UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NORTH CAROLINA
`CHARLOTTE DIVISION
`DOCKET NO. 3:22-CV-00148-FDW-DSC
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`ORDER
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`SYCAMORE BREWING, LLC,
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`Plaintiff,
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`vs.
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`STONE BREWING CO., LLC,
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`Defendant.
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`THIS MATTER is before the Court on Plaintiff Sycamore Brewing, LLC’s Motion for
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`Temporary Restraining Order and Preliminary Injunction (the “Motion”), (Doc. No. 5), filed April 8,
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`2022. On April 11, 2022, the Court entered an Order denying Plaintiff’s Motion to the extent it sought
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`a Temporary Restraining Order and deferring on ruling to the extent it sought a Preliminary
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`Injunction. On April 20, 2022, a hearing on the Motion took place before the undersigned. After
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`reviewing the pleadings, exhibits thereto, and applicable law, and after hearing the evidence and
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`arguments presented by counsel at the hearing, the Court finds Plaintiff is entitled to a preliminary
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`injunction and GRANTS the Motion with modification as set forth below.
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`Findings of Fact
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`1. Plaintiff Sycamore Brewing, LLC (“Plaintiff”) is a limited liability company founded in 2013
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`with its principal place of business in Charlotte, North Carolina. Plaintiff currently sells craft
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`beer throughout North Carolina and across seven other states – South Carolina, Virginia, West
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`Virginia, Tennessee, Ohio, Georgia, and Kentucky – and asserts it continues to expand its
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`market.
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`2. Plaintiff’s Juiciness IPA was introduced in 2019 and is currently sold throughout Plaintiff’s
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`distribution area, in eight states.
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`3. In 2020, Plaintiff began marketing its Juiciness IPA with the slogan KEEP IT JUICY. The
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`slogan is prominently printed on the retail packaging boxes that the beer is sold in:
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`4. Plaintiff owns the name and mark KEEP IT JUICY (U.S. Reg. No. 6,464,651) (the “Mark”) and
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`has registered the mark on the Principal Register of the United States Patent and Trademark
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`Office (the “USPTO”) in International Class 32 for “Beer; Beer, ale, and lager; Craft beer.” The
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`USPTO registered the mark on August 24, 2021, with a date of first use of September 12, 2020.
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`5. Defendant Stone Brewing Co., LLC (“Defendant”) is a limited liability company founded in
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`1996 with its principal place of business in Escondido, California. As of 2022, Defendant is the
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`ninth largest craft brewery in the United States and has distributed and sold beers in all fifty states
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`since 2017.
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`6. In August 2021, Defendant launched its Hazy IPA.
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`7. In March 2022, after Plaintiff obtained registration of the Mark with the USPTO, Defendant
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`changed the packaging for its Hazy IPA, adding “KEEP IT JUICY” to the bottom flap of its
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`retail box.
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`8. Defendant now distributes its Hazy IPA in retail packaging boxes that prominently feature the
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`Mark. Defendant also uses the Mark on the Hazy IPA page on its website. In addition,
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`Defendant uses the Mark in video advertising for its Hazy IPA.
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`9. Defendant is using the Mark without Plaintiff’s consent, approval, or authority.
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`Conclusions of Law
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`1. To obtain a preliminary injunction, Plaintiff must establish: “(1) it is likely to succeed on the
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`merits; (2) it is likely to suffer irreparable harm without the preliminary injunction; (3) the balance
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`of equities tips in its favor; and (4) the injunction is in the public interest.” Mountain Valley
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`Pipeline, LLC. V. W. Pocahontas Props. Ltd. P’ship, 918 F.3d 353, 366 (4th Cir. 2019) (citing
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`Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) (internal citations omitted).
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`2. The Court concludes, and neither party disputes, that it has jurisdiction over the parties and subject
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`matter of this action.
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`3. The Court concludes that Plaintiff has shown a likelihood of success on the merits of its claims
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`for (1) Trademark Infringement pursuant to 15 U.S.C. § 1114; (2) Unfair Competition pursuant
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`to 15 U.S.C. § 1125(a); and (3) Deceptive Trade Practices pursuant to N.C. Gen. Stat. § 75-
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`1.1.
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`4. To establish Trademark Infringement, Plaintiff must show that (1) it has a valid trademark; (2)
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`its mark can be protected; and (3) the defendant’s use of an imitation is likely to cause
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`consumer confusion. 15 U.S.C. § 1114(a); Synergistic Int’l, LLC v. Korman, 470 F.3d 162,
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`170 (4th Cir. 2006).
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`5. A certificate of registration is prima facie evidence of the validity of the mark, ownership by
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`the registrant, and proper registration under the Lanham Act. Birttingham v. Jenkins, 914 F.2d
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`447, 452 (4th Cir. 1990) (citing 15 U.S.C. § 1057(b)); see 15 U.S.C. § 1115(a). Accordingly,
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`the Mark is entitled to a presumption of validity, and Plaintiff is entitled to a presumption of
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`ownership of the Mark. See Rebel Debutante LLC v. Forsythe Cosmetic Group, Ltd., 799 F.
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`Supp. 2d 558, 568-69 (M.D.N.C. 2011). However, because KEEP IT JUICY was registered
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`in 2021 and therefore has not been in continuous use for five consecutive years following
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`registration, the Mark is not “conclusive” evidence and may be contested by Defendant. Id.
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`(citing 15 U.S.C. §§ 1115(b) (“Incontestability”), 1065 (“Incontestability of right to sue mark
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`under certain conditions”)). In its response brief, Defendant contests the validity of the Mark.
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`(Doc. No. 17, pp. 7-8). “In challenging the presumption, [Defendant] must introduce sufficient
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`evidence, by a preponderance, to rebut the presumption of [Plaintiff’s] right to exclusive use.
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`Id. (citing Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1529 & n.4 (4th Cir. 1984)). The
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`Court concludes Defendant has failed to carry its burden of introducing sufficient evidence to
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`rebut the presumption of validity and ownership of the Mark. Moreover, the Court concludes
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`KEEP IT JUICY on its face appears to be at least suggestive, juxtaposing three words that
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`connote, rather than describe, Plaintiff’s Juiciness IPA and together are not typically associated
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`with craft beer. Id. (citing U.S. Search, LLC v. U.S. Search.com Inc., 300 F.3d 517, 523 (4th
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`Cir. 2002) (“Suggestive as well as arbitrary and fanciful marks are deemed inherently
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`distinctive and receive the greatest amount of protection. A suggestive mark consists of words
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`that connote, rather than describe, some quality or characteristic of a product or service.”).
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`Accordingly, the Court finds the Mark, which the USPTO registered on August 24, 2021, is
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`valid and can be protected.
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`6. The Fourth Circuit generally balances the following relevant factors to assess the likelihood of
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`confusion among consumers: (1) strength/distinctiveness; (2) similarity of the marks; (3)
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`similarity of the goods; (4) similarity of the facilities used; (5) similarity of advertising; (6)
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`defendant’s intent; (7) actual confusion; (8) proximity of products as sold; (9) probability that
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`plaintiff will enter defendant’s market; (10) quality of defendant’s product compared to
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`plaintiff’s; and (11) the sophistication of potential buyers. Shakespeare Co. v. Silstar Corp. of
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`Am., 110 F.3d 234, 241 (4th Cir. 1997). Here, nearly all the Shakespeare factors weigh in
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`favor of granting a preliminary injunction. The Mark is distinctive in the craft beer context.
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`The similarity of the marks is astounding, and the goods are not just similar, they are the same
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`– a craft India Pale Ale. Both parties are already in the same market, at least within Plaintiff’s
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`current distribution area of eight states in the Southeast, and utilize a network of wholesale
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`distributors to access the retail beer markets attendant to chain retail, convenience and grocery
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`stores, bottle shops, restaurants, and bars. In some retail locations, the two products are placed
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`beside or above/below one another. Accordingly, the proximity of products as sold is again
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`staggering. Moreover, the mark has been placed, as a prominent part of the packaging, on both
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`the Juiciness IPA and Hazy IPA’s retail boxes. In addition, both parties advertise their beers
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`on social media and the Internet. Further, Defendant does not dispute that the average
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`consumer is not meaningfully more sophisticated simply because craft beers or premium drinks
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`are involved. Because of Defendant’s history of zealously protecting its intellectual property
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`rights, the Court finds the sixth Shakespeare factor, Defendant’s intent, is at best neutral.
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`Similarly, the Court finds the tenth factor is neutral, as there is no evidence that either product
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`is of a higher quality than the other. Finally, although Plaintiff does not, at this early stage,
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`provide evidence of actual confusion, the Court highlights “[t]he test is likelihood of confusion;
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`evidence of actual confusion is unnecessary.” Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d
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`455, 463 (4th Cir. 1996). The Court, nonetheless, notes its confusion in discerning the marks.
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`Based on the foregoing, the Court concludes Plaintiff has sufficiently shown a likelihood of
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`confusion among consumers. The Court, therefore, concludes Plaintiff has shown a likelihood
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`of success on the merits of its trademark infringement claim.
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`7. The test for likelihood of success on an unfair competition claim under the Lanham Act is
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`nearly identical to the test for trademark infringement and requires Plaintiff to show: “(1) it
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`possesses a mark; (2) the defendant used the mark; (3) defendant’s use of the mark occurred
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`in commerce; (4) the defendant used the mark in connection with the sale, offering for sale,
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`distribution, or advertising of goods and services; and (5) defendant used the mark in a manner
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`likely to confuse consumers.” People for the Ethical Treatment of Animals v. Doughney, 263
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`F.3d 359, 364 (4th Cir. 2001). It is undisputed that Defendant has used the Mark in commerce
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`and in connection with the sale, offering for sale, distribution, or advertising of good and
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`services. This, in conjunction with the Court’s analysis of Plaintiff’s trademark infringement
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`claim above, is sufficient to satisfy Plaintiff’s burden of showing a likelihood of success on the
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`merits of its unfair competition claim.
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`8. In order to establish a claim under N. C. Gen. Stat. § 75-1.1, a plaintiff must allege sufficient
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`facts to show that (1) the defendant committed an unfair or deceptive act or practice; (2) the
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`action in question was in or affecting commerce; and (3) the act proximately caused injury to
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`the plaintiff. S.N.R. Mgmt. Corp. v. Danube Partners 141, LLC, 659 S.E.2d 442, 448 (N.C.
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`Ct. App. 2008) (citing Dalton v. Camp, 548 S.E.2d 704, 711 (N.C. 2001)). An “unfair act or
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`practice is one in which a party engages in conduct which amounts to an inequitable assertion
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`of its power or position.” Id. Acts of trademark infringement are per se unfair and deceptive
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`trade practices. See N.C. Gen. Stat. §§ 80-11, 12. For the reasons set forth above, then,
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`Plaintiff has also met its burden of establishing a likelihood of success on the merits of its
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`Unfair Competition claim.
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`9. The Court further concludes that Plaintiff has shown it is likely to suffer irreparable harm
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`absent entry of an injunction. The Fourth Circuit has recognized that “irreparable injury
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`regularly follows trademark infringement.” Lone Star Steakhouse & Saloon, Inc. v. Alpha of
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`Virginia, Inc., 43 F.3d 922, 939 (4th Cir. 1995) (citation omitted). Trademark infringement
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`gives rise to irreparable injury because such “infringement primarily represents an injury to
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`reputation.” Id. (citations omitted). Based on the evidence presented, including the potential
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`for reverse confusion and the fact that Plaintiff will never have a second chance to make a first
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`impression, Plaintiff has met its burden of proving a likelihood of irreparable injury.1
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`1 To the extent Defendant relies on High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551,
`1557 (Fed. Cir. 1995) and T.J. Smith & Nephew Ltd. v. Consol. Med. Equip., Inc., 821 F.2d 646, 648 (Fed. Cir.
`1987) to support its assertion that Plaintiff’s suggestion of a licensing deal during settlement negotiations that would
`include Defendant’s immediate cessation of infringement is somehow dispositive on the issue of irreparably injury,
`the Court disagrees. The facts in High Tech are entirely distinguishable from the case at hand. Notably, in High
`Tech, the Federal Circuit found the patentee, who relied entirely on the presumption of irreparable harm, was not
`entitled to such presumption because the court found the record did not support a finding that the patentee was likely
`to succeed in proving its claim of patent infringement. High Tech, 49 F.3d at 1556. In addition, the Federal Circuit
`found significant the lack of commercial activity by the patentee and the nearly 17-month delay in bringing the suit
`after the issuance of the reexamination certificate for the relevant patent. Id. Similarly, in T.J. Smith, the Federal
`Circuit upheld the district court’s finding of an absence of irreparable harm and held the patentee, who also relied
`entirely on the presumption of irreparable harm, “did not show likelihood of success in respect of infringement,”
`waited 15 months before seeking a preliminary injunction, and “had long licensed its patent to two licensees.” T.J.
`Smith, 821 F.2d at 648. Thus, the case law Defendant relies on is inapposite to its contention and the present matter.
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`10. With respect to the balance of equities and the potential harm to the parties, the Court concludes
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`that the harm to Plaintiff outweighs the potential harm to Defendant. Plaintiff is indisputably
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`the senior user and owner of the Mark and, as set forth above, Plaintiff has sufficiently shown
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`a likelihood of confusion. As a result of this confusion, Defendant’s use of the Mark, inter
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`alia, is also likely to affect consumers’ opinion of Plaintiff and/or its products. As a result,
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`Plaintiff’s reputation, goodwill, and business may be permanently damaged if Defendant
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`continues to use the Mark and consumers associate Plaintiff with Defendant. On the other
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`hand, Defendant has only recently – in March 2022 – changed its packaging to include the
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`Mark. During the hearing, Defendant notified the Court of the steps it has taken to eliminate
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`the use of the Mark in connection with Defendant’s Hazy IPA. Specifically, Defendant
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`explained it will have new retail packaging that will be ready for use by May 5, 2022. The
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`potential harm Defendant faces, therefore, can be minimized by narrowly tailoring the
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`preliminary injunction. Accordingly, the balance of equities tips in favor of Plaintiff.
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`11. Finally, the Court concludes that the entry of the requested injunction, as tailored below, serves
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`the public interest. The purpose of trademark law is to protect the public from confusion about
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`“the identity of the enterprise from which goods and services are purchased.” AMP Inc. v.
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`Foy, 540 F.2d 1181, 1185-86 (4th Cir. 1976). Preventing consumers from being confused and
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`preventing trademarks from being used deceptively serves the public interest. Bowe Bell &
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`Howell Co. v. Harris, 145 F. App’x 401, 404 (4th Cir. 2005).
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`12. Based on the foregoing, the Court concludes Plaintiff has sufficiently shown “(1) it is likely to
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`Moreover, the Court reiterates its concern with Defendant’s proposition that the mere suggestion of a licensing deal
`would immediately shut the door to injunctive relief for a victim of trademark infringement. This bright line rule
`would impose a chilling effect on settlement negotiations; The same chilling effect that Rule 408 of the Federal
`Rules of Evidence seeks to prevent. See Fiberglass Insulators, Inc. v. Dupuy, 856 F.2d 652, 654-55 (4th Cir. 1988)
`(Discussing the strong public policy favoring exclusion of settlement negotiations to foster frank discussions).
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`succeed on the merits; (2) it is likely to suffer irreparable harm without the preliminary injunction;
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`(3) the balance of equities tips in its favor; and (4) the injunction is in the public interest.”
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`Mountain Valley Pipeline, 918 F.3d at 366. Accordingly, Plaintiff is entitled to a preliminary
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`injunction.
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`13. As indicated above, however, the Court finds the diligent and proactive measures Defendant
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`has taken, along with the relatively short time period that the infringing products will remain
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`in the marketplace and the financial burden that Defendant would incur in removing these
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`products, supports narrowly tailoring the preliminary injunction so as to allow Defendant to
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`sell off its available supply of Hazy IPA packaged in the infringing retail box that is already in
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`the marketplace – that is, on store shelves or in the possession of its distributors – provided,
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`however, that Defendant shall use its best efforts to ensure a label is applied as soon as
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`practicable to all infringing boxes of Defendant’s Hazy IPA that are already in the marketplace.
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`See Lance Mfg., LLC v. Voortman Cookies Ltd., 617 F. Supp. 2d 424, 434-35 (W.D.N.C.
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`2009).
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`IT IS THEREFORE ORDERED that Plaintiff’s Motion for Temporary Restraining Order
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`and Preliminary Injunction, (Doc. No. 5), is GRANTED WITH MODIFICATION to the extent it
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`seeks a preliminary injunction.
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`Defendant is HEREBY ENJOINED as follows:
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`1. Except as set forth below, Defendant, its directors, officers, employees, representatives
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`and agents, and any persons or entities in active concert or participation with them
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`having actual notice of this Preliminary Injunction, are hereby immediately enjoined
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`nationwide from using the KEEP IT JUICY name and mark, or confusingly similar
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`variations thereof.
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`2. Defendant may sell off its available supply of Hazy IPA packaged in the infringing
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`box, provided that Defendant shall use its best efforts to ensure a label is applied to all
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`infringing boxes as soon as practicable. Defendant may use any reasonable label color
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`that prohibits consumers from reading through the label. If Defendant so wishes,
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`Defendant may also petition the Court to allow the label to include a new, non-
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`infringing phrase or slogan.
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`3. The injunction stated herein shall become effective only upon the posting of a cash
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`bond in the amount of fifty thousand dollars ($50,000.00) with the Clerk of Court for
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`the United States District Court for the Western District of North Carolina for the
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`payment of such costs and damages as may be incurred by Defendant should it
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`ultimately be found to have been wrongfully enjoined. Upon such posting of bond, this
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`Order shall remain in effect until a final disposition of this case, until the Court revises
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`the Order, or until the parties agree otherwise.
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`IT IS SO ORDERED.
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`Signed: April 21, 2022
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