IP Law Daily Rival wood-pellet grill maker barred from using inventor's name and image
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Friday, October 11, 2019

Rival wood-pellet grill maker barred from using inventor's name and image

By Linda Panszczyk, J.D.

A wood pellet grill maker prevailed on a preliminary injunction claim against a rival grill maker which sought to use the grill's inventor in its advertising.

Traeger Grills, which purchased both the assets and intellectual property of the founder, Joe Traeger and his brothers, was granted a preliminary injunction against the defendant, Dansons US LLC (Dansons), a rival wood pellet grill maker, to preclude Dansons from using the Traeger name, the iconic Traeger barn, images of Joe or Brian Traeger, or references to Joe Traeger as the founder or creator of the wood pellet grill in connection with the advertising, marketing, or sale of Dansons' wood pellet grills or related products. The court indicated that Traeger Grills was likely to succeed on the merits of its trademark claim as to the Traeger mark and to the Traeger barn, as well as on its right of publicity claim, and that Traeger Grills has shown that it is likely to suffer irreparable harm in the absence of preliminary relief (Traeger Pellet Grills, LLC v. Dansons US, LLC, October 3, 2019, Rayes, D.).

After Joe, Brian, Randy, and Mark Traeger sold the Traeger Industries, Inc. (TII) company and its intellectual property rights to plaintiff Traeger Grills, Traeger Grills sought a preliminary injunction against the defendant, rival wood pellet grill maker, Dansons to preclude Dansons from (1) using the Traeger name, the Traeger barn, images of Joe or Brian Traeger, or references to Joe Traeger as the founder or creator of the pellet grill (collectively, the Traeger intellectual property) in connection with the advertising, marketing, or sale of wood pellet grills or related products; (2) publishing any statement that affiliates Joseph Traeger, Brian Traeger, or Traeger Grills with Dansons' products or endorses Dansons' grills or grill-related products; and (3) arranging any public appearance anywhere in the U.S. that communicates an endorsement by Joe or Brian Traeger of Dansons' grills or grill-related products.

Traeger Grills paid roughly $3.4 million for the assets in the business in an Asset Purchase Agreement (APA) and paid $9 million in consideration for the seller's right, title, and interest to the intellectual property rights pursuant to an Intellectual Property Rights Assignment Agreement (IPRAA) with Joe, Brian, Mark, and Randy Traeger. Since assuming these assets and rights, Traeger Grills has poured over $100 million into developing the Traeger brand. In 2007, Traeger Grills obtained federal trademark registration for the trademark TRAEGER used in connection the sale of gills, grill accessories, and wood pullets, and now owns nine other active federal trademark registrations. Also, its marketing includes images of the iconic Traeger Barn and promotion as the originator of the wood pellet grill. Dansons manufactures and sells wood pellet grills and accessories under the brand names Pit Boss and Louisiana Grills.

This conflict between the companies arose in September 2018, when Dansons announced that it had hired Joe and Brian Traeger to elevate the Louisiana Grills brand. The Dansons' marketing release features two photos of Joe and Brian Traeger and Danson executives standing in front of the Traeger Barn with the Traeger name prominently displayed behind them, and a third photo of Joe and the Dansons' CEO. After Traeger Grills sent Dansons a cease and desist letter, a resolution between the parties was never reached. Instead, Dansons promoted a new series of grills "brought to you proudly by Joe Traeger, the founder of the original wood pellet grill." Traeger Grills filed this lawsuit against Dansons, filing a motion for a preliminary injunction the next day, and, on the same date this lawsuit was filed, it filed a separate lawsuit against Joe, Brian, and Mark Traeger in the federal district court in Tampa, Florida. Last month, the court in that case declined to issue a preliminary injunction to prevent the Traegers from continuing use of their names, likenesses, and personal goodwill to promote Dansons.

Likelihood of success on trademark claims. To prevail on its trademark infringement claims, Traeger Grills must establish (1) ownership of a valid trademark previously used in commerce and (2) that Dansons used in commerce a mark similar to Traeger Grills’ trademark in a manner likely to cause confusion. In this instance, Traeger Grills asserted trademark infringement claims regarding two marks: the Traeger mark and the Traeger Barn.

As to the Traeger mark, according to the court, it is undisputed that Traeger Grills possesses valid ownership of and has previously used the Traeger mark in commerce. Also, Dansons does not dispute that nearly all the AMF v. Sleekcraft Boats factors support a finding that confusion is likely. Indeed, the Court’s independent weighing of the Sleekcraft factors lead it to find a likelihood of confusion. The Traeger mark is strong, noted the court, having acquired distinctiveness through secondary meaning after use in commerce for over three decades in association with the market leader’s manufacture and sale of wood pellet grills and Traeger Grills’ investment of over $100 million in marketing its products bearing the Traeger mark. Because Traeger Grills and Dansons directly compete, confusion is far more likely and Dansons’ use of the Traeger mark on the Traeger Barn is identical to the Traeger mark, intensifying the likelihood of confusion. Danson’s use of Joe and Brian Traeger’s full name is sufficiently similar to the Traeger mark to support a finding of likely confusion. Factor five indicates a likelihood of confusion because the parties share identical marketing channels in which their goods are sold to the same class of purchasers and in some of the same stores. Factor six, the type of goods and degree of care likely to be exercised by the buyer—weighs neither in favor of nor against likely confusion. The relatively high price of the parties’ primary good, wood pellet grills, might persuade potential buyers to exercise caution and conduct research prior to purchase, enabling them to better distinguish between Traeger Grills and Dansons products. However, the parties also produce lower cost items, noted the court, including grill accessories and wood pellets, which customers likely purchase on a whim, entailing little to no opportunity to avoid confusion. Under factor seven, Dansons has adopted the Traeger mark in the face of a cease and desist letter and has exhibited an intent the capitalize on Traeger Grills’ good will, suggesting a greater likelihood of confusion. Finally, factor eight—that the parties offer goods and services in the same field—weighs in favor of a finding that confusion is likely. According to the court, the fact that Traeger Grills already has produced various examples of actual confusion is significant and weighs in favor of a finding that confusion is likely. Finally, the court rejected Dansons' classic fair use defense. Thus, the court concluded, as to the Traeger mark, Traeger Grills has demonstrated that it likely will succeed on its Traeger mark trademark claim.

Further, according to the court, Traeger Grills also has shown a likelihood of success on the merits of its Traeger Barn trademark infringement claim. Noting that it is undisputed that Traeger Grills has never applied to federally register the Traeger Barn as a mark, the court indicated that, in order to prove valid ownership of the Traeger Barn image, Traeger Grills must establish common law trademark rights to it. To make this showing, Trager Grills must demonstrate prior adoption of the mark and use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind. Under this standard, the court ruled, Traeger Grills likely has common law trademark rights to the Traeger Barn image.

Traeger Grills adopted the mark before Dansons’ first use on September 20, 2018. Traeger Grills also has met the requirements of the test’s second prong as Traeger and its distributors have displayed artwork, images and photos of the TRAEGER Barn, on websites and at point-of-sale, brick-and-mortar locations where customers can purchase Traeger Grills’ products and apparel, including TRAEGER Barn-themed tee shirts and hats. Traeger Grills also explains that it has conducted various advertising efforts that incorporate the mark including nationwide direct television campaigns, social media marketing, and roadshows. As a result, ruled the court, such use has been sufficiently public to identify or distinguish the marked goods in an appropriate segment in the public mind. Traeger Grills therefore has met the first factor in showing a likelihood of success on the merits of its Traeger barn trademark infringement claim.

After weighing the Sleekcraft factors, the court concluded that confusion is likely. The Traeger Barn mark, as an arbitrary mark, is strong. The third factor further supports that confusion is likely. Before Dansons removed the Traeger sign from the Traeger Barn in August 2019, the parties’ marks were identical. However, the barn’s silhouette and the Traeger Barn mark are incredibly similar as they both portray the same barn in a similar realistic fashion. Finally, under the seventh factor, Dansons has exhibited an intent to capitalize on Traeger Grills’ good will, strongly suggesting that confusion is likely. In fact, Dansons’ decision to use the Traeger Barn, specifically in its advertising, can likely only be explained by an intent to capitalize on the Joe Traeger invention story. Otherwise, suggested the court, Dansons could use any other barn, building, or object, whether real or imaginary, as a mark. Thus, the court ruled, Traeger Grills has shown that it likely will succeed on its Traeger Barn trademark claim.

Right of publicity claim. In its right of publicity claim, Traeger Grills asserts that Dansons’ use of Joe and Brian Traeger’s name, likeness and goodwill in connection with the manufacture, marketing, and sale of its grills and grill-related products violates Traeger Grills’ exclusive right to such use. For Traeger Grills to prevail on its right of publicity claim, it must show that it (1) had exclusive rights to Joe and Brian Traeger’s name, likeness, and/or personal goodwill and (2) Dansons misappropriated those rights.

To determine whether these rights were likely assigned to Traeger Grills, the Court looked to the 2006 IPRAA, an agreement which is covered under Florida law. In the IPRAA, Joe, Brian, Mark and Randy Traeger assigned all of their rights, title, and interests in and to the Intellectual Property Rights used or useful in the conduct of the business to Trager Grills for $9 million. The IPRAA also likely assigned to Traeger Grills the exclusive rights to Joe and Brian Traeger’s personal goodwill. In doing so, the IPRAA necessarily assigned exclusive rights to the Traeger name. The court concluded that Traeger Grills has made a showing that it likely possesses exclusive rights to Joe and Brian Traeger’s names, likenesses, and personal goodwill. Thus, the court indicated, Traeger Grills likely will succeed on its right of publicity claim.

Other issues addressed. In this instance, Dansons’ use of the Traeger story and the faces of Joe and Brian Traeger to promote its own business could continue to confuse consumers and diminish the distinctiveness of Traeger Grills’ brand, thus preventing Traeger Grills from controlling its reputation, which is based largely on the Traeger story and family. Loss of its reputation cannot adequately be repaired by monetary damages. So, as a result, Traeger Grills has shown that it is likely to suffer irreparable harm in the absence of preliminary relief, the court indicated.

Traeger Grills argued that the balance of hardships tips sharply in its favor, and, without injunctive relief, Traeger Grills may suffer further loss of control of and harm to its goodwill, exacerbated by additional customer confusion. On the other hand, said the court, Dansons has not shown that an injunction would be fatal to its business. In fact, it has made no pertinent allegation as to the extent that its business would suffer in the face of an injunction. In fact, Dansons has competed successfully alongside Traeger Grills for almost twenty years without any connection to Joe and Brian Traeger, the Traeger mark, or the Traeger Barn and, noted the court, it has made no showing will suffer particular harm if it must do so again. Consequently, the balance of equities tips in Traeger Grills’ favor, the court concluded.

Further, noting that it must balance the public's interest on a case-by-case basis, the court distinguished an earlier case where the public’s interest in fair competition outweighed its interest in preventing consumer confusion. The court indicated that factors supporting that finding are not present here. Rather, Dansons has used the Traeger name and barn and contracted with Joe and Brian Traeger, despite APA and the IPAA and with full knowledge of Traeger Grills’ existence as its main competitor. Considering the higher risk of consumer confusion, lack of good faith usage on the part of Dansons, and effect of the APA and IPAA, the interest in preventing consumer confusion outweighs the interest in encouraging free competition. Consequently, the court ruled, an injunction is in the public interest.

This case is No. CV-19-04732-PHX-DLR.

Attorneys: Alan Peter Block (McKool Smith Hennigan PC) for Traeger Pellet Grills LLC. Kenneth L. Wilton (Seyfarth Shaw LLP) for Dansons US, LLC.

Companies: Traeger Pellet Grills LLC; Dansons US, LLC

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