Gilbert/Robinson, Inc. v. Carrie Beverage-Missouri, Inc.

• Citation: 758 F. Supp. 512
• Decision Date: 28 February 1991
• Docket Number: No. 85-2471 C (5).,85-2471 C (5).
• Parties: GILBERT/ROBINSON, INC., Plaintiff, v. CARRIE BEVERAGE-MISSOURI, INC., and Carrie Beverage, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

758 F. Supp. 512

GILBERT/ROBINSON, INC., Plaintiff, v. CARRIE BEVERAGE-MISSOURI, INC., and Carrie Beverage, Inc., Defendants.

No. 85-2471 C (5).

United States District Court, E.D. Missouri, E.D.

February 28, 1991.

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David C. Hilliard, John Bostjancich, Pattishall, McAuliffe & Hofstetter, Chicago, Ill., Thomas C. Walsh, St. Louis, Mo., for plaintiff.

Allan & Malone, James F. Malone, St. Louis, Mo., Rogers, Howell, Moore & Haferkamp, Richard E. Haferkamp, Clayton, Mo., for defendants.

MEMORANDUM

LIMBAUGH, District Judge.

Plaintiff Gilbert/Robinson, owner of HOULIHAN'S restaurants, initiated this action alleging service mark infringement, unfair competition and dilution based on defendants Carrie Beverage-Missouri, Inc. and Carrie Beverage Inc.'s (Carrie Beverage or defendants) use of the service mark MIKE HOULIHAN'S on their bars. Plaintiff's complaint was tried before this Court sitting without a jury and the Court, having considered the pleadings, the testimony of the witnesses, the documents in evidence and the stipulation of the parties, and being fully advised in the premises, hereby makes the following findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52.

I. FINDINGS OF FACT

Plaintiff Gilbert/Robinson, Inc. is a Delaware Corporation with its principal place of business in Kansas City, Missouri. Defendant Carrie Beverage-Missouri, Inc. is a Missouri corporation with its principal place of business in St. Louis, Missouri. Defendant Carrie Beverage, Inc. is a Wisconsin corporation with its principal place of business in Milwaukee, Wisconsin.

On October 16, 1985, plaintiff filed its complaint alleging service mark infringement, unfair competition and dilution. In its complaint, plaintiff alleged jurisdiction pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1338(a)-(b). Federal jurisdiction was predicated on plaintiff's claimed ownership of federal service mark registrations issued to plaintiff by the United States Patent and Trademark Office for the marks HOULIHAN'S OLD PLACE as Reg. No. 1,050,344 and HOULIHAN'S OLD PLACE with design as Reg. No. 1,130,582.

At the time of the filing of plaintiff's complaint Penn 4743 Corp. was a Missouri corporation in good standing. Penn 4743 Corp. owned and operated all of the HOULIHAN'S and HOULIHAN'S OLD PLACE restaurants in the State of Missouri at the time of the filing of plaintiff's complaint. Penn 4743 was a subsidiary corporation of plaintiff, and plaintiff owned 100% of Penn 4743's stock. Penn 4743 was not named as a party to this action.

Together with its federal claims brought under the Lanham Act, plaintiff also asserted actions for service mark infringement and dilution under § 417.005 and § 417.061, R.S.Mo., and for unfair competition under the common law of the State of Missouri.

In response to plaintiff's complaint, defendants filed an answer asserting various affirmative defenses, including an allegation that plaintiff had procured its federal service mark registrations by fraud upon the United States Patent and Trademark Office, and that plaintiff was fraudulently using the service mark HOULIHAN'S alone with an encircled "R", the statutory symbol of a federal registration, when it did not own a federal registration for that service mark.

Defendants also filed counterclaims against plaintiff, seeking to have plaintiff's service mark registrations cancelled. Further, defendants were seeking damages as a result of plaintiff's use of its alleged fraudulent federal registrations, plaintiff's alleged acts of unfair competition based on its use of fraudulent service mark registrations, and plaintiff's fraudulent use of the service mark HOULIHAN'S with an encircled "R."

In an order dated January 13, 1987, this Court bifurcated the action into two proceedings. Defendants' counterclaims were to be tried to a jury first. Then plaintiff's main claim was to be tried to the Court.

On September 25, 1987, a jury rendered a special verdict, finding that plaintiff's federal service mark registrations for HOULIHAN'S OLD PLACE and HOULIHAN'S OLD PLACE with design had been procured by fraud and that plaintiff's use of those registrations and its use of the service mark HOULIHAN'S with an encircled "R" constituted fraudulent acts of unfair competition against defendants and the consuming public. Pursuant to the jury's special verdict, this Court entered judgment in favor of defendant Carrie Beverage-Missouri, Inc. and against plaintiff in the amount of $100,000.00 in compensatory damages and $1 million in punitive damages. The Court further entered judgment in favor of defendant Carrie Beverage, Inc., and against plaintiff in the amount of $1 million in compensatory damages and $1 million in punitive damages for a total verdict of $3.1 million.

As a result of the jury's verdict, defendants moved for summary judgment based on plaintiff's unclean hands in asserting federal jurisdiction of its claims based on its fraudulent federal service mark registrations and because plaintiff had joined its Missouri state claims in the same action with plaintiff's fraudulent Lanham Act claims. This Court entered summary judgment on August 5, 1988 in favor of defendants and against plaintiff on plaintiff's Lanham Act claims on the basis of plaintiff's unclean hands. This Court, however, elected not to dismiss plaintiff's Missouri state law claims, retaining jurisdiction over those claims despite the fact that a federal claim no longer remained.

Immediately prior to the non-jury trial, defendants moved for summary judgment of the state law claims contending that the jury verdict collaterally estopped all issues raised in the non-jury trial. Particularly, the jury concluded in its verdict that defendants did not intentionally infringe on plaintiff's mark. The jury specifically found, by rejecting plaintiff's affirmative defense set out in Instruction 19, that defendants have not been aware of any likelihood of confusion caused by their use of MIKE HOULIHAN'S because of plaintiff's prior use of its HOULIHAN'S, HOULIHAN'S with design and HOULIHAN'S OLD PLACE marks. Defendants adopted their MIKE HOULIHAN'S mark without any intent or attempt to trade on any good will established by plaintiff in its mark HOULIHAN'S OLD PLACE or HOULIHAN'S. Thus, plaintiff's complaint of trademark infringement could not stand.

This Court denied defendants' motion for summary judgment because, as the law is clear, intent to infringe is not a necessary element of trademark infringement. It is but one element of the claim. Thus, even if defendants did not have the intent to infringe upon plaintiff's marks, defendants' use of the mark MIKE HOULIHAN'S still could have infringed upon those marks.

In April 1972, plaintiff began to use the service mark HOULIHAN'S OLD PLACE to identify its bar and restaurant located at 4743 Pennsylvania in Kansas City, Missouri. The concept enjoyed immediate success and another HOULIHAN'S OLD PLACE was opened in New Orleans in July 1973. A third establishment was opened under the same name in Atlanta, Georgia in December 1974, and a fourth in Des Peres, Missouri, a suburb of St. Louis, in March 1975.

Since April 1972, plaintiff has opened establishments under the name HOULIHAN'S or HOULIHAN'S OLD PLACE in 22 different states. Currently, these establishments number 55, including three in metropolitan St. Louis. There are also 10 franchise HOULIHAN'S locations in the United States. In approximately 1983, plaintiff discontinued the use of OLD PLACE in its signs and advertising for the company-owned HOULIHAN'S because the majority of its customers refer to the establishments simply as HOULIHAN'S.

HOULIHAN'S is a bar and restaurant establishment. They were designed to provide an atmosphere resembling an Irish pub and, to that end, all HOULIHAN'S establishments are decorated with a standard decor package which includes similar types of wood, brass, glass and decorative artifacts.

A significant portion of HOULIHAN'S revenues, and an even more significant portion of HOULIHAN'S profits, are derived from the sale of alcoholic beverages. Plaintiff presented evidence that approximately 36% of HOULIHAN'S gross sales, and approximately 50% of HOULIHAN'S net profits are produced by sales of alcoholic beverages.

Since 1972, plaintiff has spent nearly $27 million in advertising and promoting its HOULIHAN'S establishments nationwide and those establishments have yielded nationwide sales in excess of $1 billion during that time. Advertisements for HOULIHAN'S bars and restaurants have appeared on television, radio and in newspapers and magazines throughout the United States.

In 1982, defendant Carrie Beverage Incorporated opened a bar which it operates in the Grand Avenue shopping mall in downtown Milwaukee, Wisconsin under the service mark MIKE HOULIHAN'S. The names in the service mark MIKE HOULIHAN'S refer to Michael Heyer and John Houlihan, who are the sole shareholders of defendant Carrie Beverage, Inc. Defendant Carrie Beverage, Inc. registered its service mark MIKE HOULIHAN'S with the State of Wisconsin on October 4, 1982.

Plaintiff was aware of the existence of the MIKE HOULIHAN'S bar in Milwaukee, Wisconsin shortly after that bar opened in 1982, but, notwithstanding such knowledge, no action was immediately taken by any of plaintiff's employees or officers.

In mid-1984, defendants announced plans to open another MIKE HOULIHAN'S in Minneapolis, Minnesota. On learning of defendants' plans, plaintiff informed defendants of plaintiff's rights in the HOULIHAN'S marks and demanded that defendants change their mark. Defendants nevertheless opened a MIKE HOULIHAN'S in Minneapolis, Minnesota in the fall of 1984. However, the bar failed within a year.

In early August 1985, defendant Carrie Beverage-Missouri opened a bar in the St. Louis Centre...