Trademark Claims Dismissed Because Dispute Sounds in Contract

Posted on August 19, 2009 by R. David Donoghue

Mindy's Restaurant, Inc. v. Watters, No. 08 C 5448, Slip Op. (N.D. Ill. Jun. 9, 2009) (Der-Yeghiayan).


Judge Der-Yeghiayan granted defendants' Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction even though plaintiff brought a federal Lanham Act trademark infringement claim.  While Lanham Act claims are generally considered federal questions creating subject matter jurisdiction, plaintiffs claims were in essence breach of contract claims.  Plaintiff was a franchisor of Mindy's Restaurants.  Defendants were franchisees, until they allegedly stopped making required franchise payments and plaintiff terminated the franchise agreement.  While plaintiff's claims were for use of plaintiff's trademarks when defendants allegedly continued operating their restaurant after the franchise agreement was canceled.  As a result, the Court held that the parties dispute and plaintiff's claims sounded in contract, not the Lanham Act.  The reason the trademarks were allegedly infringed was the termination of the franchise agreement.

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No Disqualification for Counsel's Prior Meeting with Both Parties

Posted on April 8, 2009 by R. David Donoghue

Mindy's Restaurant, Inc. v. Watters, No. 08 C 5448, Slip Op. (N.D. Ill. Feb. 27, 2009) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan denied defendant's motion to disqualify plaintiff's counsel in this Lanham Act dispute regarding plaintiff's Mindy's Restaurant marks. Defendant previously was a licensee of plaintiff's marks. During their licensing arrangement, the parties explored a potential joint venture. As part of that process, plaintiff and defendant jointly met with a member of plaintiff's current law firm. Defendant contended that that meeting created an attorney-client relationship which disqualified plaintiff's counsel from this case. But the Court held that even if the single meeting with both parties created an attorney-client relationship, there was only a “slight tangential relationship” between the current case and the prior potential joint venture. And the attorney involved could not have received confidential information. The attorney met with both parties together and never spoke to either party about the matter after the initial meeting. So any information defendant provided to the attorney was also provided to plaintiff. Finally, there was no evidence that the attorney or any member of plaintiff's counsel's firm would ever be called as an essential witness in the case.

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