Law360.com reports that Dunkin’ Donuts Franchised Restaurants LLC and Baskin-Robbins Franchised Shops LLC have agreed to drop their suit accusing three New York City franchisees of unlawfully using the chains’ trademarks after their franchise agreements had been terminated, now that the defendants have pledged to sell their franchises.

The doughnut and ice cream chains submitted their notice of dismissal with prejudice on Monday in the U.S. District Court for the Eastern District of New York, adding that voluntary dismissal was appropriate because none of the defendants had served an answer or motion for summary judgment in the case.
The dismissal comes nearly two months after Dunkin’ Donuts and Baskin-Robbins notified the court in a Jan. 28 letter requesting the adjournment of an initial pretrial conference that “the parties have reached an informal settlement agreement, pursuant to which defendants will be selling their Dunkin’ Donuts and Baskin-Robbins franchises.”

The closing was scheduled to take place on Feb. 5, but was delayed until the end of February, according to the plaintiffs’ Feb. 5 letter asking the court to keep the case open so that they could continue to prosecute the suit if the closing could not be finalized.

Magistrate Judge Robert M. Levy rescheduled the initial pretrial conference for March 24, but the plaintiffs instead dropped their case Monday.
Dunkin’ Donuts spokesman Andrew Mastrangelo confirmed on Tuesday that the company decided to drop the suit after the defendants voluntarily sold their stores to pay off their outstanding debt.

The stores have been transferred to other franchisees, and the company was pleased with the resolution, Mastrangelo added.
Representatives for the three franchises could not be immediately reached for comment Tuesday.

The fast food chains originally lodged their suit on Aug. 19, accusing Brooklyn-based Church’s Donuts and Candys Inc., Brooklyn-based Kings Donuts and IceCream Inc. and Queens-based Corona Donuts and Ice Cream Inc. along with their guarantees Shiraz Sutar, Harish Shadadpuri and Sunil Dudani of defaulting on their franchise agreements by failing to pay certain fees and infringing the companies’ trademarks by failing to evacuate their combination Dunkin’ Donuts and Baskin-Robbins locations following the termination of these contracts.

The case is Dunkin’ Donuts Franchised Restaurants LLC et al. v. Church Donuts and Candys Inc. et al., case number 09-cv-03599, in the U.S. District Court for the Eastern District of New York.

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