Dairy Queen Denied Preliminary Injunction Against Blizz Frozen Yogurt

In late July, there was a flurry (pun intended) of new reports (here and here) on the trademark dispute between American Dairy Queen Corp. (“DQ”), the company behind the ice cream chain Dairy Queen and its popular BLIZZARD ice cream treat, and a California yogurt company named Yogubliz Inc., which obtained a trademark registration for the mark BLIZZBERRY and sought to register the mark Blizz Frozen Yogurt. Morris Turek, a trademark attorney who blogs at www.yourtrademarkattorney.com/blog/, has a detailed post on the dispute here.

The lawsuit actually originated back on May 17, 2010, soon after Yogubliz received a cease and desist letter from DQ regarding Yogubliz’s use of BLIZZBERRY and BLIZZ FROZEN YOGURT. Yogubliz filed the action in the United States District Court for the Central District of California seeking a declaratory judgment that its BLIZZBERRY and BLIZZ FROZEN YOGURT marks did not infringe DQ’s BLIZZARD marks. See Yogubliz Inc. v. American Dairy Queen Corp., Case No. 10-cv-03677 (C.D. Cal.). DQ subsequently filed counterclaims for trademark infringement as well as cancellation of Yogubliz’s BLIZZBERRY trademark registration. Yogubliz’s complaint and DQ’s Answer and Counterclaims can be viewed here.

DQ also initiated two proceedings with the Trademark Trial and Appeal Board -- an opposition against Yogubliz’s pending trademark application for BLIZZ FROZEN YOGURT (see American Dairy Queen Corporation v. Yogubliz, Inc., Opposition No. 91195789) and a cancellation proceeding against Yogubliz’s trademark registration for BLIZZBERRY (see American Dairy Queen Corporation v. Yogubliz, Inc., Cancellation No. 92052818).

In the federal court litigation, DQ subsequently filed a motion for preliminary injunction. Reuters reported yesterday that the federal court denied DQ its motion for a preliminary injunction on the basis that DQ failed to show a likelihood of success on the merits of any of its claims. See Yogubliz Inc. v. American Dairy Queen Corp., Case No. 10-cv-03677 (C.D. Cal. September 3, 2010). A copy of the court’s order denying DQ’s Motion for Preliminary Injunction can be viewed here.

The primary Sleekcraft factors where DQ apparently lost its argument on likelihood of confusion were similarity of the marks, relatedness of the goods, and marketing channels.

With respect to “similarity of the mark,” the court stated as follows:

[T]he Blizz Frozen Yogurt and Blizzard marks are relatively dissimilar. When considered as they appear on their respective products, the marks share nothing in common besides the spelling of the initial syllable. The font, color, and surrounding graphics of the two marks is different. The word Blizzard in Dairy Queen’s mark presented in all caps, in blue, using a straight lined font. It is topped with a depiction of snow, and backed by a red band that reads “THE ORIGINAL ONLY AVAILABLE AT DQ.” In contrast, Yogubliz’s frozen yogurt cups read “Blizz Frozen Yogurt.” The word Blizz is emphasized, appearing in pink, capitalized but not in all caps, using a stylized wavy line font. A pink and purple spiral appears next to the word Blizz on the cup. Even emphasizing similarities over differences, little connects the two marks as they appear on their respective products.
. . . [DQ] correspondingly devotes the bulk of its argument to the similarities between the words Blizz and Blizzard. Blizz and Blizzard do sound alike in that blizz is the initial syllable of the word blizzard. However, it is not clear that the word blizz, encountered independently, brings to mind the word blizzard. There is no indication that blizz is an abbreviation of blizzard in common usage. Dairy Queen’s contention that blizz has no meaning other than as an abbreviation of blizzard is unavailing. It could just as easily be associated with the word bliss. Further, products often are marketed under names that are nonsense or invented words. Thus, like Pez, Pringles, or a host of other brand names, it is unclear that Blizz has any independent meaning aside from the product it is attached to. Therefore, this critical factor weighs against Dairy Queen’s case.

As for relatedness of the goods, the court found that soft serve ice cream and frozen yogurt, while similar in that they “serve the same overall purpose for a consumer (a sweet treat),” they are not complementary goods and not closely related especially “given the health and taste differences between the two.” While the court recognized that similar marks can still cause confusion even when products are not closely related, the court found this factor to tip in favor of Yogubliz, but not dispositive.

As for the marketing channels used, while the court acknowledged that both products reach consumers through retail outlets,

the products are not marketed at a common retail location. Blizzards are sold at Dairy Queen restaurants, while Blizz Frozen Yogurt is sold through Yogubliz’s frozen yogurt shops. There is little possibility that a consumer could mistakenly seek a Blizzard in walking into a Blizz Frozen Yogurt or Blizzberry store if the consumer was aware that the Blizzard is a Dairy Queen product. There is also a distinction between the two retail locations where the products are available. While Dairy Queen operates fast food restaurants where Blizzards are offered alongside hamburgers, french fries and other food, the Yogubliz stores sell only desserts.

In response to DQ argument’s that a consumer might still think that Dairy Queen owned or sponsored Yogubliz’s shops, the court stated the following:

It is unclear, however, what would cause a consumer to believe that the stores operated by Yogubliz were owned by or affiliated with the Dairy Queen stores. There is some similarity, however weak, between the marks of Dairy Queen and Yogubliz’s respective products. But, there is no similarity alleged between the name or overall appearance of a Dairy Queen Restaurant and a Blizz Frozen Yogurt store. The argument for affiliation would thus turn on the idea that Blizzard is such an iconic brand that a store bearing some weak similarity to the name of that product would be assumed by customers to have some affiliation with the Dairy Queen company. This argument is strained, and cannot be accepted without supporting evidence. Overall, this factor weighs against Dairy Queen.

The court also rebuffed DQ’s trademark dilution claim on the grounds that the BLIZZ FROZEN YOGURT mark is not “nearly identical” to DQ’s BLIZZARD mark.

Having found no likelihood of success on the merits of any of DQ’s claims, the court denied DQ’s motion for preliminary injunction.

Of course, the court’s denial of a motion for preliminary injunction, while signaling to DQ that its case might be weak, does not bring this dispute to an end. It merely means that DQ failed to present sufficient evidence at this early stage that it would ultimately success on its claims such that it was entitled to a preliminary injunction at this early stage of the litigation.

Whether DQ will continue the fight after suffering this initial defeat is anybody’s guess. In the end, like most David and Goliath litigations, it may come down to how long can the relatively small Yogubliz do battle with the behemoth DQ (which is owned by Warren Buffett’s Berkshire Hathaway Inc.) – and how important this particular battle is to both sides.

And is anybody else out there surprised that Pinkberry, well known for its aggressive stance against any frozen yogurt store using any type of mark ending in “berry” (see prior blog post here) never went after Yogubliz's use of BLIZZBERRY?