United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
ANDREA R. WOOD, District Judge.
Plaintiff Bedrock Management Inc. ("Bedrock") has operated video poker game terminals at its northern Illinois truck stop using the name "Rock Vegas" since April 2013. Defendants Peoples Choice Entertainment Inc. ("Peoples Choice") and John Sarantakis subsequently opened two similar operations within 15 miles of Bedrock's location that used the name "Roc Vegas." Bedrock has brought this lawsuit claiming that Defendants' use of the moniker "Roc Vegas" to identify its gaming business violates federal and state law governing trademark infringement and unfair competition. Now before the Court is Bedrock's motion for a preliminary injunction to prohibit Defendants' from using the "Roc Vegas" identifier pending resolution of the merits of its claims. For the reasons detailed below, Bedrock's motion for a preliminary injunction is granted.
Bedrock alleges that it operates video poker game terminals at a northern Illinois truck stop using the name "Rock Vegas." Bedrock further alleges that is has registered "Rock Vegas" with the state of Illinois as a trademark in association with its gaming activities. According to Bedrock, after it began using the "Rock Vegas" trademark for its own gaming business, Defendants established similar video poker game locations, also in northern Illinois, using the name "Roc Vegas."
In its complaint, Bedrock asserts claims for relief under the Lanham Act, 15 U.S.C. § 1125, and Illinois statutory and common law of trademark, unfair competition, and deceptive trade practices. On September 4, 2014, this Court granted Bedrock's request for a temporary restraining order ("TRO") that, among other things, prohibited Defendants from using the Rock Vegas or Roc Vegas names. After permitting expedited discovery, the Court held an evidentiary hearing on Bedrock's motion for a preliminary injunction on October 2, 2014. At the hearing, the parties presented testimony from four witnesses: Michael Ruggles, Bedrock's business manager; Deborah Ruggles, Michael Ruggles's wife and an employee at Bedrock's location in Fox Lake, Illinois where the video poker stations are located; William Adams, Bedrock's President; and John Sarantakis, the President of Peoples Choice. The parties also submitted for the Court's consideration deposition testimony from Glenn Leonard, a representative of Gold Rush Entertainment Inc., which served as Bedrock's terminal operator for the video poker machines, as well as no less than 33 exhibits.
The evidence presented to the Court established that Bedrock's video poker terminals are located in a 10'×20' area on one side of its 24-hour truck stop in Fox Lake, Illinois. The truck stop is also known as Rock Corner. (M. Ruggles Test., Transcript of Oct. 2, 2014 Hearing ("Hearing Tr.") at 30-32.) The area's larger wall is decorated by a mural that includes the sign "Welcome to Fabulous Rock Vegas." (Pl.'s Mot. for Prelim. Inj., Ex. E., Dkt. No. 22-1.) The sign is a diamond-shaped design that mimics a sign described by both parties as "the Las Vegas sign." (Pl.'s Open. Stmt., Hearing Tr. at 11; Defs.' Open. Stmt., Hearing Tr. at 19; M. Ruggles Test., Hearing Tr. at 30; Sarantakis Test., Hearing Tr. at 127.) Bedrock used the "Welcome to Fabulous Rock Vegas" sign on a nearby billboard, a van prominently decorated with the sign, and promotional materials which included cards given to customers on site. (M. Ruggles Test., Hearing Tr. at 38-42.)
Defendants' video gaming operations are in two locations: a Waukegan, Illinois "Peoples Choice Family Fun Center, " which features miniature golf and arcade games; and a Lindenhurst, Illinois pizzeria. (Defs.' Resp. to Pl.'s Mot. at 4-5, Dkt. No. 24.) In promoting these facilities, Defendants, like Bedrock, used a sign that mimicked the "Las Vegas" sign: it used the same color and shape as the aforementioned signs. Defendants' sign was displayed along with its corporate mascot, a cartoon dinosaur they referred to as "Rocky, " and their sign was worded "Rocky's Fabulous Roc Vegas Strip." ( Id. ) Defendants used this symbol in their own visual promotional materials, including an internet website, local newspaper ads, flyers, and t-shirts. ( Id. ) Defendants also advertised on Waukegan radio stations. (Sarantakis Test., Hearing Tr. at 164-65.)
In determining whether to grant preliminary injunctive relief, this Court must, as a threshold matter, determine whether the moving party has demonstrated: (1) some likelihood of success on the merits of the underlying claim; (2) the absence of an adequate remedy at law; and
(3) the suffering of irreparable harm if preliminary relief is denied. Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). If the moving party clears these thresholds, the Court then balances the harm to the non-moving party if preliminary relief is granted against the harm to the moving party if relief is denied, and further considers the consequences to the public interest of granting or denying relief. Id. at 11-12. This equitable balancing process employed by the Seventh Circuit involves a "sliding scale" analysis, "weighting harm to a party by the merit of [his] case, " Cavel Int'l, Inc. v. Madigan, 500 F.3d 544, 547 (7th Cir. 2007), with the aim "to minimize the costs of a wrong decision, " Korte v. Sebelius, 735 F.3d 654, 665 (7th Cir. 2013). "The strength of the moving party's likelihood of success on the merits affects the balance of harms." Planned Parenthood of Ind., Inc. v. Comm'r of the Ind. State Dep't of Health, 699 F.3d 962, 972 (7th Cir. 2012).
Bedrock's complaint asserts claims under the Lanham Act, 15 U.S.C. § 1125, the Illinois Trademark Registration and Protection Act, 765 ILCS 1036/1, the Illinois common law of trademark and unfair competition, and the Illinois Deceptive Trade Practices Act ("IDTPA"), 815 ILCS 510/1. Illinois statutory and common law trademark claims are examined under the same analysis as federal trademark claims. Jim Mullen Charitable Found. v. World Ability Fed'n NFP, 917 N.E.2d 1098, 1104 (Ill.App.Ct. 2009). Claims under the IDTPA, when based upon the same alleged actions as a Lanham Act claim, are also analyzed in accordance with Lanham Act principles, SB Designs v. Reebok Int'l, Ltd., 338 F.Supp.2d 904, 914 (N.D. Ill. 2004), and the statute is interpreted to be a codification of Illinois' common law of unfair competition. Custom Bus. Sys. Inc. v. Boise Cascade Corp., 385 N.E.2d 942, 943 (Ill.App.Ct. 1979). Accordingly, analysis of the merits of Bedrock's Lanham Act claim also resolves the state statutory and common law claims asserted by its complaint.
To prevail on its claims under the Lanham Act, Bedrock must establish that (1) its mark is protectable, and (2) Defendants' use of the mark is likely to cause confusion among consumers. Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 461 (7th Cir. 2000). A party acquires protectable rights in a trademark by being the first public seller of goods or services in connection with that mark. Johnny Blastoff, Inc. v. Los Angeles Rams Football Co., 188 F.3d 427, 433-34 (7th Cir. 1999).
In the present case, Bedrock has presented evidence that it opened its gaming area in April 2013 and that its "Welcome to Fabulous Rock Vegas" sign was displayed there at that time. (M. Ruggles Test., Hearing Tr. at 33-36.) Defendants began their use of the Roc Vegas mark in June 2013. (Defs.' Resp. to Pl.'s Mot. at 4, Dkt. No. 24.)
Defendants argue that Bedrock has not used the Rock Vegas mark in a manner that permits its protection under the Lanham Act. In their prehearing brief, they cite Smith v. M & B Sales & Mfg., No. C 89 0293 MHP, 1990 WL 11112 (N.D. Cal. Jan. 31, 1990), for the proposition that Bedrock's use of Rock Vegas solely within the context of the unprotected "Welcome to Fabulous Rock Vegas" phrase and diamond-shaped sign prevents its protection as a trademark. But Smith addressed the protectability of an entire twelve-word slogan, not the impact of the use of a claimed trademark within an unprotected phrase. Id. at *10. The Smith court's opinion did not suggest that a claimed trademark lost its protectability because it was not employed in isolation or because its use was introduced by unprotected words or displayed within unprotected graphics. Smith does not support a conclusion ...