Judge rules rights to 'Apple Haus' brand didn't come with the building

A real estate investment firm bought a historic Long Grove building, but not the rights to the brand that once operated there, a federal judge ruled earlier this month.

The trademark-infringement lawsuit filed by Long Grove Investments LLC was dismissed by U.S. District Judge John Robert Blakey.

The investment firm acquired the property at 230 Robert Parker Coffin Road in the village's historic downtown shopping district in September 2014.

Long Grove Confectionary Co. leased that space to operate its Apple Haus bakery and store from 1977 through 2011. In June 2013, two years after closing the bakery there, the confectionary's business and real estate assets were acquired by Baldi Candy Co., a family business based in Chicago's Avondale neighborhood.

At least some of the products sold at the bakery, including apple ciders and pies, included the term "Apple Haus" on their labels and packaging.

The confectionary company also sold Apple Haus-branded pies at two of its other stores in the suburbs as well as to wholesalers and at Long Grove's annual outdoor festivals.

The confectionary reopened in a new Long Grove location in February 2018, and the new store sells baked goods bearing the term "Apple Haus."

In its federal lawsuit filed in August 2018, the investment firm contended it acquired common-law rights to the Apple Haus mark when it bought the former Apple Haus building. The firm alleged Baldi was infringing on those rights.

In his opinion, Blakey wrote the federal Lanham Act allows parties to assert claims of trademark infringement of unregistered marks.

Plaintiffs asserting such claims must show a protectable mark exists, that the plaintiff owns the mark and that the defendant's use of the mark is likely to cause consumer confusion, Blakey wrote.

The investment firm's infringement claim, he wrote, faltered on the ownership element.

A party obtains a protectable right in a trademark "only through use of the mark in connection with its product," Blakey wrote.

And "the party who first uses a mark owns that mark," Blakey wrote.

The investment firm, he wrote, acknowledges it never sold any goods or products at all, let alone ones using the trademark.

Both sides agree the confectionery company was the first to use the mark.

Blakey rejected the argument that the investment firm obtained ownership of the Apple Haus mark by buying the building associated with it.

Neither attorney could be reached for comment.