Appeals court partially reverses ruling in Camellia Grill sale

By Kyla Asbury | Apr 8, 2019

NEW ORLEANS — The United States Court of Appeals for the Fifth Circuit partially reversed a ruling involving the sale of a restaurant and its license-associated intellectual property.

The panel of judges affirmed the district court's ruling that the bill of sale assigned all trademark rights of Camellia Grill to Hicham Khodr, that the bill of sale assigned the trade dress associated with the restaurant, but reversed the district court's denial of summary judgment on allegations of trade-dress breach of contract, according to the March 29 opinion in the U.S. Court of Appeals for the Fifth Circuit.

Judges Edith Brown Clement, Priscilla R. Owen and James C. Ho ruled on the appeal. Clement authored the opinion.

Michael Shwartz and his family owned Camellia Grill on Carrollton Avenue for decades and operated the single restaurant through Camellia Grill Inc. Shwartz formed Camellia Grill Holdings Inc. in 1999 for the sole purpose of owning federally registered Camellia Grill trademarks.

Shwartz agreed to sell the restaurant in 2006 to Khodr and the bill of sale lays out the sale of the restaurant to Uptown Grill LLC, along with trademarks, names, logos and likenesses. Khodr opened two more Camellia restaurants, one in Destin, Fla., and one on Chartres Street in New Orleans. The Destin restaurant eventually failed. 

Shwartz filed suit against Khodr, seeking to determine respective rights for the trademarks of Camellia Grill, as well as one asserting trademark and trade-dress infringement. The cases were consolidated and the court ruled that the bill of sale transferred all of Shwartz's rights to Khodr. Shwartz then appealed to the appeals court, which reversed and remanded the case for further proceedings.

After a bench trial, Shwartz again appealed to the appeals court. The appeals court found that Shwartz offered "no argument or evidence showing the district court relied on 'clearly erroneous factual findings' or 'erroneous conclusions of law . . . when fashioning its injunctive relief.'"

However, because of the appeals court’s ruling on the enforceability of the contract, it "did not reach the question of whether Shwartz proved a breach," the opinion states.

Clements wrote that neither party briefed that question on appeal.

"Therefore, we reverse the district court’s denial of summary judgment on the trade-dress breach of contract claim and remand for proceedings to determine if Khodr breached the License Agreement by using the above-detailed alleged trade dress at the Chartres restaurant," the opinion states.

United States Court of Appeals for the Fifth Circuit Case number: 18-30515

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