JOSE E. MARTINEZ, UNITED STATES DISTRICT JUDGE
THIS CAUSE came before the Court on Plaintiffs Motion for a Preliminary Injunction against Defendants SANDBAR BAY, LLC, ALBERTO BORRERO, and JOSEPH LONGO (collectively, Defendants) [ECF No. 5]. Defendants subsequently filed a response in opposition [ECF No. 27]. This Court referred all matters relating to Plaintiffs Motion for Preliminary Injunction to the Honorable Magistrate Judge to take all necessary and proper action as required by law with respect to Plaintiffs Motion for Preliminary Injunction [ECF No. 6]. The Magistrate Judge held an evidentiary hearing on Plaintiffs Motion for Preliminary Injunction [ECF No. 30] and issued a Report and Recommendation, recommending that Plaintiffs Motion for Preliminary Injunction be DENIED [ECF No 47]. Plaintiff timely filed its objections to the Report and Recommendation (Plaintiffs objections) [ECF No. 50] and Defendants also timely filed their objection to the Report and Recommendation (Defendants objection) [ECF No. 49]. The Court has reviewed the entire file and record, has made a de novo review of the issues that both sets of objections to the Report and Recommendation present and is otherwise fully advised in the premises.
I. Background
Plaintiff has operated a sports bar in Coconut Grove, Sandbar Sports Grill since 1999 [ECF No. 47 ¶ 4]. On July 28, 2017, Plaintiff registered the Sandbar Name and the Sandbar Logo with the State of Florida, with said marks having been used since May 25, 1999 in connection with bar and restaurant services. Id. ¶ 8. Sandbar Sports Grill in Coconut Grove includes its logo in its menu and on a sign hanging above the bar. Id. ¶ 9. In addition to its logo, Sandbar Sports Grill in Coconut Grove also has the following slogans: Home of the Fish Taco and Get Rescued From Ordinary Food. Id. ¶ 4. Since its opening, Sandbar Sports Grill in Coconut Grove has won awards from various local newspapers and blogs, including the New Times Sports Bar of the Year Award, which it has won multiple times, as recently as 2017. Id. ¶ 5. Sandbar Sports Grill has a social media presence, maintain[ing] social media accounts with Instagram, Twitter, and Facebook and also markets itself on local radio, advertises in the Miami Hurricanes program guide, and places ads on social media. Id. ¶¶ 10-11.
Defendant Longo owned an interest in the Sandbar Sports Grill in Coconut Grove until he decided to move out of Miami for personal reasons in 2013 [ECF No. 48, at 55:9-15]. At that time, Defendant Longo sold his shares to Plaintiffs principal, Michael Scott Perrin (Perrin). Id. at 59:18-20. Defendant Longo also signed a document titled Sale, Transfer and Assignment, and Covenant, which he considered a license for him to use the Sandbar name, so long as it was not within a ten-mile radius from the Sandbar Sports Grill in Coconut Grove [ECF No. 47 ¶ 33-34]. Defendant Borrero became a shareholder of Sandbar Sports Grill in Coconut Grove in 2008 [ECF No. 48, at 90:1-5]. In January 2018, Defendant Longo and Defendant Borrero opened Sandbar Sports Grill in Cutler Bay, us[ing] the Sandbar logo with a different picture inside the life preserver on its menu. Id. ¶ 43. Around this time, Plaintiffs principal, Mr. Perrin, experienced a drop of between 20 to 40 percent in number of posts and marking images seen by customers, and, also claimed that any negative publicity regarding inspections of the Sandbar Sports Grill in Cutler Bay would affect the reputation of the Sandbar Sports Grill in Coconut Grove because both are in the same market. Id. ¶¶ 12-13. Plaintiff filed suit against Defendants and subsequently filed a Motion for Preliminary Injunction which would prohibit Defendants from using Plaintiffs trademark and trade dress, namely Plaintiffs slogan [ECF No. 5].
After an evidentiary hearing, the Magistrate Judge recommended Plaintiffs Motion for Preliminary Injunction be denied. Both parties filed objections to the Magistrate Judges Report and Recommendation. This Court will address each parties objections.
II. Defendants Objection to Report and Recommendation
Defendants filed a single objection as to the factual findings contained in paragraph 32 of the Report and Recommendation [ECF No. 49]. While the Court notes that the factual finding is not dispositive or material to Plaintiffs Motion for Preliminary Injunction and that [f]indings made on an application for preliminary injunction are not controlling at a later hearing on a permanent injunction, this Court will address Defendants sole objection. Paragraph 32 of the Report and Recommendation states:
The day before the closing, Longo received a packet of documents to sign. The packet included a document that prohibited Longo from using the Sandbar Marks in any way, shape or form. Longo could not sign that document because he was already operating a Sandbar Sports Grill in Kentucky, was in the process of opening one in Stuart, Florida, and was planning to open others.
[ECF No. 47]. In their objection, Defendants argue that the day before closing, Defendant Longo received closing documents with no restrictions and it was not until the next day, at closing, that Defendant Longo received a prior version of the stock transfer agreement with a total restriction-a document that Defendant Longo refused to sign because he was already operating a Sandbar and had plans to open another. Defendants specifically included the relevant portions of Defendant Longos testimony at the evidentiary hearing [ECF No. 49, at 2-4].
A de novo review of the evidence elicited at the evidentiary hearing reflects that Defendant Longo signed all the documents the day before the closing, as instructed by the attorney [ECF No. 48, at 55:21-25] and that he could not sign the documents on the day of the closing "A) because [he]
already had in operation a Sandbar Sports Grill in Owensboro, Kentucky, which would violate the agreement, and B) [he] planned on opening up one during this time in Stuart Florida (id. at 58:5-10) so they came up with [a] new document" (id. at 58:11-20). Defendants objection to the Magistrate Judges factual finding is limited to the narrow factual finding that Longo chose not to sign the document with a total restriction on the day before the closing , rather, he refused to sign it on the day of the closing. For the foregoing reasons, this Court finds that the record reflects that Longo decided not to sign the document on the day of the closing .
Accordingly, this Court SUSTAINS Defendants objection and solely modifies the factual finding in paragraph 32 of the Report and Recommendation, to the extent that Longo decided not to sign the document with the total restriction on the day of the closing.
III. Plaintiffs Objections
In order for Plaintiff to prevail on its Motion for Preliminary Injunction, it must show by a preponderance of the evidence: (1) a substantial likelihood of success on the merits; (2) irreparable harm; (3) balancing of the equities favors issuance of the injunction; and (4) the public interest will not be disserved. Levi Strauss & Co. v. Sunrise Intern. Trading, Inc. , 51 F.3d 982, 985 (11th Cir. 1995). Plaintiff objects to the Magistrate Judges findings with respect to whether Plaintiff has shown, by a preponderance of the evidence, that a preliminary injunction is appropriate under the facts of this case.
A. Likelihood of Success on the Merits
In order for Plaintiff to succeed on a claim under the Lanham Act, it must establish a prima facie case of trademark infringement by showing that (1) the plaintiffs mark has priority and (2) the defendants mark is likely to cause consumer confusion. Frehling Enters. v. Intl Select Group, Inc. , 192 F.3d 1330, 1335 (11th Cir. 1999) (citations omitted).
1. Priority
Plaintiff does not object to the Magistrate Judges finding that, Plaintiff has enforceable rights in the Sandbar Marks by virtue of its continued use of the Sandbar Marks since the opening of the Sandbar Sports Grill in Coconut Grove in 1999 [ECF No. 47, at 14]. Therefore, this Court adopts and affirms the Magistrate Judges finding as to Plaintiffs priority use of the Sandbar Marks. As Plaintiff concedes, the only issue before this Court is whether Defendants use of the Sandbar Marks at the Cutler Bay location is likely to cause confusion" [ECF No. 50, at 5].
2. Consumer Confusion
In the Eleventh Circuit, likelihood of consumer confusion is determined by evaluating the following factors: (1) type of mark; (2) similarity of mark; (3) similarity of the products the marks represent; (4) similarity of the parties retail outlets (trade channels) and customers; (5) similarity of advertising media; (6) defendants intent; and (7) actual confusion. See Frehling Enters. , 192 F.3d at 1335. Of these, the type of mark and the evidence of actual confusion are the most important. Id. ; see also Popular Bank of Florida v. Banco Popular de Puerto Rico , 9 F.Supp.2d 1347, 1358 (S.D. Fla. 1998) (In applying this test, no single factor is dispositive, but in the 11th Circuit, greater weight is given to the type of mark and evidence of actual confusion.). As other courts have noted, there is nothing magical about these factors; they operate only as a heuristic device to assist in determining whether confusion exists.
Uber Promotions, Inc. v. Uber Technologies, Inc. , 162 F.Supp.3d 1253, 1265-66 (N.D. Fla. 2016) (quoting Sullivan v. CBS Corp. , 385 F.3d 772, 778 (7th Cir. 2004) ). This multi-factor test is not really a test at all, but rather a set of things to consider, or questions to ask, en route to the ultimate question is there a likelihood of confusion in the mind[s] of an appreciable number of reasonably prudent buyers[?]" Id. at 1266 (citing John H. Harland Co. v. Clarke Checks, Inc. , 711 F.2d 966, 979 n. 22 (11th Cir. 1983) (citations and internal quotations omitted) ).
Moreover, it is vital to always keep in mind the actual market conditions and the type of confusion alleged when conducting the analysis. Id. (quoting Malletier v. Burlington Coat Factory Warehouse, Corp. , 426 F.3d 532, 534 (2d Cir. 2005) ). Courts must consider these factors because real world confusion is the confusion that the [Lanham] Act seeks to eliminate. Id. The existence of such confusion is best assessed when marks are compared in light of the way in which the marks are actually displayed or perceived by consumers. Id. Plaintiff objects to the Report and Recommendations findings as to all of the above-listed factors with the exception of: similarity of mark, similarity of the products the marks represent, and similarity of the parties retail outlets (trade channels) and customers [ECF No. 50].
i. Type of Mark
The stronger the mark, the greater the scope of protection accorded it, the weaker the mark, the less trademark protection it receives. Frehling Enters. , 192 F.3d at 1335. There are four types of marks (listed in order of weakest to strongest): generic, descriptive, suggestive, and arbitrary. Id. The types of marks are based on the relationship between the name and the service or good it describes: generic marks bear a name that is entirely connected to the service or good it describes (liquor store as applied to a store that sells liquor), id. , and arbitrary marks that bear a word in common usage applied to a service unrelated to its meaning (Sun Bank as applied to banking services). Freedom Sav. & Loan Assn v. Way , 757 F.2d 1176, 1182 n.5 (11th Cir. 1985). Descriptive marks describe a characteristic or quality of an article or service (vision center as applied to a store that sells glasses) and suggestive marks suggest characteristics of the goods and services and require an effort of the imagination by the consumer in order to be understood as descriptive (penguin is suggestive of refrigerators). Frehling Enters. , 192 F.3d at 1335 (citations omitted).
Plaintiff objects to the Report and Recommendation finding that the Sandbar Marks are generic, and argues that the Sandbar Marks are at least suggestive, if not arbitrary [ECF No. 50, at 6]. The Magistrate Judge concluded that the Sandbar Marks are generic because they use the term Sports Grill to describe a sports bar and restaurant [ECF No. 47, at 15]. However, this Court finds that the use of the term Sports Grill should not preclude a finding that the Sandbar Marks are arbitrary. Similar to the way Sun Bank was categorized as an arbitrary mark because Sun bears no relationship to banking services, neither does Sandbar bear any relationship to a sports bar and restaurant. Freedom Sav. & Loan Assn , 757 F.2d at 1182 n.5. This Court therefore agrees with Plaintiff in finding that the Sandbar Marks are arbitrary and deserve the most trademark protection.
Accordingly, this Court SUSTAINS Plaintiffs objection.
ii. Similarity of Mark
Plaintiff does not object to the Magistrate Judges finding there is a close similarity between the Sandbar Marks and the name and logo used by Defendants for the Sandbar Sports Grill in Cutler Bay [ECF No. 47, at 17]. This Court therefore adopts and affirms the Magistrate Judges finding as to the similarity of the Sandbar Marks and the name and logo used by Defendants for the Sandbar Sports Grill in Cutler Bay.
iii. Similarity of the Products the Marks Represent
Plaintiff does not object to the Magistrate Judges finding that the goods and services offered by Plaintiff and Defendants, namely, restaurant and bar services, are similar [ECF No. 47, at 17]. This Court therefore adopts and affirms the Magistrate Judges finding as to the similarity of the goods and services offered by Plaintiff and Defendants.
iv. Similarity of the Parties Retail Outlets (trade channels) and Customers
Plaintiff does not object to the Magistrate Judges finding that Plaintiff and Defendants use similar retail outlets, namely, restaurants and bars, and cater to similar customers, namely, those who enjoy a sports bar venue for their restaurant experience [ECF No. 47, at 17]. This Court therefore adopts and affirms the Magistrate Judges finding as to the similarity of the parties retail outlets and customers.
v. Similarity of Advertising Media
Plaintiff objects to the Report and Recommendation on the basis that the parties use similar advertising media (i.e., social media) [ECF No. 50, at 7]. In the Report and Recommendation, the Magistrate Judge notes that Plaintiff proffered testimony from Perrin regarding its advertising media but failed to present any evidence regarding what advertising media Defendants use [ECF No. 47, at 17]. However, based on a review of the record evidence in this case, this Court finds that Defendants, like Plaintiff, also advertised on social media [ECF No. 56 at 85] [Defendants State Court Complaint for Declaratory & Injunction Relief].
Accordingly, the Court SUSTAINS Plaintiffs objection.
vi. Defendants Intent
Plaintiff also objects to the Report and Recommendation on the basis that the Defendants adopted Plaintiffs mark with the intention of deriving a benefit from Plaintiffs business reputation [ECF No. 50, at 7]. In the Report and Recommendation, the Magistrate Judge found: (i) Defendants acted under the belief that they could use Sandbar Marks as long as they complied with the ten-mile Restricted Area (Def. Ex. 3) and (ii) all parties were aware of, and made no objection to, the Sandbar Sports Grills operating in Cocoa Beach and Key West. [ECF No. 47, at 18]. According to the Magistrate Judge, as a result, there was no basis to attribute to Defendants the intent to profit from Canes business reputation. Id.
While objective factors are most important in assessing the likelihood of confusion between two marks, courts also examine the defendants subjective intent. John H. Harland Co. , 711 F.2d at 977. While the record here does not have any direct evidence of Defendants intent, there is some evidence that infers Defendants adopted the Sandbar Marks with the intent of deriving benefit from the reputation of the plaintiff. Id. As the Magistrate Judge found, Sandbar Sports Grill in Coconut Grove, which opened in 1999, has won awards from various local newspapers and blogs, including the New Times Sports Bar of the Year Award, which it has won multiple times, as recently as 2017 [ECF No. 47 ¶ 7]. Additionally, this Court notes the striking similarities between the logos (see supra . at I), which include the same lettering in the name, Sandbar Sports Grill, the same life preserver (and corresponding colors), with the same individual on the same beach chair under the same beach umbrella. As [t]here is nothing unusual about a finding of intent based on circumstantial evidence, this Court finds there is sufficient circumstantial evidence to support a finding that Defendants intended to derive a benefit from Plaintiffs reputation, namely, the reputation of the Sandbar Sports Grill in Coconut Grove. AmBrit, Inc. v. Kraft, Inc. , 812 F.2d 1531, 1543 (11th Cir. 1986). While the Court notes that both Defendant Longo and Defendant Borrero believed they could use the Sandbar Name outside the ten-mile restriction [ECF No. 47 ¶¶ 44, 48], Paragraph 11.8 of the Shareholder Agreement only addresses use of the Sandbar Sports Grill name .
Accordingly, the Court SUSTAINS Plaintiffs objection and finds there is record evidence to support a finding that Defendants intended to derive a benefit from Plaintiffs reputation.
vii. Actual Confusion
Here, Plaintiff objects to the Magistrate Judges finding that Plaintiffs submission of social media postings were hearsay, and therefore, inadmissible [ECF No. 47, at 18]. At the preliminary injunction stage, a district court may rely on affidavits and hearsay materials which would not be admissible evidence for a permanent injunction, if the evidence is appropriate given the character and objectives of the injunctive proceeding. Levi Strauss & Co. v. Sunrise Intl Trading, Inc. , 51 F.3d 982, 985 (11th Cir. 1995) (quotations omitted). The narrow issue before this Court is whether it can consider hearsay evidence for the purposes of deciding actual confusion. With respect to the evidence in question, messages and posts by allegedly confused consumers, at least one court has considered testimony regarding the receipt of reports of alleged confusion as non-hearsay. Kos Pharm., Inc. v. Andrx Corp. , 369 F.3d 700, 719-720 (3d Cir. 2004).
In Kos , the Third Circuit found that receipt of these numerous and varied reports of alleged confusion were a factual claim that had independent evidentiary significance tending to show actual confusion. Id. Moreover, with respect to the actual messages and posts, other courts have considered out-of-court statements when such statements were offered to show a declarants state of mind. See Conversive, Inc. v. Conversagent, Inc. , 433 F.Supp.2d 1079, 1091 (C.D. Cal. 2006) (citing Fun-Damental Too, Ltd. v. Gemmy Industries Corp. , 111 F.3d 993, 1003-04 (2d Cir. 1997), Armco, Inc. v. Armco Burglar Alarm Co., Inc. , 693 F.2d 1155, 1160 n. 10 (5th Cir. 1982), Citizens Financial Group, Inc. v. Citizens Nat. Bank of Evans City , 383 F.3d 110, 133 (3d Cir. 2004), Lyons Pship, L.P. v. Morris Costumes, Inc. , 243 F.3d 789, 804 (4th Cir. 2001) ).
Turning to the record in this action, this Court finds that there is testimony by Plaintiffs principal, Mr. Perrin, which shows that he received reports of confusion, by way of posts and messages. At the evidentiary hearing, Mr. Perrin testified that he oversaw Sandbar Sports Grills (Coconut Grove) social media accounts and had the administrative passwords for said accounts [ECF No. 48, at 12:23-25, 13:1-4). During his testimony, he was shown a collection of a lot of the social media messages or posts or - mostly messages and posts that were all either sent or directed towards Sandbar Coconut Grove, and they all show confusion over the Sandbar in Cutler Bay. Id. at 13:23-25, 14:1. While this Court notes the Magistrate Judge sustained hearsay objections as to the admissibility of the collection of social media posts and messages to prove actual confusion, the Magistrate Judge did allow said collection as evidence that Mr. Perrine received them. Id. at 17:8-10.
This Court will consider the evidence that Mr. Perrine received reports of confused consumers [ECF No. 37-1, Pl.s Ex. 4]. Like in Kos , Mr. Perrine received numerous and varied reports of alleged confusion and the factual claim[s] shown therein have independent evidentiary value tending to show actual confusion. Kos , 369 F.3d at 719-720. Moreover, after a review of the proffered collection of posts and messages, this Court will consider them as probative of the declarants state of mind. These social media posts and messages included but are not limited to: (1) a request to Sandbar Sports Grill (Coconut Grove) to have a relief drive at the Cutler Bay location (id. at 5); (2) customer inquiries as to whether Sandbar Sports Grill is opening a location in Cutler Bay (id. at 6-7); (3) employment inquiries (id. at 8-9) and at least one customer post stating he was [g]etting a sandbar in cutler bay (sic) !!! (id. at 17). Thus, this Court will consider the postings as evidence of actual confusion, as they show the declarants, or in this case, the social media posters state of mind. Conversive , 433 F.Supp.2d at 1091.
Even assuming arguendo that the foregoing social media posts or messages are hearsay, this Court finds that, at this juncture in the proceedings, it may rely on hearsay materials which would not be admissible evidence for a permanent injunction, if the evidence is appropriate given the character and objectives of the injunctive proceeding. Levi Strauss & Co. , 51 F.3d at 985.
Accordingly, the Court SUSTAINS Plaintiffs objection.
viii. Analysis
All seven factors favor Plaintiff. Notably, Defendants do not object to the Magistrate Judges finding that three of the seven factors (similarity of marks, similarity of the products the marks represent, and similarity of the parties retail outlets and customers) favor Plaintiff [ECF No. 49]. In light of this Court sustaining Plaintiffs objections to the remaining factors (type of mark, similarity of advertising media, defendants intent, and actual confusion) and the Courts findings herein, all factors are in favor of Plaintiff.
Accordingly, the Court SUSTAINS Plaintiffs objection. This Court finds that Plaintiff has proven, by a preponderance of the evidence, a likelihood of success on the merits. Frehling Enters. , 192 F.3d at 1335.
B. Irreparable Harm
The Eleventh Circuit [extends] a presumption of irreparable harm once a plaintiff establishes a likelihood of success on the merits of a trademark infringement claim. N. Am. Med. Corp. v. Axiom Worldwide, Inc. , 522 F.3d 1211, 1227 (11th Cir. 2008). See also E. Remy Martin & Co., S.A. v. Shaw-Ross Intl Imports, Inc. , 756 F.2d 1525, 1530 (11th Cir. 1985) (irreparable injury is presumed for trademark infringement). This Circuit has held that a sufficiently strong showing of likelihood of confusion [caused by trademark infringement] may by itself constitute a showing of .... [a] substantial threat of irreparable harm. McDonalds Corp. v. Robertson , 147 F.3d 1301, 1310 (11th Cir. 1998) (quoting E. Remy Martin & Co., S.A. , 756 F.2d at 1530 ). As stated, the Court has made a finding that Plaintiff has shown a likelihood of success on the merits. First, Defendants do not object that Plaintiff has priority in the use of the Sandbar Marks. Second, all factors favor Plaintiff and a finding by this Court that there is a likelihood of consumer confusion. Defendants do not object that three of the consumer confusion factors (similarity of marks, similarity of the products the marks represent, and similarity of the parties retail outlets and customers) favor Plaintiff [ECF No. 49].
Accordingly, the Court SUSTAINS Plaintiffs objection and finds that Plaintiff has presented a sufficiently strong showing of likely confusion so that irreparable harm is established. Ferrellgas Partners, L.P. v. Barrow , 143 Fed. Appx. 180, 191 (11th Cir. 2005).
C. Balancing of the Equities
Since the Court has sustained Plaintiffs objections as to (1) Likelihood of Success on the Merits and (2) Irreparable Harm, this Court finds that a balancing of the equities in this case favor Plaintiff. Notably, the Courts findings with respect to Plaintiffs priority and the factors favoring Plaintiff with respect to customer confusion tip the balance of the equities in favor of Plaintiff. Plaintiffs Sandbar Sports Grill in Coconut Grove has been in business since 1999 and Sandbar Sports Grill in Cutler Bay opened in January 2018 [ECF No. 47 ¶ 4, 43]. Any harm occasioned by enjoining Defendants use of the Sandbar Marks is therefore outweighed by the potential damage to Plaintiffs reputation by Defendants use of its confusingly similar mark. Ferrellgas Partners, L.P. , 143 Fed. Appx. at 191.
Accordingly, the Court SUSTAINS Plaintiffs objection.
D. Public Interest
Since this Court has sustained Plaintiffs objections as to (1) Likelihood of Success on the Merits, (2) Irreparable Harm and (3) Balancing of the Equities, this Court finds that the public interest is served by eliminating confusion in the marketplace. See Pandora Jewelers 1995, Inc. v. Pandora Jewelry, LLC , 703 F.Supp.2d 1307, 1316 (S.D. Fla. 2010) (citing SunAmerica Corp. v. SunLife Assurance Co. of Can. , 77 F.3d 1325, 1334 (11th Cir. 1996) ).
Accordingly, the Court SUSTAINS Plaintiffs objection.
IV. Conclusion
After careful consideration of the foregoing, it is hereby:
ADJUDGED that the United States Magistrate Judges Report and Recommendation [ECF No. 47] is AFFIRMED IN PART and MODIFIED IN PART, and ADOPTED except as stated herein. Defendants objection is SUSTAINED and Plaintiffs objections are OVERRULED IN PART and SUSTAINED IN PART as stated herein.
Accordingly, it is:
ORDERED AND ADJUDGED that 1. Plaintiffs Motion for Preliminary Injunction is GRANTED .
2. The Court will issue a separate order enforcing the preliminary injunction.
DONE AND ORDERED in Chambers at Miami, Florida, this 29th day of September, 2018.
REPORT AND RECOMMENDATION
ALICIA M. OTAZO-REYES, UNITED STATES MAGISTRATE JUDGE
THIS CAUSE is before the Court upon Plaintiff Canes Bar & Grill of South Florida, Inc.s (Plaintiff or Canes) Motion for Preliminary Injunction [D.E. 5]. This matter was referred to the undersigned pursuant to 28 U.S.C. § 636 by the Honorable Jose E. Martinez, United States District Judge [D.E. 6]. The undersigned held an evidentiary hearing on this matter on February 27, 2018 [D.E. 30]. For the reasons stated below, the undersigned respectfully recommends that the Motion for Preliminary Injunction be DENIED.
PROCEDURAL BACKGROUND
Plaintiff commenced this action on January 17, 2018 with the filing of a Verified Complaint against Defendants Sandbar Bay, LLC (Sandbar Bay), Alberto Borrero (Borrero) and Joseph Longo (Longo) (collectively, Defendants) asserting the following claims:
Count I: Unfair Competition under the Lanham Act, 15 U.S.C. § 1125(a)
Count II: Florida Trademark Infringement under Florida Statute § 495.131
Count III: Common Law Trademark Infringement
Count IV: Common Law Unfair Competition
Count V: Trademark Dilution under Florida Statute § 495.151
See Compl. [D.E. 1]. Plaintiff predicates its claims on the use and trademark registration in Florida of the name Sandbar Sports Grill (hereafter, Sandbar Name) and the life preserver design pictured below (hereafter, Sandbar Logo) (collectively, Sandbar Marks) in connection with bar and restaurant services.
See Motion for Preliminary Injunction [D.E. 5 at 9]. Plaintiff contends that Defendants are using the Sandbar Marks, including the logo pictured below, in connection with the same goods and services as Plaintiff at Defendants Sandbar Sports Grill in Cutler Bay.
Id. Plaintiff requests issuance of a preliminary injunction that: prohibits Defendants from using the Sandbar Marks; mandates them to remove all allegedly infringing content from their business, signage, marketing materials, and Internet postings (including social media); and mandates them to publish a disclaimer of any association with Plaintiff. Id. at 2.
The following individuals testified at the February 27, 2018 evidentiary hearing: Plaintiffs principal, Michael Scott Perrin (Perrin); Longo; and Borrero. The following items were admitted into evidence: Plaintiffs Exhibits Nos. 1-6; and Defendants Exhibits Nos. 1-11
Having considered the testimonial and documentary evidence presented at the February 27, 2018 evidentiary hearing, and having conducted a thorough review of the parties written submissions and the relevant legal authorities, the undersigned concludes that Plaintiff failed to meet its burden of demonstrating that it is entitled to the issuance of a preliminary injunction.
STANDARD OF REVIEW
An injunction is an equitable remedy, available only when there is no adequate remedy at law. Weaver v. Florida Power & Light Co., 172 F.3d 771, 773 (11th Cir. 1999) (citing Rosen v. Cascade Intl, Inc., 21 F.3d 1520, 1527 (11th Cir. 1994). A plaintiff seeking a preliminary injunction must demonstrate by a preponderance of the evidence that: (1) there is a substantial likelihood of success on the merits; (2) a substantial threat of irreparable injury exists if an injunction is not granted; (3) the threatened injury to the plaintiff outweighs any harm that an injunction may cause the defendants; and (4) issuing the injunction will not disserve the public interest. Levi Strauss & Co. v. Sunrise Intl Trading, Inc., 51 F.3d 982, 985 (11th Cir. 1995). A preliminary injunction is an extraordinary and drastic remedy not to be granted unless the movant clearly establishes the burden of persuasion as to all four elements. Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000). The goal of a preliminary injunction is to prevent irreparable harm in order to preserve the district courts power to render a meaningful decision after a trial on the merits. Learning Experience Sys., LLC v. Foxborough Child Care, LLC, No. 10-80561-CIV, 2010 WL 3565712, at *4 (S.D. Fla. Aug. 19, 2010) (citing Canal Auth. of Fla. v. Callaway, 489 F.2d 567, 572 (5th Cir. 1974) ), report and recommendation adopted, 2010 WL 3565708 (S.D. Fla. Sept. 9, 2010). See also Stokely-Van Camp, Inc. v. Coca-Cola Co., 646 F. Supp. 2d 510, 525 (S.D.N.Y. 2009) ([A] preliminary injunction is a remedy that is directed toward preventing conduct during the pendency of the lawsuit.).
The first element, substantial likelihood of success on the merits, is generally regarded as the most important because granting a motion for preliminary injunction would be inequitable if the movant does not have a chance of success on the merits. See Learning Experience, 2010 WL 3565712, at *4 (citing Butler v. Alabama Judicial Inquiry Commn, 111 F. Supp. 2d 1224, 1229-30 (M.D. Fla. 2000) ; Callaway, 489 F.2d at 572 ; Gonzalez v. Reno, No. 00-11424-D, 2000 WL 381901, at *1 (11th Cir. Apr. 19, 2000) ). As to the second element, irreparable harm, a movant must show that the injury cannot be undone through monetary remedies. Anago Franchising, Inc. v. CHMI, Inc., No. 09-60713-CIV, 2009 WL 5176548, at *11 (S.D. Fla. Dec. 21, 2009). Further, the irreparable injury claimed must be neither remote nor speculative, but actual and imminent. Id. (citing Siegel, 234 F.3d at 1176 ).
FINDINGS OF FACT
A. Perrin
1. Canes has operated a sports bar known as Sandbar Sports Grill, Sandbar or Sandbar Grill in Coconut Grove since 1999.
2. Perrin became the President of Canes in 2013 when he gained control of the majority of the shares in the company through the shares owned by him (31%) and those owned by his father, Terry Perrin (20%). The other shareholders of Canes are Borrero and Richard M. Gentile a/k/a Matthew Gentile (Gentile). See Defs Ex. 1 at 15-16.
3. Perrin had previously acquired shares of Canes in 2008, at which time he was aware that Longo was the original founder of the Sandbar Sports Grill in Coconut Grove.
4. The Sandbar Sports Grill in Coconut Grove uses the logo depicted above and the slogans Home of the Fish Taco, and Get Rescued from Ordinary Food.
5. The Sandbar Sports Grill in Coconut Grove has won dozens of awards from various local newspapers and blogs. It has won the New Times Sports Bar of the Year Award multiple times, including as recently as 2017.
6. Because these awards encompass the Miami area and both the Sandbar Sports Grill in Coconut Grove and the Sandbar Sports Grill in Cutler Bay are located in Miami, the two establishments compete for the same awards for the best sports bar in Miami.
7. The Sandbar Sports Grill in Coconut Grove has a widely known promotion, called the Five Pound Burrito Challenge, that has been covered by several media outlets and was named the top eating challenge in all of South Florida.
8. Canes registered the Sandbar Name and the Sandbar Logo with the State of Florida on July 28, 2017 as marks used since May 25, 1999 in connection with bar and restaurant services. See Pls Exs. 1 & 2.
9. The Sandbar Sports Grill in Coconut Grove uses the Sandbar Logo in its menu, with the slogan, Get Rescued from Ordinary Food printed above the logo. See Pls Ex. 3. The slogan is also printed on a sign that hangs over the bar. The menu also features five categories of a rum drink named Hurricanes. Id.
10. The Sandbar Sports Grill in Coconut Grove maintains social media accounts with Instagram, Twitter and Facebook. The undersigned admitted a group of social media posts and emails from those accounts referencing the Sandbar Sports Grill in Cutler Bay only for the fact that they were received by Perrin. However, the undersigned sustained Defendants hearsay objection and did not admit the social media posts and emails as evidence of confusion. See Pls Ex. 4.
11. The Sandbar Sports Grill in Coconut Grove markets itself on local radio by hosting a coaches radio show and advertising in a dozen radio spots. Other marketing strategies include: advertising in the Miami Hurricanes program guide, sponsoring a lane at the University of Miami Hall of Fame Tournament, and placing ads on Facebook, Twitter and Instagram.
12. According to Perrin, in the thirty days preceding the evidentiary hearing, the Sandbar Sports Grill in Coconut Grove experienced a drop of between 20 to 40 percent in the number of posts and marketing images seen by customers.
13. Perrin is concerned that any negative publicity regarding inspections of the Sandbar Sports Grill in Cutler Bay would affect the reputation of the Sandbar Sports Grill in Coconut Grove because both are in the same market.
14. When he first acquired shares of Canes in 2008, Perrin was aware that Longo had opened a Sandbar Sports Grill in Cocoa Beach, Florida in 2004, which is still open and uses the same logo as the Sandbar Sports Grill in Coconut Grove, with the words Cocoa Beach instead of Coconut Grove at the bottom and a slightly different design at the center of the life preserver. See Defs Ex. 7.
15. Perrin never has and does not presently object to the operation of the Sandbar Sports Grill in Cocoa Beach; and has not brought any legal action against this restaurant. In response to an inquiry from a principal of the Sandbar Sports Grill in Cocoa Beach regarding the filing of a trademark registration for the Sandbar Marks, Perrin replied, As far as Cocoa Beach is concerned, my intention is absolutely nothing at all. See Defs Ex. 4 at 4.
16. The Sandbar Sports Grill in Cocoa Beach does not compete for the same awards as the Sandbar Sports Grill in Coconut Grove. Also, the distributors of beer and other merchandise for the Coconut Grove and Cocoa Beach locations are different.
17. When he acquired additional shares of Canes in 2013, Perrin was aware that Longo had opened a Sandbar Sports Grill in Kendall, across from Miami-Dade College. That restaurant remained in business for approximately one year.
18. Perrin is also aware that Longo and Borrero opened a Sandbar Sports Grill in Key West in 2016, which is still open and uses the same logo as the Sandbar Sports Grill in Coconut Grove with the words Key West instead of Coconut Grove at the bottom and a slightly different design at the center of the life preserver. See Defs Ex. 8.
19. Perrin, on behalf of Canes, had no objection to the opening of this restaurant. In fact, on February 11, 2016, Perrin sent a congratulatory email to Borrero on its opening. See Defs Ex. 2.
20. The Sandbar Sports Grill in Key West does not compete for the same awards as the Sandbar Sports Grill in Coconut Grove and the newspapers in Miami and Key West are different. Also, the merchandise distributors for Coconut Grove and Key West are different.
21. On May 31, 2013, Perrin and the other shareholders of Canes entered into an Amended and Restated Shareholder Agreement (hereafter, Shareholder Agreement). See Defs Ex. 1. Perrin signed the agreement individually and as President of Canes. Id. at 14.
22. Paragraph 11.8 of the Shareholder Agreement provides:
Other Businesses . The Shareholders acknowledge and agree that each Shareholder is involved in other business ventures. No Shareholder is obligated to offer to the Company or the other Shareholders of the Company any interest in an (sic) current or future business venture of any kind. No Shareholder, without consent of the other Shareholders, shall engage in a business which operates under the name Sandbar Grill, Sandbar Sports Grill, Sandbar, or similar name within a 10 mile radius of the Company. Subject to the foregoing limitation, this Agreement, or participation as a Shareholder, officer or director of the Company, shall give no Shareholder of the Company an exclusive right, license or otherwise to the trade name Sandbar Grill, Sandbar Sports Grill, Sandbar, or similar name variation.
Id. at 10.
23. Perrin acknowledged that the Sandbar Sports Grill in Cutler Bay is located over ten miles from the Sandbar Sports Grill in Coconut Grove.
24. Perrin claimed that he had nothing to do with the decision regarding the ten-mile restriction in Paragraph 11.8 of the Shareholder Agreement. According to Perrin, the attorney drafting the Shareholder Agreement was the one who wrote ten miles in Paragraph 11.8, and all the shareholders went along with it.
B. Longo
25. Longo developed the concept of the Sandbar restaurants in San Diego, California. Longo and his partner opened two restaurants there and looked for additional locations in California and Florida. They found the Coconut Grove location and initially intended to call the restaurant Canes Bar and Grill, but the University of Miami objected so they came up with the Sandbar Name.
26. Longo incorporated Canes in 1999 and filed the original fictitious name registration for Sandbar Grill & Cantina that same year. See Defs Ex. 5.
27. Longo also was involved in the opening of the Sandbar Sports Grill in Cocoa Beach. He owns the property where the restaurant is located. He initially owned 20 percent of the business and gave the other 80 percent to two of his associates from the Sandbar Sports Grill in Coconut Grove. However, between 2010 and 2013, Longo sold his 20 percent interest in the business.
28. In 2005, Longo filed the fictitious name registration for the Sandbar Sports Grill in Cocoa Beach. See Defs Ex. 6.
29. Longo designed the Sandbar Logo for the Coconut Grove, Cocoa Beach and Key West locations. See Defs Ex. 7. He varied the picture at the center of the life preserver for each restaurant to match each location and what is around it. Id.
30. In 2013, Longo decided to move out of Miami for personal reasons and to sell his shares in Canes. At that time, Borrero was a shareholder in Canes.
31. Longo negotiated the purchase price and the terms for the sale of his shares in Canes with Perrin.
32. The day before the closing, Longo received a packet of documents to sign. The packet included a document that prohibited Longo from using the Sandbar Marks in any way, shape or form. Longo could not sign that document because he was already operating a Sandbar Sports Grill in Kentucky, was in the process of opening one in Stuart, Florida, and was planning to open others.
33. At the closing on May 31, 2013, Longo told Perrin and the other Canes shareholders who were present that he wanted to use the Sandbar Name; and he refused to sign the document he had received prior to the closing. The shareholders got together and agreed on a new document entitled Sale, Transfer and Assignment, and Covenant not to Compete (hereafter, Covenant). See Defs Ex. 3. Longo signed the Covenant as Seller and had it notarized that same day. Id. There are no other signatories to the Covenant. Id.
34. In addition to the language assigning Longos shares of Canes to Borrero, Gentile, Perrin and Terry Perrin (collectively referred to as Buyer), the Covenant contains the following provision:
The undersigned further assigns, sells and transfers to Buyer all his rights, title and interest to the trade name Sandbar, Sandbar Grill, Sandbar Sports Grill, Sandbar Bar & Grill, Sandbar Sports Bar, and any similar variations thereof (hereinafter the Name), except however Seller shall retain the right(s), royalty f[r]ee, to use the Name on an unlimited basis, without restriction and without the consent of Buyer, outside the Restricted Area (as defined below) in connection with any business, bar, restaurant or establishment including, but not limited to, any business or establishment in which all or any of Buyers(s) are not involved. Seller shall not use the Name in connection with the operation of a bar, restaurant, or similar establishment within a ten (10) mile radius of 3064 Grand Avenue, Coconut Grove, Florida (the Restricted Area).
Id. Longo considered this provision to be a license for him to use the Sandbar Name outside the ten mile radius prescribed as the Restricted Area. Therefore, Longo and Borrero are using the Sandbar Name at the Cutler Bay location. Longo did acknowledge that he has never done business using the Sandbar Name or used the Sandbar Logo personally and has always used the Sandbar Marks as part of an entity.
35. The Covenant further provided:
In further consideration of the sums paid to Seller in connection with the purchase of Sellers interest in the Corporation, and to induce Buyer to enter into said purchase, Seller will not be involved in any way, as an owner, shareholder, member, employee, officer, director, contractor, consultant, or otherwise, in the operation or ownership of a restaurant/bar within the neighborhood commonly known as Coconut Grove, Florida for a period of not less than 3 years after the date set forth below. Seller acknowledges that this provision is a material term and induced Buyer to purchase Sellers interest in the Corporation pursuant to that Stock Purchase Agreement dated February 28, 2013.
Id. This provision was required by Perrin in his capacity as President of Canes.
36. Longo operated the Sandbar Sports Grill in Kendall in 2008 using the Sandbar Logo. At the time, Perrin was a shareholder of Canes and had no objections to the operation of the Sandbar Sports Grill in Kendall.
37. Longo opened the Sandbar Sports Grill in Stuart in 2013. Longo sold the restaurant at the end of 2014. During that time, Perrin was a shareholder of Canes and he did not object to the operation of the Sandbar Sports Grill in Stuart. Longo uses a very similar logo to the Sandbar Logo, featuring a surfboard, on the restaurants menu.
38. Longo decided to open the Sandbar Sports Grill in Key West in 2016. The menu for that restaurant features the Sandbar Logo. See Defs Ex. 8. Longo uses the slogan Home of the Fish Taco and offers a Three Pound Burrito Challenge at that location. Id.
39. The Sandbar Sports Grill in Cocoa Beach also uses the slogan Home of the Fish Taco and offers a Five Pound Burrito Challenge
40. The rum drinks named Hurricanes are also offered at the Key West and Cocoa Beach locations. Other restaurants in the immediate areas do not offer such drinks.
41. Longo is aware of other restaurants using the name Sandbar in Big Pine Key, Islamorada, and another location in the Florida Keys. Longo is also aware of Sandbar restaurants at the following Florida locations: Fort Myers, Clearwater Beach, and the Contemporary Hotel in Disney World.
42. In December 2017, an entity named Sandbar Subs LLC located in Kansas complained about attempts to obtain federal trademark registration for the Sandbar Sports Grill in Cocoa Beach and the Sandbar Sports Grill in Key West and accused those entities of trademark infringement on its own SANDBAR mark. See Defs Ex. 9 at 1-3. The firm of Malloy & Malloy, P.L. responded to the complaint, and no further action has occurred. Id. at 4-7. Borrero handled this matter, and Longo was not involved in it.
43. Longo and Borrero found the location and started negotiating a lease for the Sandbar Sports Grill in Cutler Bay in June 2017 and opened the restaurant in January 2018. The restaurant uses the Sandbar Logo with a different picture inside the life preserver on its menu. See Defs Ex. 10.
44. Longo believes that he and Borrero are within their rights to operate the Sandbar Sports Grill in Cutler Bay because they have honored the ten-mile restriction set forth in Paragraph 11.8 of the Shareholder Agreement.
45. Prior to the opening of the Sandbar Sports Grill in Cutler Bay, there had been no issues with Perrin or Canes about Longos operation of other Sandbar restaurants, and all the Sandbar restaurants had peacefully coexisted. Longo learned of Canes trademark registration of the Sandbar Marks in Florida after the opening of the Sandbar Sports Grill in Cutler Bay.
C. Borrero
46. Borrero first became a shareholder of Canes in 2008 when he purchased Longos original partners shares.
47. Borrero acquired additional shares of Canes in 2013 at the time he signed the Shareholder Agreement. Borrero acknowledged that the Shareholder Agreement does not address the Sandbar Logo or the slogan Get Rescued from Ordinary Food.
48. Borrero believes that he is subject to the ten-mile restriction set forth in Paragraph 11.8 of the Shareholder Agreement, but that he can use the Sandbar Name outside the ten-mile radius.
49. According to Borrero, the ten-mile restriction in the Covenant and in Paragraph 11.8 of the Shareholder Agreement reflected the shareholders concern, not only with Coconut Grove, but also with the nearby Brickell area.
50. Borrero remembers that the attorney at the closing typed up the Covenant, and that, once Longo signed it, the Covenant became part of the closing package.
D. Judicial Notice
51. The undersigned takes judicial notice of a Florida Division of Corporations search result for entities that include the words Sandbar and Sand Bar and for entities that have registered fictitious names that include those words. See Defs Ex. 11.
52. The search shows that there are numerous entities and several fictitious registrations that include the words Sandbar and Sand Bar. Id.
CONCLUSIONS OF LAW
As previously noted, in order for Canes to prevail on its Motion for Preliminary Injunction, it must show by a preponderance of the evidence: (1) a substantial likelihood of success on the merits; (2) irreparable harm; (3) balancing of the equities favors issuance of the injunction; and (4) the public interest will not be disserved. Levi Strauss, 51 F.3d at 985.
A. Substantial likelihood of success on the merits
Canes request for preliminary injunctive relief is predicated on its claims for Florida and common law trademark infringement, which Plaintiff acknowledges must be examined in accordance with Lanham Act jurisprudence. See Motion for Preliminary Injunction [D.E. 5 at 6-7]. In order to establish a prima facie case of trademark infringement under the Lanham Act, a plaintiff must show that it had enforceable trademark rights in the mark, and that the defendant made unauthorized use of it such that consumers were likely to confuse the two. Custom Mfg. & Engg, Inc. v. Midway Servs., Inc., 508 F.3d 641, 647 (11th Cir. 2007) (citing Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 358 (11th Cir. 1997) ).
Initially, the undersigned notes that Plaintiff has enforceable rights in the Sandbar Marks by virtue of its continued use of the Sandbar Marks since the opening of the Sandbar Sports Grill in Coconut Grove in 1999. Defendants argue, however, that their use of the Sandbar Marks was authorized by Paragraph 11.8 of the Shareholder Agreement and the Covenant because the Sandbar Sports Grill in Cutler Bay is outside the Restricted Area, that is, more than ten miles from the Sandbar Sports Grill in Coconut Grove. See Defendants Opposition to Motion for Preliminary Injunction (hereafter, Opposition) [D.E. 27 at 11]. Plaintiff counters that, at most, the authorized use beyond the Restricted Area only applies to the Sandbar Name because that is the only item mentioned in the Shareholder Agreement and the Covenant. See Reply to Defendants Opposition (hereafter, Reply) [D.E. 36 at 8]. On this basis, Plaintiff seeks a narrowed preliminary injunction protecting the Sandbar Logo, and the slogans (which it characterizes as trade dresses). Id. Given the limited impact, if any, of the Shareholder Agreement and the Covenant, the undersigned will assume unauthorized use of the Sandbar Marks and proceed to address likelihood of confusion.
In the Eleventh Circuit, likelihood of confusion is based on the following seven factors: (1) the type of mark, specifically whether the mark qualifies as generic, descriptive, suggestive, or arbitrary; (2) the similarity of the marks based on their overall impressions; (3) the similarity of the goods; (4) the similarity of the parties respective retail outlets, trade channels, and customers; (5) the similarity of types of advertising; (6) the intent of the defendant; and (7) actual confusion. Custom Mfg. & Engg, 508 F.3d at 648 (citing Frehling Enters., Inc. v. Intl Select Grp., Inc., 192 F.3d 1330, 1335-41 (11th Cir. 1999) ). Of these, the type of mark and the evidence of actual confusion are the most important. Frehling Enters., 192 F.3d at 1335.
i. Type of mark
There are four types of marks: generic, descriptive, suggestive, and arbitrary. Id. These marks are entitled to various levels of protection, with arbitrary marks being the strongest and entitled to the most protection, and generic marks being the weakest and not entitled to protection. Id. at 1335-36.
Generic marks refer to a class of which an individual service is a member (e.g. liquor store used in connection with the sale of liquor). Id. at 1335.
Descriptive marks describe a characteristic or quality of an article or service (e.g. vision center denoting a place where glasses are sold). Id.If the mark is merely descriptive, such as a personal or surname, its strength depends on whether it has acquired secondary meaning. Tana v. Dantannas, 611 F.3d 767, 776 (11th Cir. 2010). A mark has acquired secondary meaning when the consuming public associates the services with a particular provider. Caliber Auto. Liquidators, Inc. v. Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931, 938 (11th Cir. 2010). To determine whether a descriptive mark has acquired a secondary meaning, a court looks to: [t]he length and nature of the names use; the nature and extent of advertising and promotion of the name; the efforts of the proprietor to promote a conscious connection between the name and the business; and the degree of actual recognition by the public that the name designates the proprietors product or service. Tana, 611 F.3d at 776 (citing Welding Servs. Inc. v. Forman, 509 F.3d 1351, 1358 (11th Cir. 2007) ). A descriptive mark with secondary meaning is a relatively strong mark. Id.
Suggestive marks suggest characteristics of the goods and services and require an effort of the imagination by the consumer in order to be understood as descriptive. For instance, penguin would be suggestive of refrigerators. Frehling Enters., 192 F.3d at 1335.
Arbitrary marks are word[s] or phrase[s] that bear[ ] no relationship to the product (e.g. Sun Bank is arbitrary when applied to banking services). Id.
Plaintiff argues that the Sandbar Marks are at least suggestive with acquired distinctiveness and may even be arbitrary. See Motion for Preliminary Injunction [D.E. 5 at 10 & n.1]. Defendants counter that the Sandbar Marks are generic. See Opposition [D.E. 27 at 13]. The undersigned concludes that the Sandbar Marks are generic because they use the term Sports Grill to describe a sports bar and restaurant. Thus, the Sandbar Marks are the weakest type of mark.
ii. Similarity of marks
Similarity of appearance between two marks is determined on the basis of the total effect of the designation, rather than on a comparison of individual features. Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Assoc., 651 F.2d 311, 318-19 (5th Cir. 1981). See also Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 502 (5th Cir. 1979) (It is the overall impression that counts.); Frehling Enters., 192 F.3d at 1337 (In assessing similarity, the court compares the marks and considers the overall impressions that the marks create, including the sound, appearance, and manner in which they are used.). As explained by the United States Supreme Court, The commercial impression of a trade-mark is derived from it as a whole, not from its elements separated and considered in detail. Estate of P.D. Beckwith, Inc. v. Commr of Patents, 252 U.S. 538, 545-46, 40 S.Ct. 414, 64 L.Ed. 705 (1920).
Here, Defendants are using the same name, Sandbar Sports Grill, as the Sandbar Name. Additionally, the life preserver used by Defendants is the same as the one in the Sandbar Logo, with the only variations being the picture in the center of the life preserver and the location name at the bottom. Therefore, there is a close similarity between the Sandbar Marks and the name and logo used by Defendants for the Sandbar Sports Grill in Cutler Bay.
iii. Similarity of goods
Analyzing the similarity of the products the marks represent requires a determination as to whether the products are the kind that the public attributes to a single source, not whether or not the purchasing public can readily distinguish between the products of the respective parties. Caliber Auto., 605 F.3d at 939-40 (citing Frehling Enters., 192 F.3d at 1338 ). Here, the goods and services offered by Plaintiff and Defendants, namely, restaurant and bar services, are similar.
iv. Similarity of retail outlets, trade channels, and customers
The similarity of the parties retail outlets and customers takes into consideration where, how, and to whom the parties products are sold. Caliber Auto., 605 F.3d at 940 (citing Frehling Enters., 192 F.3d at 1339 ). Plaintiff and Defendants use similar retail outlets, namely, restaurants and bars, and cater to similar customers, namely, those who enjoy a sports bar venue for their restaurant experience.
v. Similarity of advertising media
The similarity of advertising media factor looks to each partys method of advertising. Caliber Auto., 605 F.3d at 940 (citing Frehling Enters., 192 F.3d at 1339 ). Although Plaintiff proffered testimony from Perrin regarding its advertising media, it presented no evidence regarding what advertising media Defendants use. Therefore, there is no basis for ascertaining any similarity of advertising media.
vi. Defendants intent
When analyzing an alleged infringers intent, [the Court] must determine whether the defendant adopted a plaintiffs mark with the intention of deriving a benefit from the plaintiffs business reputation. Caliber Auto., 605 F.3d at 940 (citing Frehling Enters., 192 F.3d at 1340 ). In this case, Defendants acted under the belief that they could operate a Sandbar Sports Grill so long as it was located outside the ten-mile Restricted Area. Defendants complied with this restriction by locating their restaurant in Cutler Bay outside the ten-mile radius. Moreover, Defendants were aware that other Sandbar Sports Grills using the Sandbar Logo had been operating in Cocoa Beach and Key West for some time without any objection from Canes or Perrin. Given these circumstances, there is no basis to attribute to Defendants the intent to profit from Canes business reputation, rather than to run their own parallel business like the operators of the Cocoa Beach and Key West locations were doing.
vii. Actual confusion
Defendants hearsay objection to Plaintiffs submission of social media postings was sustained. Therefore, Plaintiff failed to adduce any admissible evidence of actual confusion.
viii. Analysis
Three factors (similarity of marks, goods and retail outlets) favor Plaintiff. The remaining four factors favor Defendants since the Sandbar Marks are the weakest type of mark, and there is no basis for finding similarity of advertising, improper intent and actual confusion. Taking into account all seven factors, Plaintiff has not made out a prima facie case of likelihood of confusion, given that the type of mark and the evidence of actual confusion are the most important factors. Frehling Enters., 192 F.3d at 1335. Hence, Plaintiff has failed to establish by a preponderance of the evidence that it has a substantial likelihood of success on the merits. Nevertheless, in an abundance of caution, the undersigned will address the remaining three factors of the injunctive relief calculus.
B. Irreparable harm
To establish this element, Plaintiff must show that the injury it has sustained cannot be undone through monetary remedies and that such injury is neither remote nor speculative, but actual and imminent. Anago Franchising, 2009 WL 5176548, at *11. Given the lack of evidence of actual confusion, Plaintiff has not established by a preponderance of the evidence irreparable harm to its reputation in the restaurant and bar business.
C. Balancing of the equities
Given Plaintiffs failure to establish likelihood of success on the merits and irreparable harm, the harm to Plaintiff from the continued operation of the Sandbar Sports Grill does not outweigh the harm to Defendants from the proposed injunction that seeks to prohibit Defendants from using the Sandbar Marks; mandates them to remove all allegedly infringing content from their business, signage, marketing materials, and Internet postings (including social media); and mandates them to publish a disclaimer of any association with Plaintiff.
D. Public interest
The public interest is served by eliminating confusion in the marketplace. Pandora Jewelers 1995, Inc. v. Pandora Jewelry, LLC, 703 F. Supp. 2d 1307, 1316 (S.D. Fla. 2010) (citing SunAmerica Corp. v. Sun Life Assurance Co. of Can., 77 F.3d 1325, 1334 (11th Cir. 1996) ). Because Plaintiff has not established that Defendants use of the Sandbar Marks is likely to cause confusion among patrons of sports bars and restaurants, requiring Defendants to rename their Sandbar Sports Grill in Cutler Bay and to stop using the life preserver logo associated with that location would disserve the public interest.
RECOMMENDATION
Based on the foregoing considerations, the undersigned RESPECTFULLY RECOMMENDS that Plaintiffs Motion for Preliminary Injunction [D.E. 5] be DENIED. The parties have fourteen (14) days from the date of receipt of this Report and Recommendation within which to serve and file objections, if any, with the Honorable Jose E. Martinez, United States District Judge. See Local Magistrate Rule 4(b). Failure to timely file objections shall bar the parties from attacking on appeal the factual findings contained herein. See Resolution Tr. Corp. v. Hallmark Builders, Inc., 996 F.2d 1144, 1149 (11th Cir. 1993). Further, failure to object in accordance with the provisions of [ 28 U.S.C.] § 636(b)(1) waives the right to challenge on appeal the district courts order based on unobjected-to factual and legal conclusions. See 11th Cir. R. 3-1 (I.O.P. - 3).
RESPECTFULLY SUBMITTED in Miami, Florida this 27th day of March, 2018.
This Court notes that Plaintiff does not seek a preliminary injunction prohibiting Defendants use of the Sandbar name, rather, Plaintiff seeks to prohibit Defendants from continuing to infringe on Canes Bars trademarks and trade dress [ECF No. 5, at 1]. Accordingly, this Court does not find Paragraph 11.8 of the Shareholder Agreement, in and of itself, to be dispositive of the issues presented in Plaintiffs Motion for Preliminary Injunction. As noted by the Magistrate Judge, the Shareholder Agreement and Covenant are of limited impact, if any to the issues raised by Plaintiffs Motion for Preliminary Injunction [ECF No. 47, at 14].
Popular Bank of Florida v. Banco Popular de Puerto Rico , 9 F.Supp.2d 1347, 1353 (S.D. Fla. 1998) (citing E. Remy Martin & Co. v. Shaw-Ross Intl Imports, Inc. , 756 F.2d 1525, 1527 n. 1 (11th Cir. 1985) ).
The Court also takes note that Plaintiff expressly disclaimed the Sports Grill descriptor in its trademark application [ECF No. 50-1].
In Ferrellgas Partners, L.P. v. Barrow , the district court excluded evidence of actual confusion as hearsay, but, on appeal, the Eleventh Circuit did not reach whether the district court abused its discretion in excluding evidence of actual confusion as hearsay. 143 Fed. Appx. 180, 190 (11th Cir. 2005).
With respect to the number of confused consumers, the Eleventh Circuit has stated that [a]ctual confusion by a few customers is the best evidence of likelihood of confusion by many customers. Freedom Sav. , 757 F.2d at 1185.
The Court also notes Plaintiff filed additional objections to certain actual findings [ECF No. 50, at 17-19]. To the extent that such objections are not addressed by this order, the Court once more notes that [f]indings made on an application for preliminary injunction are not controlling at a later hearing on a permanent injunction. Popular Bank of Florida , 9 F.Supp.2d at 1353 (citing E. Remy Martin & Co. , 756 F.2d at 1527 n. 1 ).
In preparation for the evidentiary hearing, Longo wrote a list of the restaurants in which he has been involved. See Pls Ex. 5.
Longo did sign on May 30, 2013 a Stock Assignment for his 250 shares in Canes, which he sold as follows: 46 2/3 to Borrero; 115 to Gentile; 66 2/3 to Perrin and 21 2/3 to Terry Perrin. See Pls Ex. 6.
The number of shares assigned to each is the same as shown in the Stock Assignment. Id.
Longo personally knows about two of the locations in the Florida Keys (he stopped to eat at one of them) and about the one in Fort Myers. He is not aware of any of these entities using a logo similar to the Sandbar Logo or the slogan Get Rescued from Ordinary Food or of them having a Burrito Challenge.
Although there is a reference to licenses in the Malloy & Malloy, P.L. response, Longo is not aware of any license agreement executed by Canes for the use of the Sandbar Marks.
Although Plaintiff states in its Motion for Preliminary Injunction that it is Likely to Succeed on the Merits of its Trademark Infringement, Unfair Competition, and Trademark Dilution Claims, id. at 6, it only goes on to address the trademark infringement claims. Id. at 6-14.
The undersigned notes, however, that Plaintiff provides no rationale for treating Get Rescued from Ordinary Food, Home of the Fish Taco, Five Pound Burrito Challenge, and Hurricanes as trade dresses of any particular product worthy of protection.