Franchise Law

Hypothetical 2

As a newly licensed lawyer in Texas, you meet with your first franchise client and she asks you to help her with a potential trademark infringement action against a former manager of her Austin based Italian style restaurant concept. It appears from listening to her story that one of her managers absconded with her architectural design plans and franchise operations manual and quietly set up shop in Branson, Missouri. You carefully draft an engagement letter and she gladly delivers to you the requested $10,000 check as a retainer to secure your services. Once the check is dutifully deposited in your firm's IOLTA account you prepare a list of questions to better understand the fact situation.

a.What questions would you ask to better ascertain what the applicable issues are? Is there infringement or likelihood of confusion between the two trademarks?

b.Does she have a case and if so, what type of action is available to her?

c.What additional documents will be necessary for your analysis?

d.Apparently, the TMs and architectural designs have not been assigned to your client as of the date of your meeting. Problematic? Why or why not?

e.As of your meeting, the client has no plans to expand out of the three-state area surrounding Texas. Does that fact create any issues for your analysis?

f.The alleged infringer opened up in Branson, Mo. an exact copy of your client's restaurant but with a different color scheme for menus and trade dress. Is that an infringement and if so, why?

g.How would you prove damages?

h.Could you file an injunction against the alleged infringer? If so, what would you allege? What evidence would you need to prove your case? Where would you file and why?

i.Is insurance a consideration?

Once you have completed your research, your senior partner wants a memo on her desk by noon Dallas time Monday. Sadly, you must explain to your spouse that your weekend trip to Santa Barbara will need to be postponed.