Moon Dot, Inc. v. The Q Shack Corporation
3:25-cv-00396
| W.D.N.C. | Aug 21, 2025Background
- In 2002, Daniel Ferguson and Scott Howell opened the "Original Q Shack" BBQ restaurant in Durham, NC, using the "THE Q SHACK" marks and related branding.
- The parties restructured ownership in 2005, granting the Original Q Shack a license to use the marks in Durham County, and separating business operations between the Durham original and other "Q Shack" locations (outside Durham) under Unlimited's control.
- In 2017, Plaintiff Moon Dot acquired a Charlotte Q Shack restaurant and in 2024,“purchased the Q Shack Brand” (including federal trademarks and IP) from Unlimited.
- The dispute arose after Moon Dot learned the Original Q Shack was selling branded sauces and rubs at local Durham hardware stores and online, which Moon Dot asserted exceeded its license.
- Moon Dot sought a preliminary injunction to stop the Original Q Shack from selling these products through third party retailers, arguing likely confusion and harm to their brand rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Irreparable Harm | Ongoing branded product sales by Q Shack confuses customers and irreparably harms Moon Dot’s control of the brand. | Delay in asserting rights and long-term acquiescence shows no urgency or irremediable harm; limited product sales are not causing real injury. | Moon Dot failed to show irreparable harm; delay undermined urgency. |
| Likelihood of Confusion | Consumers are likely to be confused by Original Q Shack’s use of the marks on sauces and rubs sold locally. | Product labeling and local focus reduce confusion; disclaimers on packaging clarify origin; no evidence of actual confusion or harm to Moon Dot. | Original Q Shack rebutted presumption of confusion; no likely injury shown. |
| Balance of Equities | Harm to Moon Dot outweighs any loss to Q Shack; Moon Dot’s ability to control its brand is undermined. | Q Shack would suffer concrete harm from lost sales and reputation, while Moon Dot’s alleged harm is speculative. | Balance does not favor Moon Dot; removing sauce/rubs immediately is inequitable. |
| Delay/Laches as Bar to Injunction | Moon Dot moved promptly after learning of third-party sales. | Both Moon Dot and its predecessor ignored ongoing sales for years; Moon Dot delayed even after learning of specific retail sales. | Delay precluded "urgent" relief; injunctive relief denied. |
Key Cases Cited
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008) (sets out the four-factor preliminary injunction test and high bar for relief)
- Mazurek v. Armstrong, 520 U.S. 968 (1997) (preliminary injunction should only be granted on clear showing)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (four-factor injunctive relief standard applies to IP)
- Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th Cir. 1995) (trademark infringement can lead to irreparable injury)