Texas Pig Stands, Inc. v. Hard Rock Cafe Intern., Inc.

• Decision Date: 29 January 1992
• Docket Number: 91-5510,Nos. 90-5567,s. 90-5567
• Citation: 951 F.2d 684
• Parties: TEXAS PIG STANDS, INC., Plaintiff-Appellant-Cross-Appellee, v. HARD ROCK CAFE INTERNATIONAL, INC., Defendant-Appellee-Cross-Appellant. TEXAS PIG STANDS, INC., Plaintiff-Appellee, v. HARD ROCK CAFE INTERNATIONAL, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 684

951 F.2d 684

21 U.S.P.Q.2d 1641

TEXAS PIG STANDS, INC., Plaintiff-Appellant-Cross-Appellee, v. HARD ROCK CAFE INTERNATIONAL, INC.,

Defendant-Appellee-Cross-Appellant.

TEXAS PIG STANDS, INC., Plaintiff-Appellee, v. HARD ROCK CAFE INTERNATIONAL, INC., Defendant-Appellant.

Nos. 90-5567, 91-5510.

United States Court of Appeals Fifth Circuit.

Jan. 29, 1992.

William G. Barber, Louis T. Pirkey, William D. Raman, Arnold, White & Durkee, Austin, Tex., Hull Youngblood, Small, Craig & Werkenthin, San Antonio, Tex., for plaintiff-appellant-cross-appellee.

Ted D. Lee, Mark H. Miller, Gunn, Lee & Jackson, Frederick C. Shannon, Jr., Shannon & Weidenbach, San Antonio, Tex., Ralph W. Kalish, Jr., Peter S. Gilster, Donald J. Fitzpatrick, Ralph W. Kalish, Kalish & Gilster, St. Louis, Mo., for defendant-appellee-cross-appellant.

Appeals from the United States District Court for the Western District of Texas.

Before BROWN, JOHNSON, and BARKSDALE, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

We traverse the barbecue heartland of the South to resolve this trademark dispute between Texas Pig Stands, Inc. (TPS), and Hard Rock Cafe International, Inc. ("Hard Rock" or "Hard Rock Cafe"). The controversy centers around the two restaurant chains' use of the term "pig sandwich" to describe a Tennessee dish of barbecued pig meat on wheat or white bun. TPS owns a registration on the term and brought suit contending that Hard Rock's use of it in its Dallas restaurant constituted an infringement on TPS' rights to the two-word title. TPS sought equitable relief and attorney's fees.

At the trial below, the jury agreed with TPS that Hard Rock was guilty of deliberate infringement on TPS' mark, which it determined was capable of registration, and concluded also that TPS could recover for Hard Rock's unjust enrichment. The trial court accepted the jury finding of infringement but reversed its finding of unjust enrichment, essentially granting a j.n.o.v. Consequently, the court refused to award TPS the profits Hard Rock gained from pushing the porcine fare under the "pig sandwich" moniker. Finally, the trial court awarded TPS attorney's fees. Both parties appealed to this Court.

We affirm the trial court's holding that the term "pig sandwich" is protectable and capable of registration. We also affirm the court's reversal of the jury finding of unjust enrichment. Finally, we conclude that the court abused its discretion in awarding TPS attorney's fees for bringing this litigation.

This Little Piggy Went to Market

The pig sandwich's long and illustrious career has its origins in the hills of western Tennessee. The porcine delicacy has endeared itself to the hearts and stomachs of the citizenry there since the turn of the century. The founder of the Hard Rock Cafe, Isaac Tigrett, grew up in this area, and Jesse Kirby, one of the founders of the predecessor company to TPS, traveled extensively in the heartland of pig sandwiches in the early 1920's. Both men were apparently inspired by the dish's popularity and eventually included the garnished barbecued pork sandwich in their menus.

TPS' predecessor, Pig Stands Company, Inc. (Pig Stands), opened its very first "Pig Stand" in Dallas on September 15, 1921, which quickly enjoyed great success. In the early years of its operation, Pig Stands was in veritable hog-heaven, with over one hundred Pig Stands opening up from California to New York. The entire time, the term "pig sandwich" was used to describe its barbecued pork sandwich. The term had also become part of its distinctive sign, ¹ menus, and promotional advertising items.

Alas, however, the nation's love affair with pig sandwiches eventually chilled, resulting in the widespread closing of most Pig Stands. The last Pig Stand in Dallas closed in September, 1985, and currently less than ten Pig Stands still operate in Texas. ²

Tigrett first offered a barbecued pork sandwich with the name "pig sandwich" at the Hard Rock Cafe restaurant he opened in Jackson, Tennessee, in 1982. Tigrett later introduced the pig sandwich to New York and Stockholm, Sweden, when he opened Hard Rock Cafe restaurants in those cities. Then, in November 1986, just over a year after TPS closed its last Stand in Dallas, Tigrett opened up a Hard Rock Cafe restaurant there, featuring the pig sandwich on its menu.

This Little Piggy Went to See His Lawyer

TPS notified Hard Rock in writing on October 20, 1987, of TPS' claim to rights to the term "pig sandwich" and demanded that Hard Rock cease its infringement. Hard Rock contends that at the time it did not know that TPS even existed, much less that it claimed any rights to the term "pig sandwich." Believing that it had the right to use the term "pig sandwich" as the generic name for its barbecued pork sandwich, Hard Rock refused to cease using it and instead chose to stay in its house and let TPS try to blow it down. Whether Hard Rock's legal edifice is made of brick, twigs, or straw remains to be seen.

TPS commenced this action against Hard Rock in 1989 claiming trademark and service mark infringement and unfair competition under the Lanham Act. ³ In its complaint, TPS requested a permanent injunction against Hard Rock's use of the term "pig sandwich," as well as an award of Hard Rock's profits, reasonable attorney's fees, prejudgment interest, and costs. The case was tried to a jury on nine special issues. ⁴ The jury found in favor of TPS on each issue, concluding both that Hard Rock's infringement was willful and that Hard Rock was unjustly enriched by its infringement.

The trial court conducted a post-trial hearing to consider the amount of Hard Rock's profits and the question whether TPS should be awarded attorney's fees. While the trial court found that Hard Rock profited from its sale of pig sandwiches, it refused to award any profits to TPS, stating that it was "convinced that [Hard Rock] would have sold just as many pig sandwiches by any other name." Further, the trial court asserted that "[t]he jury's finding of unjust enrichment is not supported by the record and cannot stand." The trial court then granted the sought-for injunction and, in a subsequent damages hearing, awarded attorney's fees and costs in excess of $400,000.

Neither party was pleased with this decision, and a flurry of appeals and cross appeals ensued. TPS contests the trial court's refusal to award profits in accordance with the jury's finding of unjust enrichment. Hard Rock returns the volley, contending that: (1) the trial court erred by excluding evidence and expert testimony regarding a prior court decision dealing with Pig Stands's use of "pig sandwich"; (2) this prior decision collaterally estops TPS' claim to exclusive rights to the contested term; (3) there was insufficient evidence to support the jury finding that "pig sandwich," standing alone, is a protectable mark, and that the trial court erred (4) in not cancelling TPS' registration for "pig sandwich," and (5) in awarding attorney's fees to TPS.

Piggish Stands

Before we rush higgledy-piggledy into the questions which arise out of the trial court's damages hearing, we turn to the parties' assessments of the case's underlying merits.

Hard Rock first takes issue with the trial court's exclusion of evidence and testimony regarding Dixiepig Corp. v. Pig Stand Co., 31 S.W.2d 325 (Tex.Civ.App.1930). In that case, Pig Stands, TPS' predecessor, brought suit against Dixiepig Corporation to enjoin Dixiepig from using "pig sandwich," "Dixiepig Sandwich," or similar terms which Pig Stands argued constituted an infringement on its trademark. The fact that Dixiepig used these terms in the 1920's refutes the testimony of TPS' expert witness, Julius Lunsford, that there were "only two other entities in Texas that have used pig sandwich and both of them are far subsequent to the first use of the registrant in this case." When questioned in the absence of the jury about the Dixiepig case, Lunsford contradicted his testimony, admitting that others did use "pig sandwich" prior to TPS' predecessor.

The trial court did not permit Hard Rock to inform the jury either of Lunsford's contradictory admissions or of the facts and disposition of Dixiepig. Instead, the trial court permitted Hard Rock to read testimony from the Dixiepig transcript into the record. This was not in error. Whether a third party did indeed use the term "pig sandwich" prior to its registration by Pig Stands is insignificant under the circumstances. The term "pig sandwich" had become incontestable under 15 U.S.C. § 1065 (Supp.1990), ⁵ and thus such prior use may affect the mark's incontestability only if the third party used the mark prior to its registration by Pig Stands and has continued to use it since that time. See Casual Corner Assocs., Inc. v. Casual Stores of Nevada, Inc., 493 F.2d 709 (9th Cir.1974). No such continuing use has been alleged. Once a mark has become incontestable under § 1065, the registration constitutes "conclusive evidence" of the registrant's right to use the mark, "subject only to the seven defenses enumerated in 15 U.S.C. § 1115(b)." ⁶ Soweco, 617 F.2d at 1184. Prior use by a third party that does not continuously extend up until the time of trial does not fall within one of the enumerated defenses. Allowing the introduction of the Dixiepig opinion for the purpose of refuting Lunsford's testimony, therefore, would not have served any legitimate purpose but would only have confused the jury. Indeed, the trial court gave Hard Rock considerable leeway in allowing it to read testimony from the Dixiepig transcript into the record over TPS' objections. ⁷

Collateral Estoppel--Does the Pork Stop Here?

In contrast, Hard Rock argues that Dixiepig goes beyond mere similarity. Hard Rock argues that the issues there and here are identical, and thus Dixiepig should collaterally estop TPS from claiming that "pig sandwich" is an incontestable mark. Again, we disagree. Hard Rock bases its...