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Sarkis' Cafe, Inc. v. Sarks In Park, LLC

United States District Court, Seventh Circuit

December 16, 2013

SARKIS' CAFE, INC., an Illinois corporation, Plaintiff,
v.
SARKS IN THE PARK, LLC, an Illinois limited liability company, Defendant.

MEMORANDUM OPINION AND ORDER

JOHN Z. LEE, District Judge.

Plaintiff Sarkis' Cafe, Inc., an Illinois corporation ("Sarkis"), has sued Defendant Sarks in the Park, LLC, an Illinois limited liability company ("Sarks"), for false designation of origin, trademark infringement, dilution, unfair competition, consumer fraud, deceptive trade practices, and injunctive relief. Plaintiff asserts these claims pursuant to the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), 1125(c), Illinois common law, the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, and the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1. Defendant now moves to dismiss Plaintiff's Second Amended Complaint (the "Complaint") pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). For the reasons set forth herein, Defendant's motion is denied.

Factual Background

The following facts alleged in Plaintiff's Complaint are assumed to be true for purposes of this motion. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995).

Plaintiff Sarkis opened its business in or around 1965 in Evanston, Illinois. (2d Am. Compl. ¶ 5.) Sarkis is a restaurant that serves breakfast and lunch and offers unique meals bearing such names as the "Loretta, " "Disaster, " and "Animal." ( Id. ) Jeff Cramin purchased Sarkis from its original owner in November 2000, and incorporated Sarkis as an Illinois corporation on February 26, 2001. ( Id. ¶ 6.) Cramin died on May 9, 2002, whereupon his wife, Marla Cramin ("Ms. Cramin"), took over as the owner of Sarkis. ( Id. ) On November 9, 2010, Ms. Cramin registered the word "Sarkis" with the United States Patent and Trademark Office as USPTO Reg. No. 3872829, Serial No. 77968293. ( Id. ¶ 7.) The Sarkis name has developed valuable good will through the restaurant's more than 40 years of business. ( Id. ¶ 8.)

On May 5, 2009, Defendant Sarks in the Park was formed as an Illinois limited liability company. ( Id. ¶ 9.) Defendant thereafter opened its restaurant, called Sarks in the Park, at 444 W. Fullerton Parkway, Chicago, Illinois, in or around July 2009. ( Id. ¶ 10.) From the time the restaurant opened, Sarks in the Park has offered and continues to offer the identical unique menu items offered by Sarkis, including, but not limited to, the "Loretta, " "Disaster, " and "Animal." ( Id. ¶ 11.) Sarks in the Park describes the aforementioned sandwiches as "Original Sarks Sandwiches, " with full knowledge of Plaintiff's restaurant, its name, and its longtime use of these same sandwich names. ( Id. ¶ 11.)

Defendant also created a website, www.sarksinthepark.com, which features on the front page a logo that is nearly identical to Plaintiff's logo. ( Id. ¶ 12.) Furthermore, Defendant's website contains a section that mentions Plaintiff's restaurant and calls Sarks in the Park the Lincoln Park equivalent of the Evanston Sarkis. ( Id. ¶ 13.) Defendant also launched a Facebook page that identified Sarks in the Park as the "second location" of Sarkis. ( Id. ¶ 14.) Plaintiff never gave its consent or authorization to Defendant to use the "Sarks" or "Sarkis" names. ( Id. ¶ 15.)

As a result of Defendant's logo, name, menu, website, and Facebook page, consumers and media outlets, including a website run by the Chicago Tribune, have concluded that Plaintiff and Defendant's restaurants are one and the same. ( Id. ¶ 16.) Additionally, Defendant made direct misrepresentations to the media about its affiliation with Plaintiff's restaurant. ( Id. ¶ 17.) To illustrate the harm caused by Defendant to Plaintiff, Plaintiff asserts that the ratings of the two restaurants on the popular food review websites yelp.com and grubhub.com indicate that Defendant's restaurant is inferior to Plaintiff's restaurant. ( Id. ¶¶ 18-19.)

On July 18, 2009, Plaintiff's counsel sent a letter to Defendant's counsel informing Defendant that its planned use of the Sarks name, mark, menu, and logo would violate Plaintiff's rights. ( Id. ¶ 20.) Defendant disregarded the letter and proceeded to open and operate its restaurant. ( Id. ¶ 21.) Plaintiff alleges that the similarity between the two restaurants has resulted in a very high likelihood of confusion among the public as to the affiliation between Sarks and Sarks in the Park. ( Id. ¶ 22.) Moreover, many customers have expressed confusion to Ms. Cramin as to the ownership of Defendant's restaurant, assuming that the two restaurants are connected. ( Id. )

Defendant moves to dismiss the Complaint pursuant to Rule 12(b)(6) on two grounds. First, Defendant contends that the Complaint is time-barred by the applicable statutes of limitations. Alternatively, Defendant argues that Plaintiff's Lanham Act claims (Counts I through III) are barred by the doctrine of laches. In addition, Defendant also seeks sanctions against Plaintiff in the form of attorneys' fees and costs pursuant to 28 U.S.C. § 1927 and 15 U.S.C. § 1117(a). The Court will address each issue in turn.

Discussion

I. Statute of Limitations

Defendant first urges the Court to dismiss the Complaint pursuant to Rule 12(b)(6), arguing that each of Plaintiff's six claims is governed by a three-year statute of limitations and the allegations of the Complaint admit that Plaintiff failed to file this lawsuit within the three-year period. Plaintiff retorts that its Lanham Act claims (Counts I through III) need not comply with a three-year limitations period and that, in any event, the claims are nonetheless preserved by the continuing violation doctrine. For the reasons stated below, the Court finds that all six counts of the Complaint are subject to a limitations period of three years. The Court also holds, however, that Plaintiff's allegations are insufficient to establish that its claims should be precluded by the statute of limitations.

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint, however, need not anticipate nor overcome affirmative defenses. See Xechem, Inc. v. Bristol-Myers Squibb Co., 372 F.3d 899, 901 (7th Cir. 2004). As such, a court cannot dismiss a plaintiff's complaint under Rule 12(b)(6) simply because it fails to plead around an affirmative defense. See Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012); United States v. N. Trust Co., 372 F.3d 886, 888 (7th Cir. 2004) (Easterbrook, J.) (reversing dismissal of plaintiff's complaint under 12(b)(6) because it was irrelevant that complaint failed to plead around defendant's assertion that suit was untimely). That ...


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