kreation juicery - trade dress restaurant opinion (sept 2014)

8/9/2019 Kreation Juicery - Trade Dress Restaurant Opinion (Sept 2014)

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

KREATION JUICERY, INC.,

Plaintiff,

v.

EIMAN SHEKARCHI et al.,

Defendants.

)))))))))))))))

Case No. CV 14-658 DMG (ASx)

ORDER RE PLAINTIFFS MOTIONFOR PRELIMINARY INJUNCTION[DOC. # 14]

On January 28, 2014, Plaintiff Kreation Juicery, Inc. filed a complaint against

Defendants Eiman Shekarchi and April Heidarian (the Shekarchis), asserting trademark

infringement and dilution in violation of the Lanham Act (the Act), 15 U.S.C.

1125(a), among other claims. [Doc. # 1.] On June 12, 2014, Plaintiff filed a motion for

preliminary injunction. [Doc. # 14.] A hearing was held on Plaintiffs motion for a

preliminary injunction on September 12, 2014. For the reasons discussed below,

Plaintiffs motion for preliminary injunction is GRANTED in part and DENIED in part.

Case 2:14-cv-00658-DMG-AS Document 36 Filed 09/17/14 Page 1 of 22 Page ID #:1029


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To build upon the urban-oasis vibe generated by the living wall, Plaintiff

incorporated reclaimed wood throughout the interior. (Sarshar Decl. 7; Sarshar Decl.

9, Exh. A (Photos of Kreation Restaurants); Sarshar Decl. 19, Exh. B (Photos of

Kreation Restaurants, Including Kreation Juice Truck).)Plaintiff has spent over $3 million developing and marketing the Kreation brand.

(Sarshar Decl. 16.) Kreation has received recognition, primarily for its juices, from

Zagat, The Los Angeles Times , Sunset Magazine , The Huffington Post , and hundreds of

food and lifestyle blogs and websites. ( Id. 12.) It has also been featured on popular

television shows and networks, such as Access Hollywood , The Millionaire Matchmaker

E! Entertainment Television, CBS, KCAL, ABC, and NBC. ( Id. ) Plaintiff also relies on

social media for marketing, cultivating close to 7,000 followers on Instagram, 3,000

followers on Twitter, and over 5,000 likes on Facebook. ( Id. 22.) These followers have

shared hundreds of photos of Kreations food and dcor. ( Id. )

In or around June 2013, several Kreation customers, confusing Creation Grill for

Kreation Kafe, congratulated Kreations owner Marjan Sarshar on opening a second

location in Santa Monica. ( Id. 25.) Creation Grill is located 3.4 miles away from

Kreation Kafe. ( Id. 26; see also Sarshar Decl. 27, Exh. C (Map of Kreation

Locations and Creation Grill Location).) Creation Grill offers Mediterranean food with

an emphasis on health and nutrition, though its ingredients are not organic. (Sarshar

Decl. 28; Declaration of Derek A. Newman (Newman Decl.) 7, Exh. F (Eiman

Shekarchi, Vol. II Depo. at 115:2-3).)

Defendants claim that they were unaware of Kreation when they decided in June

2012 to open a restaurant in Santa Monica. (Declaration of April Heidarian (Heidarian

Decl.) 3, 6.) Defendants settled upon the name Creation because it referred to theway customers would be able to customize their orders. ( Id. 4.) Before finalizing the

name, Defendants searched domain names to see if Creation Grill was available and

purchased CreationGrill.com from Go Daddy in August 2012. (Declaration of Eiman

Shekarchi (Shekarchi Decl.) 4.) They also purchased KreationGrill.com to protect



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the Creation Grill name. ( Id. 5.) Defendants claim to have been unaware of Kreation

until November 20, 2013, when Plaintiffs counsel sent them a cease and desist letter.

(Heidarian Decl. 6.)

Prior to opening their restaurant, Defendants hired the same artist who designedPlaintiffs living wall. (Santiago Decl. 8-9.) The parties dispute whether Defendants

asked Santiago for a replica of Plaintiffs living wall specifically. Plaintiff claims they

did, while Defendants assert that they had not even heard of Kreation when they hired

Santiago but was referred to Santiago by Shekarchis mother. ( Id. 8-9; Shekarchi

Decl. 12, 14.) Furthermore, Defendants contend that they selected their design after

looking through a Powerpoint of sample work, among which was Plaintiffs living wall.

(Shekarchi Decl. 15.) When Plaintiff expressed its objections to Defendants living

wall, the artist offered to modify Defendants living wall at no cost, but Defendants

refused to consent to any alteration. (Santiago Decl. 11.)

Defendants also incorporate reclaimed woodthough less of itthroughout the

interior of their restaurant, using instead marble for the countertops and white subway tile

and brick on the walls. (Sarshar Decl. 32, Exh. D (Photos of Creation Grill

Restaurant); Heidarian Decl. 13, Exh. K (Photos of Creation Grill).) Defendants

assert that many of these design elements, including the reclaimed wood, were based on

their friend Chris McIntoshs Los Angeles restaurant, Kitchen Faire. (Shekarchi Decl.

9; Declaration of Chris McIntosh (McIntosh Decl.) 6.) Further, Defendants claim

they have seen reclaimed wood used in numerous restaurants in Santa Monica and Los

Angeles. (Heidarian Decl. 7; see Heidarian Decl. 7, Exh. D (Interior of Carvery

Kitchen).)

Since Creation Grills opening, Plaintiff has received numerous customer inquiriesabout the affiliation between Kreation and Creation Grill. 2 (Declaration of Frank

2 At the hearing, Defendants counsel objected to this evidence on hearsay grounds. Since theemployees submitted declarations, their statements are not hearsay. To the extent Defendants counsel



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DAndrea (DAndrea Decl.) 4-5; Declaration of Gildardo Monterrubio

(Monterrubio Decl.) 4; Declaration of Jonathan Solorzano (Solorzano Decl.) 4.)

Further, customers have attempted to pick up orders placed with Creation Grill at

Kreation. (Monterrubio Decl. 6.) On several occasions, customers have placed to-goorders with Kreation but have not picked them up. ( Id. 7.) On two distinct occasions,

Kreation diners waited for friends who, believing Creation Grill to be Kreation Kafe,

mistakenly went to Creation Grill. (Solorzano Decl. 5-6.)

Plaintiffs counsel sent a cease and desist letter to Defendants on November 20,

2013, but Defendants never responded to the letter. (Sarshar Decl. 34, 35; Sarshar

Decl. 34, Exh. E (November 20, 2013 Cease and Desist Letter).) On December 5,

2014, Plaintiffs counsel spoke to Defendants on the phone, but Defendants refused to

cease their conduct. (Sarshar Decl. 36.)

II.

LEGAL STANDARD

A plaintiff seeking a preliminary injunction must show that (1) it is likely to

succeed on the merits; (2) it is likely to suffer irreparable harm in the absence of

preliminary relief; (3) the balance of equities tips in its favor; and (4) an injunction is in

the public interest. Fox Broad. Co., Inc. v. Dish Network LLC , 723 F.3d 1067, 1072-23

(9th Cir. 2013) (citing Winter v. Natural Res. Def. Council, Inc. , 555 U.S. 7, 20, 129 S.Ct.

365, 172 L.Ed.2d 249 (2008)). A preliminary injunction is also appropriate when a

plaintiff raises serious questions going to the merits, demonstrates that the balance of

hardships tips sharply in [its] favor, and shows that there is a likelihood of irreparable

injury and that the injunction is in the public interest. Alliance for the Wild Rockies v.

is arguing that the customers inquiries are hearsay, their inquiries are not being offered for the truth ofthe matter asserted, i.e. , that Creation Grill is Plaintiffs restaurant, so they are not hearsay. See Fed. R.Evid. 801(c). Furthermore, because the customers inquiries are questions, they arguably do not assertanything.



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Cottrell , 632 F.3d 1127, 1135 (9th Cir. 2011) (quoting The Lands Council v. McNair , 537

F.3d 981, 987 (9th Cir. 2008)).

III.

DISCUSSIONA. Likelihood of Success on the Merits

1. Trademark Infringement Claim

a. Standing

Plaintiffs standing to sue under the Act is based on ownership of the unregistered

mark through prior use. Contrary to Defendants assertion, federal registration of a mark

is not required to establish ownership of a mark and thus standing to sue. Two Pesos, Inc.

v. Taco Cabana, Inc. , 505 U.S. 763, 112 S.Ct. 2753 (1992) ([I]t is common ground that

43(a) protects qualifying unregistered trademarks and that the general principles

qualifying a mark for registration under 2 of the Lanham Act are for the most part

applicable in determining whether an unregistered mark is entitled to protection under

43(a).). Federal registration is prima facie evidence of the registrants ownership of the

mark, but [i]t is axiomatic in trademark law that the standard test of ownership is

priority of use. . . . [I]t is not enough to have invented the mark first or even to have

registered it first; the party claiming ownership must have been the first to actually use

the mark in the sale of goods or services. Halicki Films, LLC v. Sanderson Sales and

Marketing , 547 F.3d 1213, 1226 (9th Cir. 2008) (quoting Sengoku Works Ltd. v. RMC

Intl, Ltd. , 96 F.3d 1217, 1219 (9th Cir. 1996)). Accordingly, ownership of an

unregistered trademark, like ownership of a registered mark, is sufficient to establish

standing under the Lanham Act. Halicki , 547 F.3d at 1213 (internal citation omitted).

Plaintiff has established ownership of the Kreation mark through priority of use.To establish ownership through priority of use, the party claiming ownership must be the

first to use the mark in the sale of goods or services. Sengoku Works , 96 F.3d at 1219.

The first to use a mark is the senior user and has the right to enjoin junior users from

using confusingly similar marks in the same industry, or within the senior users natural



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zone of expansion. Brookfield Communications, Inc. v. West Coast Entertainment

Corp. , 174 F.3d 1036, 1047 (9th Cir. 1999). Because Kreation began using the

Kreation mark for Mediterranean restaurant services in 2007, six years before

Defendants opened Creation Grill, Kreation has established its ownership of theKreation mark through priority of use. 3 Therefore, Kreation has standing to sue under

the Act.

b. Validity of the Mark

To succeed on its claim for trademark infringement under 15 U.S.C. 1125(a)(1),

Plaintiff must demonstrate (1) the presence of a valid and protectable trademark, and (2)

that Defendants use of the mark is likely to cause consumer confusion. Aurora World,

Inc. v. Ty Inc. , 719 F. Supp. 2d 1115, 1141 (C.D. Cal. 2009) (citing Dept of Parks &

Rec. v. Bazaar Del Mundo, Inc. , 448 F.3d 1118, 1124 (9th Cir. 2006)). For unregistered

marks, the burden of proof is on the plaintiff to establish the validity of the mark. Yellow

Cab Co. of Sacramento v. Yellow Cab of Elk Grove, Inc. , 419 F.3d 925, 928 (9th Cir.

2005).

To be valid and protectable, the mark must be distinctive. An unregistered mark is

not presumed to be distinctive, but must either (1) be inherently distinctive or (2) have

acquired distinctiveness through secondary meaning. See Wal-Mart Stores, Inc. v.

Samara Bros., Inc. , 529 U.S. 205, 210-11, 120 S.Ct. 1339, 1343 (2000). Plaintiff argues

3 Defendants argue that Plaintiff cannot establish priority of use of the Kreation mark because asearch of the U.S. federal trademark database for Kreation generates 87 results, revealing otherentities who registered the term before Plaintiff applied to register the mark. (Oppn at 18.) But a third

partys prior use of a trademark is not a defense in an infringement action. Comm. for Idahos High

Desert, Inc. v. Yost , 92 F.3d 814, 820 (9th Cir. 1996). So long as plaintiff proves rights superior todefendant, that is enough. Defendant is no less an infringer because it is brought to account by a

plaintiff whose rights may or may not be superior to the whole world. The plaintiff's speculative disputewith a third party does not concern the defendant. See id. (quoting J. Thomas McCarthy, McCarthy onTrademarks and Unfair Competition 31.39 (3d ed.)). Thus, the existence of other potential owners ofthe mark does not affect the Courts analysis in this case.



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that Kreation is entitled to protection because it is inherently distinctive. Fanciful,

arbitrary and suggestive marks are considered inherently distinctive. Official Airline

Guides, Inc. v. Goss , 6 F.3d 1385, 1390 (9th Cir. 1993). Plaintiff contends that

Kreation is an arbitrary mark. The Court, as it discusses infra , concludes thatKreation is a suggestive mark instead. In any event, Kreation is still a valid and

protectable mark because suggestive marks qualify as inherently distinctive.

c. Likelihood of Confusion

In addition to the presence of a valid and protectable trademark, Plaintiff must

show that Defendants use of the mark is likely to cause consumer confusion. Aurora

World , 719 F. Supp. 2d at 1141. To determine whether a likelihood of confusion exists

between the original trademark and the allegedly infringing product, courts look at eight

factors. GoTo.Com, Inc. v. Walt Disney Co. , 202 F.3d 1199, 1204 (9th Cir. 2000); see

also AMF Inc. v. Sleekcraft Boats , 599 F.2d 341, 348-49 (9th Cir. 1979), abrogated on

other grounds by Mattel, Inc. v. Walking Mountain Prods. , 353 F.3d 792, 810 n.19 (9th

Cir. 2003). The eight factors are: (1) strength of the mark; (2) proximity of the goods;

(3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels

used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7)

defendants intent in selecting the mark; and (8) likelihood of expansion of the product

lines. Rearden LLC v. Rearden Commerce, Inc. , 683 F.3d 1190, 1209 (9th Cir. 2012).

These factors are intended as an adaptable proxy for consumer confusion, not a rote

checklist. Network Automation, Inc. v. Advanced Sys. Concepts, Inc. , 638 F.3d 1137,

1145 (9th Cir. 2011). [S]ome factorssuch as the similarity of the marks and whether

the two companies are direct competitorswill always be important, but the relative

importance of each individual factor will be case-specific. Brookfield , 174 F.3d at 1054;see also Network Automation , 638 F.3d at 1149 (stating that each factor [is assigned]

appropriate weight in accordance with its relevance to the factual circumstances

presented).

//



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i. Strength of the Mark

The stronger a markmeaning the more likely it is to be remembered and

associated in the public mind with the marks ownerthe greater the protection it is

accorded by the trademark laws. Network Automation , 638 F.3d at 1149 (citing Brookfield , 174 F.3d at 1058). In analyzing the strength of a mark, the Court weighs both

conceptual strength and commercial strength.

First, the Court considers the conceptual strength of the Kreation mark. Marks

can be conceptually classified along a spectrum of generally increasing inherent

distinctiveness as generic, descriptive, suggestive, arbitrary, or fanciful. Brookfield , 174

F.3d at 1058. Where the mark falls on the scale is partly determinative of how strong it

is, with a mark that is generic being weak and a mark that is fanciful strong. Id. [T]he

less protected suggestive category requires the exercise of some imagination to

associate the mark with the good or service. Rearden LLC , 683 F.3d at 1211.

Arbitrary marks are common words that have no connection with the actual product

for example, Dutch Boy paint. Surfvivor Media, Inc. v. Survivor Prods ., 406 F.3d 625,

631-32 (9th Cir. 2005) (citation omitted). Marks that are fanciful have no commonly

known connection with the product at hand and include examples such as Kodak for

cameras or Aveda for skin care products. Id. (citations omitted).

A mark is suggestive when it requires a mental leap from the mark to the

product. Brookfield , 174 F.3d at 1058. For example, the word glow on perfume is

suggestive because it refers suggestively to the positive feeling one will achieve by

using the product. See Glow Indus., Inc. v. Lopez , 252 F. Supp. 2d 962, 978 (C.D. Cal.

2002). Slickcraft for boats and Air Care for a service that maintains medical

equipment that administers oxygen are additional examples of suggestive marks.Surfvivor , 406 F.3d at 630 (citation omitted).

The Court concludes that Kreation is suggestive. Kreation is not a descriptive

term because it does not clearly refer to Mediterranean food made with organic, locally

sourced ingredients. The Court rejects, however, Plaintiffs contention that Kreation is



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arbitrary merely because it is a common word that does not directly describe healthy

Mediterranean cuisine. As in Surfvivor , where the Ninth Circuit held that Surfvivor

was suggestive because it was highly evocative of the companys beach-related

products, Kreation is highly suggestive of Plaintiffs organic cuisine. Id. at 632.[S]uggestive marks are presumptively weak. Id. Therefore, the conceptual

strength of the Kreation mark does not suggest a likelihood of confusion.

Next, the Court analyzes the commercial strength of the Kreation mark.

Commercial strength is based on actual marketplace recognitionin this context, actual

advertising expenditures are considered. Network Automation , 638 F.3d at 1149. The

Court considers whether one partys ability to saturate the marketplace creates a

potential that consumers will assume that one partys mark is so strong that customers

will perceive that the businesses are somehow associated. Cohn v. Petsmart, Inc. , 281

F.3d 837, 842 (9th Cir. 2002).

The Court concludes that the commercial strength of the Kreation mark is strong.

Kreation has used the mark exclusively and continuously in commerce since 2007, and

has expanded to several locations in the Los Angeles area. Plaintiff has spent $3 million

promoting the Kreation brand, placing it several times on prominent national television

shows and in print media with substantial readership. Creation Grill, in contrast, has not

spent any money marketing its brand or received recognition on television or in the print

media. Therefore, the commercial strength of the Kreation mark suggests a likelihood

of confusion.

After balancing the weak conceptual strength and the strong commercial strength

of the Kreation mark, the Court finds that this factor leans in favor of Plaintiff.

ii. Proximity of the GoodsGoods are proximate if they are reasonably thought by the buying public to come

from the same source if sold under the same mark. Rearden LLC , 683 F.3d at 1212

(quoting Sleekcraft , 599 F.2d at 348 n.10). Proximate goods are similar in use and

function. Sleekcraft , 599 F.2d at 350. The Ninth Circuit has held that goods as



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dissimilar as movies and sci-fi merchandise are proximate goods. Dreamwerks Prod.

Group Inc. v. SKG Studio , 142 F.3d 1127, 1131 (9th Cir. 1998); see also Fleischmann

Distilling Corp. v. Maier Brewing Co. , 314 F.2d 149, 159-60 (9th Cir. 1963) (whiskey

and beer proximate goods). Here, both restaurants serve healthy Mediterranean cuisinewithin a few miles of each other. See Duck Dive v. Heydari , 13-CV-07791, 2014 U.S.

Dist. LEXIS 42313 (C.D. Cal. Mar. 27, 2014) (enjoining a restaurant in Los Angeles

from using a mark similar to plaintiffs bar located in San Diego because of the

likelihood of confusion).

Accordingly, this factor strongly favors Plaintiff.

iii. Similarity of the Marks

The more similar the marks in terms of appearance, sound, and meaning, the

greater the likelihood of confusion. Brookfield , 174 F.3d at 1054 (citing Dreamwerks

142 F.3d at 1131). The marks must be considered in their entirety and as they appear in

the marketplace. Id. (citing Goss , 6 F.3d at 1392 (9th Cir. 1993)). Similarities are

weighed more heavily than differences. Goss , 6 F.3d at 1392 (citation omitted); see also

GoTo.com , 202 F.3d at 1206 (same).

Plaintiff argues that the Court should focus its analysis on the term Creation and

disregard Grill or Mediterranean Cookhouse in Defendants mark. A junior user

who has appropriated anothers entire mark may not avoid likelihood of confusion by

adding descriptive or non-distinctive matter to it. Electropix v. Liberty Livewire Corp.

178 F. Supp. 2d 1125, 1132 (C.D. Cal. 2001) (quoting J. Thomas McCarthy, McCarthy

on Trademarks and Unfair Competition 23:50 (4th ed.)) (internal quotations omitted);

see, e.g. , Golden Door, Inc. v. Odisho , 646 F.2d 347 (9th Cir. 1980) (holding defendants

addition of the descriptive terms for hair and coiffeur to Golden Door did notreduce the likelihood of confusion because the parties services overlapped). Because

grill and Mediterranean cookhouse are descriptive terms denoting a restaurant and a

type of restaurant, respectively, the Court will focus its inquiry on the dominant, source-

identifying featureCreation.



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With respect to sound, the marksKreation and Creationsound exactly the

same. As for appearance, the words Kreation and Creation are the same except for

one letter. The logos associated with the marks differ in appearance. In Kreation, the

Kr and ion are darkened so that the word eat stands out, and a leafy plant blossoms between the o and n. (Heidarian Decl. 11, Exh. F (Kreation Menu).) The letters

forming Creation, on the other hand, look like Scrabble tiles. (Heidarian Decl. 5,

Exh. B (Creation Grill Menu).) These differences reflect in part the dissimilarity in the

parties reasons for using the word creation. Plaintiff hopes the word will evoke the

healthiness of its offerings, while Defendants intend to remind customers of its style of

service, in which customers customize their meals. Despite the fact that the marks are

meant to highlight different aspects of the dining experience, there is no escaping the fact

that, to the ordinary consumer, the definition of the words Kreation and Creation is

one and the same.

Moreover, the similarity of the marks must be considered in light of the way the

marks are encountered in the marketplace. See Lindy Pen Co., Inc. v. Bic Pen Corp.

725 F.2d 1240, 1245 (9th Cir. 1984) (finding whether prospective purchasers were

encountering products in a marketplace permitting visual examination or in the

telephone solicitation marketplace relevant to the similarity inquiry). Because both

sidesparticularly Defendants since they do not extensively advertise their business in

printrely heavily on word of mouth to generate business, similarity in sound weighs

more heavily than similarity in appearance in this case. ( See Newman Decl. 6, Exh. E

(Eiman Shekarchi, Vol. II Depo. at 83:3-12.)

Therefore, this factor weighs in Plaintiffs favor.

iv. Evidence of Actual ConfusionEvidence of actual confusion among significant numbers of consumers provides

strong support for the likelihood of confusion. Network Automation , 638 F.3d at 1151.

Plaintiff has provided evidence of actual confusion: customers have asked about

Kreations association with Creation Grill; customers have come to Kreation to pick up



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orders placed with Creation Grill; customers have placed orders with Kreation but failed

to pick them up, raising the possibility that they may have gone to Creation Grill instead;

and customers have waited at Kreation only to realize the rest of their party mistakenly

went to Creation Grill. 4 Thus, this factor supports a finding of likelihood of confusion.

v. Marketing Channels Used

Convergent marketing channels increase the likelihood of confusion. Sleekcraft

599 F.2d at 353. The Sleekcraft court considered the locations where the goods were

sold, the price range of the goods, and the types of advertising used. Here, both

restaurants cater to consumers seeking reasonably priced Mediterranean food in Santa

Monica.

Accordingly, the Court finds that this factor weighs in Plaintiffs favor.

4 Defendants decry Plaintiffs lack of a survey testing consumer confusion as well as offer theirown survey showing a lack of consumer confusion. With respect to the first point, [p]roof of actualconfusion is considered the best evidence of likelihood of confusion. . . . A claimant may presentanecdotal evidence of marketplace confusion. Smith v. Wal-Mart Stores, Inc. , 537 F. Supp. 2d 1302

(N.D. Ga. 2008). Plaintiffs anecdotal evidence of actual confusion is permissible.As for Defendants survey, Defendants expert Bruce Isaacson focused on eight neighborhoods

near Kreation Juicery locations, identifying potential respondents as consumers who (1) had purchasedfood at a fast casual restaurant in the past month, (2) were likely to purchase food at a fast casualrestaurant in the next month, (3) had purchased Mediterranean food in the past month, and (4) werelikely to purchase Mediterranean food in the next month. (Declaration of Bruce Isaacson (IsaacsonDecl.) 10.) Because Isaacson used the Eveready survey format, in which respondents are notinformed of the senior markhere, Kreationbut are assumed to be aware of the mark from priorexperience, Isaacson had the burden of establishing that the senior mark is well known. (Declarationof Michael Rappeport (Rappeport Decl.) 27.) Unless the mark is well known by the Evereadystandard, the survey format cannot accurately measure confusion. (Rappeport Decl. 22.)

Here, Defendants have not met the burden of showing that the Kreation mark is well knownunder the Eveready standard. As Plaintiff points out, Isaacsons survey covered an area with a

population of 600,000 people, only a small fraction of whom could reasonably be expected to be awareof Kreation from prior experience based on the volume of Plaintiffs business and its targeted appeal tohealth-conscious consumers. Thus, Isaacson should have screened respondents to confirm that theyknew the Kreation brand. Because the survey does not conform to the Eveready standard, the Courtgives the survey very little weight.



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vi. Degree of Care Customers Are Likely to Exercise in

Purchasing the Goods

The lower the customer care the greater the likelihood of confusion . Network

Automation , 638 F.3d at 1152 ( citing Playboy Enterprises, Inc. v. Netscape CommcnsCorp. , 354 F.3d 1020, 1028 (9th Cir. 2004)). Plaintiff relies on Frischs Restaurants, Inc.

v. Elbys Big Boy of Steubenville , to argue that restaurant consumers do not exercise a

significant degree of care. 670 F.2d 642, 648 (6th Cir. 1982). But there, the court

determined that fast-food restaurant selection is subject to impulse and is not likely to be

the object of intensive consumer research. Id. (emphasis added). The situation here is

closer to that in Barbecue Marx, Inc. v. 551 Ogden, Inc. , where the court found that a

barbecue restaurants customers could be expected to exercise a reasonable degree of care

because the restaurant was critically acclaimed and most of its customers were

barbecue aficionados. 235 F.3d 1041, 1045 (7th Cir. 2000). Indeed, the degree of care

exercised by Kreations customers may even exceed the attention paid to ribs by the

barbecue aficionados described in Barbecue Marx . Kreation characterizes its customers

as health-conscious locavores. Given that its customers care where the very ingredients

in their dishes originated and how they were grown, it is reasonable to infer that

Kreations customers would exercise a great deal of care in choosing where to eat in the

first place. In fact, Plaintiffs proffered evidence that Kreations customers, believing

Creation Grill to be Kreation, have complained about the white rice served at Creation

Grill supports this characterization of its clientele. (Newman Decl. 3, Exh. B (Marjan

Sarshar Depo. at 142:19-24).)

Accordingly, this factor tips in favor of Defendants.

vii. Defendants Intent in Selecting the MarkWhen the alleged infringer knowingly adopts a mark similar to anothers,

reviewing courts presume that the defendant can accomplish his purpose: that is, that the

public will be deceived. Sleekcraft , 599 F.2d at 354. This factor favors the plaintiff

where the alleged infringer adopted his mark with knowledge, actual or constructive, that



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it was anothers trademark. Brookfield , 174 F.3d at 1059. Yet, this factor is only

relevant to the extent that it bears upon the likelihood that consumers will be confused by

the alleged infringers mark (or to the extent that a court wishes to consider it as an

equitable consideration). Id. (citing Sleekcraft , 599 F.2d at 348 n.10). Therefore, the Ninth Circuit has emphasized the minimal importance of the intent factor. GoTo.com

202 F.3d at 1208 (declining to consider this factor).

The parties dispute when Defendants knew of Kreation Kafe. But it is undisputed

that as of November 20, 2013, Defendants knew of Kreation Kafe when it received

Plaintiffs cease and desist letter. Despite learning of Kreation Kafe at that time,

Defendants continued to operate its business as Creation Grill.

This factor is of minimal importance, but to the extent it is relevant at all, it favors

Plaintiff. See Boldface Licensing + Branding v. By Lee Tillett, Inc. , 940 F. Supp. 2d

1178, 1195 (C.D. Cal. 2013) (intent factor favored confusion where company was aware

of other companys trademark through cease-and-desist letter yet continued with product

roll out ).

viii. Likelihood of Expansion into Other Markets

Where two companies are direct competitors, this factor is unimportant.

Network Automation , 638 F.3d at 1153. Courts find this factor irrelevant when it has

been determined that the goods are similar. Id. ; see also Playboy , 354 F.3d at 1029

(same); Brookfield , 174 F.3d at 1060 (same).

Because the parties offerings are similar, the Court does not consider this factor.

ix. The Sleekcraft Factors Suggest a Likelihood of Confusion

The likelihood of confusion inquiry generally considers whether a reasonably

prudent consumer in the marketplace is likely to be confused as to the origin or source ofthe goods or services bearing one of the marks or names at issue in the case. Rearden

LLC , 683 F.3d at 1209. To succeed, a plaintiff must show more than simply a

possibility of such confusion. Id.



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In reviewing the Sleekcraft factors here, the Court finds that almost all of the

factorsstrength of the mark, proximity of the goods, similarity of the marks, evidence

of actual confusion, marketing channels used, and defendants intent in selecting the

markheavily weigh in favor of a finding of likelihood of confusion.In sum, the Court concludes that Plaintiff has demonstrated a strong likelihood of

success on the merits of its trademark infringement claim.

2. Trade Dress Infringement Claim

Plaintiff claims its restaurant dcorthe living wall; the exterior and interior

walls of reclaimed, unpainted wood; [the] accented portions of the wood paneled walls

made of raised strips of unpainted lath, laid in horizontal and rectangular sections; and

the use of reclaimed wood throughout the restaurant, including for tables, counters, and

barsconstitutes trade dress that is deserving of protection. (Mot. at 14.)

Trade dress is the totality of elements in which a product or service is packaged or

presented. These elements combine to create the whole visual image presented to

customers and are capable of acquiring exclusive legal rights as a type of identifying

symbol of origin. Stephen W. Boney, Inc. v. Boney Services, Inc. , 127 F.3d 821, 828

(9th Cir. 1997) (quoting McCarthy on Trademarks and Unfair Competition 8:1 (4th

ed.)). The distinctive dcor, menu, layout, and style of a restaurant may constitute

protectable trade dress. Fuddruckers, Inc. v. Docs B.R. Others, Inc. , 826 F.2d 837, 841-

42 (9th Cir. 1987).

In order to establish trade dress infringement, Plaintiff must prove that: (1) the

trade dress is inherently distinctive or has acquired distinctiveness through secondary

meaning; (2) there is a likelihood that consumers will be confused by the infringing use;

and (3) the trade dress is nonfunctional. Two Pesos , 505 U.S. at 769.a. Nonfunctionality

Trade dress is functional if the collection of its elements taken together must be

used by others in order to compete in the business. See Taco Cabana Intl, Inc. v. Two

Pesos , 932 F.2d 1113, 1119 (5th Cir. 1991). Here, Kreations trade dress is



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nonfunctional since the collection of its elementsreclaimed wood and a living wall

does not have to be used by others in order to compete in the healthy Mediterranean food

business.

b. Distinctiveness Plaintiffs trade dress claim falters on distinctiveness grounds. Its argument that its

restaurant dcor is inherently distinctive is unpersuasive. Though the use of reclaimed

wood and a living wall may contribute to an earthy, natural atmosphere, Plaintiff has not

demonstrated that such dcor, particularly in the beach community of Santa Monica, is

the sort of arbitrary or uncommon trade dress that might qualify as inherently

distinctive. See Fuddruckers , 826 F.2d at 844.

Thus, Plaintiff must show that its trade dress has acquired distinctiveness through

secondary meaning. To establish secondary meaning, a plaintiff must put forth evidence

that consumers associate the trade dress with a single source. See Chrysler Corp. v.

Vanzant , 44 F. Supp. 2d 1062, 1073 (C.D. Cal. 1999). Factors to consider include

whether actual customers associate Kreations trade dress with Kreation, the degree and

manner of Kreations use of the trade dress, and the exclusivity of Kreations use of the

trade dress. Vision Sports, Inc. v. Melville Corp. , 888 F.2d 609, 615 (9th Cir. 1989).

Here, Plaintiff supports its contention that customers associate Kreations trade

dress with the restaurant by claiming that customers have posted on social media about

Kreations living wall and identified a new, unopened Kreation restaurant without a sign

simply by the distressed wood theme and living wall. Further, Plaintiffs living wall

designer Santiago testified that Defendants hired him after finding out he had designed

Plaintiffs living wall and requested a wall similar to Plaintiffs living wall. [P]roof of

copying strongly supports an inference of secondary meaning. Id. ; see also Click Billiards, Inc. v. Sixshooters , 251 F.3d 1252, 1264 (9th Cir. 2001) ([D]eliberate copying

may suffice to support an inference of secondary meaning.). Defendants, however,

rebut this evidence of copying by asserting that they had never heard of Kreation or seen

Kreations living wall at the time they hired Santiago and that Santiago had included



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Kreations living wall in a Powerpoint as an example of work he had done. Though the

similarities in trade dress may be too numerous to be coincidental, the Court need not

resolve this disputed evidence at this time.

Defendants further assert that they based the design of their restaurant, includingthe use of reclaimed wood, on their friends restaurant. Besides, many other restaurants

in Los Angeles incorporate reclaimed wood in their design. The same can be said for

living walls. The fact that these design elements are popular trends at the moment

undermines the exclusivity of Kreations trade dress.

Because consumers likely do not associate the use of reclaimed wood and living

walls with Kreation alone, the Court finds Plaintiff is unlikely to establish the

distinctiveness of its trade dress.

c. Likelihood of Consumer Confusion

With respect to trade dress, the Court must consider the total effect of the trade

dress on the eye of the ordinary purchaser to determine the likelihood of consumer

confusion. First Brands Corp. v. Fred Meyer, Inc. , 809 F.2d 1378, 1383-84 (9th Cir.

1987). Here, the two restaurants do not look similar enough to establish a likelihood of

consumer confusion. Reclaimed wood is the overwhelmingly dominant feature of

Kreations interior and exterior. In contrast, Creation Grill employs reclaimed wood less

prominently, making the marble countertops, the wall of white subway tile behind the

counter, and the brick wall to the side the restaurants primary interior design

components. The living walls make this factor a closer question. The size and overall

shape of the walls differ from each other, but the color scheme and the placement of the

strips of wood are remarkably similar. Examined as a whole, the Court concludes that

Plaintiff has at least raised serious questions with respect to trade dress.3. Anticybersquatting Claim

Plaintiff also asserts that Defendants use of the KreationGrill.com and

CreationGrill.com domain names violates the Anticybersquatting Consumer Protection

Act (ACPA), 15 U.S.C. 1125(d). The ACPA provides for a cause of action by the



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owner of a mark against any person who, with a bad faith intent to profit from that

mark, registers, traffics in, or uses a domain name that is identical or confusingly

similar to or dilutive of that mark. 15 U.S.C. 1125(d)(1)(A). The ACPA protects

unregistered marks. Lahoti v. VeriCheck, Inc. , 586 F.3d 1190, 1196 (9th Cir. 2009).The statute sets forth a list of nine non-exclusive factors to consider when

determining whether a person acted with bad faith intent. See id . 1125(d)(1)(B)(i). In

addition, the ACPA contains a safe-harbor provision, which provides that bad faith shall

not be found in any case in which the court determines that the person believed and had

reasonable grounds to believe that the use of the domain name was a fair use or otherwise

lawful. Id . 1125(d)(1)(B)(ii); see also Interstellar Starship Servs., Ltd. v. Epix, Inc.

304 F.3d 936, 947 (9th Cir. 2002).

Plaintiff argues that since consumers hear Creation when they are referred to

Kreation, consumers are more likely to type in Creation Santa Monica when searching

for the Kreation Kafe in Santa Monica. Because this search yields CreationGrill.com

as the first result, Plaintiff argues that Defendants are using CreationGrill.com to divert

Internet users from Kreations website.

Defendants claim that they were not aware of Kreation until over five months after

their restaurant opened. Moreover, Defendants contend that they attempted to ascertain

whether any conflicts existed by running a domain name search, which yielded no results

for Kreation Juicery, Kreation Kafe, or Kreation. Under these circumstances, the

Court concludes that whether Defendants can avail themselves of the ACPAs safe-

harbor provision is a question of fact and credibility to be resolved on another day. For

purposes of this motion, Plaintiff has raised serious questions as to whether Defendants

acted in bad faith in registering and using the domain names KreationGrill.com andCreationGrill.com.

4. California Trademark Infringement and UCL Claims

Because the standard for California state law claims for trademark infringement

and unfair competition is substantially congruent to the Lanham Act standard, Plaintiff



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is likely to prevail on the analogous state law claims with respect to the Kreation mark

and has raised serious questions as to the state law trade dress and domain name claims.

B. Likelihood of Irreparable Harm

A plaintiff seeking a preliminary injunction in a trademark case must establish alikelihood of irreparable harm in the absence of preliminary relief. Herb Reed

Enterprises, LLC v. Florida Entmt Mgmt., Inc. , 736 F.3d 1239, 1242 (9th Cir. 2013).

Those seeking injunctive relief must proffer evidence sufficient to establish a likelihood

of irreparable harm. Id. at 21. A Court may not rely on unsupported and conclusory

statements regarding harm [a plaintiff] might suffer. Id . at 19 (internal quotation marks

omitted; emphasis in the original). Evidence of loss of control over business reputation

and damage to goodwill constitutes irreparable harm. Id. at 1250.

Plaintiff argues that it is suffering irreparable harm to its goodwill and reputation

because customers are confusing Creation Grill with Kreation Kafe. According to

Plaintiff, not only is Creation Grill diverting customers, but since Creation Grill does not

serve organic food, it is also damaging Kreations reputation for offering organic

ingredientsa loss of goodwill among Kreations highly health-conscious demographic

that cannot be cured by monetary damages. Even if Creation Grill were not harming

Kreations goodwill by offering non-organic food, Plaintiffs loss of control over its

business reputation is sufficient to establish a likelihood of irreparable harm.

Therefore, Plaintiff has established a likelihood of irreparable harm with respect to

the use of the Kreation mark. The Court declines to address the issue of irreparable

harm as to the trade dress infringement and ACPA claims because the record is not

sufficiently developed at this juncture.

C. The Balance of the Hardships and the Public InterestThe balance of equities tips in favor of an injunction. Without an injunction,

Defendants will continue to free ride on Plaintiffs efforts to promote Kreation, while

injuring Kreations reputation as a provider of organic food. Moreover, any injury that

Defendants may suffer as a result of the preliminary injunction may be discounted by



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the fact that Defendants brought the injury upon themselves by intentionally

adopting a deceptively similar trademark to Plaintiffs. Moroccanoil, Inc. v. Moroccan

Gold, LLC , 590 F. Supp. 2d 1271, 1282 (C.D. Cal. 2008); cf. Cadence Design Sys. v.

Avant! Corp ., 125 F.3d 824, 829 (9th Cir. 1997) ([A] defendant who knowinglyinfringes anothers copyright cannot complain of the harm that will befall it when

properly forced to desist from its infringing activities.).

Further, a preliminary injunction will promote the public interest. See State of

Idaho Potato Commn v. G & T Terminal Packaging, Inc. , 425 F.3d 708, 715 (9th Cir.

2005) (Trademarks protect the public from confusion by accurately indicating the source

of a product.).

D. A Mandatory Injunction is Appropriate With Respect to the Kreation

Mark

The preliminary injunction with respect to the Kreation mark is a mandatory

injunction. A mandatory injunction orders a responsible party to take action. Marlyn

Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co. , 571 F.3d 873, 879 (9th Cir. 2009)

(internal quotations omitted). While a mandatory injunction is generally disfavored, the

Court is empowered to grant mandatory injunctions, especially when prohibitory orders

may be ineffective or inadequate. Katie A., ex rel. Ludin v. Los Angeles County , 481 F.3d

1150, 1156-57 (9th Cir. 2007). Here, any relief short of requiring Defendants to cease

using the mark would fail to address the continuing irreparable harm. Moreover, the

Court finds that the facts and law clearly favor Plaintiff with respect to the Kreation

mark. See Transwestern Pipeline Co. v. 17.19 Acres of Property Located in Maricopa

County , 550 F.3d 770, 776 (9th Cir. 2008) (citing Stanley v. University of Southern

California , 13 F.3d 1313, 1320 (9th Cir. 1994)) (mandatory injunctions should be deniedunless the facts and law clearly favor the moving party). Because Plaintiff has shown a

very strong likelihood of success on the merits at least with respect to the infringement of

the Kreation mark and demonstrated that the potential for irreparable harm cannot be



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remedied by a later award of damages, the Court finds that Plaintiff has met its burden of

establishing the need for a preliminary injunction with respect to the Kreation mark.

E. Bond

Plaintiff shall post a $7,500 bond, which should cover Defendants costs ofchanging the name of their restaurant on their front awning, menus, website, and other

business papers in the event the preliminary injunction is determined to be improvidently

granted (Newman Decl. 8, Exh. G (Invoice for Awning). Fed. R. Civ. P. 65(c); see

Gorbach v. Reno , 219 F.3d 1087, 1092 (9th Cir. 2000).

IV.

CONCLUSION

In light of the foregoing, Plaintiffs motion is GRANTED as to the Kreation

mark and DENIED as to the trade dress infringement and ACPA claims.

IT IS SO ORDERED.

DATED: September 17, 2014

DOLLY M. GEEUNITED STATES DISTRICT JUDGE


kreation juicery - trade dress restaurant opinion (sept 2014)

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