Dickey’s Barbecue Restaurants, Inc. ran a national promotion
using a pitch that infringed on the Boise Idaho BBQ 4 LIFE restaurant.
BBQ 4 LIFE demanded disgorgement
of Dickey’s Barbecue Restaurants, Inc.’s national profits[i].
Disgorgement is defined by Black’s Law Dictionary as “the act of giving up something (such as profits illegally obtained) on demand or by legal compulsion.”
https://en.wikipedia.org/wiki/Disgorgement
Dickey’s Barbecue Restaurants, Inc. pushed back. BBQ 4 LIFE only has restaurants in Boise, Idaho. Why should Dickey’s Barbecue Restaurants, Inc. be disgorged of national profits and pay BBQ 4 LIFE all of its profits earned nationally.
The court said they should. Dickey’s Barbecue Restaurants, Inc. willfully infringed on BBQ 4 LIFE’s trademark. Dickey’s Barbecue Restaurants, Inc., need a disincentive. Besides, the BBQ 4 LIFE infringement increased sales nationally; therefore, national sales should be disgorged.
After all, Dickey’s has willfully infringed plaintiffs’ trademark and used it nation-wide for a reason – to increase sales throughout its operations, not just in areas where it competes with plaintiffs. Such an award would, according to Maier, remove the motive for infringements, deter future infringements, and protect the intangible value associated with trade-marks.
BBQ Id. citing Maier, 390 F.2d at 122.
The takeaway, infringement is expensive. Infringe of even a small local brand can result in national disgorgement of profits.
[i] BBQ 4 Life, LLC, et al. v. Dickey’s Barbecue Restaurants, Inc., Business Franchise Guide – Explanations, Laws, cases, rulings, new developments Issued Apr 23, 2019 Case No. 1:18-cv-140-BLW