540 F.2d 266 (7th Cir. 1976), 75-1992, James Burrough Ltd. v. Sign of Beefeater, Inc.

Docket Nº:75-1992.
Citation:540 F.2d 266
Party Name:192 U.S.P.Q. 555 JAMES BURROUGH LIMITED and Kobrand Corporation, Plaintiffs-Appellants, v. SIGN OF the BEEFEATER, INC., and Montgomery Ward & Co., Incorporated, Defendants-Appellees.
Case Date:July 27, 1976
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 266

540 F.2d 266 (7th Cir. 1976)

192 U.S.P.Q. 555

JAMES BURROUGH LIMITED and Kobrand Corporation, Plaintiffs-Appellants,

v.

SIGN OF the BEEFEATER, INC., and Montgomery Ward & Co.,

Incorporated, Defendants-Appellees.

No. 75-1992.

United States Court of Appeals, Seventh Circuit

July 27, 1976

Argued April 21, 1976.

As Amended Aug. 3, 1976.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Henry W. Lauterstein, New York City, W. Thomas Hofstetter, Chicago, Ill., for plaintiffs-appellants.

Robert F. Hanley, Chicago, Ill., Don K. Harness, Birmingham, Mich., for defendants-appellees.

Mark C. Curran, Chicago, Ill., for Montgomery Ward & Co.

Before FAIRCHILD, Chief Judge, MARKEY, Chief Judge, [*] and GRANT, Senior District Judge. [**]

MARKEY, Chief Judge.

This is an appeal from the ruling of the district court granting appellees' (Restaurant's) 1 motion for directed verdict under Fed.R.Civ.P. 41(b) grounded on appellants' (Distiller's) 2 failure to establish a right to relief. We reverse and remand.

Background

Distiller is the owner of three trademark registrations for gin, each alleging first use on November 11, 1909. The registrations are for the term "BEEFEATER"; 3 for the symbol of a Yeoman (English Tower of London guard); 4 and for the term and symbol in combination. 5 The latter trademark is:

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

During the period 1953 through 1974, Distiller's national retail sales, including those in restaurants, totaled nearly a billion dollars. From 1955 to 1974 Distiller's promotional expenditures, involving newspapers, magazines, and billboards, totaled nearly thirty-two million dollars.

Restaurant's predecessors, John F. Joliat and Robert E. LaJoie, commenced a restaurant operation in a suburb of Detroit, Michigan in 1957, adopting, with prior knowledge of Distiller's BEEFEATER mark, the notation SIGN OF THE BEEFEATER for their restaurant. As currently employed and as involved in this action, Restaurant's mark comprises the phrase SIGN OF THE BEEFEATER displayed in connection with the face of a fat hungry man. The man is shown as wearing a three-cornered hat, holding a knife and fork in his hands, and having a bib about his neck. The following is a typical outdoor sign employed by Restaurant.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

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In 1959 and 1960, Distiller objected to Joliat and LaJoie's use of BEEFEATER. 6 Ignoring Distiller's protests, Joliat and LaJoie opened a second restaurant in the Detroit metropolitan area in 1964, and a third in 1966. Also in 1966, Joliat and LaJoie filled an application 7 to register the notation SIGN OF THE BEEFEATER with the U.S. Patent and Trademark Office for restaurant services. Distiller opposed that application. 8

Distiller's opposition was based on the ground that SIGN OF THE BEEFEATER so resembled its registered trademark BEEFEATER as to be likely to cause confusion, mistake or deception. The Trademark Trial and Appeal Board (TTAB) of the Patent

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and Trademark Office dismissed that initial opposition, finding that Distiller was estopped from asserting likelihood of confusion because of laches and acquiescence. 15 U.S.C. § 1069. 9 Upon appeal, the Court of Customs and Patent Appeals (CCPA) reversed, pointing out that Distiller had never before had an opportunity to oppose Restaurant's application to register SIGN OF THE BEEFEATER, and remanded for consideration of the likelihood of confusion issue. 10 In 1972, the TTAB found that SIGN OF THE BEEFEATER so resembled Distiller's BEEFEATER trademark that confusion would be likely when the former was applied to restaurant services and sustained the opposition. 11 Restaurant did not appeal.

In February, 1972, Joliat and LaJoie assigned their rights in the contested mark to a corporation styled "Sign of the Beefeater, Inc." In the same year that corporation was, by mesne assignments, acquired by defendant Ward.

In 1973, Restaurant filed an application to register the mark involved in this action. Distiller's opposition 12 to that application has been suspended pending the outcome of this appeal.

Restaurant expanded its operations to the Chicago, Illinois metropolitan area in 1975. 13 Distiller filed a civil action in the U. S. District Court for the Northern District of Illinois, Eastern Division, alleging trademark infringement, unfair competition and trademark dilution. Specifically, Distiller alleged that use of the SIGN OF THE BEEFEATER sign in connection with restaurant services would be likely to cause confusion, mistake or deception, in view of Distillers long use of its BEEFEATER trademarks. Restaurant denied any likelihood of confusion, mistake or deception and affirmatively alleged laches and estoppel.

Upon completion of Distiller's case, Restaurant moved for a directed verdict under Fed.R.Civ.P. 41(b) for failure of Distiller to establish a right to relief. The District Court, indicating that it had taken detailed notes and that it considered the issues "not too complex," dispensed with oral argument from either side and retired to chambers to consider the motion. Returning to the bench, the court granted the motion, stating its findings and conclusions orally for the record. The findings and conclusions of the District Court material on this appeal are:

* * * I have before me the Sign of the Beefeaters sign which has been staring at me throughout the trial and for most of yesterday I stared at the Beefeater Gin bottle with the Yeoman of the Guard and the word Beefeater and the advertising and the various manifestations of Burrough's registered marks, and a comparison of those two is very easy and obvious to make just by looking at them.

* * * The (trademark) laws are drafted and are applied and must be interpreted by the Court in an economic context so that infringement is normally for business advantage and unfair competition and the concept of confusion is a legal concept as a legal concept relates to the confusion among consumers of business entities to the economic disadvantage of one, and I think the same general economic concepts are applicable to the legal concepts of dilution.

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* * * I suppose it would be fair to say that Beefeaters and the Yeomen together hae (sic) acquired a secondary meaning in the field of distillers competing for gin sales. It has not acquired a secondary meaning, however, outside the liquor industry.

The defendants, on the other hand, have opened and are expanding a chain of restaurants under the name Sign of the Beefeater and have a distinctive sign advertising, lighted sign outside the restaurants that contains a picture of an individual who does not bear any resemblance, I find, to the traditional London Beefeater who was on the bottle of gin.

That, of course, doesn't dispose of the case, but it seems to me that there is extremely remote possibilities that anyone seeing the Sign of the Beefeater outside of a restaurant would confuse it in any with the traditional mark or legend or Yeoman who appears in the Beefeater Gin advertising on bottles. The heart of the controversy, I suppose, lies in the word Beefeater itself and the relation that the public had to it.

The evidence, despite the considerable testimony, boils down to essentially what I could observe. I have seen the Sign of the Beefeater, I have studied the three registered marks, I have compared them, I have compared the testimony on the survey and I'd like to comment on that.

In response to the question, and I paraphrase because I don't remember exactly, who do you believe is sponsoring this restaurant, after the picture of the sign has been shown to the interviewee, 15 per cent of all the people questioned referred to Beefeater liquor in some way in their response and another seven and a half per cent associated the sponsoring organization with liquor of some type but not specifically with the Beefeater product. This result does not demonstrate to me any more than that a small percentage of the population thinks of Beefeater Gin when they see the word Beefeater or hear it in any context and it does not seem to me that there is a sufficient modicum of proof to demonstrate what the audit or survey was offered to demonstrate.

The question I have to decide is whether this survey rises to the dignity of evidence proving that the sign in question evoked a public response economically harmful to the plaintiff. I've already concluded that the sign of the Beefeater does not infringe upon the Burrough's registered trademark and I now conclude that despite the survey results the evidence demonstrates that the public cannot reasonably be deemed to be confused into believing that the plaintiff is a sponsor of or associated with the defendant's restaurant.

So, I find the Sign of the Beefeater sign that is the exhibit in evidence and the one used in front of all of the restaurants in substantially the same form, does not resemble the Burrough's label sufficiently to establish an infringement on that registered symbol; I find that the registered word Beefeater gives plaintiff an exclusivity in the use of that word limited in its application to alcoholic beverages; and the third registered mark, that of the Yeoman, I find that the defendant is not using a representation of the famous Yeoman or that human figure on the defendant's sign resembles in any way the Yeoman who has become associated in the public mind with Beefeater Gin. So the allegation of trademark infringement, unfair competition and dilution of the distinctive value of the plaintiff's trademark has not been sustained, the plaintiff has not made prima facie case in support of these contentions.

One, I find that trademark has not been infringed; two, that there is not a likelihood of confusion and therefore no unfair competition and that is that the Sign...

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