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Bobak Sausage Co. v. A & J Seven Bridges

September 5, 2008


The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

Judge Robert M. Dow, Jr.


This matter is before the court on Defendants' motion to dismiss Plaintiff's complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. [10]. For the reasons explained below, Defendants' motion is denied.

I. Background*fn1

A. Plaintiff Bobak Sausage Company ("BSC") is an Illinois corporation that manufactures, markets, and sells a variety of wholesale and retail food products. Compl. ¶ 1. BSC owns three federally registered trademarks: (i) the Bobak's word mark ("the Mark"); (ii) a stylized version of the Mark in letters designed to resemble sausage links; and (iii) a pig logo.*fn2

Id. BSC provides retail grocery, deli, restaurant, and catering services under the marks, and has its principal place of business in Chicago. Id. BSC and its predecessors have used the Mark in commerce continually since 1967. Id. at ¶ 16. The Mark has been federally registered by Plaintiff on the Principal Register since 2004. Id.

BSC alleges that it has become well-known for its Bobak's branded products as well as its grocery, restaurant, and catering services. Compl. ¶ 13. BSC also sells its branded products at grocers and retailers throughout Chicagoland and the country. Id. BSC's products, stores, restaurants, and catering have received extensive media attention and exposure in newspapers, radio, and television. Id. at ¶ 14.

According to the complaint, Frank Bobak founded BSC in 1967 on the north side of Chicago. Compl.¶ 8. By 1974, BSC had grown to a total of four deli/sausage shops in Chicago, all of which were supplied by a manufacturing facility located in the original shop. Id. In 1975, Frank Bobak opened a sausage making facility on the south side of Chicago that was dedicated to supplying the four retail stores, as well as his smaller wholesale business. Id. at ¶ 9. The business then was formally incorporated and renamed Bobak Sausage Co., but it continued to be referred to as Bobak's. Id.

In 1989, Plaintiff opened a food manufacturing facility and a small retail deli at its current location of 5275 S. Archer Avenue in Chicago, Illinois. Compl. ¶ 10. In 1997, BSC expanded and opened a larger retail store at the Archer Avenue location and opened a restaurant and catering option at that location the following year under the Bobak's name. Id. at ¶ 11. On or about January 1, 2001, Frank Bobak transferred his shares in BSC to his four children: Stan, John ("Brother John"), Joe, and Jane Jasnak. Id. at ¶ 12. Two years later, Stan, Brother John, and Joe acquired their sister Jane's shares, leaving them as equal one-third owners of BSC. Id.

In February 2006, BSC and a related company (Bobak Enterprises LLC) owned by Stan, Brother John, and Joe Bobak were reorganized. Compl. ¶ 17. As part of that reorganization, two Bobak stores, located in Naperville and Burr Ridge, were sold by Bobak Enterprises LLC to third parties who were permitted to use the marks under a Limited License Agreement. Id. Bobak Enterprises LLC then dissolved. Id. Brother John had been President of BSC prior to the reorganization. Id. at ¶ 18. As a result of the reorganization, Brother John was forced to sell his shares in BSC to Stan. Id. In exchange for divesting his shares, Brother John was granted ownership of a grocery and restaurant facility being constructed in Orland Park.*fn3 Id. Brother John intended to operate the Orland Park location as a Bobak's location before he was compelled to resign as President. Id.

B. On August 31, 2006, BSC brought a trademark infringement action (the "Orland Park litigation") against Bobak Orland Park, Inc. and others in this district (the "Orland Park defendants"), that arose out of the 2006 reorganization of BSC. Compl. ¶ 23.On October 3, 2006, Judge Kennelly entered a Temporary Restraining Ordering prohibiting the Orland Park defendants from using the Marks or "any other mark, term or description containing the word 'Bobak' and compelling them to publicly disclaim any affiliation with Plaintiff Bobak Sausage Company". Id. at ¶ 25.

As part of a settlement of the Orland Park litigation, in October of 2006, Judge Kennelly entered a Stipulated Order of Permanent Injunction that required the Orland Park defendants to choose new trade names sufficiently distinct from the Marks to avoid confusion. Compl. ¶ 26. The injunction further mandated that the defendants display the disclaimer "Our Products Are Not Made By Bobak Sausage Company" on their website. Id. The injunction specifically required the defendants to choose a trade name or names that "will be sufficiently distinct from the Marks so as to reasonably avoid a likelihood of confusion." Orland Park Injunction at ¶ B(1). Under the injunction, the new names "may contain the word 'Bobak' in conjunction with other words, but not alone," and "must be written in a script different from that employed by the Marks." Id.

The trade name then being used by the defendants -- "Frank Bobak Fresh Marketplace" -- was deemed to be acceptable. Orland Park Injunction at ¶ B(1). However, the injunction clarified that "[o]ther than their use of the New Trade Names*fn4 and the Bobak's Pig as permitted in the Settlement Agreement and the accompanying Stipulated Permanent Injunction, the [defendants] will not use the word 'Bobak' or 'Bobak's', or otherwise use the Marks." Id. "The New Trade Names will be used exclusively as store names, and may be placed on signage outside and inside any stores owned and operated by the [defendants], and used in advertising for the [defendants] but not for any specific products or categories of products." Id. at ¶ B(2). "The defendants will not place the words 'Bobak' or 'Bobak's' * * * on any product labels or packaging, except that they may place the New Trade Names on 'scale labels'*fn5 , provided that the scale labels for all for meat and deli products are packaged on the premises and sold over the deli counter which are the same as or substantially similar to the products manufactured by [BSC] as of the date of the settlement agreement * * *, also display the disclaimer provided for in paragraph 6 on the scale label in a reasonably legible manner."*fn6 Id. The defendants "will not use the words 'Bobak' or 'Bobak's' in conjunction with any wholesale business, either as part of the New Trade Names or otherwise." Id.

The injunction obligated the defendants, within the first 45 days of the effective date, to "use good faith effort to display the New Trade Names on the signs on the front of the stores." Orland Park Injunction at ΒΆ B(3). During those 45 days, [the defendants] were allowed to "display the names 'Frank Bobak Fresh Market Place' or 'Frank B's' but not 'Bobak's' or 'Bobak Sausage Company." Id. "Product labels and interior store signs containing the words 'Bobak' or 'Bobak's' will be removed within 30 days of the Effective date, except for Bobak Sausage Company's products and except for ...

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