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Court Watch

BY Susan H. Morton
August 01, 2003

Preliminary Injunction Granted Against Former Franchisee's Trademark Use

The U.S. District Court for the Eastern District of Michigan has granted a preliminary injunction sought by American Dairy Queen, preventing a terminated franchisee from continuing to use American Dairy Queen's marks. Vander Vreken v. American Dairy Queen Corp. et al., 261 F.Supp.2d 821 (E.D. Mich. 2003).

After American Dairy Queen terminated Vander Vreken's franchise agreement for failure to comply with its quality and service standards, Vander Vreken sought and won a preliminary injunction in state court permitting it to continue to operate under American Dairy Queen's marks, but the U.S. District Court subsequently dissolved the injunction because it found that the stringent standard for entry of injunctive relief had not been met because neither party had established a strong likelihood of success on the merits. This ruling meant that American Dairy Queen had had the right to terminate the franchise agreement; nevertheless, Vander Vreken announced his intention to reopen the store following its winter closing, still bearing American Dairy Queen's trademarks, and the franchisor moved for a preliminary injunction preventing him from doing so.

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