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The Franchise Memorandum

Franchisee’s Notice to Customers Regarding End of Franchise Relationship Does Not Constitute Trademark Infringement

In Anago Franchising, Inc. v. IMTN, Inc., 2012 U.S. App. LEXIS 8120 (7th Cir. Mar. 29, 2012), Anago Franchising terminated one of its subfranchisors, IMTN. After termination, Anago discovered that IMTN had sent a letter to many of its customers advising them that it would no longer be operating under the franchisor’s name, but instead would operate under a competing trademark and software system. Anago commenced an action, claiming that IMTN’s use of its trademarks in the letter would cause confusion regarding IMTN’s continued affiliation with Anago. Specifically, Anago contended that IMTN’s statement that it would continue servicing customers’ accounts without interruption suggested that IMTN remained affiliated with Anago. The district court dismissed the claim, finding that IMTN’s letter to its customers specifically stated that it would no longer be using the franchisor’s trademark as of a set date and time. The Seventh Circuit affirmed, noting that there “is absolutely nothing in [the letter] to indicate that [the new mark] is related to [the franchisor’s marks].”

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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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