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Donut Joe's, Inc. v. Interveston Food Servs., LLC

United States District Court, N.D. Alabama, Southern Division

April 22, 2015

DONUT JOE'S, INC., Plaintiff,
v.
INTERVESTON FOOD SERVICES, LLC d/b/a DONUT CHEF, Defendant

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Donut Joe's, Inc., Plaintiff, Counter Defendant: Joseph E Watson, III, THE WATSON FIRM, Birmingham, AL.

For Donut Chef, Defendant: Jade E Sipes, LEAD ATTORNEY, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL LLP, Birmingham, AL; G Thomas Sullivan, Diane B Maughan, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL, Birmingham, AL.

For Interveston Food Services, LLC, Defendant: Diane B Maughan, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL, Birmingham, AL; Jade E Sipes, LEAD ATTORNEY, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL LLP, Birmingham, AL.

For Donut Chef, Counter Claimant: Jade E Sipes, LEAD ATTORNEY, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL LLP, Birmingham, AL; Diane B Maughan, CABANISS JOHNSTON GARDNER DUMAS & O'NEAL, Birmingham, AL.

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MEMORANDUM OPINION

VIRGINIA EMERSON HOPKINS, United States District Judge.

This case is now before the court on a motion for summary judgment (" the Motion" ) (Doc. 54), filed on January 15, 2015 by defendant Interveston Food Services, LLC (" Interveston" ), the only remaining defendant[1] in this case. Interveston seeks summary judgment in its favor on the only remaining claims[2] in this case: the trademark infringement claims made against it by plaintiff Donut Joe's, Inc. (" Donut Joe's" ). (Doc. 54). Donut Joe's responded to the Motion on February 5, 2015. (Doc. 65, Doc. 66), and also filed a Motion To Strike several pieces of Interveston's evidence. (Doc. 68). Interveston filed a reply brief to Donut Joe's response on February 19, 2015, (Doc. 69), as well as a Response In Opposition to the motion to strike. (Doc. 70). Therefore, the matter is now under submission.

II. STATEMENT OF MATERIAL FACTS[3]

A. Undisputed Facts

1. The Origins Of Donut Joe's And The Donut Chef

In July 2009, Donut Joe's opened a shop in Pelham, Alabama that primarily sells donuts and coffee. Towards the end of

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2010, Werner Beiersdoerfer and Michael Kenneth Flowers approached Donut Joe's President and sole shareholder, Richard Byrd, about potentially opening a Donut Joe's franchise. Beiersdoerfer and Flowers are members of Interveston.[4] Neither Beiersdoerfer nor Flowers had prior experience operating a restaurant. Beiersdoerfer's son, Brock Tyson Beiersdoerfer, was formerly a member of Interveston. Beiersdoerfer's explicit intent in placing his son as a member in Interveston Food Services, LLC was due to " the potential consequences and the legal action I faced at that time." Beiersdoerfer's son was installed as a member of Interveston as a " favor" to Beiersdoerfer, even though he " was never a part of the LLC as a functioning body." Beiersdoerfer did not have any membership interest in the LLC until December 2011, at the earliest, when his son resigned and transferred his interest to Beiersdoerfer for no consideration or reason.

On November 12, 2010, Beiersdoerfer and Flowers entered into a Confidentiality and Non-Disclosure Agreement with Donut Joe's. In February 2011, the parties entered into a Letter of Understanding with respect to Interveston's development of Donut Joe's shops in Alabama. Interveston then began the process of opening a Donut Joe's shop. Interveston initially investigated a location in Clanton, Alabama, but ultimately chose a location in Calera, Alabama.

Around May 2011, Interveston entered into a lease for space, obtained approval from the Shelby County Health Department, and obtained a building permit from the City of Calera, keeping Donut Joe's apprised of the progress via emails. (Ex. 6.) Interveston also obtained financing and purchased equipment for the Calera location, including " [t]ables, trays, chairs, mixers, ice machine, displays, refrigerators, ovens, [and] freezers." The build-out of the Calera store began in early June 2011 and, around June 14, 2011, Byrd met with Interveston at the Calera location to discuss the build-out and go over the plans. The parties could not agree[5] on the final terms of a license arrangement, and their business relationship terminated at the end of June 2011. Because Interveston had already entered into a lease agreement, begun building out the space to accommodate a donut shop, and purchased equipment for the store, Interveston proceeded to open an independent donut shop in the Calera location.

After the business relationship between Donut Joe's and Interveston terminated, Byrd drove to The Donut Chef location in Calera while it was still under construction, saw a donut character painted on the wall of the store, and took photographs of the inside of the store. On August 2, 2011, Byrd sent an email relaying that Interveston was opening up a donut store and that he had taken photographs of the store in Calera. On August 28, 2011, Byrd purchased the domain name for the website TheDonutChef.com. On or about September 18, 2011, Interveston opened The Donut Chef store in Calera.

2. The Marks

Interveston engaged Roger Meadows, a corporate communications professional who assists businesses in branding, to help

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design a name and a logo for the Calera donut shop. Meadows proposed a number of potential names and designs. Flowers initially wanted to use the name " DJ's Donuts and Java" to promote a musical theme for the shop, but Beiersdoerfer rejected it, and Meadows did not recommend it because he thought it was weak. Interveston also rejected one of Meadow's proposed logos on the basis that it contained the word " Joe." Ultimately, Interveston selected " The Donut Chef," one of the names proposed by Meadows. Meadows came up with the concept for The Donut Chef's logo. Interveston never showed the ...


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