Thursday, September 20, 2007

Burger King won't let former franchisee Have It Their Way

Burger King Corporation (BKC) filed a lawsuit yesterday in the U.S. District Court for the Southern District of Florida against three indivduals who operated a Burger King restaurant franchise in Des Moines, Iowa. See Burker King Corporation v. Meltzer et al., Case 1:07-CV-22468 (download copy of complaint here). The complaint sets forth causes of action for trademark infringement, false designation, common law trademark infringement, common law unfair competition, and breach of contract.

BKC is seeking damages and injunctive relief against the defendants' unauthorized use of BKC's trademarks, which are owned by Burger King Brands, Inc., by assignment from BKC, and licensed exclusively to BKC. BKC then grants its franchisees a limited license and authority to use the trademarks in such a manner as is authorized by BKC.

BKC alleges that the defendants failed to stop using BKC's trademarks after their franchise agreement was terminated by BKC for repeated failure to maintain and operate their Burger King restaurant in accordance with BKC's standards as required by the franchise agreement. Upon termination of the franchise agreement, terminated franchisees are prohibited from identifying themselves as a current or former Burger King franchisee; from using any of BKC's trade secrets, promotional materials, BKC's trademarks (or confusingly similar mark); and are required to change all signage and the restaurant premises to distinguish its apperance from other Burger King restaurants.

BKC maintains that the defendants continue to hold themselves out as operating a genuine Burger King restaurant by using BKC's trademarks even after the franchise agreement was terminated. In doing so, the defendant's are infringing on BKC's trademarks and breaching its continuing obligations under the franchise agreement.

BKC asks for a preliminary and permanent injunction enjoining the defendants from displaying or using BKC's trademarks and from taking any other actions which are likely to lead the public into believing that the defendants are affiliated with BKC. BKC also asks for an order requiring the defendants to turn over to BKC any materials that bear BKC's trademarks as well as BKC's confidential franchisee operating manual and to allow BKC to inspect the premises and make any changes deemed necessary to distinguish the restaurant from a Burger King restaurant. BKC also asks for an accounting of and payment to BKC of all profits derived by defendants from their improper use of BKC's trademarks.

BKC asks for actual damages, treble damages, punitive damages, prejudgment interest and attorney's fees (as provided for in the franchise agreement to a prevailing party), and costs. Finally, BKC requests an injunction preventing the defendants from operating a hamburger restaurant within a two mile radius of where the Burger King restaurant was located for a one year period.

Interesting Burger King Fact: BKC is seeking a trademark on the word "KURGER BING". Based on the specimen of use submitted, KURGER BING appears to be the name of the "king" mascot -- and not just Burger King when you are drunk (as the Urban Dictionary defines it).

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