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Atomic Cafe, Inc. v. Roy

United States District Court, D. Massachusetts

October 26, 2017

ATOMIC CAFE, INC., and JOHN MAHONEY, Plaintiffs,
v.
KYLE ROY, PETER ROY, COLD BREW VENTURES, LLC, and LEAN & LOCAL LLC d/b/a LEANBOX d/b/a GRIND or GRIND COFFEE, Defendants.

          MEMORANDUM & ORDER

          Indira Talwani United States District Court, Judge.

         Before the court is Plaintiffs' Motion for Preliminary Injunction [#2]. In their Motion, Plaintiffs seek relief based on claims of common law trademark infringement, trademark infringement in violation of 15 U.S.C. § 1114, and misappropriation of trade secrets in violation of Massachusetts General Laws ch. 93, § 42. For the reasons that follow, the relief Plaintiffs seek based on their trademark claims is GRANTED in part and DENIED without prejudice in part. The court will address Plaintiffs' claim for misappropriation of trade secrets in a separate order.

         I. Background[1]

         Plaintiff John Mahoney is the President of Plaintiff Atomic Cafe, Inc., a Massachusetts coffee business. Compl. 4 [#1]. Atomic Cafe owns and operates retail cafes in several Massachusetts locations, and a roasting, toll-roasting, and kegging facility in Salem, Massachusetts. Compl. 4 [#1]. Atomic Cafe owns two registered trademarks related to the Atomic Coffee Roasters brand. Compl. 4 [#1]; Opp. to Mot. for Prelim. Inj. [“Opp.”] 6 n.21 [#15].

         Defendants Kyle Roy and Peter Roy are co-founders of LeanBox, a company that provides food vending services to businesses. Compl. 6 [#1]. Grind or Grind Coffee (“Grind”) is LeanBox's coffee business. Compl. 6 [#1]. Grind coffee products are offered in connection with LeanBox's vending machines and office supply services. Compl. 6 [#1].

         In or around September 2016, the parties agreed to pursue a business venture together called “Cold Brew Ventures.” Compl. 6-7 [#1]. On September 18, 2017, Peter Roy informed Mahoney that Defendants were no longer interested in pursuing the joint venture with him. Decl. of John Mahoney [“Mahoney Decl.”] 6 [#4]. Mahoney “withdrew any permission Defendants had” to use the Trademarks “immediately following” Mahoney's removal from the venture. Pl.'s Mem. 6-7 [#3].

         II. Trademark Infringement

         Plaintiffs contend that Defendants are no longer authorized to use the trademarks but have continued to do so. Specifically, Plaintiffs claim that Defendants have sold products, including stale products, labeled with the trademarks, and have displayed, and continue to display, Atomic Cafe's trademarks on at least some webpages and social media pages. Mahoney Decl. 7 [#4]; Decl. of Michael E. Strauss, Esq. [“Strauss Decl.”] 1-6 [#16-1].

         Defendants generally concede that they are no longer authorized to use the trademarks, but contend that they are authorized to sell products purchased for the express purpose of resale. They state further that after September 18, they “began discontinuing their use of Atomic's trademarks, ” and that they “no longer are using Atomic's trademarks in any way other than on products purchased for the express purpose of resale.” Opp. 6 [#15].

         A. Likelihood of Success on the Merits

         To succeed on a claim of trademark infringement, Plaintiffs must demonstrate that they own a protectable mark, that Defendants' use of that mark is unauthorized, and that such use will likely cause consumer confusion. 15 U.S.C. § 1125; Borinquen Biscuit Corp. v. M.W. Trading Corp., 443 F.3d 112, 116 (1st Cir. 2006) (“Before a party can succeed in an infringement action, it must demonstrate that its mark merits protection and that the allegedly infringing use is likely to result in consumer confusion.”).

         The first element is satisfied. Registration of a mark on the Principal Register is “prima facie evidence of the validity of the mark and of the registration of the mark, the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce.” 15 U.S.C. § 1115(a). Defendants offer no evidence to rebut that prima facie showing.

         The second element is also satisfied as to uses of the trademarks on Defendants' website and social media pages. Defendants do not dispute that they are no longer authorized to use the trademarks on these platforms, while Plaintiffs have come forward with evidence of Defendants' continued use of the trademark on these platforms after the termination of the parties' relationship. See Strauss Decl. 1-6 [#16-1].

         The record is less clear as to the use of the trademarks on products offered for sale. At the hearing, Plaintiffs clarified that they were not seeking to enjoin Defendants' resale of prepackaged coffee beans, but that they did object to Defendants' use of the trademarks on coffee products, such as cold brew, that were produced by Defendants after the relationship was terminated. The record at this juncture does not demonstrate a likelihood that ...


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