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Foodworks Usa, Inc. v. Foodworks of Arlington Heights, LLC

United States District Court, Seventh Circuit

September 27, 2013

FOODWORKS USA, INC., Plaintiff,
v.
FOODWORKS OF ARLINGTON HEIGHTS, LLC, Defendant.

FOODWORKS OF ARLINGTON HEIGHTS, LLC, Kevin K. McCormick, Lee F. DeWald, DeWald Law Group PC One of Its Attorneys, Arlington Heights, Illinois.

Defendant/Counter-Plaintiff, FOODWORKS OF ARLINGTON HEIGHTS, LLC, by its attorneys, DEWALD LAW GROUP PC, and for its Motion for Judgment on Damages, states:

DEFENDANT'S MOTION FOR JUDGMENT ON DAMAGES

INTRODUCTION

On July 1, 2013, the Court granted Defendant/Counter-Plaintiff, Foodworks of Arlington Heights, LLC's ("FWAH"), Motion for Default Judgment, in part, finding that a default judgment on liability on FWAH's Counterclaim in favor of FWAH was an appropriate sanction for Plaintiff/Counter-Defendant, Foodworks USA, Inc.'s ("FUSA") conduct. (Dkt. 152 at p. 22). While liability has been established in favor of FWAH, the Court has sought additional information from FWAH relative to the issue of damages, and the instant Motion for Judgment on Damages is being brought for that purpose.

STANDARD OF REVIEW

A default judgment establishes, as a matter of law, that FUSA is liable to FWAH on each cause of action alleged in the Counterclaim. e360 Insight v. The Spamhouse Project, 500 F.3d 594, 602 (7th Cir. 2007). "Upon default, the well-pled allegations of the complaint relating to liability are taken as true, but those relating to the amount of damages suffered ordinarily are not." Wehrs v. Wells, 688 F.3d 886, 892 (7th Cir. 2012). Nevertheless, if one party's conduct makes it difficult for the other party to prove the precise extent of its damages, the Court will give broad latitude in quantifying damages. BCS Services, Inc. v. Heartwood 88, LLC, 637 F.3d 750, 759 (7th Cir. 2011).

COUNT I-DECLARATORY JUDGMENT

Count I seeks a declaratory judgment regarding the Fuego Logo and its derivatives, as well as the common law trademark rights in the name FUEGO MEXICAN GRILL & MARGARITA BAR, (collectively, and hereinafter the "Fuego Marks"). FUSA licensed the Fuego Marks to other entities, including an entity called Foodworks 2047, LLC, which operated an identical Mexican-themed restaurant named FUEGO MEXICAN GRILL & MARGARITA BAR in Chicago. (Doc. 1 at ¶ 54). FWAH would seek the following relief for Count I, none of which would require the production of evidence outside of the allegations of the Counterclaim:

(1) declaring, pursuant to 28 U.S.C. § 2201, FWAH as the rightful and sole owner of the Fuego Marks;
(2) declaring, pursuant to 28 U.S.C. § 2201, FUSA as having no ownership rights in the Fuego Marks;
(3) declaring, pursuant to 28 U.S.C. § 2201, the License Agreement between FUSA and FWAH void ab initio and held for naught;
(4) declaring any and all other licenses executed between FUSA and any third-party regarding any or all of the Fuego Marks void ab initio and held for naught; and
(5) temporarily, preliminarily, and permanently enjoining FUSA and all individuals or entities acting in concert with FUSA from using the Fuego Marks in any manner.

COUNT II-DECLARATORY JUDGMENT

Count II seeks a declaratory judgment regarding the trade dress found at FWAH's restaurant ("Fuego Dress"). In addition to the license of the Fuego Marks, FUSA licensed the trade dress to other entities, including Foodworks 2047, LLC. (Doc. 1 at ¶ 54). FWAH would seek the following relief for Count II, which, as with Count I, would not require the production of any evidence outside of the allegations of the Counterclaim:

(1) declaring, pursuant to 28 U.S.C. § 2201, FWAH as the rightful and sole owner of the Fuego Dress;
(2) declaring, pursuant to 28 U.S.C. § 2201, FUSA as having no ownership rights in the Fuego Dress;
(3) declaring, pursuant to 28 U.S.C. § 2201, any and all other licenses executed between FUSA and any third-party regarding the Fuego Dress void ab initio and held for naught;
(4) temporarily, preliminarily, and permanently enjoining FUSA and all individuals or entities acting in concert with FUSA from using the Fuego Dress in any manner; and COUNT III-TRADEMARK INFRINGEMENT

Count III seeks damages for trademark infringement of the Fuego Marks. Section 35 of the Lanham Act provides that a prevailing party may recover:

(1) defendant's profits,
(2) any damages sustained by the ...

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