Stonefire Grill, Inc. v. FGF Brands, Inc.

987 F.Supp.2d 1023

STONEFIRE GRILL, INC., Plaintiff,

v.FGF BRANDS, INC., Defendant.

FGF Brands, Inc., Counterclaimant,

v.Stonefire Grill, Inc., Counterdefendant.

Case No. CV 11–8292 JGB (PJWx).

United States District Court, C.D. California.

Aug. 16, 2013.

Brent H. Blakely, Michael Marchand, Blakely Law Group, Manhattan Beach, CA, for Plaintiff.

Allison W. Buchner, Diana M. Torres, Melissa Yaffa Lerner, Kirkland and Ellis LLP, Los Angeles, CA, Dale M. Cendali, Kirkland and Ellis LLP, New York, NY, Robin McCue, Irkland and Ellis LLP, Chicago, IL, for Defendant.

AMENDED ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

JESUS G. BERNAL, District Judge.

Before the Court is Defendant FGF Brands, Inc.'s Motion for Summary Judgment. (“Motion,” Doc. No. 71.) After considering the papers timely filed and the arguments presented at the July 29, 2013 hearing, the Court GRANTS Defendant's Motion.

I. BACKGROUND

A. Procedural History

Plaintiff Stonefire Grill, Inc. (“Plaintiff” or “Stonefire Grill”) filed its Complaint on October 6, 2011 against Defendant FGF Brands, Inc. (“Defendant” or “FGF”). (Compl., Doc. No. 1.) On January 9, 2013, Stonefire Grill filed its First Amended Complaint. (“FAC,” Doc. No. 30.) The FAC states five causes of action for: (1) trademark infringement under 15 U.S.C. § 1114; (2) false designation of origin and unfair competition pursuant to 15 U.S.C. § 1125; (3) state law infringement under Cal. Bus. & Prof.Code § 14245; (4) state law unfair competition pursuant to Cal. Bus. & Prof. Code § 17200; and (5) cancellation of U.S. Registration No. 4,020,583. (FAC ¶¶ 30–61.)

On January 22, 2013, Defendant answered the FAC and asserted two counterclaims for: (1) declaratory judgment of no trademark infringement and (2) cancellation of Stonefire Grill's federal trademark registrations. (Doc. No. 32.) Stonefire Grill answered the counterclaims on January 30, 2013. (Doc. No. 34.)

Plaintiff filed a motion to exclude the expert testimony of James Malackowski on May 20, 2013. (Doc. No. 40.) On June 27, 2013, the Court denied Plaintiff's motion. (Doc. No. 125.)

FGF filed a Motion for Summary Judgment on June 14, 2013. (“Motion,” Doc. No. 71.) The Motion seeks summary judgment on the grounds that (1) Plaintiff cannot establish a likelihood of confusion, or alternatively that, (2) Plaintiff abandoned its trademark rights through a deceptive naked licensing and policing scheme; (3) Plaintiff's federal marks are void ab initio for lack of use in interstate commerce; and (4) Plaintiff cannot recover lost profits because it cannot establish willful infringement.¹ (Motion at 1.) Stonefire Grill opposed on June 24, 2013. (“Opp'n,” Doc. No. 85.) On July 1, 2013, FGF replied. (“Reply,” Doc. No. 127.)

Initially, the parties filed redacted public versions of their papers and evidence and applied to seal unredacted versions of portions of the same. On July 10, 2013, the Court denied the parties' applications to seal for failing to identify any compelling interest justifying secrecy. (Doc. No. 140.) The Court noted that it would not consider the memoranda and evidence submitted under seal in deciding the Motion. ( Id. at 2.) Thereafter, the parties filed corrected versions of portions of their evidence, including public versions of documents previously-filed conditionally under seal. ( See Doc. Nos. 141, 144, 154, 177.) Finally, Stonefire Grill again applied to seal one deposition excerpt, its Statement of Genuine Disputes of Material Fact, and its Memoranda of Points and Authorities in support of its Opposition. (Doc. No. 178.) The Court granted the application to seal redacted versions of these three documents on July 23, 2013. (Doc. No. 180.)

Based on the foregoing, the Court considers the following documents submitted by Defendant in support of its Motion:

• Memoranda of Points and Authorities (“Motion,” Doc. No. 71);

• Statement of Undisputed Facts (“SUF,” Doc. No. 72);

• Declaration of Ojus Amjera (“Amjera Decl.,” Doc. No. 75) attaching Exhibits 2, 4, and 5–7 ²;

• Declaration of Shiana Zalma Ostroff (“Ostroff Decl.,” Doc. No. 76) attaching Exhibit 3;

• Declaration of Dr. Gerald L. Ford (“Ford Decl.,” Doc. No. 77) attaching Exhibits A through D;

• Declaration of Rhonda Harper (“Harper Decl.,” Doc. No. 78);

• Corrected Declaration of Allison Buchner (“Buchner Decl.,” Doc. No 142) attaching Exhibits 1–55 ³; and

• Supplemental Declaration of Allison Buchner (“Supp. Buchner Decl.,” Doc. No 143) attaching Exhibits 56–60.

The Court considers the documents below submitted by Stonefire Grill in opposition to the Motion:

• Memoranda of Points and Authorities in Opposition (Opp'n, Doc. No. 85 (public version), Doc. No. 182 (sealed version));

• Statement of Genuine Disputes of Material Fact and Additional Undisputed Material Facts (“SGI,” Doc. No. 87 (public version), Doc. No. 181 (sealed version));

• Plaintiff's Evidentiary Objections to Defendant's SUF (“Pl. Evid. Obj.,” Doc. No. 86);

• Declaration of Justin Lopez (“Lopez Decl.,” Doc. Nos. 100, 103, 105–123) attaching Exhibits 1–6, 8–10, 12–20, and 22–24;

• Corrected Declaration of Michael Marchand (“Marchand Decl.,” Doc. Nos. 145–153, 155–167, 169–176) attaching Exhibits 1–27 ⁴; and

• Notice of Errata Correcting Portions of Declaration of Justin Lopez, Plaintiff's Additional Statement of Undisputed Facts, and Plaintiff's Opposition (“Pl. Corr'n,” Doc. No. 177).

In support of FGF's reply, the Court considers:

• Memoranda in Support of Reply (“Reply,” Doc. No. 127);

• Corrected Declaration of Diana M. Torres (“Torres Decl.,” Doc. No. 168) attaching Exhibits 1–4;

• Responses to Plaintiff's Evidentiary Objections (“Def. Resp.,” Doc. No. 128);

• Responses to Additional Facts in Plaintiff's SGI (“Def. SGI,” Doc. No. 129); and

• Defendant's Evidentiary Objections to Plaintiff's SGI (“Def. Evid. Obj.,” Doc. No. 130).

Finally, Stonefire Grill submitted evidentiary objections to the declaration of Diana M. Torres filed in support of FGF's Reply. (“Pl. Torres Obj.,” Doc. No. 136.)

B. First Amended Complaint

Stonefire Grill owns a chain of restaurants in Southern California which provide dine-in, pickup, delivery, and catering services. (FAC ¶¶ 7, 11.) Plaintiff alleges that since 2004 it has been the owner of the marks “Stonefire Grill,” a design using the words “Stonefire Grill,” and the phrase “Stonefire Grill A Fresh Approach to Family Dining!,” which are registered with the United States Patent and Trademark Office (“USPTO”) and the State of California. (FAC ¶¶ 8–9.)

According to the FAC, Defendant sells bread in retail outlets in connection with the word “Stonefire.” (FAC ¶¶ 19, 21.) In August 2011, Defendant registered the mark “Stonefire” with the USPTO. (FAC ¶ 55.) Plaintiff contends that consumers will mistakenly assume Defendant's bread is connected to Plaintiff because it is a common practice for restaurants to offer food products in retail and wholesale settings. (FAC ¶ 22.) Moreover, the parties allegedly use similar marketing channels. (FAC ¶ 23.) Based on these facts, Plaintiff claims that Defendant violated several state and federal trademark and unfair competition laws as outlined above.

II. LEGAL STANDARD⁵

Federal Rule of Civil Procedure 56 empowers the Court to enter summary judgmenton factually unsupported claims or defenses, and thereby “secure the just, speedy and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is appropriate if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A fact is material when it affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir.1997).

The party moving for summary judgment bears the initial burden of establishing an absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. This burden may be satisfied by either (1) presenting evidence to negate an essential element of the non-moving party's case; or (2) showing that the non-moving party has failed to sufficiently establish an essential element to the non-moving party's case. Id. at 322–23, 106 S.Ct. 2548. Where the party moving for summary judgment does not bear the burden of proof at trial, it may show that no genuine issue of material fact exists by demonstrating that “there is an absence of evidence to support the non-moving party's case.” Id. at 325, 106 S.Ct. 2548. The moving party is not required to produce evidence showing the absence of a genuine issue of material fact, nor is it required to offer evidence negating the non-moving party's claim. Lujan v. National Wildlife Fed'n, 497 U.S. 871, 885, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); United Steelworkers v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989).

However, where the moving party bears the burden of proof at trial, the moving party must present compelling evidence in order to obtain summary judgment in its favor. United States v. One Residential Property at 8110 E. Mohave, 229 F.Supp.2d 1046, 1047 (S.D.Cal.2002) (citing Torres Vargas v. Santiago Cummings, 149 F.3d 29, 35 (1st Cir.1998) (“The party who has the burden of proof on a dispositive issue cannot attain summary judgment unless the evidence that he provides on that issue is conclusive.”)). Failure to meet this burden results in denial of the motion and the Court need not consider the non-moving party's evidence. One Residential Property at 8110 E. Mohave, 229 F.Supp.2d at 1048.

Once the moving party meets the requirements of Rule 56, the burden shifts to the party resisting the motion, who “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S....