The Franchise Memorandum

A Texas federal court has granted an injunction to a Bundt cake franchisor seeking to prevent a competitor from using its trademarked frosting pattern on her cake products. Denbra IP Holdings, LLC v. Thornton, 2021 WL 674238 (E.D. Tex. Feb. 22, 2021). Plaintiff Denbra IP Holdings, LLC d/b/a Nothing Bundt Cakes has over 300 franchises around the United States and Canada selling Bundt cakes topped with its trademarked frosting pattern. The frosting pattern consists of long strips of tubular ring-shaped frosting that expands outward from the center of the cake. Twenty-one of its franchises are located in the Dallas-Fort Worth area. In August 2020, some of the Dallas-Fort Worth-area franchisees reported to Nothing Bundt Cakes that Defendant Thornton was selling Bundt cakes using its trademarked frosting pattern and operating under the name “Anything Bundt Cakes.” Nothing Bundt Cakes sent Thornton a demand letter and, in response, Thornton changed the name to “All About Bundt Cakes,” but continued utilizing the frosting pattern. Nothing Bundt Cakes sent Thornton a second demand letter, but she continued using the frosting pattern. Nothing Bundt Cakes then brought a motion for a preliminary injunction.

Thornton failed to appear in the matter. Nonetheless, the court determined that all four factors considered in the preliminary-injunction analysis weighed in Nothing Bundt Cakes’ favor and enjoined Thornton from using the frosting-pattern mark. First, the court determined that there was a substantial likelihood that Nothing Bundt Cakes would succeed on the merits because it has a protectable mark and Thornton’s use of the mark was likely to confuse customers. Second, the court concluded that Nothing Bundt Cakes would suffer irreparable harm because it has established goodwill in the Dallas-Fort Worth area that may be lost due to Thornton’s actions, and that it has lost control of its reputation. Third, the court found that the balance of equities weighs in Nothing Bundt Cakes’ favor because any damage suffered by Thornton to replace advertising materials or stop using the frosting pattern is minimal compared to the harm to Nothing Bundt Cakes’ reputation and its loss of goodwill. Lastly, the court concluded that enjoining Thornton will serve the public interest because the public interest “is always served” by enjoining the unauthorized use of a protected mark.