Franchisor/Franchisee Relationships and Trademarks

Judge Mazzant issued findings and conclusions in this trademark-plus case brought by a franchisor against its former franchisees. Essentially, plaintiff lost on its claims, but did obtain injunctive relief.

Luxottica, the franchisor of Pearle Vision optical retail stores, filed a lawsuit against Jeffrey and Dawn Gray and Brave Optical Inc., former franchisees, for violating non-compete agreements and infringing on Luxottica’s trademarks after rebranding their stores as “Brave Optical” and directly competing with Luxottica​​.

Luxottica asserted claims against the Brave Parties for violations of the Lanham Act, common law trademark infringement, breach of various non-compete agreements, and separately against the Grays for breach of personal guarantees in the parties’ franchise agreement. The defendants asserted counterclaims against Luxottica for libel, tortious interference with business relations, business disparagement, and civil theft.

After 51 pages of findings and conclusions, the Court founds as follows:

  • Plaintiff Luxottica of America Inc. takes nothing on its claims for trademark infringement, false designation of origin, trademark dilution, unfair competition, and breach of contract. The court concluded that an award of profits under 15 U.S.C. § 1117(a) for trademark infringement was not appropriate due to the lack of intent to confuse or deceive, and no evidence of sales diversion. Luxottica failed to prove trademark dilution by blurring or tarnishing as a result of the Brave Parties’ short-lived use of the marks following the State Court Injunction​​.
  • Plaintiff Luxottica is, however, entitled to a one (1) year permanent injunction that Defendant Brave Optical, Inc., will not, either directly or indirectly, engage in a competitive business within a three (3) mile radius of either Store. This prohibition includes engaging in a competitive business as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, tenant or consultant thereof. The permanent injunction shall last until and including July 17, 2024.
  • Luxottica is also entitled to a one (1) year permanent injunction that Defendants Jeffrey Gray and Dawn Gray, will not, either directly or indirectly, engage or participate in a competitive business within a three (3) mile radius of either Store. This prohibition includes engaging in a competitive business as a proprietor, partner, investor, shareholder, director, officer, employee, principal, agent, advisor, or consultant thereof. The permanent injunction shall remain in place for a period of one year from July 18, 2023, the date upon which the Grays began to fully comply with their non-compete obligations.
  • Defendants Jeffrey Gray, Dawn Gray, and Brave Optical, Inc., are jointly and severally liable to Plaintiff Luxottica of America Inc. for all attorneys’ fees, costs, and expenses Luxottica incurred in connection with the enforcement of the Non-Compete Agreements and Section 14.2 of the License Agreements.
  • Defendants Jeffrey Gray, Dawn Gray, and Brave Optical, Inc., shall take nothing on their counterclaims for libel, business disparagement, tortious interference with business relationships, and civil theft.

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