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Detroit Coffee Co., LLC v. Soup For You, LLC

United States District Court, E.D. Michigan, Southern Division

August 21, 2019

Detroit Coffee Company, LLC, Plaintiff,
v.
Soup For You, LLC, d/b/a Detroit Bold Coffee Co. and Allen James O'Neil, Defendants.

          ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          Victoria A. Roberts United States District Judge.

         I. Background

         Plaintiff Detroit Coffee Company brings suit against Defendants for federal and New York state law violations arising from an alleged trademark infringement.

         This dispute is over Defendants' use of its “Detroit Bold, ” “Detroit Bold Coffee Co., ” and “Detroit Bold Coffee Company DB” marks in connection with their coffee products and related merchandise. Plaintiff argues the use of those marks infringes on its senior “Detroit Coffee” and “Detroit Coffee Company” marks, also used in connection with coffee and merchandise.

         Plaintiff is a New York based company. It began doing business as Detroit Coffee Company in 2003. It registered a trademark for “Detroit Coffee” for coffee and clothing merchandise in 2013 with the principal register of the United States Patent and Trademark Office (“USPTO”).

         Initially, Plaintiff was active with its coffee sales and promotion, amassing $22, 339 in nationwide marketing expenses and roughly $26, 000 in sales with its marks. However, Plaintiff engaged in no active marketing in the past three years; instead relying on promotion via its website, www.detroitcoffee.com, and “word-of-mouth.”

         Plaintiff's only business in Michigan consists of selling coffee to a Detroit café that closed in 2005, an undisclosed number of online sales in Michigan, and donating coffee to Michigan events sometime before or during 2011. Overall, Plaintiff's sales nationwide consist of approximately $900 in each of the past four years.

         Defendants began using the mark Detroit Bold to sell coffee in 2009, and registered “Detroit Bold, ” “Detroit Bold Coffee Co., ” and “Detroit Bold Coffee Company DB” between 2014 and 2016 in the USPTO supplemental register. They sell coffee and other merchandise using the Detroit Bold mark via Amazon, the website www.detroitboldcoffee.com, and several retail stores like Meijer and Plum Market. Defendants market Detroit Bold via their website, a third-party marketing agency called Karma Jack, social media, the Detroit Eastern Market, advertisements in local Detroit papers, and events in the Detroit area.

         In 2016, Plaintiff filed proceedings against Defendants with the USPTO. Defendants say this was the first time they learned of Plaintiff's marks. Later that same year, Plaintiffs filed suit in the Southern District of New York for several trademark related claims. These were transferred to the Eastern District of Michigan. The claims before the Court are:

I. Federal trademark infringement in Violation of 15 U.S.C. § 1114;
II. Unfair competition in violation of 15 U.S.C. § 1125;
III. Trademark dilution in violation of 15 U.S.C. § 1125;
IV. Cybersquatting under federal law 15 U.S.C. § 1125(d);
V. State law trademark infringement under N.Y. GEN. BUS. Law § 360;
VI. Unfair business practices under state law N.Y. GEN. BUS. Law § 349;
VII. Injury to business practices and unfair competition under N.Y. GEN. BUS. Law § 360-L;
VIII. Common Law trademark infringement and unfair competition.

         Defendants and Plaintiff filed motions for summary judgment on all of Plaintiff's claims. Defendants' motion for summary judgment is granted; Plaintiff's is denied.

         Defendants also filed counter claims for:

I. Cancellation of Plaintiff's trademark due to abandonment;
II. Cancellation of Plaintiff's trademark for being merely descriptive;
III. Cancellation of Plaintiff's trademark for being misdescriptive;
IV. Cancellation of Plaintiff's trademark due to fraud;
V. Violations of Michigan's Consumer Protection Act, M.C.L. 445.903;
VI. Common law trademark infringement; and
VII. Declaratory judgment of noninfringement.

         These claims are not raised in these motions and will proceed.

         II. Standard of Review

         A motion for summary judgment can be granted under Fed.R.Civ.P. 56 when the pleadings, depositions, answers to interrogatories, and admissions on file show there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Gen. Motors Corp. v. Lanard Toys, Inc., 468 F.3d 405, 412 (6th Cir. 2006). There must be no evidence that would allow a reasonable jury to find for the non- moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242-43 (1986). Generally, the burden is on the moving party to demonstrate no material fact exists, but that burden may be discharged provided there is an absence of evidence supporting the nonmoving party's case. Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005). When reviewing a motion for summary judgment, evidence is viewed in a light most favorable to the non-moving party. Id.

         III. Analysis

         Both parties agree that the analysis of Count I, trademark infringement in violation of 15 U.S.C. § 1125, is dispositive for almost all of Plaintiff's claims, including Counts I, II, VII. As later discussed, it is also dispositive of Counts V, VI, and VIII.

         Claims under 15 U.S.C. § 1125 are analyzed in a two-step process. Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723, 728 (6th Cir. 2012). First, the Court determines whether the mark is protectable under the statute. Id. Second, the Court decides if the allegedly infringing mark is likely to cause confusion among relevant consumers. Id.

         Plaintiff says it has a valid and protectable mark, which Defendants dispute in one of their counter claims but do not directly address in their motion for summary judgment. The parties hotly contest whether Defendants' mark is likely to cause confusion.

         A. Protectable Nature of “Detroit Coffee”

         Plaintiff asserts that the “Detroit Coffee” mark is protectable because it was registered with the USPTO's principal register. Defendants argue in Count II of their counter claims and in some portions of their motion for summary judgment that the mark is merely geographically descriptive and thus not distinctive or protectable.

         A mark is only protected if it is “distinctive” as a matter of law. Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504, 513 (6th Cir. 2007). There are three levels of distinctiveness used to classify marks. Id. The first and least distinctive is the generic mark, which is merely the commonly used name of the goods and is never afforded protection. Id. The second, called descriptive marks, are marks that directly impart information such as the goods' geographic origin, function or use, intended class of users, desirable characteristics, or effects on the end user. Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F.2d 590, 594 (6th Cir. 1989). Descriptive marks may sometimes be protected. Id. The third, called inherently distinctive marks, are marks that are “arbitrary, ” “fanciful, ” or “suggestive” and are always protected. Leelanau, 502 F.3d at Descriptive marks - between generic and inherently distinctive - are only afforded protection if they have developed a secondary meaning among consumers; for example, when the public associates the goods as originating from the mark holder, rather than being merely described as originating from a place. Id.

         A mark that contains a geographical term can be either merely descriptive or inherently distinctive, depending on whether the geographic term is “minor, obscure, remote or unconnected with the goods.” See Burke, 871 F.2d at 594. Terms that bear no relationship to the goods or are otherwise not manufactured in the geographic area identified in the mark are inherently distinctive, rather than merely descriptive. Id.

         Detroit Coffee is inherently distinctive. Detroit is a metropolitan city and not a producer of coffee. Therefore, the geographic term “Detroit” is unconnected to the term “Coffee, ” resulting in an inherently distinctive mark that is protectable.

         Even if the mark is merely descriptive, its registration with the USPTO's primary register creates a rebuttable presumption that the mark has developed a secondary meaning. Leelanau, 502 F.3d at 511. Defendants do not attempt to rebut that presumption, so the mark is protectable either way.

         Plaintiff's mark is protectable under 15 U.S.C. § 1125.

         B. Likelihood of Confusion

         The parties dispute whether any of the “Detroit Bold” and “Detroit Coffee” marks are confusing to consumers. The second inquiry is whether a defendant's use of its mark is likely to cause confusion among consumers over which party the goods originate from. Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997). Confusion is the touchstone of liability for violations of 15 U.S.C. § 1125, and is determined by eight factors:

1. Strength of the senior mark;
2. Relatedness of the goods or services;
3. Similarity of the marks;
4. Evidence of actual ...

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