In Brief: Assigning goodwill along with the assignment of a trademark isn’t form over substance.
Here’s What Happened. For the Mother Cluckers trademark saga, we need a little background about goodwill. A trademark establishes a connection between the owner’s goods and services and the consumer. That connection is the goodwill in the trademark. In order to be effective, a trademark assignment requires the assignment of the goodwill attached to it.
And now for the Mother Cluckers trademark saga. The procedural history is a little complicated. Pass Restaurant Group operated a Mother Cluckers Restaurant in Mississippi. Pass registered the trademark. About 3 years later, Nextbite Brands LLC filed an application to register Mother Clucker (without the “s”). Nextbite also filed a cancellation proceeding against Pass alleging that Pass is no longer using the trademark. A few days later, Pass assigned the Mother Cluckers registered trademark to Hot ‘N Sweet Concepts LLC. Hot ‘N Sweet then filed a trademark infringement suit against Nextbite. Hot ‘N Sweet and Nextbite settled almost immediately.
The problem with Hot ‘N Sweet’s trademark is whether Pass actually assigned the goodwill in the trademark to Hot ‘N Sweet. Here are the facts that might make that a problem: (1) Pass’ logo is completely different from Hot ‘N Sweet’s (see picture); (2) Their menus are completely different; (3) Pass’ restaurant was located over 800 miles away from Hot ‘N Sweet’s Missouri location and even was even further away from Hot ‘N Sweet’s Oklahoma City location; (4) The appearance of the restaurants was completely different; and (5) If Nextbite’s allegations were true and Pass was no longer operating, there was no goodwill for Pass to assign to Hot ‘N Sweet.
Why You Should Know This: Goodwill is not just a perfunctory trademark side issue. So, let’s dig a little deeper on why Hot ‘N Sweet may not be able to rely on the assignment of Pass’ goodwill. If the logos, menus and restaurants look different, the consumer wouldn’t be able to connect Pass’ goods and services to Hot ‘N Sweet’s goods and services. The restaurants being so far from each other means that each restaurant isn’t targeting and serving the same group of consumers. And, the final issue would be the fatal blow. If Pass wasn’t operating, then Hot ‘N Sweet got a trademark ‘in gross’ which means ‘a nothing.’ Because the case was settled, these issues weren’t fully adjudicated.
As a side note, there appears to be a plethora of Mother Cluckers restaurants all over the US. They don’t all seem to be affiliated with each other. Obviously, this is a very popular name for a chicken restaurant.