615 F.2d 252 (5th Cir. 1980), 79-3650, Amstar Corp. v. Domino's Pizza, Inc.

Docket Nº:79-3650.
Citation:615 F.2d 252
Party Name:205 U.S.P.Q. 969 AMSTAR CORPORATION, Plaintiff-Appellee, v. DOMINO'S PIZZA, INC. and Atlanta Pizza, Inc., Pizza Enterprises, Inc. and Pizza Services, Inc., Hanna Creative Enterprises, Inc., Defendants-Appellants.
Case Date:April 08, 1980
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 252

615 F.2d 252 (5th Cir. 1980)

205 U.S.P.Q. 969

AMSTAR CORPORATION, Plaintiff-Appellee,

v.

DOMINO'S PIZZA, INC. and Atlanta Pizza, Inc., Pizza

Enterprises, Inc. and Pizza Services, Inc., Hanna

Creative Enterprises, Inc., Defendants-Appellants.

No. 79-3650.

United States Court of Appeals, Fifth Circuit

April 8, 1980

Page 253

[Copyrighted Material Omitted]

Rehearing and Rehearing En Banc Denied May 2, 1980.

Page 254

Newton, Hopkins & Ormsby, Todd Deveau, William H. Needle, Atlanta, Ga., Beaman & Beaman, Jackson, Mich., George M. Hopkins, Atlanta, Ga., Miles J. Alexander, Jerre B. Swann, Virginia S. Taylor, Atlanta, Ga., for defendants-appellants.

Browne, Beveridge, DeGrandi, Kline & Lunsford, Julius R. Lunsford, Jr., J. Rodgers Lunsford, III, Atlanta, Ga., Cooper, Dunham, Clark, Griffin & Moran, Gerald W. Griffin, Norman H. Zivin, New York City, for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before AINSWORTH and HENDERSON, Circuit Judges, and HUNTER, [*] District Judge.

AINSWORTH, Circuit Judge:

Amstar Corporation brought this suit asserting trademark infringement and unfair competition against Domino's Pizza, Inc. (DPI) and several of its franchisees 1 to enjoin their use of Amstar's federal registration of the "Domino" trademark. The complaint is based on allegations that defendants' use of the mark "Domino's Pizza" in connection with the sale of fast-food delivered hot pizza pies constitutes trademark infringement and a false designation of origin or representation in violation of the Trademark Act of 1946, 15 U.S.C. § 1051 et seq.; 2 also that said use constitutes unfair competition in violation of the

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Georgia Uniform Deceptive Trade Practices Act, Ga.Code Ann. § 106-701 et seq., and dilutes the distinctive quality of plaintiff's mark "Domino" in violation of the Georgia anti-dilution statute, Ga.Code Ann. § 106-115. 3 Defendants denied that plaintiff was entitled to any equitable relief, asserted trademark misuse by plaintiff, and counterclaimed for cancellation of plaintiff's registration of the "Domino" mark for salt. 4 The district court ruled in favor of plaintiff, dismissed defendants' counterclaim, and permanently enjoined defendants' use of the names "Domino" or "Domino's Pizza." Defendants then filed this appeal. We reverse because we find that the district court's decision was fundamentally erroneous since it was predicated on a holding that there was a likelihood of confusion between the use of "Domino's Pizza" by defendants in connection with pizza store services and the use of "Domino" by plaintiff in connection with the sale of sugar and individual packets of condiment items.

I. Background of Dispute

Amstar Corporation holds several federal registrations for the widely known "Domino"

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trademark, 5 and the mark has been used since the turn of the century on plaintiff's various sugar products. Since 1965, plaintiff has also packaged single-serving (portion-control) envelopes of salt, pepper, sugar, mustard, ketchup, mayonnaise, jams and jellies, salad dressings, taco sauce, honey, cranberry sauce, tartar sauce and table syrup under the "Domino" mark. Plaintiff has spent more than $54 million since 1947 in advertising and promoting its "Domino" products, and as a result there is wide public recognition of the mark as a source of sugar products. Amstar's non-sugar, single-serving condiment packages introduced in 1965 have become the nation's largest line of portion-control items, with sales currently running at a rate of about $14 million per year.

Defendant DPI is the nation's largest chain of fast-food delivered pizza pie outlets, with 287 stores in 30 states and current sales exceeding $43 million annually. The chain has used the name "Domino's Pizza" since early in 1965. Prior to that date, the pizzeria from which the chain grew was known as "Dominick's," named after its founder, Dominick Devarti. Devarti sold his pizzeria located in Ypsilanti, Michigan to Thomas Monaghan in December of 1960. In 1963 Devarti withdrew his permission to use the name "Dominick's," and for an interim period Monaghan called the store "Ypsilanti Dominick's." During this period Monaghan searched for a suitable new name for his pizzeria. In 1965 an employee suggested the name "Domino's Pizza," and Monaghan adopted the name immediately. At trial, Monaghan stated that he selected the name because it sounded Italian, it resembled "Dominick's," and he was unaware of any other pizzerias using the name. The company initially prospered, and in 1967 the first "Domino's Pizza" franchise was sold. By the end of 1969, there were 42 "Domino's Pizza" stores in operation in three states.

The plaintiff first became aware of DPI on June 24, 1970 when defendants' "Domino's" and "Domino's plus design" marks were published in the Official Gazette of the Patent Office, pending registration of the marks by the U. S. Patent Office. Pursuant to 15 U.S.C. § 1063, plaintiff filed notices of opposition to registration of the marks. DPI at the time was in serious

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financial difficulty, and the oppositions were not answered. Registration of the marks was therefore refused by the Patent Office.

In early 1971 plaintiff's counsel wrote to DPI's predecessor, Domino's Inc., requesting that the "Domino's Pizza" mark be changed. Domino's Inc. did not respond to the letter, and plaintiff took no further action at that time. Plaintiff did, however, order credit reports on DPI for the next three years which were used in monitoring DPI's business.

In 1972 and 1974 DPI again sought to register the trademark "Domino's Pizza" with the U. S. Patent Office. The mark was passed for publication in the Official Gazette of the Patent Office on each occasion, signifying that an examiner of the office had concluded that the mark was entitled to registration, 15 U.S.C. § 1062(a). Plaintiff filed notices of opposition to each of the foregoing applications, and defendant withdrew each application. Plaintiff ultimately filed this suit against DPI in September 1975.

In a lengthy memorandum of Findings of Fact and Conclusions of Law, the district court held that the defendants were guilty of trademark infringement (15 U.S.C. § 1114(1)), false designation of origin (15 U.S.C. § 1125(a)), and dilution, unfair competition and deceptive trade practices under Georgia law. The court detailed at length the plaintiff's use of the "Domino" trademark in connection with sugar, and more recently with portion-control items. It found that "(c)onsumers are highly likely to associate any food products sold or available for sale in supermarkets, groceries or other food stores under the DOMINO mark with the DOMINO food products sold by plaintiff." Finding of Fact No. 31. It further concluded that "(a)s a result of plaintiff's widespread use, advertising and promotion of the DOMINO trademark on a great variety of food products, the consuming public is very likely to believe that DOMINO's Pizza, sold in a separate food store outside of the supermarket, is in some way or manner sponsored by or affiliated with, or connected with, or emanates from plaintiff." Finding of Fact No. 61. The court found that the mark "Domino's Pizza" is "so similar to plaintiff's famous mark DOMINO in sound and appearance that the public cannot always perceive any differences between them." Finding of Fact No. 63. The court concluded that, as a matter of law, "(u)se of virtually identical marks for food products distributed to and in food stores to the consuming public is likely to result in confusion, mistake or deception." Conclusion of Law No. 10.

On appeal, defendants contend the district court erred in concluding that use of virtually identical marks for food products is likely to result in confusion or deception, and defendants also contend that the court erred "by misapplying or failing to apply the critical factors to be weighed in assessing likelihood of confusion." Brief for Appellants at 10. Plaintiff Amstar contends that the court's finding of likelihood of confusion or mistake is not clearly erroneous, and must therefore be sustained by this court. Plaintiff contends that this finding is substantiated by many factors, including the notoriety and strength of the "Domino" mark, the confusing similarity of the marks "Domino's Pizza" and "Domino," the related nature of defendants' goods and services to those of plaintiff, the fact that customers for both plaintiff's and defendants' goods are the general consuming public, the existence of some actual confusion, and the results of two surveys which tend to confirm the likelihood of confusion.

Based on the record before us, we are convinced that the trial court erred in enjoining defendants' use of the mark "Domino's Pizza." We therefore reverse the decision of the district court, and vacate the injunction entered against defendants.

II. Standard of Review

Initially, we must determine the appropriate standard of review applicable to the district court's finding of likelihood of confusion. The determination as to whether confusion is likely has been held to present a question of law, Fleischman Distilling Corp. v. Maier Brewing Co., 314 F.2d

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149, 152 (9th Cir. 1963), cert. denied, 374 U.S. 830, 83 S.Ct. 1870, 10 L.Ed.2d 1053 (1963); a mixed question of law and fact, B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254, 1261 (5th Cir. 1971), and a question of fact, T.G.I. Fridays v. International Restaurant Group, Inc., 569 F.2d 895, 899 (5th Cir. 1978). This circuit has held that likelihood of confusion is a question of fact which can only be set aside if clearly erroneous. T.G.I. Fridays, supra ; Fed.R.Civ.P. 52(a). The record in the present...

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