Anheuser-Busch, Inc. v. AB Distributors, Inc.

• Decision Date: 17 November 1995
• Docket Number: No. 95-241-Civ-J-20.,95-241-Civ-J-20.
• Citation: 910 F. Supp. 587
• Parties: ANHEUSER-BUSCH, INC., Plaintiff, v. A-B DISTRIBUTORS, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

910 F. Supp. 587

ANHEUSER-BUSCH, INC., Plaintiff, v. A-B DISTRIBUTORS, INC., Defendant.

No. 95-241-Civ-J-20.

United States District Court, M.D. Florida, Jacksonville Division.

November 17, 1995.

COPYRIGHT MATERIAL OMITTED

George E. Schulz, Jr., Christopher J. Greene, Holland & Knight, Jacksonville, FL, Peter E. Moll, John J. Rosenthal, Carmine R. Zarlenga, Howrey & Simon, Washington, DC, for plaintiff Anheuser-Busch, Inc.

Stephen D. Busey, James J. Taylor, Jr., Smith, Hulsey & Busey, Jacksonville, FL, Charles Cook Howell, III, Howell, O'Neal & Johnson, Jacksonville, FL, for defendant A-B Distributors, Inc.

Gregory L. Scott, Nason, Gildan, Yeager, Gerson & White, P.A., West Palm Beach, FL, for movant Tonet Company, Inc.

ORDER

SCHLESINGER, District Judge.

Before the Court is Motion of Plaintiff Anheuser-Busch, Inc. for Preliminary and Permanent Injunction to Stop Defendant's Post-Termination Use of Anheuser-Busch Trademarks (Doc. No. 94, filed September 29, 1995). Defendants' Responsive Brief in Opposition to Motion for Preliminary Injunction (Doc. No. 106) was filed October 16, 1995. A Preliminary Injunction Hearing was held before the undersigned on October 20, 1995.

A preliminary injunction is an "extraordinary and drastic remedy" and should not be granted unless the movant meets its burden of persuasion with respect to each of the following prerequisites: (1) a substantial likelihood of success by the movant on the merits; (2) that the movant will suffer irreparable harm unless the injunction issues; (3) that the threatened injury to the movant outweighs any threatened harm the injunction may cause the opposing party; and (4) that the injunction, if issued, "will not disserve the public interest." Bryan v. Hall Chemical Co., 993 F.2d 831, 835 (11th Cir. 1993) (citing United States v. Jefferson County, 720 F.2d 1511, 1519 (11th Cir.1983)).

Plaintiff, Anheuser-Busch, Inc. (Anheuser-Busch), has brought this against Defendant, A-B Distributors, Inc. (A-B Distributors), for federal and state trademark infringement and unfair trade practices, in violation of the Trademark Act of 1946 (commonly known as the Lanham Act), 15 U.S.C. § 1051 et seq., specifically §§ 32(1) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114(1), 1125(a), Florida's anti-dilution statute, Fla.Stat. § 495.151, and Florida's deceptive and unfair trade practices act, Fla.Stat. § 501.201; and for breach of the agreement between the parties and of the implied covenant of good faith and fair dealing.¹

For more than 35 years, until July 24, 1995, A-B Distributors was the exclusive authorized Anheuser-Busch wholesaler for the Jacksonville/Lake City, Florida areas. The relationship between the parties was governed by a written contract, the Anheuser-Busch, Inc. Wholesaler Equity Agreement (Equity Agreement).² On March 31, 1995, Anheuser-Busch notified A-B Distributors that it was terminating the Equity Agreement for engaging in fraudulent conduct. Plaintiff alleged that Defendant was fabricating and falsifying records of sales calls, misrepresenting the accuracy and authenticity of its records to Anheuser-Busch, and repackaging and selling overage Anheuser-Busch beer as fresh beer. The termination was effective on July 24, 1995, following this Court's denial of Defendant's second request for a preliminary injunction for failure to establish that it had a substantial likelihood of prevailing on the merits of either Plaintiff's Complaint or on its Counterclaim (Doc. No. 59, dated July 24, 1995). Defendant stopped selling and distributing Anheuser-Busch products at that time.

Plaintiff seeks a preliminary and permanent injunction enjoining A-B Distributors from: (1) displaying any of Anheuser-Busch's trademarks; (2) using the trademark "A-B" in connection with the name of its business; and (3) representing to any person that it is associated with Anheuser-Busch. Motion of Plaintiff for Preliminary and Permanent Injunction (Doc. No. 94) at 2. The specific objects of the requested injunctive relief concern: (1) a billboard located in a local minor-league baseball stadium on which the name "A-B Distributors" is printed along with one of Plaintiff's beer trademarks, Budweiser; (2) forty-plus beer trucks with Anheuser-Busch trademarks on the trailers, which are parked in the now-idle A-B Distributors warehouse; and (3) the use of "A-B" in Defendant's corporate name, A-B Distributors, Inc. At the hearing held on October 20, 1995, the parties stipulated that the stadium sign has been removed; thus, it is not at issue. It is undisputed that Plaintiff owns the trademarks "Budweiser," "Michelob," "Busch," "Bud Light," and "A B" (the latter trademark does not have a hyphen; however, there is a space between the two initials).

To determine the likelihood of success on the merits, the court looks to the standards proscribed by substantive law.

I. The Equity Agreement

Plaintiff contends that Defendant's right to use Plaintiff's trademarks ceased upon termination of the Equity Agreement, and that its continued use of the "A-B" name and display of Plaintiff's logos on its trucks is a breach of that agreement. Section 9, entitled "Trademarks of Anheuser-Busch," provides, in pertinent part:

Wholesaler is hereby granted a limited, nonassignable and nontransferable right to use Anheuser-Busch's trademarks and trade names in distributing, advertising and promoting the sale of the Products, but only in accordance with Anheuser-Busch's policies regarding the use of its trademarks and trade names. The right conferred herein shall cease and terminate upon termination of this Agreement.

Anheuser-Busch's trademarks and trade names, however, shall remain the sole and exclusive property of Anheuser-Busch. Anheuser-Busch reserves all rights including the right to license the use of its trade names, designs, brand names, labels, and promotional slogans or trademarks on merchandise, goods, items or services, including but not limited to the Products sold and distributed hereunder.

It is specifically agreed that the Wholesaler, prior to leasing, selling or otherwise transferring to another or putting to a use other than that originally intended any vehicles, warehouse facilities, equipment, office supplies or other property having had affixed temporarily or permanently trademarks or trade names of Anheuser-Busch, shall remove, obliterate or eliminate said trademarks or trade names.

Emphasis added.

Plaintiff is correct that Defendant's right to use Anheuser-Busch's trademarks and trade names in distributing, advertising and promoting the sale of Anheuser-Busch beer was terminated upon termination of the Equity Agreement. It is uncontested that A-B Distributors is no longer distributing, advertising, or promoting the sale of Plaintiff's (or anyone else's) beer. The use of the A-B name, therefore, does not violate the Equity Agreement, since that name is not being used in the beer market.

Likewise, since the parked trucks with Plaintiff's logos are not being leased, sold or otherwise transferred to another or putting to a use other than that originally intended (to distribute Plaintiff's beer), there is no contract violation. It is clear that unless Defendant sells or otherwise disposes of the trucks, it is not required by the Equity Agreement to remove the trademarks or trade names.

II. The Lanham Act

Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), provides, in relevant part, a cause of action to a registrant against:

(1) Any person who shall, without the consent of the registrant—

(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive....

Emphasis added.

To establish a claim for trademark infringement, a plaintiff must show: (1) its mark was used in commerce by the defendant without the registrant's consent, and (2) the unauthorized use of the trademark was likely to cause confusion or mistake among the relevant public. Burger King Corp. v. Mason, 710 F.2d 1480, 1491 (11th Cir.1983), cert. denied, 465 U.S. 1102, 104 S.Ct. 1599, 80 L.Ed.2d 130 (1984). See also Contemporary Restaurant Concepts, Ltd. v. Las Tapas-Jacksonville, Inc.; 753 F.Supp. 1560, 1563 (M.D.Fla.1991); Varitronics Systems, Inc. v. Merlin Equipment, Inc., 682 F.Supp. 1203, 1206 (S.D.Fla.1988). The court must consider the likelihood of confusion from the standpoint of the typical buyer of the product, in this case, retail customers of Anheuser-Busch in the Jacksonville/Lake City market. Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 389 (5th Cir. 1977).

Plaintiff contends that Defendant's unauthorized use of Anheuser-Busch's trademarks on its trucks and in its corporate name misleads the public into believing that it and its goods and services are approved by, or affiliated with, Anheuser-Busch. As indicated, the only relevant "public" in this case are retail customers who sell Plaintiff's beer, who formerly were serviced by A-B Distributors.

It is undisputed that Plaintiff has valid registrations for the trademarks printed on the trucks parked outside Defendant's former beer distribution warehouse. Nonetheless, Plaintiff has not shown a likelihood of success on the merits of a trademark infringement violation with respect to the trucks parked at Defendant's warehouse because they are not "in use." The warehouse solely was used for Defendant's beer distribution business and is now idle. There is no violation of the Lanham Act because the trucks are not "used in commerce" or "in connection with the sale, distribution, or advertising" of Plaintiff's products. The Court need not reach the issue of whether Defendant's use of Plaintiff's trademarks causes a likelihood of confusion among retailers of Anheuser-Busch...