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USA-Halal Chamber of Commerce, Inc. v. Best Choice Meats, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 14, 2019

USA-HALAL CHAMBER OF COMMERCE, INC., a Maryland corporation Plaintiff,
v.
BEST CHOICE MEATS, INC., an Illinois corporation Defendant.

          MEMORANDUM OPINION AND ORDER

          HONORABLE MARVIN E. ASPEN, UNITED STATES DISTRICT JUDGE

         In 2015, Plaintiff USA-Halal Chamber of Commerce, Inc. (“USA Halal”) began certifying meat products from Defendant Best Choice Meats, Inc. (“Best Choice”) as halal. (Dkt. No. 1-1, Ex. 3 at 86.)[1] In general terms, a meat product is halal if it is slaughtered and prepared in accordance with Islamic law. The certification allowed Best Choice to use certain USA Halal trademarks on its products to indicate their status as halal. (Dkt. No. 14-1, Ex. 3 (“Terms of Service”) at 50-51.) USA Halal eventually terminated Best Choice's certification and notified it that it could no longer use USA Halal's trademarks. (Dkt. No. 1-1, Ex. 7 at 118-20.) Despite this notice, Best Choice used a mark on its products and website similar to one of USA Halal's trademarks. (Id., Ex. 12 at 132-33; see also Decl. of Jihad El-Kareh, (“El-Kareh Decl.”) (Dkt. No. 13-1) ¶¶ 9, 43.) Presently before us is USA Halal's motion for a temporary restraining order and preliminary injunction seeking to enjoin Best Choice from using its mark. (Mot. for Injunction (“Mot.”) (Dkt. No. 5).) For the reasons set forth below, we grant USA Halal's motion.

         PRELIMINARY FACTS[2]

         USA Halal inspects and certifies meat and poultry products as halal in exchange for a fee. (Compl. (Dkt. No. 1) ¶¶ 2-3, 17; see also USA-Halal Chamber of Commerce, Inc., About Us, https://www.ushalalcertification.com/about.html, (last visited July 31, 2019.)[3] As part of USA Halal's business, it has registered trademarks with the United States Patent and Trademark Office (“USPTO”). (Dkt. No. 1-1, Ex. 1 at 1-13.) One such mark is the letter “H” semi-encircled by a crescent moon with the following appearance:

         (Image Omitted)

(“Crescent Moon Mark”). (Id. at 2.) USA Halal has used the Crescent Moon Mark in commerce since 1999 and registered it in 2013. (Id.) The mark is a “certification mark, as used by authorized persons, certif[ying] that the food products [bearing the mark] meet Islamic Halal Guidelines." (Id.) In 2018, USA Halal had the mark declared "incontestable" under Section 15 of the Lanham Act.[4] (Id., Ex. 2 at 15-26.)

         Best Choice was founded in 2015 and distributes beef, lamb, chicken, and turkey products. (El-Kareh Decl. ¶¶ 2, 4.) On August 23, 2016, Best Choice applied to USA Halal to have its products certified. (Dkt. No. 1-1, Ex. 4 at 92-93.) The application was signed by Jihad El-Kareh, the founder, CEO, and President of Best Choice. (Id. at 93; El-Kareh Decl. ¶¶ 1-2.) Above El-Kareh's signature is a clause that states, "I hereby certify that... I have read and agreed to [USA Halal's] TERMS of SERVICE." (Dkt. No. 1-1, Ex. 4 at 93.) The Terms of Service in effect when El-Kareh signed the application includes a list and images of USA Halal's registered trademarks including its Crescent Moon Mark. (Aff of Aly Ghanim (Dkt. No. 1-1) ¶ 3; Terms of Service at 51.)

         Best Choice eventually became certified by USA Halal in 2016 and that same year, El-Kareh designed Best Choice's product packaging to include "a small crescent moon design." (El-Kareh Decl. ¶¶ 8-9.) El-Kareh asserts that when he designed the packaging he was "unaware of any trademark registration relating to a crescent and 'H' design" and was never informed about USA Halal's trademark rights until its complaint was filed. (Id. ¶¶ 13, 23-26.) The mark eventually included on Best Choice's packaging appears as follows:

         (Image Omitted)

(Dkt. No. 13-1, Ex. B at 8-9; see also Def's Resp. to PL's Mot. for Injunction ("Resp.") (Dkt. No. 13) at 4, 13-14 (referring to "Ex. B" as examples of Best Choice's packaging).)

         In May 2018, USA Halal sent Best Choice a letter regarding its 2017 certification. (Dkt. No. 1-1, Ex. 10 at 127-28, Ex. 6 at 116.) The letter stated that USA Halal did not receive any of Best Choice's monthly production reports, which are required to maintain certification. (Id., Ex. 6 at 116.) The letter warned that without action, Best Choice's certification was subject to suspension and “[o]nce . . . certification is suspended . . . all of [USA Halal's] trademarked logos [could] no longer be [used].” (Id.) On September 18, 2018, USA Halal sent Best Choice another letter stating that its certification was “terminated, ” and that Best Choice needed to return its USA Halal certificate and “cease and desist from using [USA Halal's] registered logos and trademarks.” (Id., Ex. 7 at 118-19.) Best Choice responded the following day that it had destroyed its certificate and that “we do not now and have never used any [of USA Halal's] logos, graphics, designs, or trademarks, etc. in any [] way on any of [our] product packaging.” (Id., Ex. 8 at 122.)

         Despite Best Choice's representations, on May 13, 2019, USA Halal informed Best Choice that it “c[ame] to [USA Halal's] attention that [Best Choice was] still displaying [the] certificate on [its] website” and requested that the certificate be immediately removed. (Id., Ex. 12 at 133.) The following day, USA Halal informed Best Choice that it needed to remove its “products['] labels as well [because] they still ha[d] [USA Halal's] logo.” (Id. at 132.) Nearly two months later, USA Halal filed its complaint and motion for a preliminary injunction seeking to enjoin Best Choice from using any of its trademarks. (Compl.; Mot.) Shortly thereafter, Best Choice removed the letter “H” crescent moon mark it was using from its website but has not removed the mark from its packaging. (El-Kareh Decl. ¶¶ 28, 43.) El-Kareh asserts that if enjoined, Best Choice would need to replace approximately $70, 000 worth of packaging, which would take two to three weeks. (Id. ¶¶ 28, 30.) He also asserts that recalling already packaged products and waiting for new packaging would cause spoliation of inventory and damage valuable customer relationships. (Id. ¶¶ 30, 33-34, 36, 38.)

         STANDARD OF REVIEW

         “A preliminary injunction is an extraordinary and drastic remedy . . . that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.”[5]Goodman v. Ill. Dep't of Fin. & Prof'l Regulation, 430 F.3d 432, 437 (7th Cir. 2005) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 1867 (1997)) (emphasis in original) (internal alteration omitted). We engage in a two-step analysis to determine if preliminary relief is warranted. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008). First, we determine if the movant has a made a threshold showing “that it has some likelihood of success on the merits; that it has no adequate remedy at law; [and] that without relief it will suffer irreparable harm.” GEFT Outdoors, LLC v. City of Westfield, 922 F.3d 357, 364 (7th Cir. 2019) (quotation omitted). “If the [movant] fails to meet any of these threshold requirements, the court ‘must deny the injunction.'” Id. (quoting Girl Scouts of Manitou Council, Inc., 549 F.3d at 1086). If, however, the movant meets the threshold requirements, we must “weigh[] the irreparable harm that the moving party would endure without the protection of the preliminary injunction against any irreparable harm the nonmoving party would suffer if the court were to grant the requested relief.” Girl Scouts of Manitou Council, Inc., 549 F.3d at 1086; see also Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375, 381 (7th Cir. 2018). “This Circuit employs a sliding scale approach for this balancing: if a [movant] is more likely to win, the balance of harms can weigh less heavily in its favor, but the less likely a [movant] is to win the more that balance would need to weigh in its favor.” GEFT Outdoors, LLC, 922 F.3d at 364 (quotation omitted). Finally, we “must also consider the public interest in granting or denying an injunction.” Stuller, Inc. v. Steak N Shake Enters., Inc., 695 F.3d 676, 678 (7th Cir. 2012).

         ANALYSIS

         USA Halal argues that Best Choice should be enjoined from using its Crescent Moon Mark because it will likely be successful on the merits given the protected status of its mark. (Mot. at 8-9.) It also argues that it will suffer irreparable harm without an injunction because it cannot verify whether Best Choice's products meet its certification standards, which could damage the credibility of its certifications. (Id. at 10-11; Pl.'s Reply to Def.'s Resp. to Pl.'s Mot. for Injunction (“Reply”) (Dkt. No. 14) at 8-9.) USA Halal argues that this harm outweighs any harm Best Choice would suffer by having to stop using its mark. (Mot. at 11-12.) Best Choice responds that preliminary relief is not warranted because USA Halal has failed to present evidence of irreparable harm and an injunction would cause Best Choice substantial income and inventory loss and severely damage its customer relationships. (Resp. at 7-12.) Best Choice also argues that USA Halal has failed to demonstrate a likelihood of success on the merits because the mark it uses is different than USA Halal's Crescent Moon Mark and USA Halal has failed to show that any consumers have been confused by the two marks. (Id. at 14.)

         I. LIKELIHOOD OF SUCCESS ON THE MERITS

         We first address whether USA Halal has demonstrated a likelihood of success on its trademark infringement claim.[6] “A party moving for preliminary injunctive relief need not demonstrate a likelihood of absolute success on the merits. Instead, [it] must only show that [its] chances to succeed on [its] claims are better than negligible[, ]” which is a “low threshold.” Whitaker By Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034, 1046 (7th Cir. 2017) (quotation and citations omitted). We assess “how likely” USA Halal's success is “after we clear the threshold inquiries and proceed to the balancing phase of the analysis.” Girl Scouts of Manitou Council, Inc., 549 F.3d at 1096. To succeed on a trademark infringement claim, the plaintiff must show “(1) that its mark is protectable, and (2) that the defendant's use of that mark is likely to cause confusion among consumers.” Phx. Entm't Partners v. Rumsey, 829 F.3d 817, 822 (7th Cir. 2016).

         A. Protectability

         USA Halal argues that its Crescent Moon Mark is protectable because it is registered and incontestable. (Mot. at 8-9.) Best Choice argues that USA Halal's mark is not protectable because it is generic. (Resp. at 14-15.) It argues that crescent moons and the letter “H” are “commonly used in association with [h]alal marks” and submits examples of various halal trademarks as evidence. (Id. at 15; Dkt. No. 13-1, Ex. E at 18-35.)

         A registered mark is “prima facie evidence of the validity of the . . . mark . . . and of the registrant's exclusive right to use the mark in commerce.” Packman v. Chi. Tribune Co., 267 F.3d 628, 638 (7th Cir. 2001) (quoting 15 U.S.C. § 1115(a)). Registration also affords plaintiffs a presumption that the mark is either not generic or has acquired secondary meaning. Packman, 267 F.3d at 638. After a mark has been used for five consecutive years following registration, it becomes “incontestable.” Eco Mfg. LLC. v. Honeywell Int'l, Inc., 357 F.3d 649, 651 (7th Cir. 2003) (citing 15 U.S.C. § 1065). “Incontestability is ‘conclusive evidence of the validity of the registered mark and . . . the registrant's exclusive right' to use the mark in commerce.” Eco Mfg. LLC., 357 F.3d at 651 (quoting 15 U.S.C. § 1115(b)). Despite a mark's registered or incontestable status, trademarks may still be cancelled if they become generic. Eco Mfg. LLC., 357 F.3d at 651. “A generic mark is ‘one that is ...


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