By Randall Holbrook, J.D.
A nationwide acupuncture chain was barred from using name similar to that of local, pre-existing competitor in Minnesota and Colorado.
A local acupuncture provider was entitled to a preliminary injunction against a national franchisor competitor using a similar name in the states of Minnesota and Colorado, the U.S. District Court in Saint Paul, Minnesota has held. Although not identical, the names were similar enough that customers and other acupuncture providers were confused. Although the national company and its franchisees had invested substantial sums of money in their businesses, a party’s rights in a trademark cannot be overpowered merely by a competitor’s larger size and expenditures (Modern Point, LLC v. ACU Development, LLC, October 28, 2020, Brasel, N.).
Modern Point, LLC has operated acupuncture studios in Minnesota and Colorado since 2013, using the name Modern Point Acupuncture. ACU Development, LLC (ACU) has operated acupuncture studios through a franchise model since 2017 under the name Modern Acupuncture, and is active in thirty states. Soon after opening franchises in Minnesota and Colorado, Modern Point began receiving inquiries from customers confusing the two businesses. Modern Point sued ACU for trademark infringement, unfair competition, and deceptive trade practices under Minnesota, Colorado, and federal law, and moved for a preliminary injunction to prevent ACU from using the Modern Acupuncture name pending resolution of the case.
Likelihood of success on the merits. Modern Point had a fair chance of prevailing on the merits because Modern Point was using its mark for several years before ACU and had established a secondary meaning through its advertising under that name. ACU admitted in its answer that the marks were confusingly similar, and there was evidence in the record of actual confusion by customers of Modern Point, as well as by other operators of acupuncture clinics in the area.
Irreparable harm. The court held that Modern Point was likely to suffer irreparable harm because it had lost control over its image among the public. That loss is difficult or impossible to quantify. The court also held that a delay between the opening of ACU’s clinics and Modern Point’s filing of this request for an injunction did not defeat the claimed harm because it was otherwise explained by outside factors, including the cancer treatment of Modern Point’s owner and a lack of funds, which limited its ability to litigate.
Balancing harms. Although ACU and its franchisees had invested substantial sums of money in their businesses, the court held that a party’s rights in a trademark cannot be overpowered merely by a competitor’s larger size and expenditures. Modern Point stood to lose more from consumer confusion than ACU did from having to re-brand its locations in Minnesota and Colorado, especially when the acupuncture industry as a whole is operating at a reduced level due to the COVID-19 pandemic.
Public interest. Because the public interest is served by preventing confusion and trademark infringement, and it was already determined that Modern Point is likely to succeed on the merits, the public interest favored an injunction.
Because the four factors supported an injunction, the court enjoined ACU from using the Modern Acupuncture name in Minnesota and Colorado until the case was determined on the merits, and ordered that Modern Point post a bond of $100,000.
This case is No. 0:19-cv-00668-NEB-HB.
Attorneys: Brent A. Lorentz (Winthrop & Weinstine, P.A.) for Modern Point, LLC. Brian Casper (Klemchuk LLP) for ACU Development, Inc.
Companies: Modern Point, LLC; ACU Development, Inc.
MainStory: TopStory Trademark MinnesotaNews GCNNews
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