Here are the facts: Franchise agreement expires. Franchisee continues the same business, but changes the name of the business, same services, same location, and same staff. Franchisee informs its franchise business consumers of its status as a former franchisee.
Here is the question before the court: Is this considered trademark infringement?
The case is Anago Franchising (Anago) v. IMTN, Inc. Anago, franchisor, grants to IMTN an Anago commercial cleaning franchise. Upon the expiration of the franchise agreement, both parties mutually agreed not to renew. IMTN sends the following letter to its franchised business consumers.
[A]fter 10 years, our franchise relationship with Anago will expire on January 25, 2011. We have decided to explore other options that would best suit our clients and our franchises. At midnight on January 25, 2011, we will close operations as “Anago Chicago.” We have made arrangements with another company, Image One Facility Solutions, to take over the servicing of your account, starting at 12:01 a.m. on January 25, 2011. The transition from Anago Chicago to Image One Facility Solutions will be seamless. Image One will take over all our office staff and all of our cleaning crews (unless they choose NOT to be a part of Image One.) You can reach Image One at the same address and telephone number.
The only difference you should see is the name on the invoice sent to you. …. You will receive a letter from Image One Facility Solutions introducing itself and giving you information regarding where future payments should be sent.
Anago, franchisor, takes exception to the letter sent to consumers of the Anago franchised business and wagered a claim of trademark infringement against the franchisee. The court rejected Anago’s claim. As noted by the court, a trademark infringe claim is based on consumer confusion. In order to succeed on a claim of trademark infringement, Anago had to show that customers were or possibly could be confused as to who was performing the commercial cleaning services as a result of the letter.
The court stated: “The language of the letter belies any such [trademark infringement] claim… The letter prevents rather than causes consumer confusion and therefore there are not factual allegations indicating a plausible claim [for trademark infringement].”
Lesson from the Court: Trademark infringement is based on confusion. Without confusion there is no claim of trademark infringement.