2014. (ECF No. 57.)
Plaintiff is a California corporation with its principal place of business in Modesto, California. (Joint Stipulation of Undisputed Facts in Supp. of Pl. E. & J. Gallo Winery's Mot. for Summ. J. ("JUF") No. 1.) Defendant is a California limited liability company with its principal place of business in Orange, California. (JUF No. 2.) The "GALLO" mark as used for wine products has been displayed in different formats over the years. (JUF No. 3.)
Plaintiff has sold wine under the "GALLO WIGNATURE SERIES" trademark since October 2011. (JUF No. 4.) GALLO wines can be found in many different areas of liquor stores and other off-premise retail stores. (JUF No. 5.) GALLO wines are currently sold in over 93,000 off-premise and 22,000 on-premise retailers located throughout the United States. (JUF No. 6.) Over 1.5 billion bottles of GALLO wines have been sold in the United States since 1996. (JUF No. 7.) GALLO wines currently are sold through over 235 wholesale distributors in the United States. (JUF No. 9.) Wines currently sold under a GALLO trademark include GALLO FAMILY VINEYARDS, GALLO FAMILY VINEYARDS ESTATE, GALLO FAMILY VINEYARDS SINGLE VINEYARD, GALLO FAMILY VINEYARDS SONOMA RESERVE, GALLO SIGNATURE SERIES, and GALLO vermouth. (JUF No. 10.)
Rooster Design logos have been displayed on all bottles of GALLO FAMILY VINEYARDS, GALLO FAMILY VINEYARDS ESTATE, GALLO FAMILY VINEYARDS SINGLE VINEYARD, GALLO FAMILY VINEYARDS SONOMA RESERVE, and GALLO SIGNATURE SERIES wines and GALLO vermouth sold in the United States since 2005. (JUF No. 11.) Over the years, Plaintiff has made extensive use of television, radio and print advertising in advertising and promoting GALLO wines. (JUF No. 12.) Over the last few years, Plaintiff has advertised GALLO FAMILY VINEYARDS wine on many popular websites reaching a wide spectrum of consumers, including the websites of the Huffington Post, Woman's Day, Hollywood, Recipe.com, Good House Keeping, IMDB, Food and Wine, Life and Style, ABC, BravoTV, Oprah, All Recipes, Parade, Better Homes and Gardens, Bazaar, the Weather Channel, Match.com, Taste of Home, US Magazine, Yahoo, and the Rachel Ray Show. (JUF No. 14.)
GALLO wines can be purchased online at numerous online alcoholic beverage retail websites. (JUF No. 15.) Many third party articles have been published over the years about the Gallo family, the Gallo Winery and Gallo products, including GALLO wines. (JUF No. 16.) Since the mid-1990s, Plaintiff has engaged in numerous co-promotional campaigns with partners such as the NFL and Heineken, in connection with marketing Plaintiff's GALLO wines. (JUF No. 17.) Plaintiff has produced and continues to produce a wide variety of point of sale displays and other materials for GALLO wines, which are and have for many years been displayed in both off-premise and on-premise retail locations. (JUF No. 18.) The "For All Your Families" campaign generated over 119 million impressions for the GALLO FAMILY VINEYARDS brand. (JUF No. 20.) Plaintiff's GALLO FAMILY VINEYARDS has been the sponsor of a campaign started in 2009 and still running called "Every Cork Counts" in which Plaintiff donates a certain amount of money to Meals on Wheels for every GALLO FAMILY VINEYARDS wine cork or photo of a GALLO FAMILY VINEYARDS wine cork submitted to Plaintiff by consumers. (JUF No. 21.)
In addition to the facts listed in the jointly submitted statement of facts, the following facts are undisputed, as Defendant concedes they are undisputed in its response to Plaintiff's separate statement of facts.
Plaintiff is the owner of U.S. trademark Registration No. 3091520 of a Rooster Design, which trademark has been in use since November 2005, which registration is valid and subsisting, and Plaintiff's exclusive rights in Reg. No. 3091520 are incontestable. (Def. Grenade Beverage LLC.'s Resp. to Pl. E. & J. Gallo Winery's Sep. Stmt. in Supp. of Mot. for Summ. J. ("Def.'s Resp.") No. 19.) Plaintiff is the owner of U.S. trademark Registration No. 2159050 of a Rooster Design, which registration is valid and subsisting, and Plaintiff's exclusive rights in Reg. No. 2159050 are incontestable. (Def.'s Resp. No. 20.)
GALLO wines, and virtually all of Plaintiff's wine products can be purchased online through Plaintiff's Barrel Room website
Defendant's first sale of its EL GALLO product was made to The Car Spa car wash in Irvine, CA, on or around October 20, 2011. (Def.'s Resp. No. 96.) Defendant has sold its EL GALLO product in Irvine, CA, Santa Ana, CA, Anaheim, CA, Los Angeles, CA, Corona, CA, Los Alamitos, CA, Fresno, CA, Austin, TX, Norwalk, CA, Las Vegas, NV, Lake Forest, CA, Mission Viejo, CA, Orange, CA, Phoenix, AZ, Bakersfield, CA, Laguna Beach, CA, Tustin, CA, Turlock, CA, La Habra, CA, Irwindale, CA, Porterville, CA, City of Commerce, CA, El Monte, CA, Manor, TX, Larkspur, CO, Centennial, CO, Aurora, CO, and Menlo Park, CA. (Def.'s Resp. No. 97.)
Defendant's EL GALLO product was sold at retail pricing that was determined by charging slightly more than ROCK STAR energy drink, and slightly less than MONSTER energy drink. (Def.'s Resp. No. 105.) At least one bar displayed the EL GALLO product next to alcoholic beverages. (Def.'s Resp. No. 106.) The EL GALLO product was promoted as a mixer for alcoholic beverages on a Colorado news program. (Def.'s Resp. No. 107.) Defendant was familiar with GALLO wines before the inception of Grenade Beverage LLC or the creation of the EL GALLO product. (Def.'s Resp. No. 108.) Defendant's distribution and advertising of its EL GALLO product were limited. (Def.'s Resp. No. 119.)
The following facts are undisputed, as Plaintiff concedes they are undisputed in its response to Defendant's separate statement of facts.
Plaintiff has never applied to register the EL GALLO mark with the United States Patent and Trademark Office. (Pl. E. & J. Gallo Winery's Resp. to Def. Grenade Beverage LLC's Separate Statement in Supp. of Mot. for Summ. J. ("Pl.'s Resp.") No. 2.) Plaintiff has never applied to register the EL GALLITO mark with the USPTO. (Pl.'s Resp. No. 4.)
Plaintiff has abandoned its claims for damages as well as for any other monetary relief in this action, except for costs and attorneys' fees should it prevail. (Pl.'s Resp. No. 9.)
Plaintiff has never sold any nonalcoholic beverages except for water and does not intend to sell any nonalcoholic beverages except for water. (Pl.'s Resp. Nos. 23-25.) Plaintiff has no plans to sell energy drinks. (Pl.'s Resp. No. 26.)
Under Federal Rule of Civil Procedure 56, "[a] party may move for summary judgment . . . if 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." Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case. . ."
Plaintiff argues that it is entitled to summary judgment because there is no genuine dispute as to any material fact with respect to its trademark claim. Trademark claims are governed by 15 U.S.C. § 1125, which prohibits the use in commerce of any word, term, name, symbol, or device, or any combination thereof, which is likely to cause confusion or to cause mistake or to deceive as to the affiliation, connection, or association of such person with another person or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. To state a trademark claim, a plaintiff must meet three basic elements: (1) distinctiveness, (2) nonfunctionality, and (3) likelihood of confusion.
"To be valid and protectable, a mark must be `distinctive.' Distinctiveness measures `the primary significant of the mark to the purchasing public.'"
Plaintiff has introduced evidence that the GALLO mark is federally registered and that Plaintiff owns that GALLO mark. (
Defendant's objection based upon the ownership of the El Gallo Giro trademark does not create a genuine dispute with respect to whether Plaintiff registered and owned the GALLO trademark. The fact that the El Gallo Giro trademark exists does not create a factual dispute regarding whether Plaintiff owned and registered the separate GALLO trademark.
Since Plaintiff has established that the GALLO mark has been properly registered, the burden shifts to Defendant to show that the mark is not protectable.
"A product feature is functional and cannot serve as a trademark if the product feature is essential to the use or purpose of the article or if it affects the cost or quality of the article, that is, if exclusive use of the feature would put competitors at a significant, non-reputation-related disadvantage."
There is no dispute that the GALLO mark is nonfunctional, as the term "GALLO" does not describe a feature of Plaintiff's products. Accordingly, the Court finds that Plaintiff has met the second element of a trademark infringement claim.
"The core element of trademark infringement is the likelihood of confusion, i.e., whether the similarity of the marks is likely to confuse customers about the source of the products."
When comparing marks, courts compare the marks in terms of appearance, sound and meaning.
Curiously, Plaintiff's motion for summary judgment fails to include any evidence which shows what Defendant's "El Gallo" product looks like or any evidence which shows how Defendant identified or distinguished its "El Gallo" product. The Ninth Circuit has directed trial courts to consider marks "as they appear in the marketplace" for similarity.
Even without analyzing the appearance of the EL GALLO mark, the Court concludes that the two marks are similar. Recently, the Ninth Circuit held that the "La Quinta" and "Quinta Real" marks are similar because the two marks have an identical dominant word: "Quinta": "This conclusion is supported by the fact that the dominant words frequently appear without anything more in the marketplace."
Further, there is also some evidence that consumers pronounce Plaintiff's mark in the same manner as Defendant's mark: Plaintiff introduces anecdotal evidence of witnesses overhearing the GALLO mark pronounced as both "GUY-YO" and as "GAL-LOW." (
Neither party has submitted much in the way of admissible evidence regarding the meaning of the Plaintiff's use of GALLO and the meaning of Defendant's use of EL GALLO. Without citing to any admissible evidence, Defendant argues that Plaintiff's use of GALLO refers to the surname of Ernest Gallo and Julio Gallo, who are the older brothers of owner Joseph Gallo, whereas Defendant's use of EL GALLO refers to the Spanish word for rooster. Plaintiff does not deny whether GALLO refers to Ernest and Julio Gallo, but argues that Plaintiff has marketed its GALLO products using rooster logos, suggesting that the GALLO mark has a double meaning. Since neither party has introduced admissible evidence regarding the meaning of GALLO and EL GALLO, the Court will not consider these arguments in ruling on the cross motions for summary judgment.
Finally, the Court rejects Defendant's argument that the doctrine of foreign equivalents somehow applies to eliminate any similarities between GALLO and EL GALLO. The doctrine of foreign equivalents states that foreign words from common languages are translated into English to compare the two marks.
The similarity in spelling between GALLO and EL GALLO shows that the marks are similar and this alone tilts this factor in Plaintiff's favor.
"Related goods are generally more likely than unrelated goods to confuse the public as to the producers of the goods."
Defendant argues that GALLO and EL GALLO are unrelated because Plaintiff's GALLO mark is primarily used to market Plaintiff's wine products whereas Defendant's EL GALLO product is a non-alcoholic energy drink. However, the products need not be exactly identical, as the test is whether a consumer would associate the two.
Moreover, it is undisputed that EL GALLO was promoted as a mixer for alcoholic drinks, making the two product lines closer in relationship than, say, wine and some other beverage less associated with alcohol, such as milk. Other courts have found products to be related despite minor differences in the type of goods or services at issue.
Courts generally view the relatedness factor using a sliding scale approach.
"The stronger a mark—meaning the more likely it is to be remembered and associated in the public mind with the mark's owner—the greater the protection it is accorded by the trademark laws."
The undisputed facts show that Plaintiff's GALLO mark is strong. The jointly submitted facts establish that GALLO products are sold in tens of thousands of stores across the United States, with 1.5 billion bottles of GALLO wines sold in the United States since 1996. (JUF Nos. 5-7.) Plaintiff has advertised GALLO extensively on television, radio, in print advertising and on the Internet. (JUF No. 12-14.) Plaintiff has spent over $6.4 million in 2012 and over $6 million in 2013 in advertising. (Def.'s Resp. No. 89.)
Defendant's brief includes a section entitled "The First Factor: Strength of the Mark Does not Favor Gallo." (Def. Grenade Beverage, LLC.'s Opp'n to Pl. E. & J. Gallo Winery's Mot. for Summ. J. 5:21-6:2.) However, the arguments presented therein are unrelated to the strength of mark issue. Defendant argues that Plaintiff does not own the "El Gallo" or "El Gallito" marks, but this fact is irrelevant for purposes of determining the strength of Plaintiff's GALLO mark. Defendant argues that Plaintiff failed to police other entities' use of the "El Gallo" mark, but, even if accepted as true, this fact is also irrelevant for purposes of determining the strength of the GALLO mark.
Defendant presents no relevant facts or argument disputing the strength of Plaintiff's GALLO mark. Accordingly, this factor weighs in favor of Plaintiff.
"When examining the marketing channels used by the competing companies, we consider where the goods or services are sold, the sales and marketing methods employed, and the class of purchasers exposed to the marketing efforts."
This factor is difficult to assess as there appears to be little evidence in the record regarding the marketing channels used by Defendant to sell and advertise its EL GALLO product. Plaintiff relies on excerpts from the deposition of Paul Sandford, but this testimony only states that Defendant
There may be some overlap in marketing channels, as it is undisputed that Defendant's EL GALLO product was advertised as a mixer for alcoholic beverages. (Def.'s Resp. No. 107.) Given that both products are beverages, there is a reasonable inference that their marketing channels will overlap to some degree since beverages are commonly sold in grocery stores and GALLO may be sold in the same grocery store as EL GALLO. However, at this stage, all ambiguities and reasonable inferences must be drawn in favor of the non-moving party.
Courts have held that persons seeking expensive goods and services will exercise more care and will be less easily confused compared to persons seeking inexpensive goods and services.
Plaintiff introduces evidence that GALLO wines and GALLO vermouth are regularly sold at prices from $5.99 per bottle to $9.99 per bottle. (Decl. of Michael J. Salvatore in Supp. of Pl.'s Mot. for Summ. J. ¶¶ 3-4.) Defendant objects to this evidence based upon lack of personal knowledge, inadmissible hearsay and inadmissible opinion testimony. However, Mr. Salvatore's declaration is based upon his visit to an actual retailer's website which sold GALLO products at the prices stated. Accordingly, Mr. Salvatore has personal knowledge of the fact that GALLO products can be found at retail at the prices stated and his testimony is therefore admissible. Defendant offers no other evidence or argument disputing Plaintiff's contention that consumers are likely to exercise less care and would be more easily confused because the goods at issue are relatively inexpensive. Therefore, this factor weighs in favor of Plaintiff.
"`The law has long been established that if an infringer "adopts his designation with the intent of deriving benefit from the reputation of the trade-mark or trade name, its intent may be sufficient to justify the interference that there are confusing similarities."`"
In this case, Defendant admitted that it was aware of Plaintiff's GALLO products before Defendant created its EL GALLO product. (Def.'s Resp. No. 108.) It is undisputed that Defendant reached out to Plaintiff via Twitter and via telephone in an attempt to co-promote Plaintiff's GALLO product and Defendant's EL GALLO product. (Def.'s Resp. No. 93.) It also worth noting that, in support of its opposition to Plaintiff's motion for summary judgment, Mr. Sandford, a "managing member" of Defendant, rather brazenly declared that he intends to resume sales of EL GALLO products since he learned that Plaintiff no longer seeks monetary damages from Defendant. (Decl. of Paul Sandford ¶ 3, ECF No. 72.6.) The fact that Plaintiff abandoned its claim for damages against Defendant does not speak to whether Defendant's use of its EL GALLO mark violates the Lanham Act. Mr. Sandford declaration suggests that he and his company find it acceptable to violate the Lanham Act so long as their conduct does not result in monetary damages, which suggests bad faith.
However, Defendant points to evidence rebutting an inference of intent. Mr. Sandford testified that the name EL GALLO was selected due to the perception in Hispanic culture of roosters being powerful and energetic.
Based upon the foregoing, for purposes of ruling on the pending motions for summary judgment, the Court cannot conclude that this factor weighs in either party's favor.
"Evidence that use of the two marks has already led to confusion is persuasive proof that future confusion is likely."
Plaintiff points to two instances of actual confusion from consumers regarding the GALLO and EL GALLO marks. Mr. Harline, an employee with Defendant, testified at a deposition that, on two occasions, people mentioned GALLO wines to Mr. Harline in connection with a sale call or activity made regarding Defendant's EL GALLO product. (Decl. of Michael J. Salvatore in Supp. of Pl.'s Mot. for Summ. J., Ex. 22, pg. 65:14-66:5.) Regarding the first instance, Mr. Harline testified that he vaguely recalled a conversation with someone from the area where Plaintiff's business was located who associated Plaintiff's GALLO with Defendant's GALLO. (
Defendant objects to Mr. Harline's testimony on hearsay grounds. However, Plaintiff does not introduce the statements of these unidentified persons to prove the truth of the matter stated therein, Plaintiff seeks to admit Mr. Harline's testimony as evidence that conversations occurred with one of Defendant's representatives where a member of the consuming public inquired as to an association between GALLO and EL GALLO. Accordingly, this evidence is not hearsay.
Defendant also argues that these conversations are not evidence of actual consumer confusion. This argument is without merit, as the mere fact that consumers inquired about a possible relationship between GALLO and EL GALLO evidences a certain degree of confusion regarding the two brands. Accordingly, this factor still weighs in favor of Plaintiff.
Finally, Defendant argues that Plaintiff has submitted no evidence of consumer confusion within this district. Defendant attempts to revive a venue argument already rejected by the Court in denying Defendant's motion to dismiss. (
"When there is `a strong possibility that either party may expand his business to compete with the other,' this factor weighs in favor of finding `that the present use is infringing.'"
The only evidence of expansion presented by Plaintiff is Plaintiff's statement that it has "demonstrated a commitment to diversifying its beverage offerings" and evidence that at least one of Plaintiff's competitors markets both alcoholic and non-alcoholic beverages. Even if uncontroverted, neither of these facts are convincing with respect to the likelihood of expansion factor. Plaintiff has not voiced any intent to expand into the energy drink market which Defendant's product occupies. Accordingly, this factor does not weigh in Plaintiff's favor.
Assessing the totality of the facts in the record, the Court finds that Defendant's use of the EL GALLO mark is likely to confuse consumers with respect to Plaintiff's GALLO mark. Five of the
Plaintiff argues that it is entitled to summary judgment on all its claims because the foregoing analysis with respect to Plaintiff's trademark claims applies to Plaintiff's remaining claims. In addition to Plaintiff's trademark claim under the Lanham Act, Plaintiff asserted claims for Use of False Designations of Origin and False Representations in Commerce under the Lanham Act, for Unfair Competition under the Lanham Act, and for common law unfair competition and trademark infringement under California law.
The legal standards for claims for false designation of origin or sponsorship under the Lanham Act, 15 U.S.C. § 1125(a)(1), are largely identical to the legal standards for trademark infringement, 15 U.S.C. § 1114.
The legal standards for common law trademark and unfair competition claims under California law are substantially similar to the standards under the Lanham Act.
In sum, the Court's analysis with respect to Plaintiff's trademark infringement claims is applicable to Plaintiff's remaining claims, and therefore the Court finds that Plaintiff is entitled to summary judgment on all claims.
The only relief requested by Plaintiff is a permanent injunction prohibiting Defendant from using the EL GALLO and EL GALLITO marks. Defendant argues in its motion for summary judgment that Plaintiff is not entitled to injunctive relief. "[A] plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction."
As an initial matter, the Court finds that Plaintiff is not entitled to injunctive relief regarding Defendant's use of the EL GALLITO mark. None of the claims asserted in the complaint challenge the legality of the EL GALLITO mark.
The complaint simply did not put the legality of the EL GALLITO mark at issue in this action and Plaintiff attempts to improperly bootstrap injunctive relief with respect to the EL GALLITO mark in a lawsuit that is solely concerned with the legality of the GALLO mark. "An injunction should be `tailored to eliminate only the specific harm alleged. . . .'"
Addressing the first factor, Plaintiff argues that irreparable injury can be presumed in trademark law. However, the Ninth Circuit has held that "actual irreparable harm must be demonstrated to obtain a permanent injunction in a trademark infringement action."
Although irreparable injury cannot be presumed in trademark cases, the Court finds that Plaintiff has submitted sufficient evidence supporting a finding of irreparable injury. Plaintiff relies predominantly upon the declaration of Anna Bell in support of a finding that irreparable injury exists. Ms. Bell is the director of marketing for Plaintiff. (Decl. of Anna Bell in Supp. of Pl.'s Mot. for Summ. J. ("Bell Decl.") ¶ 2.) In her capacity as director of marketing, Ms. Bell works on brand strategy and execution, developing and refining communications with retailers and consumers, defining the strategy for the design of marketing collateral, overseeing and analyzing research relating to consumers, and overseeing advertising and promotional programs. (Bell Decl. ¶ 2.) Bell also stated:
(Bell Decl. ¶ 75.) Bell further stated:
(Bell Decl. ¶ 76.)
Defendant objects that Bell's statements are premised upon her inadmissible opinion that mixing energy drinks with alcoholic beverages promotes irresponsible drinking. This objection is valid, as Bell has not established her qualification to render such an opinion. However, Bell, as director of marketing for Plaintiff, can testify that it is Plaintiff's
This distinction is critical. Courts have recognized that, in trademark cases, the injury caused by the infringement manifests as the loss of control over a business' reputation, a loss of trade and loss of goodwill.
While Plaintiff may not have introduced admissible evidence to support the proposition that energy drinks are associated with irresponsible drinking or that an association with energy drinks would be harmful to Plaintiff's reputation, it is enough that Plaintiff has introduced evidence of loss of control over their own business reputation. Plaintiff's marketing director testified that Plaintiff's brand image does not encompass energy drinks and trademark law affords Plaintiff the right to control its branding and image via the legal right to control the usage of the GALLO mark. Defendant's actions rob Plaintiff of this control, which is a sufficient showing of irreparable harm.
Defendant argues that Plaintiff cannot show irreparable harm because other companies have used trademarks that include the word "Gallo." Defendant's argument has no merit. The fact that Plaintiff permits other entities to use "Gallo" in certain contexts says nothing about whether the harm caused by Defendant's use is irreparable. Moreover, Defendant argues that Plaintiff's licensing of various marks using the term "Gallo" shows that Plaintiff is not actively policing the mark, when in fact the opposite is true. Plaintiff's various licensing agreements with other entities shows that it is actively asserting control over other entities' use of these marks. The fact that Plaintiff permits other entities to use Gallo under licensing agreements does not give Defendant free reign to also use Gallo and does not demonstrate that Defendant's wrongful use is reparable. Accordingly, this factor weighs in favor of a permanent injunction.
Courts have broadly accepted the general proposition that, even after the Supreme Court's decision in
Defendants' raises several arguments in support of its contention that remedies at law are adequate. First, Defendant argues that Plaintiff entered into a licensing agreement with another companies involving the use of the word "Gallo" on various products. However, the fact that Plaintiff was able to negotiate agreements involving the use of the word "Gallo" in other contexts does not demonstrate that the damages
Defendant argues that the balance of the equities does not favor Plaintiff because it would somehow be inequitable to allow Plaintiff to obtain equitable relief in the form of an injunction when Plaintiff abandoned its claims for monetary damages. This argument has no basis in fact, law or logic. The Court is aware of no authority which suggests that claims for damages are a prerequisite to equitable relief such as an injunction. Moreover, there are many valid reasons for Plaintiff to abandon a claim for damage, such as difficulty in ascertaining damages in cases such as this, where the extent of damage caused by Defendant's trademark infringement may not yet be great or easily calculated, but Plaintiff wishes to prevent future damage before it occurs.
Defendant also argues that various other entities have used the word "Gallo" in marks without Plaintiff taking legal action against them. Defendant cites no authority for the proposition that this fact is relevant in any way, nor is the Court aware of any such authority.
Moreover, the equities favor Plaintiff as Defendant has brazenly admitted that it would continue to market and sell products under the EL GALLO mark simply because Plaintiff has dropped its claim for monetary damages.
Based upon the foregoing, the Court finds that the balance of equity and public interest factors weigh in favor of a permanent injunction.
For the reasons set forth above, all four factors weigh in favor of a permanent injunction enjoining Defendant from marketing or selling products using the EL GALLO mark. Accordingly, the Court recommends that a permanent injunction be issued.
Based upon the foregoing, the Court finds that Plaintiff is entitled to summary judgment. The Court finds that a permanent injunction is the appropriate remedy prohibiting Defendant from further using the EL GALLO mark. However, the Court does not enjoin Defendant from using the EL GALLITO mark.
Accordingly, it is HEREBY RECOMMENDED that:
These Findings and Recommendations are submitted to the United States District Judge assigned to this case, pursuant to the provisions of 28 U.S.C. § 636 (b)(1)(B) and Rule 304 of the Local Rules of Practice for the United States District Court, Eastern District of California. Within fourteen (14) days after being served with a copy, any party may file written objections with the court and serve a copy on all parties. Such a document should be captioned "Objections to Magistrate Judge's Findings and Recommendation." The Court will then review the Magistrate Judge's ruling pursuant to 28 U.S.C. § 636 (b)(1)(C). The parties are advised that failure to file objections within the specified time may waive the right to appeal the District Court's order.
(Compl. ¶¶ 16, 17.) However, Plaintiff never alleged or claimed that the EL GALLITO mark was used in violation of the Lanham Act. EL GALLITO is not mentioned at all within the four claims for relief, whereas EL GALLO is specifically alleged to constitute an infringement on the GALLO trademark. (
