Thursday, March 7, 2013, 4:52 PM

Franchisee Sued by Mrs. Winners Restaurant Franchise on Several Trademark Counts

A Mrs. Winners® franchisee said to be operating in Henry County, Georgia faces multiple trademark counts arising from alleged refusal to sign a new proposed licensing agreement.

On March 1, 2013, Mrs. Winners Brand Management LLC (“Winners Brand”) filed a complaint in the Gainesville Division of the U.S. District Court for the Northern District of Georgia against Shelton, Incorporated (“Shelton”), based in Mineral Bluff, Georgia.  The complaint asserts counts for federal trademark infringement, trade dress infringement, federal unfair competition (Lanham Act § 43(a)), dilution, and trademark counterfeiting.

The complaint alleges that Shelton formerly operated a duly-licensed Mrs. Winners® franchise, but that it is no longer duly-licensed, and that Shelton continues to operate a restaurant in Henry County under the name “Mrs. Winners Chicken and Biscuits,” using not only Mrs. Winners trademarks but also Winners Brand’s claimed trade dress, described as “the distinctive red color scheme for its restaurant décor, menus and website.”

Though not specifically alleged in the complaint, the urging of Shelton to sign a new license agreement appears to have stemmed from recent changes in ownership of the asserted trademarks and trade dress.  The complaint describes the following ownership transfers:
  • October 2012:  John Buttolph acquires Mrs. Winners trademarks and trade dress from Winners International Restaurants Franchise Services, Inc. (“WIRFS”) “via strict foreclosure under revised Article 9 of the Uniform Commercial Code.”
  • January 23, 2013:  Winners Brand acquires Mrs. Winners trademarks from Buttolph. 
The complaint alleges that Shelton was notified of trademark ownership issues via the following communications:
·       November 7, 2012: “WIRFS and Buttolph each separately notified Shelton in writing of Buttolph’s ownership of the Mrs. Winners trademarks.”
·       December 13, 2012: Second notice of Buttolph’s ownership of the trademarks.  New proposed licensing agreement enclosed, with request that Shelton sign and return it by January 2, 2013.
·       February 19, 2013: Winners Brand’s counsel sends cease-and-desist letter to Shelton but “offer[s] Shelton a final opportunity to obtain a valid licensing agreement from Winners Brand . . . .”

Winners Brand asserts that Shelton did not respond to any of the above communications, and that Shelton “has knowingly continued to advertise and promote its restaurant services using Mrs. Winners Chicken and Biscuits® Trademarks and Mrs. Winners Chicken and Biscuits® Trade Dress.”

The complaint alleges willful conduct as to all counts and seeks injunctive and monetary relief, including an award of attorneys’ fees.

The case is Mrs. Winners Brand Management LLC v. Shelton Incorporated, No. 2:13-cv-0033-WCO, filed 03/01/13 in the U.S. District Court for the Northern District of Georgia, Gainesville Division, assigned to Judge William C. O’Kelley.

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