Haynes and Boone Assists Krispy Kreme in Trademark Claims Win Against Franchisee

07/23/2010

Krispy Kreme Doughnut Corp. has won an injunction blocking a delinquent franchisee from operating in New York's Pennsylvania Station and another location.

A federal judge granted the preliminary injunction to the donut maker on the grounds that franchisee Satellite Donuts was behind on its obligations under its agreements with Krispy Kreme and is in violation of the Lanham Act.

Judge Lewis A. Kaplan made that ruling after considering allegations by Krispy Kreme that Satellite was infringing its marks by continuing to operate without authorization and diluting the marks by making substandard donuts in Krispy Kreme Doughnut Corp. v. Satellite Donuts, LLC, 10 Civ. 4272.

Satellite Donuts entered into a franchise agreement for Penn Station in 2008 and a second agreement for a commissary facility in Baldwin, N.Y., where the Penn Station donuts are made, in 2009.

Judge Kaplan found that Krispy Kreme had easily shown it would suffer irreparable harm if an injunction was not granted.

He noted that Krispy Kreme's quality control manager had stated that the Penn Station and Baldwin operations were failing to meet "the most basic quality control standards" for Krispy Kreme franchises.

Jonathan D. Pressment and David Siegal of Haynes and Boone represented Krispy Kreme.

"We are very pleased with Judge Kaplan's ruling which vindicated the rights of Krispy Kreme to protect its valuable trademarks," Mr. Siegal said.

Excerpted from New York Law Journal. To view the full article, click here.

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