In an August 19, 2013 ruling, Judge Thomas P. Griesa denied defendants' motion to dismiss plaintiff Pop Bar, LLC's complaint, including a Lanham Act unfair competition claim. Pop Bar makes and sells customizable Italian gelato, sorbet and frozen yogurt on a stick under its Popbar and Popbar system marks, and licenses others to do the same. The defendant, Hip Pops, LLC, approached Pop Bar about becoming a franchisee, and signed a confidentiality agreement before receiving Pop Bar's "recipes and formulas, specially designed equipment, systems and methods of making customized Popbar products, and ideas for Popbar food trucks." Negotiations then broke down under circumstances that Pop Bar contended show that Hip Pop never intended to enter into a deal with Pop Bar, and merely acted as if it would do so to gain access to Pop Bar's confidential information. Hip Pop subsequently introduced competing products under the HipPOP mark. Pop Bar sued, asserting a variety of claims, including false designation of origin under the Lanham Act.Hip Pop moved to dismiss Pop Bar's complaint in its entirety. With regard to the false designation of origin claim, the Court found that:
Here, the Popbar brand, unique production process, and product offerings originated with plaintiff. Plaintiff alleges that defendants attempted to sell their Gelato products by utilizing an alleged, albeit non-existent, affiliation with Popbar, in violation of the Lanham Act. That is, a combination of the Hip Pop name, the HipPop mark, and the products and operations used by defendants, tends to suggest that Popbar condones, authorizes, or affiliates with Hip Pop. The complaint alleges that Popbar was in the business of franchising the brand in Florida, defendants' place of business. Plaintiff has also alleged that defendants' use, offer, and sale of defendants' goods and services under HipPOP constitutes use of a false designation of origin and a false description that is likely to cause confusion among purchasers.Judge Griesa thus concluded that Pop Bar has established a likelihood of confusion and made a prima facie case of a "reverse passing off" Lanham Act violation.
