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Ewe Group, Inc. v. Bread Store, LLC

United States District Court, N.D. Georgia, Atlanta Division

September 22, 2014

EWE GROUP, INC., doing business as Sweet Hut Bakery & Cafe, Plaintiff,
v.
THE BREAD STORE, LLC, doing business as Sweet Talk Bakery & Cafe, Defendant

For Ewe Group, Inc., doing business as, Sweet Hut Bakery & Cafe, Plaintiff: Kirk W. Watkins, Marcy Lane Sperry, LEAD ATTORNEYS, Womble Carlyle Sandridge & Rice, LLP-GA, Atlanta, GA USA; Preston Hamilton Heard, LEAD ATTORNEY, Womble Carlyle Sandridge & Rice, LLP -Atl, Atlanta, GA USA.

For The Bread Store, LLC, doing business as, Sweet Talk Bakery & Cafe, Defendant: Julie Anne Hoehn Burke, Steven G. Hill, LEAD ATTORNEYS, Hill Kertscher & Wharton, LLP, Atlanta, GA USA; John L. North, Hill Kertscher & Wharton, LLP, Atlanta, GA USA.

For The Bread Store, LLC, Counter Claimant: Julie Anne Hoehn Burke, Steven G. Hill, LEAD ATTORNEYS, Hill Kertscher & Wharton, LLP, Atlanta, GA USA; John L. North, Hill Kertscher & Wharton, LLP, Atlanta, GA USA.

For Ewe Group, Inc., Counter Defendant: Kirk W. Watkins, Marcy Lane Sperry, LEAD ATTORNEYS, Womble Carlyle Sandridge & Rice, LLP-GA, Atlanta, GA USA; Preston Hamilton Heard, LEAD ATTORNEY, Womble Carlyle Sandridge & Rice, LLP -Atl, Atlanta, GA USA.

Page 1344

ORDER

Timothy C. Batten, Sr., United States District Judge.

This is an action for trademark and trade dress infringement and unfair competition under federal and Georgia law. The parties appeared before the Court on September 18, 2014 for a hearing on Plaintiff's

Page 1345

motion for preliminary injunction [9].[1] Based on the evidence and argument presented in the parties' briefs and by counsel at the hearing, the Court will grant the motion.

I. Factual Background

A. Parties

The parties in this case operate bakeries specializing in Taiwanese baked goods and bubble teas, among other dishes and drinks. Plaintiff Ewe Group, Inc. does business as Sweet Hut Bakery & Cafe (" Sweet Hut" ). Defendant The Bread Store, LLC does business as Sweet Talk Bakery & Cafe (" Sweet Talk" ).

In April 2012, Sweet Hut's first location opened in Doraville, Georgia. Additional locations are expected to open in Atlanta in October 2014, Duluth in early 2015, and Norcross in early 2016. Sweet Talk's only location opened in Duluth in July 2014. It is eleven miles away from Sweet Hut's current Doraville location, but across the street from Sweet Hut's planned Duluth location.

B. The Marks at Issue

Sweet Hut is the owner of the registered trademark SWEET HUT®, Registration No. 4382937. This registration was issued on August 13, 2013, based on an initial use date of April 8, 2012. It was issued under international class 30, for bakery products, namely, sweet bakery goods. During the registration process, the Trademark Office required that Sweet Hut disclaim any exclusive right to use the word " sweet" apart from the mark as shown, because it considered " sweet" to be descriptive of the goods and services in class 30. Sweet Hut also asserts common-law rights in the mark SWEET HUT® as well as in the marks SWEET HUT BAKERY & CAFE and SWEET HUT BAKERY & CAFE & Design (collectively, the " Marks" ). It has used these Marks since April 8, 2012 in connection with its cafe, restaurant, bakery services, and baked goods.

Defendant Sweet Talk advertises, markets, offers and sells cafe, restaurant and bakery goods and services using the marks SWEET TALK BAKERY & CAFE and SWEET TALK BAKERY & CAFE & Design, which Sweet Hut alleges infringe Sweet Hut's Marks. Although its store did not open until July 2014, Sweet Talk began using these marks in advertising in February 2014, and in June it filed two trademark applications in connection with these marks (Serial Nos. 86177109 & 86177123). Sweet Hut is opposing the applications, and no decision has been made by the Trademark Office.

C. The Trade Dress Claims

Although Sweet Hut has also brought claims against Sweet Talk alleging trade dress infringement, its motion is premised only on its mark claims. Nevertheless, the trade dress claims provide context for the parties' arguments relating to confusion and are relevant to the question of Sweet Talk's intent, so the Court will briefly address them here.

Sweet Hut claims a protected trade dress in its restaurant's layout, floor plan, dé cor, and related attributes. The specific design elements it points to as forming a part of its protected trade dress include, without limitation: (1) faux dark wood ceramic floor tiles; (2) white, wavy tiled walls; (3) pink booths separated by a hanging divider; (4) pendant lighting over the booths; (5) a ceiling with an arc design; and (6) LCD screens above the counter

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displaying its menu. It contends these features are inherently distinctive and non-functional and that they serve a source-identifying function.

There is no dispute that Sweet Talk incorporates at least some features that are similar to these. Sweet Hut asserts that Sweet Talk merely copied its design and made nominal changes. Sweet Talk responds that many of these features are common to most or all Asian bakeries and that their use of similar design features does not show any intent of copying Sweet Hut's trade dress. It is also undisputed that the restaurants' menus are similar but not identical.

D. History Between the Parties

The first interaction between the parties occurred more than a year prior to the opening of Sweet Talk's restaurant. In May 2013, Dino Chow, who is now one owner of Sweet Talk, applied for an employee position at Sweet Hut. After training for two days, Mr. Chow informed Sweet Hut that he was no longer interested in the position and resigned. During those two days, Sweet Hut contends, Mr. Chow had unfettered access to Sweet Hut's menu, recipes, design, packaging, and other elements related to its operation. Sweet Talk contends Mr. Chow learned only how to make drinks during that two-day training period and that he did not have access to any information that is not available to Sweet Hut's customers. Mr. Chow submitted an affidavit testifying that he resigned to accept a full-time position at another restaurant. It is undisputed that Mr. Chow was not asked to and did not sign any sort of confidentiality, non-compete, or other agreement with Sweet Hut.

In March 2014, Sweet Hut learned through an equipment supplier that Sweet Talk had ordered similar or identical baking equipment from the same Taiwanese supplier. Sweet Talk contends that this distributor is one of the few well established Taiwanese distributors of baking supplies and that it was recommended by a personal friend of Sweet Talk's owners who is familiar with the restaurant-equipment industry.

The next month, in April 2014, Sweet Talk's contractor visited Sweet Hut's Doraville location. Sweet Hut contends the contractor measured cabinets and other design elements that were then copied at Sweet Talk's restaurant. Sweet Talk claims this visit was not at its direction and that in any event, its contractor built custom cabinets and did not copy any of Sweet Hut's design elements.

Finally, in June 2014 Mr. Chow visited Sweet Hut's new Atlanta location, which was not yet open to the public, and asked the contractor working there numerous questions about the restaurant's design. Sweet Talk responds that Mr. Chow was merely in the area and stopped in to ask when the store would be opening.

E. The Evidence of Actual Confusion

Sweet Hut contends it has suffered loss of its goodwill and reputation as a result of the consuming public's confusion of Sweet Hut with Sweet Talk. To support is claims of actual confusion, Sweet Hut submitted declarations from its owners and employees testifying to examples of confusion including, without limitation, phone calls to Sweet Hut asking for the telephone number of Sweet Talk; inquiries from customers, vendors, and employees' friends about whether Sweet Hut and Sweet Talk are affiliated; a customer coming to Sweet Hut to pick up a cake that had been ordered ...


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