National late-night cookie chain Insomnia Cookies LLC filed a federal lawsuit against Red Eye Cookie Company LLC Jan. 26, alleging five counts of wrongdoing, including trademark infringement, unfair competition and trademark dilution.
Both companies have a similar business plan, selling warm cookies mainly to college students with late night delivery options.
Insomnia Cookies was founded about 11 years prior to Red Eye’s 2014 opening of its first store in Richmond. Although Insomnia’s store did not reach Richmond until after Red Eye, Insomnia Cookies is claiming that Red Eye copied the business model of Insomnia.
Both companies currently operate bakeries on the Corner. Insomnia opened its Charlottesville location in January 2016 and Red Eye opened in February of this year.
In the lawsuit, Insomnia said its national publicity as well as their heavy brand promotion has made Insomnia famous for being successful in the late-night cookie market.
Insomnia cites Red Eye’s logo as one of the many ways it allegedly copied their brand. Both companies use a crescent moon in their company’s logo.
“Red Eye adopted and is using a crescent moon design in connection with its retail bakeries and its goods and services with full knowledge of Insomnia and its exclusive rights to the Insomnia Design Mark and the Crescent Moon Design Mark, and with full knowledge that Red Eye has no legal right to use a crescent moon design to promote or sell their own goods or services,” the complaint says.
Insomnia also believes Red Eye copied the idea of the company name.
“The name INSOMNIA COOKIES gives the commercial impression that Insomnia provides cookies to consumers who are up late at night or who are unable to sleep at night,” the complaint reads. “The name RED-EYE COOKIE CO. similarly gives the commercial impression that Red Eye provides cookies to consumers who are up late at night or who are unable to sleep at night.”
Insomnia said it believes Red Eye’s adoption and use of a crescent moon could lead consumers to mistakenly believe the company is affiliated with or sponsored by Insomnia. The lawsuit states this adoption of the moon “is likely to cause consumer confusion that has and will continue to damage Insomnia.”
In their complaint, Insomnia claims to have reached out to Red Eye twice before to resolve this issue outside of the courts. Insomnia sent a letter to Red Eye July 31, 2015 regarding the use of the crescent logo.
“Insomnia Cookies is concerned that your adoption and use of the logo below may cause consumers to believe, mistakenly, that your products and services originate from, are associated or affiliated with, or sponsored or endorsed by Insomnia Cookies,” a letter included in the lawsuit said.
The complaint alleges Red Eye did not respond to this letter or a subsequent letter sent to the company on Nov. 4, 2015.
The lawsuit states Insomnia was left with no option but to file this lawsuit when Red Eye announced plans to open their second retail bakery in Charlottesville, just blocks away from the preexisting Insomnia location.
In a statement released through its attorney, Red Eye called the lawsuit an attempt to eliminate local competition.
“Red Eye will vigorously defend the lawsuit, which appears to be nothing more than an attempt by a large cookie chain to stifle competition in the late-night cookie marketplace,” the statement said. “Red Eye believes that customers recognize the unique value that the Red Eye brand brings to the marketplace and the role that Red Eye plays in serving our communities … Red Eye has developed all of its own recipes, makes its dough from scratch and takes pride in locally sourcing its flour, butter, and milk.”
The statement also affirms Red Eye was the first to the late-night cookie market in Richmond.
Insomnia formally requested a trial by jury on all issues in the complaint seeking injunctive relief, damages and recovery of its reasonable costs and attorneys’ fees. Red Eye has until March 30 to respond to the lawsuit from Insomnia.
Full text of lawsuit:
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