Tuesday, February 19, 2013

You Fit vs. Fit U - injunction entered against former franchisee

Plaintiffs are entities that own and operate the You Fit brand of health clubs.  They claim ownership of 3 federal trademark registrations: "YOUFIT," "Fit begins with You," and "It's where YOU FIT In."   They operate at least 38 gyms in Florida, Georgia, and Arizona under the You Fit name.

Defendants, made up of a number of entities including some former You Fit franchisees, opened a competing gym called "Fit U."  These gyms are in California.  This litigation followed.

Plaintiffs sought a preliminary injunction on the basis of trademark infringement and misappropriation of Plaintiffs' trade secrets.  Magistrate Judge Jenkins recommended granting the preliminary injunction.   Defendants objected to this decision on three grounds: (1) Plaintiffs' marks were merely descriptive and weak or invalid, and there was no likelihood of confusion; (2) there was no consideration as to whether the confusingly similar mark was used in the same trade area; and (3) Plaintiff had not properly identified any justiciable trade secrets.  The Court only addressed the trademark claims to resolve Defendants' objections.

Likelihood of Confusion

The Court analyzed the seven factors to address this concern:

1) the type of mark
      Here, the Court found the marks somewhere between descriptive and suggestive.  While "YOU" and "FIT" "bear a logical relationship to the health club services provided by Plaintiff," .... "a consumer would not automatically associate the marks 'YOUFIT,' 'It's Where YOU FIT In,' and 'Fit begins with You' with a health club.   Thus, Plaintiff's will likely be able to prove their marks are suggestive and entitled to a heightened level of protection.

2) the similarity of the marks
      "'YOUFIT' and 'FIT U' are plainly very similar marks."  Enough said.

3 & 4) the similarity of the services; similarity of the parties' service outlets and customers
     Services, service outlets, and customers were all similar.  This weighed in Plaintiff's favor.

5) nature and similarity of the parties' advertising
    Insufficient evidence for the Court to evaluate this factor.

6) Defendants' intent
    While there were text messages from a defendant suggesting intent to copy, there was also conflicting evidence.  This factor was neutral.

7) actual confusion
    Reviews on yelp demonstrated at least one consumer was confused.  "While these anonymous posts are not conclusive evidence of actual confusion, they are indicative of potential consumer confusion."  This factor favored Plaintiffs.

On balance, the Court agreed with the Magistrate Judge, and found the Plaintiff's likely to prevail on this claim.

Zone of Natural Expansion

Defendants also argued that Plaintiff's franchise business in Florida, Georgia, and Arizona was not likely to expand to Defendants' forum -- California.  The Court dispensed with this argument quickly on two grounds.

First, there was evidence that the franchise was expanding to California as demonstrated by the presence in Arizona.  Second, the federal registrations entitled Plaintiffs to exclusive use of their marks and Defendants could not use the common law zone of natural expansion doctrine to avoid liability.

Injunction entered; $50,000 bond.

You Fit, Inc. v. Pleasonton Fitness, LLC, Case No. 8:12-cv-1917 (M.D. Fla. Feb. 11, 2013) (J. Whittemore)

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