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The Franchise Memorandum

California Federal Court Enjoins Use of Confusingly Similar Name

In Country Inns & Suites By Carlson, Inc. v. Camarillo Hospitality, LLC, Case No. SACV 11- 1802 AG (ANx) (N.D. Cal. Jan. 9, 2012), a case handled by Gray Plant Mooty, the franchisor filed a motion for preliminary injunction seeking to prevent the defendant from using and/or infringing upon its registered trademarks in promoting its new hotel as the “Camarillo Country Inn & Suites.” The hotel had been operated as a Country Inn & Suites By Carlson system hotel for over twelve years, but the former franchisee had recently been terminated and the property repossessed by its lender. In granting the franchisor’s motion, the court held that the name Camarillo Country Inn & Suites was confusingly similar to the Country Inn & Suites By Carlson trademark. The court noted that the confusion was amplified by the defendant’s use of an exterior sign that was nearly indistinguishable from the franchisor’s trademarked sign. In addition, the court held that the franchisor had demonstrated irreparable harm and actual confusion by providing evidence from a dissatisfied guest of Camarillo Country Inn & Suites, who had posted a review on Expedia.com revealing that the guest believed the hotel continued to be affiliated with the franchisor’s system. The court found that such confusion and harm was precisely the type that federal trademark law seeks to prevent.

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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