MYRTLE BEACH — Confectionery combat is being waged between a pair of retailers here who specialize in selling sweet treats, with the national ItSugar chain and its store at Broadway at the Beach filing a trademark infringement lawsuit this week against candy come-lately I Love Sugar, which opened this month along Ocean Boulevard.
ItSugar claims in court documents that I Love Sugar is a slavish copy of the national chains concept. It has asked a federal judge to issue a preliminary injunction to forbid I Love Sugar from using marketing and design materials that ItSugar claims violate its trademark. No hearing has been scheduled.
The I Love Sugar store mimics every element and the entire look of the Myrtle Beach ItSugar store, Atlanta lawyer John Foster said in court documents filed in support of the preliminary injunction.
Mark Rosenberg a New York-based lawyer representing I Love Sugar and its owner, David Oaknin called the lawsuit an instance of trademark bullying, adding in court documents that I Love Sugar does not intend to change its name or the design of its store.
With regard to [the] trademark infringement assertion, that assertion is absurd, Rosenberg said.
Oaknin said the lawsuit will represent a financial hit for his business, but were not backing down.
They have absolutely no case, Oaknin said. Whats going on here is that they are not used to direct competition. America was built on competition and they dont own the candy store concept. Everything in our store is on a much different level than them.
The sugary standoff pits the national ItSugar chain, with 67 locations and an expected $60 million in sales this year, against local entrepreneur Oaknin, who previously operated a T-shirt kiosk near the ItSugar site at Broadway at the Beach.
ItSugar claims in court documents that Oaknin visited the Myrtle Beach ItSugar store on numerous occasions in the months before I Love Sugar opened. The national chain says Oaknin also tried to recruit employees of ItSugar to his store and contacted ItSugars vendors including candy wholesalers, design firms and marketers in an attempt to duplicate ItSugars concept.
He [Oaknin] told me he wanted his store to be as close as possible to ItSugar stores and asked me very specific questions concerning the items sold . . . to ItSugar stores, Randy Goldbaum, vice president of specialty confections for Nassau Candy of Hicksville, N.Y., said in an affidavit included with the lawsuit. Nassau Candy has been a longtime supplier for the ItSugar chain and Goldbaum said Oaknin contacted the company to also supply products for his store.
When I commented that the drawing of the I Love Sugar store looked a lot like the ItSugar stores, Mr. Oaknin replied that Imitation is the sincerest form of flattery and said Why reinvent the wheel?, Goldbaum said in the affidavit.
ItSugar hired a private investigator from Myrtle Beach to visit the I Love Sugar store when it opened on June 1, according to court documents. That investigator took photos at the I Love Sugar and ItSugar sites and then filed a report showing similarities between designs and marketing materials at both locations. Among the similarities, according to ItSugar: a lollipop swirl design on storefront signage; marketing posters showing mermaids in candy outfits; a wall display of various M&M candies; large photographs of young women holding, wearing or licking candy; and round tables featuring bulk candies.
Jeffrey Rubin, founder and chief executive of ItSugar, said in an affidavit that his company broke the mold in candy retailing by specifically marketing to customers in their teens and twenties when the majority of candy stores were featuring nostalgic or child-like themes.
ItSugar stores combine notions of optimism, indulgence, irreverence, spontaneity, boldness, energy, fashion, fantasy, pleasure, color and fun, Rubin said, adding that ItSugar presents a cool, cheeky attitude . . . that is unique among retail candy stores.
Its that alleged unique atmosphere that Rubin said he is trying to preserve by taking I Love Sugar to court. The lawsuit claims that ItSugars store at Broadway at the Beach is already feeling a negative impact from its Ocean Boulevard competitor -- sales prior to June 1 were clocking in at 3.2 percent higher than the same period a year ago while sales have dipped 11.5 percent year-over-year in the weeks since I Love Sugar opened. The Broadway at the Beach location is among the chains top performers, with sales of about $3 million projected for this year.
Worse than a drop in sales, Rubin said, is the notion that some tourists will leave Myrtle Beach confused over whether the I Love Sugar site is affiliated with the ItSugar chain.
I Love Sugar has seized control of ItSugar LLCs reputation, Rubin said in the affidavit.
Not everyone agrees with that. Oaknin said there are other chain stores -- such as Dylans Candy Bar in New York and Sugar Factory in Las Vegas -- that have concepts similiar to ItSugar and I Love Sugar.
Your client will have a very difficult time showing trademark infringement, Michigan lawyer Barry Kane wrote to ItSugars lawyers. Kane represents Blu Sol Design, which created shop displays and layouts for I Love Sugar. ItSugar named Blu Sol Design and MCoy Group LLC as defendants in the trademark infringement lawsuit over work they did for I Love Sugar. Both Blu Sol Design and MCoy Group previously did work for ItSugar.
Neither company has filed a formal response to the ItSugar lawsuit, although Ohio lawyer Gregory Hall -- who represents MCoy Group, which builds and installs fixtures for retail outlets -- said in a court filing that there is no basis to the trademark infringement claim.
The layout and fixtures being installed in I Love Sugar differ significantly from the design and fixtures of the ItSugar stores and, therefore, no confusion will be experienced by the general public as to the two separate companies, Hall wrote in a letter to ItSugars lawyers.
In addition to the trademark infringement claims, ItSugar is suing I Love Sugar under South Carolinas Unfair Trade Practices Act. ItSugar wants a jury trial and is asking for unspecified triple damages and costs.
Contact DAVID WREN at 626-0281.