What’s in a name? Litigation, if it’s Square Donuts

July 18, 2016

This state isn’t big enough for two sellers of Square Donuts.

A federal judge last week kept alive a lawsuit filed by a northern Indiana maker and seller of Square Donuts against Square Donuts Inc., the Terre Haute-based company that sells its trademarked treats mostly across the four corners of southern Indiana.

Valparaiso-based Family Express Corp. has made and sold Square Donuts at its convenience stores since at least 2005. Square Donuts Inc. has bakeries in Bloomington, Indianapolis, Richmond and Terre Haute, and has been pedaling pastry under that name since 1967, according to the record.

In 2006, Square Donuts sent Family Express cease-and-desist letters claiming trademark rights in the Square Donuts name and threatened legal action. Family Express argued it wasn’t infringing because the name was merely descriptive of the product.

Square Donuts Inc. received state and federal trademark protection of the Square Donuts product name under classes for café services and retail bakery shops in 2012 and 2013. Family Express later attempted to trademark the name in a different category, but the U.S. Patent and Trademark Office refused, citing likely confusion with the existing mark.

After Square Donuts rejected Family Express’ proposal for a co-existence agreement, Family Express sued earlier this year. The Valpo firm asked for a declaratory judgment that its product did not infringe, and it also asked the court to cancel Square Donuts’ trademarks.

Square Donuts asked the court to dismiss the case because it was filed in the wrong venue, but Judge Theresa Springmann of the U.S. District Court for the Northern District of Indiana denied the motion, permitting the case to proceed.

“Rather than rely solely on the cease and desist letter or the communication regarding the co-existence agreement, the Court considers the underlying substance of the litigation; whether the Defendant’s Square Donuts trademark is valid, and, if it is, whether the Plaintiff nevertheless has refrained from infringing on the trademark in connection with the sale of its Square Donuts,” Springmann wrote. She noted there were substantial events in both the Northern and Southern districts of Indiana permitting venue in the Northern District.

“The Plaintiff has not haled the Defendant into court in a remote district completely unconnected … to the events underlying this litigation,” she wrote in denying Square Donuts’ motion to dismiss based on improper venue. She noted, however, that as the case goes forward, it will be Family Express’ burden to prove that the trademark should not have been issued because it is merely descriptive of the product.

“Whether the mark is generic will depend on factors that include the event that took place in the Northern District of Indiana,” she wrote. “Likewise, whether the mark is descriptive, but has obtained secondary meaning, will scrutinize events and omissions throughout the State of Indiana, so as to determine what the Indiana donut-consuming public believes about the mark and its identity as a single source of square-shaped donuts.”

The case is Family Express Corp. v. Square Donuts, Inc., 2:16-cv-103.


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