Case 3:17-cv-01297-YY Document 16 Filed 09/07/17 Page 1 of 43

Steven T. Lovett, OSB No. 910701
steve.lovett@stoel.com
Nathan C. Brunette, OSB No. 090913
nathan.brunette@stoel.com
Elliott J. Williams, OSB No. 144835
elliott.williams@stoel.com
STOEL RIVES LLP
760 SW Ninth Avenue, Suite 3000
Portland, OR 97205
Telephone: 503.224.3380
Facsimile: 503.220.2480

Attorneys for Defendants

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

HEART, LLC, an Oregon limited liability Case No.: 3:17-cv-01297-YY
company,
DEFENDANTS’ RESPONSE IN
Plaintiff, OPPOSITION TO PLAINTIFF’S
MOTION FOR PRELIMINARY
v. INJUNCTION

HEART PIZZA, LLC, an Oregon limited REQUEST FOR ORAL ARGUMENT
liability company; and MICAH CAMDEN,
an individual residing in Oregon,

Defendants.

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ......................................................................................................... ii
I. INTRODUCTION ............................................................................................................. 1
II. ARGUMENT ..................................................................................................................... 2
A. HCR Fails to Carry Its Burden to Prove a Likelihood That It Will Suffer
Specific and Immediate Irreparable Harm Absent Entry of A Preliminary
Injunction ............................................................................................................... 3
1. HCR Cannot Rely on A Presumption of Irreparable Harm, Since
Such a Presumption Is No Longer Legally Permissible ............................ 3
2. HCR Fails to Offer Evidence That Could Establish Specific, Non-
Speculative, and Imminent Irreparable Harm ............................................ 4
3. HCR’s Long Delay in Filing Suit and This Motion Undercuts Its
Conclusory Assertions of Irreparable Harm .............................................. 6
4. HCR’s Assertions of Supposed Actual Confusion Cannot Establish
Irreparable Harm Without Additional Proof .............................................. 7
B. HCR Has Not Made A Clear Showing That It Is Likely to Succeed on the
Merits ..................................................................................................................... 8
1. HCR Has Not Introduced Evidence That Can Establish Actual
Marketplace Confusion .............................................................................. 8
2. Consumers Would Not Assume that Pizzerias and Specialty, High-
End Coffee Derive from a Common Source ............................................ 13
3. Viewed in the Correct Context, the Parties’ Marks Are Distinct,
Not Similar ............................................................................................... 16
4. HCR’s HEART Mark Is Entitled to Narrow Protection .......................... 19
5. Defendants Did Not Adopt Their Mark to Trade on HCR’s
Goodwill .................................................................................................. 20
6. Both Parties’ Customers Are Sophisticated Purchasers Who Are
Unlikely to Be Confused .......................................................................... 24
7. The Fact that Both Parties Rely on Ubiquitous Trade Channels
Does Not Suggest A Likelihood of Confusion ........................................ 26
8. As Properly Analyzed, the “Expansion” Factor Does Not Support
A Likelihood of Confusion Here ............................................................. 28
9. The Fact That Both Parties Happen to Have A Location in
Portland’s Popular West End Neighborhood Does Not Favor A
Likelihood of Confusion .......................................................................... 29
10. On Balance, the Sleekcraft Factors Establish that HCR is Unlikely
to Prevail on the Merits ............................................................................ 30

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TABLE OF CONTENTS

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C. The Balance of Hardships Weighs Heavily Against a Preliminary
Injunction ............................................................................................................. 31
D. The Public Interest Disfavors A Preliminary Injunction ..................................... 34
III. CONCLUSION ................................................................................................................ 35

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TABLE OF AUTHORITIES

Page

Cases

Adidas America, Inc. v. Skechers USA, Inc.,
149 F. Supp. 3d 1222 (D. Or. 2016) ............................................................................31, 33, 34

Alpha Indus., Inc. v. Alpha Steel Tube & Shapes, Inc.,
616 F.2d 440 (9th Cir. 1980) ...................................................................................................16

AMF Inc. v. Sleekcraft Boats,
599 F.2d 341 (9th Cir. 1979) ...................................................................................8, 22, 28, 30

Amoco Prod. Co. v. Vill. of Gambell,
480 U.S. 531 (1987) .................................................................................................................31

Brennan's, Inc. v. Brennan's Rest., L.L.C.,
360 F.3d 125 (2d Cir. 2004).....................................................................................................30

Caribbean Marine Servs. Co. v. Baldridge,
844 F.2d 668 (9th Cir. 1988) .....................................................................................................4

Cohn v. Petsmart, Inc.,
281 F.3d 837 (9th Cir. 2002) .............................................................................................10, 11

Dahl v. Swift Dist., Inc.,
No. Cv 10-00551 SJO, 2010 WL 1458957 (C.D. Cal. Apr. 1, 2010) ......................................21

Danaei v. Rostam,
No. 2:16-cv-0319-RGK-JPR, 2017 WL 2719984 (C.D. Cal. Feb. 2, 2017)..............................6

Denny's, Inc. v. Kennedy Rests., L.L.C.,
No. CV-09-0741-PHX-SRB, 2009 WL 10673493 (D. Ariz. Sept. 15, 2009) .........................35

First Franklin Fin. Corp. v. Franklin First Fin., Ltd.,
356 F. Supp. 2d 1048 (N.D. Cal. 2005) ...................................................................................33

Fleischmann Distilling Corp. v. Maider Brewing Co.,
314 F.2d 149 (9th Cir. 1963) .............................................................................................21, 22

Flynt Distrib. Co. v. Harvey,
734 F.2d 1389 (9th Cir. 1984) ...................................................................................................9

Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc.,
736 F.3d 1239 (9th Cir. 2013) ......................................................................................... passim

Herbalife Int'l, Inc. v. Lumene N. Am. LLC,
No. CV 07-5040 AHM (RCX), 2007 WL 4225776 (C.D. Cal. Oct. 15, 2007) .......................25
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TABLE OF AUTHORITIES

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Horos v. Locol, LLC,
No. CV148065 MWFMRWX, 2015 WL 12656946, at *8 (C.D. Cal. Feb. 11,
2015) ........................................................................................................................................26

Icebreaker Ltd. v. Gilmar S.P.A.,
911 F. Supp. 2d 1099 (D. Or. 2012) ......................................................................14, 16, 19, 30

Icon Enters. Int’l, Inc. v. Am. Prods. Co.,
No. CV 04-1240 SVW, 2004 WL 5644805 (C.D. Cal. Oct. 7, 2004) .....................................10

Idaho Golf v. TimberStone Mgmt., LLC,
No. 1:14-cv-00233, 2016 WL 5340302 (D. Idaho Sept. 21, 2016) .........................................30

iFreedom Direct Corp. v. McCormick,
No. SACV 16-470-JLS(KESx), 2016 WL 9049647 (C.D. Cal. June 15, 2016),
aff’d, 662 F. App’x 550 (9th Cir. 2016).................................................................................4, 6

Isle of Capri Casinos, Inc. v. Flynt,
No. 2:16-cv-06148-CAS, 2016 WL 6495380 (C.D. Cal. Nov. 1, 2016) .................................17

Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery,
150 F.3d 1042 (9th Cir. 1998) .................................................................................................22

Ketab Corp. v. Mesriani Law Grp.,
No. 214CV07241RSWLMRW, 2015 WL 12655670 (C.D. Cal. Feb. 6, 2015) ......................29

Lindy Pen Co. v. Bic Pen Corp.,
725 F.2d 1240 (9th Cir. 1984) .................................................................................................17

Lopez v. Brewer,
680 F.3d 1068 (9th Cir. 2012) ...................................................................................................1

M2 Software, Inc. v. Madacy Entm’t,
421 F.3d 1073 (9th Cir. 2005) ...........................................................................................22, 23

Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co.,
571 F.3d 873 (9th Cir. 2009) .....................................................................................................3

Mastro’s Rests. LLC v. Dominick Grp. LLC,
No. CV 11-1996-PHX-PGR, 2012 WL 2091535 (D. Ariz. June 11, 2012) ............................30

Matrix Motor Co. v. Toyota Jidosha Kabushiki,
290 F. Supp. 2d 1083 (C.D.Cal. 2003) ....................................................................................14

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TABLE OF AUTHORITIES

Page

Miss World (UK) Ltd. v. Mrs. Am. Pageants, Inc.,
856 F.2d 1445 (9th Cir. 1988), abrogated in part on other grounds by Eclipse
Assocs. Ltd. v. Data Gen. Corp., 894 F.2d 1114 (9th Cir. 1990).......................................10, 19

Mrs. U.S. Nat’l Pageant, Inc. v. Miss U.S. Org., LLC,
875 F. Supp. 2d 211 (W.D.N.Y. 2012) ......................................................................................7

Murray v. Cable Nat’l Broad. Co.,
86 F.3d 858 (9th Cir. 1996) .....................................................................................................29

Network Automation, Inc. v. Advanced Sys. Concepts, Inc.,
638 F.3d 1137 (9th Cir. 2011) ...........................................................................................13, 27

Newport Pac. Corp. v. Moe's Sw. Grill, LLC,
No. 05-995 KI, 2006 WL 2811905 (D. Or. Sept. 28, 2006) ....................................................26

Nordstrom, Inc. v. NoMoreRack Retail Gr., Inc.,
No. C12-1853-RSM, 2013 WL 1196948 (W.D. Wash. Mar. 25, 2013)............................23, 27

Oculu, LLC v. Oculus VR, Inc.,
No. SACV 14-0196 DOC(JPRx), 2015 WL 3619204, at *13 (C.D. Cal. June
8, 2015) ..............................................................................................................................12, 13

Official Airline Guides, Inc. v. Goss,
6 F.3d 1385 (9th Cir. 1993) .....................................................................................................28

One Indus., LLC v. Jim O'Neal Distrib., Inc.,
578 F.3d 1154 (9th Cir. 2009) .....................................................................................19, 20, 22

Pedego, LLC v. All. Wholesalers, Inc.,
No. SACV 12-01106-CJC(JPRx), 2012 WL 12892900 (C.D. Cal. Sept. 14,
2012) ..........................................................................................................................................9

Pizzeria Uno Corp. v. Temple,
747 F.2d 1522 (4th Cir. 1984) .................................................................................................14

Planet Coffee Roasters, Inc. v. Hung Dam,
No. SACV 09-00571-MLG, 2010 WL 625343 (C.D. Cal. Feb. 18, 2010) .............................34

Quia Corp. v. Mattel, Inc.,
No. C 10-1902 JF (HRL), 2011 WL 2749576 (N.D. Cal. July 14, 2011) ...............................27

Rodeo Collection, Ltd. v. W. Seventh,
812 F.2d 1215 (9th Cir. 1987) ...................................................................................................4

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TABLE OF AUTHORITIES

Page

Ross v. Target Corp.,
No. CV 07-1147 ODW, 2008 WL 11336378 (C.D. Cal. July 7, 2008) ..................................10

San Miguel Pure Foods Co. v. Ramar Int’l Corp.,
625 F. App’x 322 (9th Cir. 2015) (unpublished) .......................................................................6

Stone Creek Inc. v. Omnia Italian Design, Inc.,
862 F.3d 1131 (9th Cir. 2017) ...........................................................................................18, 22

Stonefire Grill, Inc. v. FGF Brands, Inc.,
987 F. Supp. 2d 1023 (C.D. Cal. 2013) .................................................................14, 15, 16, 26

Suja Life, LLC v. Pines Int’l, Inc.,
No. 16CV985-GPC(WVG), 2016 WL 6157950 (S.D. Cal. Oct. 24, 2016) ................11, 17, 25

Surfvivor Media, Inc. v. Survivor Prods.,
406 F.3d 625 (9th Cir. 2005) .............................................................................................13, 29

Titaness Light Shop, LLC v. Sunlight Supply, Inc.,
585 F. App’x 390 (9th Cir. 2014) (unpublished) .......................................................................4

TPW Management, LLC v. Yelp, Inc.,
No. 16-cv-03063-YGR, 2016 WL 6216879 (N.D. Cal. Oct. 25, 2016) ..................4, 21, 23, 27

TravisMatthew, LLC v. Leisure Soc’y Unlimited, LLC,
No. SACV 12–213–JST, 2012 WL 1463548 (C.D. Cal. Apr. 16, 2012)...................................7

U.S. Philips Corp. v. KBC Bank,
590 F.3d 1091 (9th Cir. 2010) ...................................................................................................1

VBS Distrib., Inc. v. Nutrivita Labs., Inc.,
No. SACV 16-01553-CJC(DFMx), 2017 WL 2404919 (C.D. Cal. Jan. 19,
2017) ....................................................................................................................................6, 31

Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc.,
No. C 12-3856 PJH, 2014 WL 4312021 (N.D. Cal. Aug. 28, 2014) .......................................12

Winter v. Nat. Res. Def. Council,
555 U.S. 7 (2008) .................................................................................................................3, 31

Young v. 3.1 Phillip Lim, LLC,
No. SA CV 16-1556-DOC, 2016 WL 6781200 (C.D. Cal. Nov. 16, 2016) ........................7, 33

Rules

Fed. R. Evid. 803(6)(A)-(C) & 902(11) ...........................................................................................9
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TABLE OF AUTHORITIES

Page

Other Authorities

Restatement (Third) of Unfair Competition § 23 cmt. C (1995) ...................................................10

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I. INTRODUCTION

A preliminary injunction is “‘an extraordinary and drastic remedy, one that should not be

granted unless the movant, by a clear showing, carries the burden of persuasion.’” Lopez v.

Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012) (affirming denial of preliminary injunction)

(citation omitted). The purpose of a preliminary injunction is “to preserve the status quo and the

rights of the parties until a final judgment issues in the cause.” U.S. Philips Corp. v. KBC Bank,

590 F.3d 1091, 1094 (9th Cir. 2010). Here, plaintiff Heart Coffee Roasters (“HCR”) seeks to

dramatically change the status quo, not to preserve it, by forcing defendants to abandon the Heart

Pizza brand they have used since last October. As discussed below, if defendants are

preliminarily enjoined from using the brand, they will have to close the three currently operating

restaurants, lay off employees, and completely rethink their mission. Moreover, Heart Pizza’s

founders cannot close Heart Pizza and then relaunch the business under that brand after the

litigation ends two years from now. If defendants are preliminarily enjoined from continuing to

use the Heart Pizza brand, they will be forced to permanently abandon it, thereby destroying the

goodwill and value the brand has already achieved.

In support of its motion for “extraordinary and drastic” relief, HCR resorts to outdated

presumptions, hyperbole, and unreliable multi-layered hearsay to compensate for its thin factual

record. For example, HCR relies on the presumption of irreparable harm based on a showing of

likelihood of success on the merits of a trademark infringement claim. This presumption no

longer applies in the Ninth Circuit, however, and HCR fails to offer any specific evidence of

irreparable harm. On that basis alone, its motion fails. Equally remarkable, HCR asks the Court

in balancing the equities at this preliminary stage to ignore entirely all hardship HCR’s requested

relief would cause defendants. HCR’s argument misreads the law and rests exclusively on

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inadmissible (and inaccurate) multi-level hearsay. The evidence of severe hardship that would

be imposed on defendants if an injunction is entered, and the absence of any evidence of harm to

HCR if an injunction is not entered, is an independent ground on which HCR’s motion fails.

On the merits, all of HCR’s arguments are colored by its unsupported and inaccurate

allegations of ‘actual confusion’ and of defendants’ alleged intent to trade on HCR’s goodwill.

HCR’s evidence of ‘actual confusion’ is nothing of the sort, and is based on unreliable hearsay in

any event. And the idea that Mr. Camden, who has created several successful mini-chains of fast

gourmet restaurants, would launch another fast gourmet concept by leveraging the goodwill of a

coffee shop, rather than on his own track record, is evidence of HCR’s exaggerated sense of its

importance, not of Mr. Camden’s bad intent.

HCR’s arguments also rest on baseless exaggeration, such as its assertion that

defendants’ pizzerias ‘compete[] directly’ with HCR’s coffee shops merely because both are in

the ‘restaurant industry.’ HCR also boasts that the parties’ marks are ‘identical,’ despite the fact

that, when viewed in commercial context, as is appropriate, the opposite is true. HCR’s coffee

shops and defendants’ pizzerias look and feel entirely different and no consumers are confused

as between them. Try as it might, HCR cannot parlay its common law trademark rights arising

from using HEART as a small, boutique coffee roaster and operator of two Portland coffee

shops, into the exclusive right to use the word ‘heart’ in any business that serves food or drink.

HCR fails to carry its burden on each of the four elements of the Ninth Circuit’s preliminary

injunction test, any one of which dooms its motion for extraordinary relief.

II. ARGUMENT

The party seeking injunctive relief must make a clear showing that separately establishes

four separate required elements: “[1] that he is likely to succeed on the merits, [2] that he is

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likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of

equities tips in his favor, and [4] that an injunction is in the public interest.” Winter v. Nat. Res.

Def. Council, 555 U.S. 7, 20 (2008). As shown below, HCR fails to carry its burden on any of

the four required elements, and its motion for immediate injunctive relief should be denied.

A. HCR Fails to Carry Its Burden to Prove a Likelihood That It Will Suffer Specific
and Immediate Irreparable Harm Absent Entry of A Preliminary Injunction.

Any preliminary injunction requires a showing of a likelihood of imminent irreparable

harm during the pendency of the action. Winter, 555 U.S. at 21-22 (overturning earlier Ninth

Circuit cases allowing preliminary injunction based on mere “possibility” of irreparable harm).

1. HCR Cannot Rely on A Presumption of Irreparable Harm, Since Such a
Presumption Is No Longer Legally Permissible.

HCR neither offers specific evidence showing how it will be irreparably harmed if this

action proceeds without entry of a preliminary injunction, nor does it explain why it failed to

object to Heart Pizza’s use of the name when it first learned of it nearly a year ago. Indeed, in

discussing irreparable harm, HCR does not even cite into the record. See Mtn. at 18. Instead,

HCR first relies on outdated authority applying a presumption that irreparable harm follows

automatically from proof of a likelihood of confusion. (Mtn. at 18 (citing Marlyn

Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir. 2009) (applying

the then-accepted presumption of irreparable harm in trademark cases: “irreparable injury may

be presumed from a showing of likelihood of success on the merits” (internal quotation marks

and citation omitted)).) The Ninth Circuit subsequently overturned this standard, flatly rejected

any such presumption, and demanded evidence that proves imminent irreparable harm:

Gone are the days when “[o]nce the plaintiff in an infringement
action has established a likelihood of confusion, it is ordinarily
presumed that the plaintiff will suffer irreparable harm if injunctive
relief does not issue.” This approach collapses the likelihood of

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success and the irreparable harm factors. Those seeking injunctive
relief must proffer evidence sufficient to establish a likelihood of
irreparable harm.

Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc., 736 F.3d 1239, 1250-51 (9th Cir. 2013)

(quoting Rodeo Collection, Ltd. v. W. Seventh, 812 F.2d 1215, 1220 (9th Cir. 1987)).

2. HCR Fails to Offer Evidence That Could Establish Specific, Non-
Speculative, and Imminent Irreparable Harm.

Courts require “evidence” rather than “platitudes” to establish how irreparable harm will

likely occur during pendency of the case. Id. at 1250-51 (vacating preliminary injunction entered

without factual findings on irreparable harm). In addition, a preliminary injunction must be

justified by irreparable harm that is specific and imminent, not merely speculative. “Speculative

injury does not constitute irreparable injury sufficient to warrant granting a preliminary

injunction.” Titaness Light Shop, LLC v. Sunlight Supply, Inc., 585 F. App’x 390, 391 (9th Cir.

2014) (unpublished) (quoting Caribbean Marine Servs. Co. v. Baldridge, 844 F.2d 668, 674 (9th

Cir. 1988))) (reversing preliminary injunction, despite likelihood of success on the merits, due to

lack of non-speculative evidence of irreparable harm).

For example, in TPW Management, LLC v. Yelp, Inc., No. 16-cv-03063-YGR, 2016 WL

6216879, at *11-12 (N.D. Cal. Oct. 25, 2016), evidence consisting of two articles featuring

complaints about the quality of the junior user’s services and the plaintiff’s self-serving

declaration claiming that the junior user’s continuing (alleged) infringement would erode

plaintiff’s customer base and control over goodwill, was held insufficient to prove likelihood of

irreparable harm in the absence of specific evidence such as diminished revenues or lost

customers.1

1
See also iFreedom Direct Corp. v. McCormick, No. SACV 16-470-JLS(KESx), 2016
WL 9049647, at *4-5 (C.D. Cal. June 15, 2016) (denying preliminary injunction where expert
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HCR cites no evidence of irreparable harm. Mtn. at 18. The only evidence even

arguably relating to irreparable harm in the entire preliminary injunction record are conclusory

and speculative assertions in the declaration of HCR’s owner regarding supposed confusion of

customers eroding HCR’s goodwill. Dkt. 10 ¶¶ 25-26. But Mr. Yli-Luoma’s declaration does

not explain how HCR is supposedly being irreparably harmed, and the conclusory assertions of

irreparable harm made in HCR’s briefing are lawyer argument rather than evidence. See Danaei

v. Rostam, No. 2:16-cv-0319-RGK-JPR, 2017 WL 2719984, at *3 (C.D. Cal. Feb. 2, 2017)

(despite finding likelihood of success on trademark infringement claim, refusing preliminary

injunction for failure to prove irreparable harm between direct competitors because only

evidence of irreparable harm was plaintiff’s conclusory and self-serving declaration and because

decrease in plaintiff’s website traffic was not proven to be caused by infringement); see also VBS

Distrib., Inc. v. Nutrivita Labs., Inc., No. SACV 16-01553-CJC(DFMx), 2017 WL 2404919, at

*5 (C.D. Cal. Jan. 19, 2017) (self-serving declaration claiming that Lanham Act plaintiff “will

lose goodwill because of consumer confusion” was too conclusory and speculative to support

imminent irreparable harm).

Thus, even if HCR could show that it is likely to prevail on the merits, and it cannot,

HCR’s motion still fails as a matter of law due to its lack of evidence establishing specifically

how HCR faces immediate and irreparable harm absent entry of an injunction.

declaration regarding supposed irreparable harm failed to offer specific analysis, backed by facts,
showing precisely how infringement would irreparably harm trademark plaintiff), aff’d, 662 F.
App’x 550, 551 (9th Cir. 2016) (affirming that expert declaration could not establish irreparable
harm because it “was too speculative” and “failed to show that harm is likely to occur or that
traditional remedies . . . are inadequate”); San Miguel Pure Foods Co. v. Ramar Int’l Corp., 625
F. App’x 322, 327 (9th Cir. 2015) (unpublished) (vacating permanent injunction for failure to
prove irreparable harm, even though evidence of actual confusion existed, where evidence failed
to show that even incidents of actual confusion had resulted in “lost customers or goodwill”).

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3. HCR’s Long Delay in Filing Suit and This Motion Undercuts Its Conclusory
Assertions of Irreparable Harm.

HCR’s claims of irreparable harm are further undercut by HCR’s delay in filing this

action and moving for injunctive relief. HCR knew about Heart Pizza’s plan to open its pizza

restaurants under the HEART PIZZA mark and pizza box logo long before Heart Pizza opened

to the public in February 2017. Due to the prominence of Heart Pizza’s owners in the Portland

restaurant market, at least three articles highlighting the Heart Pizza restaurant concept appeared

in the Oregonian and elsewhere in mid-October 2016. The employees at HCR’s West End

coffee shop began asking Mr. Camden about Heart Pizza as soon as those initial news articles

were published. (Camden Decl. ¶¶ 19, 39.) In addition, an “Opening Soon” sign featuring the

Heart Pizza brand was prominently placed on the West End store 3-4 months before the February

2017 opening, and Mr. Camden brought in sample pizzas to HCR’s West End location beginning

in December 2016 or January 2017. (Id. ¶¶ 40-41.)

HCR’s delay undermines its motion for emergency injunctive relief. In an analogous

case, the plaintiff learned in June 2015 that defendant would enter the disputed market with its

mark, but waited ten months before moving for a preliminary injunction in April 2016, during

which time the defendant entered the market. iFreedom Direct Corp. v. McCormick, No. SACV

16-470-JLS(KESx), 2016 WL 9049647, at *4 (C.D. Cal. June 15, 2016), aff’d 662 F. App’x 550

(9th Cir. 2016). After reviewing cases holding that delays of three, five, and seven months

undercut claims of irreparable harm, the court held that plaintiff’s ten-month delay undercut any

potential irreparable harm. Id.

For the same reasons, HCR’s 10-month delay in filing this motion undercuts its claims of

exigent irreparable harm justifying extraordinary relief. Like the plaintiff in iFreedom, HCR

easily could have made this motion to maintain the status quo before defendants built out their

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pizzerias, or as soon as they opened, if HCR was sincerely concerned about suffering irreparable

harm. Instead, it waited until six months after Heart Pizza opened to seek emergency relief.

4. HCR’s Assertions of Supposed Actual Confusion Cannot Establish
Irreparable Harm Without Additional Proof.

Finally, HCR asserts that its supposed evidence of actual confusion independently and

automatically proves irreparable harm. Mtn. at 18. Even if HCR had proven actual

confusion -- and for all the reasons discussed in Section II.B.1, it did not -- evidence of actual

confusion alone does not suffice to prove irreparable harm for purposes of a preliminary

injunction. HCR’s view of irreparable harm relies on two district court cases from 2012, one of

which is out-of-circuit. (Mtn. at 18 citing TravisMatthew, LLC v. Leisure Soc’y Unlimited, LLC,

No. SACV 12–213–JST (MLGx), 2012 WL 1463548, at *4 (C.D. Cal. Apr. 16, 2012), and Mrs.

U.S. Nat’l Pageant, Inc. v. Miss U.S. Org., LLC, 875 F. Supp. 2d 211, 226-27 (W.D.N.Y. 2012)

(applying Second Circuit requirements for proof of irreparable harm).) After TravisMatthew was

decided, the Ninth Circuit rejected the same argument HCR makes here, explaining that evidence

of actual confusion merely “underscores customer confusion, not irreparable harm” and is

insufficient on its own to support a preliminary injunction. Herb Reed, 736 F.3d at 1250.

In sum, HCR delayed bringing this action for months, offers no specific evidence

showing how it is likely to be irreparably harmed, and relies on presumptions of irreparable harm

(one based on a likelihood of success on the merits and the other on supposed actual confusion)

that no longer exist. HCR failed to meet its burden to prove irreparable harm and its motion for

extraordinary relief should be denied on that basis alone. See Young v. 3.1 Phillip Lim, LLC, No.

SA CV 16-1556-DOC (KESx), 2016 WL 6781200, at *5-6 (C.D. Cal. Nov. 16, 2016) (despite

finding likelihood of success on trademark infringement claim, refusing preliminary injunction

for lack of proof of irreparable harm).

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B. HCR Has Not Made A Clear Showing That It Is Likely to Succeed on the Merits.

Even if HCR could overcome its failure to establish irreparable harm, and it cannot, it

would still be required to establish a likelihood of success on the merits on each of HCR’s

substantive claims. As shown below, no Sleekcraft factor significantly favors infringement, and

those of greatest important weigh heavily against any likelihood of confusion.

1. HCR Has Not Introduced Evidence That Can Establish Actual Marketplace
Confusion.

HCR boldly claims that it has offered “overwhelming evidence of actual confusion”

(Mtn. at 19), but beneath the surface of its carefully crafted arguments, HCR’s evidence is

inadmissible, unreliable, and at most demonstrates inquiries about whether the parties are

related, which are insufficient as a matter of law to establish actual confusion.

HCR relies on four supposed facts to support its assertions of actual confusion: (1) a log

kept by HCR employees of statements purportedly made by customers at one of HCR’s coffee

shops, (2) comments supposedly made by non-customers, (3) statements supposedly made and a

mental state supposedly held by an unidentified individual, and (4) the results of contrived

Google searches. (Mtn. at 18-19; Dkt. 9 ¶¶ 2-3; Dkt. 10 ¶¶ 25-26 & Ex. 8.) None of these

supposed facts are based on admissible or reliable evidence, nor would they establish actual

confusion even if they could be believed.

a. HCR’s “Heart Pizza Log.” HCR offers a log of statements from unidentified

customers apparently written down by HCR employees at its downtown location. (Decl. of

Wille Yli-Luoma (Dkt. 10) Ex. 8.) HCR contends that the statements show that the customers

were confused as between the parties.

To begin, this log contains multiple levels of hearsay, including the log itself (which

Mr. Yli-Luoma admits he did not have first-hand knowledge of, but was made by unspecified

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HCR employees), as well as the statements from the customers to the employees who heard them

(and perhaps from those employees to whoever entered the statement into the log). Mr. Yli-

Luoma’s declaration fails to explain who created the log, whether it was created in the ordinary

course of HCR’s business (it appears that it was created for purposes of this litigation), whether

the individuals who wrote entries actually heard the statements described, and whether the

entries were contemporaneously written. See Fed. R. Evid. 803(6)(A)-(C) & 902(11); see also

Pedego, LLC v. All. Wholesalers, Inc., No. SACV 12-01106-CJC(JPRx), 2012 WL 12892900, at

*2 (C.D. Cal. Sept. 14, 2012) (telephone log and descriptions of telephone calls allegedly

evidencing confusion not considered on preliminary injunction due to lack of sufficient

foundation for reliability). Indeed, the log itself raises a significant reliability problem: it

appears as if it were contemporaneous and purports to directly quote customers, but the April 20,

2017 entry is above the April 15, 2017 entry, which suggests that one or more of the entries may

have been re-constructed after the fact.2

In any event, the statements reported on HCR’s log, even if entirely accurate, are mere

inquiries that, as a matter of law, are not sufficient to show actual confusion. Four of the five

entries on the log, from April 20, April 15, May 11, and May 21, are at most merely questions

2
The court has discretion to afford “some weight” to hearsay statements on a preliminary
injunction motion where the exigency of the motion has made obtaining formally admissible
testimony impossible, and suspension of formal rules is necessary to avoid injustice. Flynt
Distrib. Co. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984). But here, exigency is lacking in a
preliminary injunction motion that HCR has had months to prepare, HCR fails to provide any
foundational explanation for the log, and the declarations of HCR’s own employees, who
supposedly heard these statement and created this log, were not submitted to answer these
questions. These foundational facts may be missing from HCR’s motion because they are not
favorable to HCR.

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asking whether any affiliation exists between the parties. See Dkt. 10 Ex. 8.3 Such affiliation

inquiries may merely reflect that “consumers perceive a difference between the [marks] and are

skeptical of the existence of a connection between the users.” Restatement (Third) of Unfair

Competition § 23 cmt. C (1995). Accordingly, questions about affiliation are insufficient as a

matter of law to prove “actual confusion.” See e.g., Cohn v. Petsmart, Inc., 281 F.3d 837, 842

n.7 (9th Cir. 2002) (although plaintiff had “received several dozen inquiries” as to “whether the

parties were related,” mere inquiries are “too ambiguous to demonstrate actual confusion” on

their own); see also id. (“[W]hile enquiry evidence is admissible and relevant, standing alone

with no other evidence it is insufficient proof of actual confusion.” (quoting 4 McCarthy on

Trademarks and Unfair Competition § 23:16)). At least one district court in this circuit applied

Cohn to conclude that a series of approximately 10 customers over a short period of time

inquiring whether the parties had any relationship or affiliation was insufficient to prove actual

confusion. Ross v. Target Corp., No. CV 07-1147 ODW (PLAx), 2008 WL 11336378, at *8

(C.D. Cal. July 7, 2008).

b. Hairdresser and Sign Vendor Statements. HCR also points to two interactions

with non-customers, a Vancouver, Washington sign vendor and Ms. Yli-Luoma’s hairdresser.

(Mtn. at 7; Dkt. 9 ¶¶ 2-3). Again, both interactions turn on hearsay statements and there is no

3
The other log entry, dated May 1, 2017, is merely a question about whether HCR offers
pizza by the slice, and does not reference Heart Pizza at all. (Dkt. 10 Ex. 8.) Such questions
about whether the plaintiff offers specific products do not evidence consumer confusion. See
Icon Enters. Int’l, Inc. v. Am. Prods. Co., No. CV 04-1240 SVW (PLAx), 2004 WL 5644805, at
*13 (C.D. Cal. Oct. 7, 2004) (evidence that consumer call placed to plaintiff video monitor
company asking if they offered wheel rims, the trademark defendant’s product, was not evidence
of consumer confusion); see also Miss World (UK) Ltd. v. Mrs. Am. Pageants, Inc., 856 F.2d
1445, 1451 (9th Cir. 1988) (customer inquiry asking about services that happened to be provided
by the other party did not evidence confusion), abrogated in part on other grounds by Eclipse
Assocs. Ltd. v. Data Gen. Corp., 894 F.2d 1114, 1116 n.1 (9th Cir. 1990). Incidentally, Heart
Pizza does not sell pizza by the slice so, unlike Icon, the product the customer was asking about
here isn’t even offered by the alleged infringer. (Camden Decl. ¶ 23.)
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explanation for why declarations from these third parties could not have been obtained. Ms. Yli-

Luoma’s recounting of what her hairdresser allegedly said to and was told by unnamed clients of

the hairdresser includes multiple layers of hearsay and is patently unreliable. (See Dkt. 9 ¶ 3.) In

addition, the substance of these interactions also fail to show any actual confusion. The

hairdresser merely recounted that a client of the hairdresser had a pizza box from Heart Pizza,

and the hairdresser asked Ms. Yli-Luoma whether “the pizza place was affiliated with” HCR.

Similarly, the sign vendor merely asked whether HCR and Heart Pizza were affiliated. (Dkt. 9

¶¶ 2-3.) As discussed above, such inquiries do not prove actual confusion. Cohn, 281 F.3d at

842 & n.7. Moreover, even if HCR had evidence that such non-consumers were actually

confused (rather than merely making inquiries about association), evidence of non-consumer

confusion does not prove actual consumer confusion in the market. See Suja Life, LLC v. Pines

Int’l, Inc., No. 16CV985-GPC(WVG), 2016 WL 6157950, at *10 (S.D. Cal. Oct. 24, 2016)

(rejecting evidence of alleged confusion by one who was not an “actual consumer” and finding

no actual confusion).

c. “Facts” Asserted in HCR’s Brief But Missing from the Record. Citing

paragraph 3 of Rebekah Yli-Luoma’s Declaration (Dkt. 9), HCR also claims that “defendants’

customers have carried pizza boxes with defendants’ logo on it into other businesses. When

asked where they bought it, those customers said they ‘got it at Heart.’ These customers had

assumed defendants’ business was affiliated with Heart.” (Mtn. at 7.) First, Ms. Yli-Luoma

provides no explanation of how she purportedly knew what these unnamed third parties “had

assumed.” Second, these facts recounted in HCR’s brief are nowhere to be found in Ms. Yli-

Luoma’s declaration. (See Dkt. 9.)

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d. Contrived Google Search Results. Finally, HCR argues that Google search

results for “search for heart near me” conducted from counsel’s offices somehow demonstrate

actual (human) confusion. At the outset, computer-generated Google search results

intermingling references to the parties’ businesses are not evidence of actual trademark

confusion. See Oculu, LLC v. Oculus VR, Inc., No. SACV 14-0196 DOC(JPRx), 2015 WL

3619204, at *13 (C.D. Cal. June 8, 2015) (“To the extent that Plaintiff is relying on the Google

search engine’s propensity . . . to intermingle ‘oculu’ and ‘oculus’ search results, such evidence

is not evidence of customer confusion.” (citing additional cases)). In addition, it is highly

unlikely that an actual consumer would contrive a search of “search for heart near me.” Rather,

customers looking for HCR’s coffee would search “Heart Coffee” or “coffee near me” and

customers looking for a Heart Pizza’s pizzeria would search for “Heart Pizza” or “pizza near

me.” Unsurprisingly, neither of these more realistic searches turned up the other party. (Hoff

Decl. ¶¶ 4-9 & Exs. 3-7.)

The most important aspect of HCR’s actual confusion evidence is what is missing.

Despite its efforts to search for actual confusion for months, HCR presents no evidence at all

from its East Burnside location or from any aspect of its national coffee roasting business.

Moreover, the inquiries about association between the parties ended in May, which demonstrates

that the public readily appreciates the obvious differences between the parties services and

marks, and is not confused or likely to be confused. Wells Fargo & Co. v. ABD Ins. & Fin.

Servs., Inc., No. C 12-3856 PJH, 2014 WL 4312021, at *5 (N.D. Cal. Aug. 28, 2014) (finding

actual confusion factor weighed against likelihood of confusion on preliminary injunction

motion because any potential instances of confusion occurred within a short period “immediately

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following ABD’s launch” and then subsided). This factor weighs against a likelihood of

confusion.

2. Consumers Would Not Assume that Pizzerias and Specialty, High-End
Coffee Derive from a Common Source.

The lack of a close relationship between HCR’s specialty coffee shops and coffee and

Heart Pizza’s pizzerias is a key factor weighing against any likelihood of confusion. Without

relying on any citation to the record, HCR contends that its coffee shops and coffee distribution

business is somehow a direct competitor of Heart Pizza’s pizzerias. (Mtn. at 13.) To imagine

consumers deciding on a day to day basis whether to have coffee or pizza for dinner, or whether

to pair coffee or pizza with a donut, ignores reality. Coffee and pizza are not substitutes for each

other, and coffee shops and pizzerias are not direct competitors. (See Camden Decl. ¶ 24.)

Where, as here, the goods at issue are not competitive, the analysis of relatedness of

goods centers on whether the products are sufficiently related in the minds of consumers that

“the buying public could reasonably conclude that the products came from the same source.”

Oculu, 2015 WL 3619204, at *15 (quoting Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d

625, 633 (9th Cir. 2005)). As HCR acknowledges, this analysis turns on relationships between

the goods or services, such as whether they are complementary or similar in use. (Mtn. at 12

(citing Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137 (9th Cir.

2011)).) Coffee is typically paired with cream or sugar, and is consumed with pastries, donuts or

other sweets. Pizza is paired with wine and beer, or perhaps a salad. But pizza and coffee are

not commonly paired together, and for good reason: coffee pairs well on the palate with sweets

and badly with garlic, cheese and olive oil. (Camden Decl. ¶ 23.) Nor are coffee and pizza used

for the same purpose: coffee is a drink mostly consumed in the morning that supplies caffeine,

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not nourishment. Pizza is nourishing food, with no caffeine, most often served as an entrée at

dinner. (Camden Decl. ¶ 26.)

HCR also argues that the relatedness of goods factor “weighs heavily” in its favor,

because both parties operate “in the restaurant industry.” (Mtn. at 12.) The only legal support

HCR musters for this argument is a 33 year old case from the Fourth Circuit finding related a

taco restaurant and an Italian restaurant, which unlike here, both served meals, used similar

ingredients and offered the same or similar beverages. (Mtn. at 13 (citing Pizzeria Uno Corp. v.

Temple, 747 F.2d 1522 (4th Cir. 1984).) In this circuit, “[c]ourts have held that the mere fact

that two products or services fall within the same general field does not mean that the two

products or services are sufficiently similar to create a likelihood of confusion.” Icebreaker Ltd.

v. Gilmar S.P.A., 911 F. Supp. 2d 1099, 1104 (D. Or. 2012) (ellipsis omitted) (quoting Matrix

Motor Co. v. Toyota Jidosha Kabushiki, 290 F. Supp. 2d 1083, 1092 (C.D.Cal. 2003)). Courts

have rejected efforts to find products closely related simply because they can be grouped in a

broad and vague industry category. Matrix, 290 F. Supp. 2d at 1092 (automotive industry:

specialty race cars and passenger cars not sufficiently related to favor confusion); Icebreaker,

911 F. Supp. 2d at 1105 (apparel industry: active wear and designer apparel not sufficiently

related to favor confusion).

Courts also recognize that consumers readily distinguish among different types of

restaurants, and between restaurants and other types of food and beverage providers. For

example, in Stonefire Grill, Inc. v. FGF Brands, Inc., 987 F. Supp. 2d 1023, 1040-41, 1050-51

(C.D. Cal. 2013), the court found relatedness of goods was absent, even though the parties’

businesses were more closely related than the coffee shops and pizzerias at issue here. In

Stonefire Grill, the Plaintiff operated seven fast-casual restaurants serving pizza, sandwiches,

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salads, soups, and meat and fish entrees under the STONEFIRE GRILL mark. The defendant

distributed pre-packaged flat-breads through grocery stores under the STONEFIRE mark. Id. at

1040-41. The Court concluded that the food products and restaurants were not closely related

and that the relatedness factor weighed against a likelihood of confusion, observing that

“restaurant customers are not likely to assume that a restaurant sponsors food products that the

restaurant does not offer, make, or sell at its locations.” Id. at 1050-51.

Here, HCR primarily sells coffee and baked goods, (which Heart Pizza does not sell),

along with bagged coffee beans, T-Shirts, coffee mugs, and other coffee paraphernalia. (Hoff

Decl. ¶ 11; Ex. 9 at 45-88.) Heart Pizza sells pizza, salad, wine, and beer, (which HCR does not

sell), and does not sell T-Shirts, mugs or other souvenirs. (Camden Decl. ¶¶ 23, 25.) As in

Stonefire Grill, the public is unlikely to assume that businesses offering distinct products share a

common source.

HCR also asserts that the goods are necessarily related because the parties supposedly

“share customers.” (Mtn at 12.) Nothing in the five declaration paragraphs HCR cites as support

(Dkt. 10 ¶¶ 16, 25-26; Dkt. 9 ¶¶ 2-3), or elsewhere in HCR’s record, demonstrates that the same

customers visit Heart Pizza and HCR. Rather, HCR goes to some length to show that customers

often visit both Blue Star Donuts and HCR, and that a Heart Pizza customer once visited Ms.

Yli-Luoma’s hairdresser. (See Dkt. 10 ¶¶ 16, 25-26; Dkt. 9 ¶¶ 2-3.) But even if some customers

purchase coffee from HCR and pizza from Heart Pizza, that does not demonstrate that customers

view pizza and coffee as so related that they would naturally come from the same source. Many

of HCR’s coffee shop customers presumably also purchase shoes, but these “share[d] customers”

do not make coffee and shoes closely related in the minds of consumers.

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Finally, since the relatedness factor is sometimes expressed as “proximity” of goods,

HCR asserts its satisfaction of this factor because Heart Pizza and HCR each operate a location

in Portland’s West End neighborhood, such that the parties’ goods are “proximate . . . in terms of

physical presence.” (Mtn. at 12.) But the relevant inquiry focuses on whether the goods are

related, Icebreaker, 911 F. Supp. 2d at 1104, and HCR cites to no authority holding that

geographic proximity is even relevant where the goods are unrelated.

3. Viewed in the Correct Context, the Parties’ Marks Are Distinct, Not Similar.

HCR seeks to preliminarily enjoin defendants from using two marks: the word mark

HEART PIZZA, and Heart Pizza’s pizza box logo. HCR argues that the word mark should be

viewed as “identical” to HCR’s mark because “‘Heart Pizza’ incorporates, in its entirety, the

HEART mark.” (Mtn. at 13.) In fact, the marks are not identical, or even similar -- consumers

can easily distinguish between HEART PIZZA and HEART in sight, sound, and meaning,

because the added word “pizza” describes exactly what Heart Pizza sells. As a matter of brand

policy, Heart Pizza never uses the word ‘heart’ without the word ‘pizza.’ (Camden Decl. ¶ 11.)

Furthermore, the pizza box logo looks nothing like HCR’s HEART mark. (Id. ¶ 10.)

HCR argues, without citing authority, that the word “pizza” in HEART PIZZA should be

ignored because it is “merely descriptive of the food sold by” Heart Pizza. (Mtn. at 13, n.2).

The Stonefire Grill court rejected the same argument. There, the restaurant’s mark STONEFIRE

GRILL included the word “grill” in addition to the common word “stonefire.” The court

explained that this additional word was “crucial here because . . . the inclusion of the word ‘grill’

in the [mark] indicates that Plaintiff is a restaurant” and concluded that the marks were “not

similar.” 987 F. Supp. 2d at 1051-52; see also Alpha Indus., Inc. v. Alpha Steel Tube & Shapes,

Inc., 616 F.2d 440, 444 (9th Cir. 1980) (marks ALPHA and ALPHA STEEL TUBE or ALPHA

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STEEL not similar because the additional words “steel” and “steel tube” indicated a different

origin). Inclusion of the word ‘pizza’ indicates that Heart Pizza is a pizzeria and of a different

origin than HEART used for coffee.

HCR also errs by ignoring the very different commercial context in which the parties’

marks are presented to consumers. Isle of Capri Casinos, Inc. v. Flynt, No. 2:16-cv-06148-CAS

(MRWx), 2016 WL 6495380, at *5 (C.D. Cal. Nov. 1, 2016) (even marks that are identical in

isolation “may be readily distinguishable in light of other packaging or promotional material

affecting the context in which they are encountered” (quoting Lindy Pen Co. v. Bic Pen Corp.,

725 F.2d 1240, 1245 (9th Cir. 1984))). For example, in Suja Life, 2016 WL 6157950, at *1, *10,

the parties both used the mark MIGHTY GREENS, in connection with a fruit and vegetable juice

drink on one hand, and a concentrated cereal grass nutrient powder for mixing into drinks on the

other. Despite the fact that the marks were exactly the same words and were used for similar

products, the court concluded that the marks were “dissimilar” because the look and feel of the

packaging featuring the mark were different in shape, color, style, font and overall appearance.

Id. at *10. Similarly here, the parties marks are presented in dramatically different commercial

contexts. HCR presents its HEART mark in lower case courier font, typically in white text on a

black circle, and sometimes black text on white. (Mtn. at 5; Hoff Decl. ¶ 13, Ex. 12.) In

contrast, Heart Pizza’s logo, used with or without the word “heart,” presents the unmistakable

impression of an angular pizza box, usually in red, cemented by the word “pizza” below it.

(Camden Decl. ¶¶ 10, 13.) The angular box looks nothing like HCR’s circular design, and the

thin, sans serif font looks nothing like HCR’s courier font. As used in the marketplace, Heart

Pizza and the pizza box logo do not suggest any connection to coffee, but do tie directly to Heart

Pizza’s charitable giving concept ($1 given to charity per pie sold). (Id. ¶ 14-15.)

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In addition, the look and feel of HCR’s coffee shops, on the one hand, and the pizzerias

where customers encounter Heart Pizza’s name and logo, on the other, are entirely different.

HCR’s coffee shops are sleek, cool and Scandinavian, prominently featuring coffee brewing

machines, and emanating the distinct smell of coffee. (Camden Decl. ¶¶ 27.) In contrast,

defendants’ pizzerias, which are designed in a comfortable and warm “farmhouse modern” style

featuring bead board, butcher block, cherry counter tops, and wrought iron, are dominated by

Italian pizza ovens backed by colorful tile, and smell of baking pizza. The pizzerias feature

colorful bags and cans of ingredients used to make pizza, none of which are used in coffee or

products commonly sold with coffee. (Camden Decl. ¶ 28; Lynch Decl. ¶¶ 4-6.)

Simply put, no consumer is going to see a colorful Heart Pizza pizzeria, dominated by

smells of pizza baking and a prominent pizza oven, or look at a pizza box bearing Heart Pizza’s

distinctive logo (Camden Decl. ¶ 12), and think about coffee or be confused about any

association with the sleek ultramodern image of HCR.

Finally, despite the sharp differences in how the marks are presented to the public in

commercial context, HCR jumps to the conclusion that the parties are using “identical marks on

competitive goods” such that liability is “‘open and shut’” (Mtn. at 13), relying on Stone Creek

Inc. v. Omnia Italian Design, Inc., 862 F.3d 1131, 1136 (9th Cir. 2017) (citation omitted). But

Stone Creek involved very different facts: there a manufacturer produced furniture for sale by a

distributor under the distributor’s mark, and also sold its own interchangeable furniture pieces

under its own mark. In response to orders from a retailer, the manufacturer then started selling

interchangeable furniture pieces with exact counterfeit copies of the distributor’s mark, even

scanning and copying the distributor’s marketing materials. 862 F.3d at 1136-37 (“Omnia’s

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mark is an exact replica of Stone Creek’s logo that Omnia copied from materials given to Omnia

by Stone Creek.”).

Here, not only are the parties not in direct competition, but their respective marks are

easily distinguished in sight, sound, and meaning, and are presented in radically different

commercial contexts. The lack of similarity of the parties’ marks weighs strongly against a

likelihood of confusion.

4. HCR’s HEART Mark Is Entitled to Narrow Protection.

HCR is asserting only common law rights in its HEART mark, as it has no federal

registrations. HCR’s rights are thus limited to its use of the mark in its two Portland coffee

shops and its wholesale coffee roasting business. Citing coverage touting the quality of HCR’s

high-end coffee in niche coffee-industry publications, HCR nonetheless argues that its common

law mark is conceptually and commercially strong and entitled to broad protection. (Mtn. at 11-

12.) But even a conceptually strong mark can be weakened by third-party use of similar marks.

Icebreaker, 911 F. Supp. 2d at 1112-14 (despite finding arbitrary mark ICEBERG conceptually

strong, concluded that strength of mark factor weighed against potential confusion because other

apparel industry marks used “ice” including “SUNICE, ICECREAM, ICETEX, ICE BOX, and

PINK ICE”). “When similar marks permeate the marketplace, the strength of the mark

decreases. ‘In a crowded field of similar marks, each member of the crowd is relatively weak in

its ability to prevent use by others in the crowd.’” One Indus., LLC v. Jim O'Neal Distrib., Inc.,

578 F.3d 1154, 1164 (9th Cir. 2009) (quoting Miss World (UK) Ltd. v. Mrs. Am. Pageants, Inc.,

856 F.2d 1445, 1449 (9th Cir. 1988)).

For example, in One Industries, the parties both used symbols with some similarity to the

letter O on motocross racing helmets. The Ninth Circuit concluded that even though plaintiff’s

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fanciful mark was in the strongest possible category of conceptual strength, “[t]he record . . .

contains several examples of similar O marks used by different companies, including Oakley,

OGIO, and Alloy MX. Such use of other ‘O’ symbols weakens the Rounded O’ mark.” Id.

HCR’s HEART mark consists of a common English language word, that is extensively

used by other businesses, which significantly weakens HCR’s mark, and narrows the scope of

protection to which it is entitled. In the Portland metro area alone, at least six third party

restaurant, food, or beverage related companies use or recently used marks that include the word

heart: Lion Heart Kombucha, Bless Your Heart Burgers, Hungry Heart Bakery, Eat Your Heart

Out Catering, Heart Bar, and I Heart Gyro in Vancouver, Washington. (Hoff Decl. ¶¶ 17 & Ex.

16.) Outside Portland, many other restaurant and food companies operate under marks using the

word “heart,” (Id. ¶ 18 & Ex. 17.) Similarly, in HCR’s own niche market, any number of coffees

and coffee shops use marks that incorporate the word “heart.” (Id. ¶ 19 & Ex. 18.)

Use of the word “heart” in other businesses, including restaurants and beverage

companies in Portland and elsewhere, suggest that consumers are likely to use greater care in

distinguishing the parties’ already dissimilar marks, and are even less likely to assume

association between HCR’s coffee shops and Heart Pizza’s pizzerias. This factor, therefore,

also weighs against a likelihood of confusion.

5. Defendants Did Not Adopt Their Mark to Trade on HCR’s Goodwill.

HCR asserts that the facts of this case “strongly indicate” that Micah Camden and Heart

Pizza adopted the Heart Pizza name and pizza box logo with an intent to “usurp the goodwill

associated with” HCR’s HEART mark, because Camden regularly bought coffee at HCR’s West

End coffee shop, and opened a Heart Pizza store in the same neighborhood. (Mtn. at 15-16.)

But “the Court’s analysis does not end once it determines that the junior user was aware of the

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senior user’s use of the mark. The relevant inquiry is whether the junior user adopted the mark

‘deliberately with a view to obtain some advantage from the good will, good name, and good

trade which another has built up.” TPW, 2016 WL 6216879, at * 9 (quoting Fleischmann

Distilling Corp. v. Maider Brewing Co., 314 F.2d 149, 158 (9th Cir. 1963)).

In fact, defendants adopted the Heart Pizza name and pizza box logo for specific reasons

completely unrelated to HCR’s use of the heart name. Dahl v. Swift Dist., Inc., No. Cv 10-00551

SJO (RZx), 2010 WL 1458957, at *9 (C.D. Cal. Apr. 1, 2010) (although junior user adopted

name with knowledge of plaintiff’s mark, junior user’s good faith explanation for selecting name

resulted in this factor weighing against likelihood of confusion). The Heart Pizza name was

selected because (1) it plays on the charitable giving at the core of the Heart Pizza concept, (2) of

the ubiquitous use of heart symbols as in “I [heart] NY” and “I [heart] pizza” images on T-shirts,

(3) it lent itself to an immediately recognizable idea in a heart pizza box logo, and (4) it had a

strong and available domain name: <heartpizza.com>. (Camden Decl. ¶¶ 14-15.)

Similarly, defendants opened a pizzeria in the West End, not because HCR has a coffee

shop there, but because Camden’s overall strategy is to “follow [his] own trail” by opening new

concept restaurants near his existing businesses. Doing so encourages customers already loyal to

one of his restaurants to try his newly launched one, and Camden had other businesses

established in West End long before HCR moved in. (Camden Decl. ¶¶ 2-9; Hoff Decl. ¶ 2 &

Ex. 1.) Moreover, the mere fact that Camden regularly bought coffee from HCR does not

establish that his opening of a pizzeria concept under the “Heart Pizza” name and pizza box logo

was an attempt to steal HCR’s goodwill among “super-serious” coffee aficionados for his

pizzeria’s. Nor does the fact that Blue Start Donuts once offered HCR the chance to compete

with four other roasters for the chance to replace its incumbent coffee vendor suggest that

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defendants named their pizzeria concept Heart Pizza to trade on HCR’s goodwill. (See Mtn. at 4,

16; Camden Decl. ¶ 37.)

The very idea that defendants would name their pizzeria concept in order to trade on the

goodwill of a coffee roaster makes no sense. The cases that HCR cites on the intent factor

involve junior users adopting a mark either similar to the existing mark used by a direct

competitor or on closely-related goods.4 But even in the context of direct competitors, where the

marks are not very similar and there is no additional evidence of bad faith, mere knowledge of a

competitor’s allegedly-similar mark is insufficient to support an inference of intent. See One

Indus., 578 F.3d at 1163-64.

The same reasoning applies here but with greater force. Heart Pizza’s marks and the look

and feel of its pizzerias are easily distinguished from those of HCR and the parties offer

unrelated goods and services. (Camden Decl. ¶¶ 16, 23.) In fact, defendants adopted a visually

distinct logo, use a totally different décor, and do not serve coffee, which strongly undermines

any presumed attempt to trade on HCR’s goodwill. Moreover, with the strong reputation and

good will of Mr. Camden’s other brands, such as Blue Star Donuts and Boxer Ramen, it makes

no sense for him to attempt to trade on the goodwill of an unrelated high-end coffee shop to sell

pizza. Rather, Mr. Camden is building on the goodwill of his established brands. (See Camden

Decl. ¶¶ 5-9.) M2 Software, Inc. v. Madacy Entm’t, 421 F.3d 1073, 1085 (9th Cir. 2005)

(knowledge of senior user’s mark alone insufficient to establish inference of intent to deceive

4
See Stone Creek, Inc. v. Omnia Italian Design, Inc., 862 F.3d 1131, 1136 (9th Cir.
2017) (adoption of counterfeit mark in connection with interchangeable furniture made by same
manufacturer); Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1044 (9th
Cir. 1998) (competing wines); AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979)
(high-speed fiberglass boats with overlapping customers); Fleischmann Distilling Corp. v.
Maider Brewing Co., 314 F.2d 149, 158 (9th Cir. 1963) (alcoholic beverages).

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where junior user had its own, separate strong reputation in the industry under other marks,

negating any conclusion that it would seek to trade on senior user’s weaker reputation).

Furthermore, defendants adopted the HEART PIZZA mark and pizza box logo believing

that Heart Pizza could readily “‘carve out’ a non-infringing mark, even with the existence of

[HCR’s] mark,” given the significant differences in services and dissimilarity of the marks. Id.

(no intent to deceive consumers where junior user adopted mark based on belief it could “carve

out” non-infringing space for its use).5 Here, Mr. Camden did not believe there would be any

likelihood of confusion due to the obvious differences between the parties respective goods and

services, and the differences between the parties’ respective logos and look and feel of their

businesses. (Camden Decl. ¶ 16.) Defendants also searched federal and state trademark

databased for ‘heart pizza’ and ‘heart’ and found that there were no registered trademarks for

either one. (Camden Decl. ¶ 15.)

Finally, HCR contends that “Camden . . . misrepresented to a third party that defendants

had permission to use the HEART mark . . . , demonstrating knowledge that he knew such

permission would be necessary.” (Mtn. at 16.) The basis for this accusation is an inference

drawn by HCR’s owner that in turn is based on unreliable, inadmissible, and inaccurate hearsay.6

5
See also TPW, 2016 WL 6216879, at *9-10 (applying M2 and concluding intent factor
did not favor confusion on preliminary injunction despite defendant’s knowledge of plaintiff’s
mark, where defendant searched for trademark registrations and believed products and marks
were sufficiently distinct to avoid confusion); Nordstrom, Inc. v. NoMoreRack Retail Gr., Inc.,
No. C12-1853-RSM, 2013 WL 1196948, at *8 (W.D. Wash. Mar. 25, 2013) (junior user’s intent
weighed against likelihood of confusion on preliminary injunction, even though defendant
adopted mark with knowledge of plaintiff’s mark, because parties operated in a crowded field,
and defendant used mark believing it “did not infringe on [plaintiff’s] marks”).
6
Both Mr. Yli-Luoma’s third-hand account of what Mr. Nakamoto told Mr. Yli-Luoma
that Mr. Camden told Mr. Nakamoto, and the out-of-court text message exchange between
Mr. Nakamoto and Mr. Yli-Luoma are unreliable and inadmissible hearsay.

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What actually happened, according to the only sworn statement from a party to the actual

conversation, is this: In response to a question from his longtime design consultant, David

Nakamoto, Mr. Camden said that HCR did not care about his use of the word ‘heart.’ He said

that because he had discussed the Heart Pizza concept with HCR employees repeatedly, even

bringing them samples, and no one at HCR expressed any concern about the name. (Camden

Decl. ¶ 42.) Contrary to what Mr. Yli-Luoma says Mr. Nakamoto’s texts mean, Mr. Camden

never suggested that he spoke with Mr. Yli-Luoma, or that he needed Yli-Luoma’s permission to

open Heart Pizza (he did not), and never told his long-time colleague Mr. Nakamoto to “f*ck

off.” (Id. ¶ 42.)

In short, there is no evidence that defendants adopted the Heart Pizza name and pizza box

logo intending to trade on HCR’s goodwill. In fact, the obvious differences between the parties’

businesses, products, and marks point to the opposite conclusion. This factor, therefore, weighs

against a likelihood of confusion.

6. Both Parties’ Customers Are Sophisticated Purchasers Who Are Unlikely to
Be Confused.

HCR argues that since the parties offer goods at relatively low prices, the degree of

consumer care must be low, and favors confusion. (Mtn. at 14-15.) But price alone is not

determinative: the “touchstone remains the general impression that is left with the ordinary

consumer.” Herbalife Int'l, Inc. v. Lumene N. Am. LLC, No. CV 07-5040 AHM (RCX), 2007

WL 4225776, at *11 (C.D. Cal. Oct. 15, 2007). In Herbalife, the court found that plaintiff’s

products were “at the high end of the mass market for skin care products in terms of price.” Id.

Herbalife’s consumers were “health-conscious and interested in improving their appearance and

nutritional habits” and the defendant’s products were “not inexpensive” in the mass-market

retailers where they were sold. Id. Moreover, the target customers were “women ages 25 and

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older who are looking to improve the quality of their skin.” Thus, purchasers were “likely to

exercise great care,” even though both parties sold products in the $3 to $23 range. Id.

In Suja Life, the court noted that the allegedly infringing MIGHTY GREENS juice

product, while not expensive in absolute terms at $7 to $14, was more expensive than similar

products. 2016 WL 6157950, at *12 & n.3. Denying the motion for preliminary injunction, the

court found that the relevant market are “educated shoppers and will pay a premium for these

nutrient-dense products and are more likely to exercise a higher degree of care.” Id.

Here, according to HCR, its coffee is unique, ultra-premium and widely recognized in

coffee circles for its high quality, particularly among “super-serious coffee nerds.” (Dkt. 10 ¶¶ 8,

10-15 & Ex. 1.) HCR’s customers pay a premium for high-quality beans and brews, and at $3

for a small regular cup of coffee and up to $25 for a 12 ounce bag of coffee beans, HCR’s

products are priced at the high end of the coffee market. (Camden Decl. ¶ 38.) HCR encourages

its customers’ care and discernment by offering coffee “cupping clinic[s]” ($30 per student),

featuring palette training, and coffee “home-brewing” classes ($40 per student) to teach

consumers how best to brew HCR’s premium coffee beans. (Hoff Decl. ¶ 12 & Exs. 10, 11.)

Customers who care enough about their coffee to attend cupping clinics and coffee-brewing

classes take care when selecting their coffee drinks and in purchasing bags of coffee.

Similarly, Heart Pizza targets discerning foodies, and focuses on neighborhoods with

repeat customers, rather than high foot-traffic areas such as upscale malls. (Camden Decl. ¶ 3,

20-22.) Heart Pizza does not sell pizza by the slice, focusing instead on high-quality, quick serve

pizza. (Id. ¶ 23; Lynch Decl. ¶ 3.) Positive feedback from food and restaurant influencers on

social media and the strength of Mr. Camden’s other brands motivate customers to try Heart

Pizza. (Camden Decl. ¶ 17.) Customers who seek out Heart Pizza’s high-quality product are

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attentive to what they consume, and are making a choice to visit Heart Pizza rather than similar

gourmet fast-casual restaurants a block or two away like Grassa, Lardo, or Boxer Ramen.

(Camden Decl. ¶ 20; Hoff Decl. ¶ 3 & Ex. 2.) See Horos v. Locol, LLC, No. CV148065

MWFMRWX, 2015 WL 12656946, at *8 (C.D. Cal. Feb. 11, 2015) (purchaser care at take-out

restaurants weighed slightly against confusion); Newport Pac. Corp. v. Moe's Sw. Grill, LLC,

No. 05-995 KI, 2006 WL 2811905, at *15 (D. Or. Sept. 28, 2006) (choice of fine dining and fast

casual restaurants, a “cut above the typical fast food restaurant” is not simply impulse buying and

degree of care weighs against confusion).

Because coffee and pizza are not closely related, even if the Court was to conclude that

the level of purchaser care was low, such a determination would be of little relevance to the

overall likelihood of confusion analysis. E.g., Stonefire Grill, 987 F. Supp. 2d at 1055 (holding

that customer care was an inconsequential factor in finding no likelihood of confusion between

STONEFIRE GRILL for restaurant services and STONEFIRE for bread sold at retail, due to

dissimilarity of goods). Even a customer exercising a low degree of care will have no difficulty

distinguishing pizza and coffee. In any event, customers of both parties are actually quite

discerning and careful, and are especially unlikely to confuse HCR’s coffee shops and Heart

Pizza’s pizzerias. The purchaser care factor weighs against a likelihood of confusion.

7. The Fact that Both Parties Rely on Ubiquitous Trade Channels Does Not
Suggest A Likelihood of Confusion.

HCR argues that the marketing channels factor suggests a likelihood of confusion merely

because HCR relies upon word-of-mouth and social media to promote its services, and it

assumes Heart Pizza does the same. (Mtn. at 14.) HCR makes that assumption because every

consumer-facing brand relies on word of mouth and social media promotion. In the Ninth

Circuit, the parties’ joint use of ubiquitous trade channels is not material to the likelihood of

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confusion analysis. Network Automation, 638 F.3d at 1151 (“Today it would be the rare

commercial retailer that did not advertise online, and the shared use of a ubiquitous marketing

channel does not shed much light on the likelihood of consumer confusion.”).

The same reasoning now applies to social media promotion. For example, in Nordstrom,

2013 WL 1196948, at *7 & n.3, a plaintiff argued that social media promotion should be treated

as a niche marketing channel, and not like ubiquitous Internet marketing. The court rejected this

argument, applying Network Automation and concluding that social media is “used as a routine

vehicle for most Internet marketing strategies today,” and thus concluded that marketing

channels did not favor confusion, despite the parties’ shared use of Facebook, YouTube, and

Twitter. Id.; see also TPW, 2016 WL 6216879, at *8 (applying Network Automation’s holding to

now ubiquitous use of social media, including “Facebook, YouTube, and Twitter,” as well as the

parties’ appearing “on search results together on Google”); see also Camden Decl. ¶ 18 (unaware

of any fast-gourmet restaurant in Portland that does not use the Internet and social media as

primary marketing channels).

In contrast, the lone case relied upon by HCR, (Mtn. at 14) involved a very different

situation. In Quia Corp. v. Mattel, Inc., No. C 10-1902 JF (HRL), 2011 WL 2749576, at *4

(N.D. Cal. July 14, 2011), the court suggested that overlapping trade channels might potentially

favor the plaintiff not merely because both parties relied on social media promotion, as HCR

contends, but because both parties relied on the same niche tactics, that is social media tie-ins

with so-called “mommy bloggers.” Id. Here, Heart Pizza is not targeting “super-serious coffee

nerds” for its social media promotions (Dkt. 10, Ex. 1), nor is HCR targeting pizza-lovers.

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8. As Properly Analyzed, the “Expansion” Factor Does Not Support A
Likelihood of Confusion Here.

HCR argues that if the court concludes that pizzerias and coffee shops do not directly

compete, then the likelihood of future expansion factor favors a finding of likely confusion. In

doing so, HCR focuses myopically on the word “expansion” to argue that the mere fact that

Heart Pizza plans to expand the number of its pizzeria locations tips that Sleekcraft factor in

HCR’s favor. (Mtn. at 16-17.) HCR’s argument misconstrues the “expansion” factor. In

actuality, the “expansion” factor asks whether either party has concrete plans to expand into

direct competition with the other, not whether they may get bigger. Official Airline Guides, Inc.

v. Goss, 6 F.3d 1385, 1394 (9th Cir. 1993) (explaining that plaintiff’s argument on this factor

based on potential expansion in unrelated markets “misses the point. The question is whether the

parties are likely to compete with a similar product in the same market.”).

Here, adding coffee to Heart Pizza’s menu is inherently inconsistent with its business

plan to build a brand around serving fast, high quality and reasonably priced pizza. (Camden

Decl. ¶ 23.) Heart Pizza’s narrow menu (pizza, salad, local wine and beer, and pop) is consistent

with other concepts executed by Mr. Camden, each of which features a particular food, whether

it be hamburgers, donuts, or ramen, and the beverages that complement that food. (Id.) Coffee

is not consumed with garlic, cheese and tomatoes, and is rarely consumed during the hours Heart

Pizza does the majority of its business. (Id.) Accordingly, not only does Heart Pizza have no

plans to offer coffee, but doing so would undermine its business. (Id.)

Nor is there anything in the record suggesting that HCR is preparing add pizza ovens

alongside its elaborate coffee brewing machines. HCR hints that it may in the future expand the

small assortment of prepared food delivered each day to its coffee shops by a third party vendor,

but is silent about undertaking the significant regulatory and logistical hurdles it would have to

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overcome to start cooking fresh foods in its coffee shops. (See Camden Decl. ¶ 29; c.f. Dkt. 10 ¶

5.) Moreover, vague, generalized speculation about future activity does not constitute evidence

of plans to complete directly in the future. Surfvivor, 406 F.3d at 634 (holding plaintiff’s

conclusory self-serving statements about potential future expansion insufficient). Finally, HCR

cites no authority in support of its argument that mere growth is relevant to this factor. (Mtn. at

16-17.) Since neither party plans to expand into the other’s product line, the expansion factor

weighs against a finding of a likelihood of confusion.

9. The Fact That Both Parties Happen to Have A Location in Portland’s
Popular West End Neighborhood Does Not Favor A Likelihood of Confusion.

Finally, HCR seeks to add a ninth factor to the analysis, arguing that although not

traditionally considered, “geographic proximity” favors a likelihood of confusion merely because

both parties happen to have one of their locations in Portland’s West End neighborhood. HCR’s

geographic proximity argument, however, rests entirely on cases where the parties provided

identical goods or services. As discussed above, see supra Section II.B.2, the opposite is true

here. Defendants’ pizza and plaintiff’s coffee products are as different as plaintiff’s information

directory and marketing services and defendant’s legal services in Ketab Corp. v. Mesriani Law

Grp., No. 214CV07241RSWLMRW, 2015 WL 12655670, at *3 (C.D. Cal. Feb. 6, 2015). In

that case, the plaintiff alleged an overlapping customer base: plaintiff served Iranians outside of

Iran, specifically Iranian-Americans in Southern California, and defendant, a Los Angeles law

firm, advertised via radio and television programs directed to the Iranian community in the same

geographic area. Id. at *1-2. Notwithstanding these facts, the court dismissed the complaint

because the services were unrelated. Id. at *3. The dispositive principle in Ketab applies here:

an overlapping customer base cannot create a likelihood of confusion where the goods or

services are clearly distinct. See also Murray v. Cable Nat’l Broad. Co., 86 F.3d 858, 861 (9th

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Cir. 1996) (affirming dismissal of trademark infringement claims because the plaintiff’s man-on-

the-street polling services and defendant’s TV polling reports were unrelated).

HCR’s geographic proximity argument also primarily relies on cases from circuits that,

unlike the Ninth Circuit, require analysis of whether the parties operate in the same geographic

market in addition to analyzing whether the goods or services are competitive or otherwise

closely related. Brennan's, Inc. v. Brennan's Rest., L.L.C., 360 F.3d 125, 134 (2d Cir. 2004)

(analyzing geographic proximity as a sub-factor of the “proximity of the products” factor).

The two cases cited by HCR from the Ninth Circuit simply do not support HCR’s

arguments. In denying the Michigan golf course’s motion to exclude the Idaho golf course’s

evidence of geographic separation at trial, the Idaho Golf court did not assert that geographic

proximity alone could cause confusion as to unrelated goods and services. Idaho Golf v.

TimberStone Mgmt., LLC, No. 1:14-cv-00233, 2016 WL 5340302, at *4 (D. Idaho Sept. 21,

2016). In Mastro's, the court found that genuine issues of fact precluded summary judgment of

no infringement where defendant’s steakhouse competed with plaintiff’s steakhouse in the same

city and named itself Dominick’s after Dominick Mastro, the “family patriarch” and namesake of

plaintiff’s Mastro’s Restaurant. Mastro’s Rests. LLC v. Dominick Grp. LLC, No. CV 11-1996-

PHX-PGR, 2012 WL 2091535, at *7 (D. Ariz. June 11, 2012). Neither case supports HCR’s

argument that customers are likely to confuse a pizzeria and a coffee shop merely because they

operate in the same popular neighborhood.

10. On Balance, the Sleekcraft Factors Establish that HCR is Unlikely to Prevail
on the Merits.

The Sleekcraft factors, are not “a scorecard, a bean-counter, or a checklist” and individual

factors will be more or less important in each individual case, and the focus must be on what the

analysis of the factors reveals about whether consumer confusion is likely, overall. Icebreaker,

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911 F. Supp. 2d at 1103 (citation omitted). Here, the critical factors making confusion unlikely

are the dissimilarity of pizza and coffee, and the lack of close similarity between the parties’

marks in commercial context. In addition, the crowded field of other restaurant and coffee shops

using “heart” in their names (including in Portland) and the sophistication of both parties’

customers, make confusion highly unlikely. Just as significant, HCR cannot succeed on either of

the two factors that HCR asserts as trump cards, actual confusion and junior user’s intent.

Because HCR is unlikely to succeed in showing trademark infringement, its preliminary

injunction motion should be denied.

C. The Balance of Hardships Weighs Heavily Against a Preliminary Injunction.

In addition to proving irreparable harm and a likelihood of success on the merits, HCR

must make a clear showing that “the balance of equities tips in [its] favor.” Herb Reed, 736 F.3d

at 1247 (quoting Winter, 555 U.S. at 20). The Court “must balance the competing claims of

injury and must consider the effect on each party of the granting or withholding of the requested

relief.” Winter, 555 U.S. at 24 (quoting Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531, 542

(1987)). Thus, HCR must make a clear showing that any harm HCR would suffer during

litigation absent an injunction outweighs the harm Heart Pizza would suffer due to an injunction.

HCR offers no evidence that it will be harmed in any way during the pendency of the

litigation absent entry of a preliminary injunction, assuming harm instead. See supra Section

III.A. HCR claims that it has “invested significant time, capital, and human resources in

building its HEART brand,” (Mtn. at 20 (quotation marks omitted)), but offers no evidence that

this investment would be lost or eroded if an injunction is not entered.7 See, e.g., VBS, 2017 WL

7
HCR supports its claim that its investment in its own brand is material here by quoting
from Adidas America, Inc. v. Skechers USA, Inc., 149 F. Supp. 3d 1222 (D. Or. 2016). In that
case, however, the plaintiff’s investment in its brand was relevant because the alleged infringer
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2404919, at *5 (limited harm to defendant, in requiring re-labeling of goods, outweighed lack of

any concrete evidence of harm to trademark plaintiff in the absence of preliminary injunction);

Young, 2016 WL 6781200, at *5-6 (balance of equities weighed against preliminary injunction

where plaintiff failed to show any evidence of non-speculative harm arising from alleged

ongoing trademark infringement). HCR offers no proof of lost sales, lost goodwill, or other

actual harm it would suffer absent an injunction. (See Mtn. at 18-20.)

In contrast, if the Court enjoins defendants from using the Heart Pizza brand, they would

be forced to immediately close all three current Heart Pizza locations and stop the process of

opening new restaurants. Without the Heart Pizza brand, defendants would have to reconceive

the business’s mission from scratch. Heart Pizza’s founders would seek to develop another

concept that could work in the spaces it currently has under lease, but it is not at all clear that

they could come up with another strong concept and brand for pizza in order to recoup

defendants’ significant investment in leases, pizza ovens and the design and build-out of

pizzerias. At a minimum, defendants’ pizzerias would have to remain closed pending selection

of a new name, development of a new logo, acquisition of a new domain name, and building out

a brand, a website and a social media presence. That process would take several months at least,

and potentially much longer. (Camden Decl. ¶¶ 30-31.)

Heart Pizza has 30 employees and is hiring more. If it is enjoined from using its name

and logo, defendants would lay off at least 20 to 25 current Heart Pizza employees for as long as

the pizzerias remain closed, making them ineligible for benefits. Id. ¶ 33. If the restaurants

could not be re-opened under a new concept, defendants would have to buy out of the current

was a direct competitor taking away sales and eroding prices with lower-quality shoes with
knock-off designs. Id. at 1248-50. HCR offers no similar evidence of how it will allegedly be
harmed absent a preliminary injunction.

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leases, and if any new concept developed did not involve pizza, they would need to remove and

sell the pizza ovens and other concept-specific equipment and fixtures. Id. ¶ 31.

If defendants are preliminarily enjoined from using the Heart Pizza name and logo, they

will never go back to using them, even if they ultimately prevailed in the litigation. Changing

the brand name and logo a year after it was announced and eight months after operations began,

would be a marketing nightmare. Changing back again a couple of years later is unthinkable

from a branding perspective. Defendants are in the business of building restaurant concepts tied

to a brand, and cannot bounce back and forth between brands. (Camden Decl. ¶ 35.)

Enjoining defendants from using the name and logo during the pendency of the case

would cause the company to permanently stop using the Heart Pizza brand, thereby abandoning

all goodwill developed in that brand. The current value of the Heart Pizza brand is about $5 to

$6 million. All of that value and the investment of time, creativity, and capital that created it,

would be lost upon entry of a preliminary injunction. Camden Decl. ¶ 36. See First Franklin

Fin. Corp. v. Franklin First Fin., Ltd., 356 F. Supp. 2d 1048, 1055 (N.D. Cal. 2005) (balance of

hardships weighed against injunction where, among other things, injunction would cause the

defendant to lose all goodwill it had earned in its name).

Perhaps understanding the significant harm entry of a preliminary injunction would do to

defendants, HCR argues that any hardship to defendants must be ignored because they

knowingly infringed HCR’s trademark. (Mtn. at 20.) The case HCR cites, Adidas America, Inc.

v. Skechers USA, Inc., 149 F. Supp. 3d 1222 (D. Or. 2016), however, does not support HCR’s

argument here. In that case, the court relied on strong evidence that Skechers acted intentionally

to deceive consumers, including by referencing Adidas trademarks in the source code of the

relevant pages of Skechers’ website, and by deceptively trading on Adidas’ goodwill on other

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products. Id. at 1244-45. Only on the basis of such intentional deceit did the court discount

harm to Skechers arising from an injunction in balancing the equities. Id. at 1250. In contrast,

the evidence here does not suggest that defendants intended to confuse consumers or trade on

HCR’s goodwill among coffee drinkers, but rather that Heart Pizza and Mr. Camden acted in

good faith. In any event, HCR’s argument puts the cart before the horse. A key factor courts

must consider in balancing the equities is the potential harm if the Court turns out to be wrong in

its predictions, and improperly denies a meritorious injunction or grants an unmeritorious

injunction. Planet Coffee Roasters, Inc. v. Hung Dam, No. SACV 09-00571-MLG, 2010 WL

625343, at * 6-7 (C.D. Cal. Feb. 18, 2010). Because there is a risk that infringement may not

ultimately be found in this case, harm to defendants from an injunction that turns out not to be

meritorious must be considered in weighing the equities.

HCR’s motion for a preliminary injunction should be denied because HCR has not shown

that the balance of hardships tips in its favor. In the event a preliminary injunction is entered,

HCR should be required to post a bond of at least $5 million based on the costs, lost business,

and lost goodwill that defendants would incur. (Camden Decl. ¶ 36.)

D. The Public Interest Disfavors A Preliminary Injunction.

As the final element for a preliminary injunction, HCR must make a clear showing that

the requested injunction serves the public interest. Herb Reed, 736 F.3d at 1247. HCR argues

that it is likely to succeed on the merits, and thus the public interest against consumer confusion

favors a preliminary injunction. (Mtn. at 20-21.) As discussed above, HCR has not shown that it

will likely succeed on the merits, and its public interest argument also fails.

Regardless of how the likelihood of success on the merits element is resolved, however,

competing public interests strongly weigh against a preliminary injunction in this case, and

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provide yet another basis to deny HCR’s motion. If a preliminary injunction is granted and

Heart Pizza shuts its doors, the donations to charity baked into the Heart Pizza concept will also

disappear from the community. Based on what Heart Pizza’s three current pizzerias are donating

now, and considering both the interest in adding Heart Pizza restaurants and its principals’

experience opening new stores, by 2019 Heart Pizza could produce total charitable donations of

$360,000 to $500,000 per year. (Camden Decl. ¶ 34.) All that will be lost if defendants are

preliminarily enjoined from using the Heart Pizza brand. In addition, granting HCR’s motion

would put at least 20-25 people out of work, without pay or benefits while defendants’ pizzerias

are shuttered, all contrary to the public interest. See, e.g., Denny's, Inc. v. Kennedy Rests.,

L.L.C., No. CV-09-0741-PHX-SRB, 2009 WL 10673493, at *4 (D. Ariz. Sept. 15, 2009) (public

interest weighed against preliminary injunction in trademark infringement and franchise

agreement action where restaurant employees would be put out of work by granting injunction).

For these reasons, the public interest also weighs against entry of the requested

preliminary injunction.

III. CONCLUSION

For all the above reasons, HCR’s preliminary injunction motion should be denied.

DATED: September 7, 2017.

STOEL RIVES LLP

/s/ Steven T. Lovett
STEVEN T. LOVETT, OSB No. 910701
steve.lovett@stoel.com
NATHAN C. BRUNETTE, OSB No. 090913
nathan.brunette@stoel.com
ELLIOTT J. WILLIAMS, OSB No. 144835
elliott.williams@stoel.com
Telephone: 503.224.3380
Attorneys for Defendants

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