Baskin-Robbins USA Co. v. Oceana Catering Services Inc., dba M&M Dining Services, Sam Miller, Lisa Miller
Published: Oct. 19, 2000 | Result Date: Apr. 15, 2000 |Case number: 00CV360EJFS Bench Decision – $0
Judge
Court
USDC Southern District of California
Attorneys
Plaintiff
Defendant
Facts
According to the plaintiff: Ice cream and frozen yogurt franchisor Baskin-Robbins brought an action for trademark infringement under the Lanham Act against its franchisee and against the operator of the dining center at Callaway Golf Company. Baskin-Robbins alleged that the franchisee, which operated franchises in Escondido, Ramona and Poway, had supplied Baskin-Robbins trademarked frozen yogurt mix without authorization at Ely's Place, the Callaway corporate dining center in Carlsbad. Baskin-Robbins terminated the franchise agreements and alleged violations of the Lanham Act and the franchise agreements by unauthorized use of the marks, by making unauthorized, off-site sales, and by failing to report sales and pay royalties. The franchisee initially contended that the sales were approved and that the franchisee would book the income when received. Later, the franchisee contended that it had donated the product as a promotion, had not received any payment, and therefore, was excused from reporting sales or paying royalties. The franchisee further contended that the failure to book a non-income producing sale was a technical, curable default which did not warrant termination of the franchisee agreements and was punitive. The franchisor offered evidence that the sales were unauthorized, that the duty to report sales and pay royalties accrued upon the transfer of the goods, but that, in any event, the franchisee had sought payment from the dining center and concealed the transactions by not issuing invoices. The court granted a preliminary injunction, terminating the right of the franchisee to do business as a Baskin-Robbins franchisee at any location. A permanent injunction was stipulated to by the dining center operator.
Settlement Discussions
The franchisor had demanded that the franchisee voluntarily cease business as a Baskin-Robbins franchisee. The franchisee declined.
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