CPC Props., Inc. v. Dominic, Inc., No. 12–4405, 2013 WL 5567584 (E.D. Pa. Oct. 9, 2013).

In a trademark infringement and dilution action brought by the owner of the CRAB FRIES mark against the defendant restaurant’s use of a crab image next to the word “FRIES,” the plaintiff won the case but was denied any damages, as the Eastern District of Pennsylvania judge determined that “[t]he seasoned fries at the center of this case are small potatoes.”

The plaintiff company markets and sells seasoned fries in its chain of sports bars in the Philadelphia area under the mark CRAB FRIES. The defendant is the owner of a small restaurant in the same city that also sells seasoned fries. The plaintiff brought a trademark and dilution action against the defendant’s use of a crab image next to the word “FRIES” on their menu and advertisements, and won a judgment on the pleadings when the defendant filed an inadequate response to the complaint.

Although the plaintiff won the battle, it lost the crab fries war. Under the Lanham Act, a plaintiff who demonstrates a violation of the statute is entitled, “subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.” Here the plaintiff asked the court to disgorge the defendant’s profits resulting from using the crab image in combination with the word “FRIES.” To decide if disgorging profits is appropriate, the Third Circuit balances several factors, including “(1) whether the defendant had the intent to confuse or deceive, (2) whether sales have been diverted, (3) the adequacy of other remedies, (4) any unreasonable delay by the plaintiff in asserting his rights, (5) the public interest in making the misconduct unprofitable, and (6) whether it is a case of palming off.”

After going through these factors, the court concluded that disgorging the defendant’s profits would not be appropriate, because the plaintiff did not demonstrate that any of its sports bars had actually lost sales as a result of the defendant’s use of the crab image, and damages would not be necessary to deter future infringement as the defendant agreed to cease use of the image at the commencement of the action. Further, the defendant did not profit from the use of the crab image, because the record showed that the defendant restaurant had been losing money for the last ten years and its $4.80 seasoned fries was not even a popular menu item. From this sad record, the court confidently concluded that there was no doubt there were no actual damages.

The plaintiff was likely left feeling more than a bit crabby about this holding.

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