Sardi's Restaurant Corp. v. Sardie

• Citation: 755 F.2d 719,226 USPQ 23
• Decision Date: 12 March 1985
• Docket Number: No. 84-5712,84-5712
• Parties: SARDI'S RESTAURANT CORPORATION, Sardi's Restaurant Services, Inc., and Vincent Sardi, Plaintiffs/Appellants, v. Lyle SARDIE and Western Pubs, Inc., Defendants/Appellees. C.A.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 719

755 F.2d 719

226 U.S.P.Q. 23

SARDI'S RESTAURANT CORPORATION, Sardi's Restaurant Services Inc., and Vincent Sardi, Plaintiffs/Appellants, v. Lyle SARDIE and Western Pubs, Inc., Defendants/Appellees.

C.A. No. 84-5712.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 7, 1985.

Decided March 12, 1985.

Ira M. Siegel, Blakely, Sokoloff, Taylor & Zafman, Beverly Hills, Cal., for plaintiffs/appellants.

John M. Carmack, Gill & Baldwin, Glendale, Cal., for defendants/appellees.

Appeal from the United States District Court for the Central District of California.

Before BOOCHEVER and BEEZER, Circuit Judges, and HARDY, ^* District Judge.

BEEZER, Circuit Judge:

The owner of "Sardi's" restaurant in New York City appeals a district court's refusal to issue a preliminary injunction against the use of the name "Sardie's" by a restaurant owner in Burbank, California. We affirm.

FACTS

The Sardi family has been operating "Sardi's" restaurant in the New York City theater district since 1921. Although "Sardi's" seldom advertises, it is often featured in television shows, movies and periodicals, and apparently has a national reputation, especially among actors. "Sardi's" is large and expensive, and caters to a diverse clientele that includes celebrities and tourists. Appellant Vincent Sardi, the current owner, has long considered opening a Los Angeles restaurant, but has no immediate or detailed plans for doing so. A stylized "Sardi's" service mark was registered with the U.S. Patent and Trademark Office on October 12, 1982.

In early 1983, Hank Berger and appellee Lyle Sardie formed a partnership to develop a small restaurant and singles bar called "Saints and Sinners" in Burbank, California. Appellee ordered a temporary banner with the words "Opening Soon, Saints and Sinners, a great New York style bar and grill." Shortly thereafter, the partnership was dissolved pursuant to an agreement that gave Berger the name "Saints and Sinners" and appellee the property. Lyle Sardie then decided to name his restaurant "Sardie's," and ordered the banner changed to reflect the new name. He did not order any change in the words "a great New York style bar and grill." The banner was hung on the fence surrounding the restaurant site until construction was completed and it was replaced by a permanent sign with the single word "Sardie's". "Sardie's" is now open for business and draws much of its clientele from a nearby television studio.

Appellant first heard of the Burbank restaurant when he was contacted by two different people seeking jobs there. He also testified that some Californians who maintained house accounts at the New York restaurant contacted him about the Burbank establishment. Appellant then filed this action, and simultaneously moved for a preliminary injunction.

At the injunction hearing, appellant's attorney presented four witnesses who testified that they thought the Burbank restaurant was connected in some way with the New York restaurant. In response to questions from the district judge, the two witnesses who had entered both establishments testified that they were not confused about any affiliation between them after seeing both. At the conclusion of testimony, the district judge expressly acknowledged that "the keystone to any trademark infringement action is likelihood of confusion and not actual confusion."

In a written order, the district court denied the motion for a preliminary injunction on the ground that the plaintiffs had not shown either a "realistic possibility of irreparable injury" or a "sharp balance of hardships in favor of plaintiffs." The judge relied in part on the differences between the two restaurants, both of which he had personally visited. The court described the New York establishment as "a very exclusive and expensive theater district restaurant, catering to a high class of patrons." It described the Burbank establishment as "a fairly typical Southern California neighborhood restaurant offering very moderately priced food and simple service." The court added:

Without at all denigrating the presentation of the [Burbank restaurant] or its food, service or patronage, it is possible to state as fact that no person even casually familiar with SARDI'S could confuse the two in any respect. The two establishments, being the distance of our continent apart, do not compete with one another geographically. The menus are totally different. The customers are from totally different socio-economic backgrounds. One is intimately identified with New York and its legitimate theater; the other is a neighborhood pub and diner. While hardly determinative of the central legal issues, it is not at all irrelevant that the record supports Mr. Sardie's claim that he has no intent to create confusion or to trade on plaintiffs' well earned reputation....

Simply put, the similarities between the two establishments are: (i) both serve food and beverages and (ii) the names above the respective doors surely do pass the idem sonans test. Those common factors are insufficient to establish likelihood of irreparable harm, much less sharp tilt in the balance of hardships. That conclusion might not come so readily if there were any real possibility that SARDI'S would establish a restaurant of the same name on the West Coast. Mr. Vincent Sardi ... testified that he has considered this for many years. In fact, however, he has not done so, and the problems encountered in such an effort are quite obvious to anyone knowledgeable in the restaurant business. He has no plans or program--however ephermeral--to do so, other than the basic idea. Were the same to fructify, the location would obviously be the exclusive Beverly Hills/Century City area--not Burbank.

The balance of hardships analysis is an easy call. The defendants have opened a neighborhood restaurant on a shoestring, at least from the standpoint of restaurant presentation and identity, and are trying to make a go of it. Plaintiffs operate a very exclusive and successful New York restaurant to which ordinary folk would not even gain admittance on short notice. Additionally, there is an appropriate judicial reluctance to preclude an individual's business use of his own surname when such is honest and straightforward, with no attempt to confuse the public....

In the court's opinion, the only conceivable possibility of confusion in this case would arise in the mind of a person who might assume that Vincent Sardi had indeed opened on the West Coast and, for whatever reason, chosen Burbank as the site of the event. However, that assumption would not survive more than a few minutes inside defendants' establishment. In order to minimize the risk of what the court views as a remote possibility of harm, the order denying preliminary injunctive relief will be conditioned upon a notice of distinctly modest size, at both front and rear entrances to "Sardie's," which will have the effect of disclaiming any connection with plaintiffs' restaurant.

Vincent Sardi appeals the decision.

ANALYSIS

A. Standard of Review

The grant or denial of a motion for a preliminary injunction lies within the discretion of the district court. Its order granting or denying the injunction will be reversed only if the district court abused its discretion.... A district judge may abuse his discretion in any of three ways: (1) he may apply incorrect substantive law or an incorrect preliminary injunction standard; (2) he may rest his decision to grant or deny a preliminary injunction on a clearly erroneous finding of fact that is material to the decision to grant or deny the injunction; or (3) he may apply an acceptable preliminary injunction standard in a manner that results in an abuse of discretion.

A district court's order is reversible for legal error if the court did not employ the appropriate legal standards which govern the issuance of a preliminary injunction, ... or if, in applying the appropriate standards, the court misapprehended the law with respect to the underlying issues in litigation....

Abuse of discretion may occur when the district court rests its decision to grant or deny a preliminary injunction on a clearly erroneous finding of fact.... A finding of fact is clearly erroneous when "the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."

* * *

In reviewing the district judge's application of a preliminary injunction test to the substantive legal area and the facts before him, we will not reverse the district court's order simply because we would have reached a different result. To determine whether there has been an abuse of discretion, we "must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... The [reviewing] court is not empowered to substitute its judgment for that of the [district court.]"

Zepeda v. United States Immigration & Naturalization Serv., 735 F.2d 719, at 724-725 (9th Cir.1985) (citations omitted). See also Apple Computer, Inc. v. Formula Int'l Inc., 725 F.2d 521, 523 (9th Cir.1984); William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 526 F.2d 86, 88 (9th Cir.1975).

B. Legal Standard

A plaintiff is entitled to a preliminary injunction in a trademark case when he demonstrates either (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in his favor. Apple Computer, 725 F.2d at 523; William Inglis, 526 F.2d at 86.

Appellant correctly asserts that "[i]n order to show a probability of success in the causes of action for trademark infringement, false designation of origin and unfair competition, Appellants need show that ... a likelihood of confusion exists." See 1 J. McCarthy, Trademarks and Unfair Competition Sec. 2:3...