Judge serves up ruling in ongoing trademark dispute over suburban Mexican restaurant

By Kenneth Lowe | Dec 17, 2014

A federal court ruling has wrestled control of one company’s use of a Mexican restaurant’s trademark and given it to the owners of its Arlington Heights location.

Foodworks USA Inc. (FUSA) filed suit against Foodworks of Arlington Heights LLC (FAH), the company that ran the restaurant formerly known as the Fuego Mexican Restaurant & Margarita Bar and then Cocina Fuerte.

Between 2005 and January of 2010, FAH operated Fuego’s downtown Arlington Heights location under a licensing agreement with FUSA, which included the rights to use the brand’s logos, interior designs and other accoutrements.

The suit arose from allegations that FAH continued to operate essentially the same restaurant at the same location after the termination of the licensing agreement in January of 2010.

FAH filed a counterclaim and a motion for judgment on damages, which U.S. Magistrate Judge Mary M. Rowland granted in part, denied in part, and reserved in part late last month.

FUSA’s original suit claims FAH made a few token changes to its location and then continued to operate under the “Cocina Fuerte” label, which translates roughly to “Strong Kitchen” in Spanish.

Noting that “fuego” is the Spanish word for “fire,” FUSA alleged that FAH’s use of a flame in its Cocina Fuerte logo appropriated imagery provided under the original agreement. Pictures included in the suit also show a before-and-after comparison of the back wall of the restaurant, where the font and placement of “Fuerte” bears many of the same typographical hallmarks as the “Fuego” logo originally did.

Aside from some “partial” changes to the signage and interior decoration of the restaurant, no other changes were made, FUSA claimed in its original suit, noting that Employee uniforms, napkins, table settings, menus and business cards all remained unchanged throughout January of 2010 after the agreement terminated.

“FUSA’s distinctive and nonfunctional Trade Dress serves as a symbol of origin to diners seeking a fine dining experience in an upscale Mexican themed restaurant,” FUSA argued.

According to a numbered list included in the suit, the “trade dress” includes preparing guacamole and ceviche tableside and serving beans in a taco shell bowl, among other things.

“The Trade Dress currently being used by FAH to promote its new restaurant operation is identical or substantially similar to the Trade Dress developed by FUSA, and is identical or substantially similar to the Trade Dress used by FUSA’s authorized licensee in the operation of a Fuego Mexican Grill and Margarita Bar restaurant in Chicago, Illinois,” the suit states.

FAH faced counts of trademark infringement, trade dress infringement and unfair competition, dilution of trademark, dilution of trade dress, violation of the Uniform Deceptive Trade Practices Act and breach of contract.

In its counterclaim, FAH claimed it was partially responsible for development of the chain’s trade design, and seeks declaratory and injunctive relief, disgorgement of all monies received by FUSA from licensing the trademarks and trade dress, money damages, and costs and fees.

Rowland in July 2013 granted FAH's motion for default judgment and set the matter for a hearing on damages. She determined then that “FUSA’s continuing discovery violations and flaunting of court-ordered deadlines warranted granting default judgment."

Among FAH’s counterclaims granted by the court was that the trademarks in question rightly and fully belong to FAH and not FUSA. It also held their original licensing agreement and any other licensing agreements with third parties void ab initio.

Court records show Rowland held a status hearing on Dec. 11, when gave the defendant's a a Jan. 9 deadline to file a prove-up brief and any requests to reconsider last month's ruling from last month.

FUSA is represented by Chicago attorneys Jeffrey H. Bunn of Latimer LeVay Fyock,  Stavros S. Giannoulias of Horwood Marcus & Berk Chtd. and Kevin S. Besetzny of Besetzny Law.

FAH is represented by Arlington Heights attorneys Lee F. DeWald and Kevin K. McCormick of DeWald Law Group.

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