Holiday Inns, Inc. v. Holiday Out in America

• Decision Date: 11 July 1973
• Docket Number: No. 72-2830.,72-2830.
• Citation: 481 F.2d 445
• Parties: HOLIDAY INNS, INC., Plaintiff-Appellant, v. HOLIDAY OUT IN AMERICA and Holiday Out in America at St. Lucie, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

481 F.2d 445 (1973)

HOLIDAY INNS, INC., Plaintiff-Appellant, v. HOLIDAY OUT IN AMERICA and Holiday Out in America at St. Lucie, Inc., Defendants-Appellees.

No. 72-2830.

United States Court of Appeals, Fifth Circuit.

June 13, 1973.

Rehearing Denied July 11, 1973.

James L. Kurtz, Washington, D. C., Richard A. Zachar, Chicago, Ill., Theodore P. Mavrick, Fort Lauderdale, Fla., James B. St. John, Jr., Liskow & Lewis, New Orleans, La., for plaintiff-appellant.

Karl Vance Hart, Miami, Fla., Robert S. Swecker, Washington, D. C., for defendants-appellees.

Before COLEMAN and DYER, Circuit Judges, and ESTES, District Judge.

ESTES, District Judge:

Plaintiff, Holiday Inns, Inc. (hereinafter Holiday Inn), seeks damages and injunctive relief against the defendants, Holiday Out in America and Holiday Out in America at St. Lucie, Inc., for using the service marks Holiday Out, Holiday Out in America, and The Nation's Campground in connection with their campground services business.

Holiday Inn has an international reputation for operating a chain of uniformly high-quality motels, of which it owns approximately one-fifth, with the remainder operating under franchise agreements. Plaintiff owns the following registered service marks, which are used in connection with its motel services: Holiday Inn (arcuate script), Holiday Inn (linear script), a design for a distinctive "Great Sign" bearing the name "Holiday Inn" in script, Holiday Inn of America, Holiday Inns of America, and The Nation's Innkeeper. Plaintiff carefully supervises the use of its service marks by the facilities within its chain. Plaintiff and its franchisees have extensively advertised their motel facilities on radio and television and in newspapers and magazines. In 1970 (more than three years after defendants' first use of their own marks), plaintiff expanded into the business of owning and franchising campground facilities, using the service mark Holiday Inn Trav-L-Park.

Defendant Holiday Out in America is a partnership consisting of Hazen H. Kreis and Robert A. Epperson. Defendant Holiday Out in America at St. Lucie, Inc., is a corporation initially organized by Kreis and Epperson. Defendants built and operate campground facilities at Tansi, Tennessee, and at St. Lucie, Florida. These facilities are divided into small lots, containing parking slabs and connections for electricity, water, and sewage. The defendants sell the lots on a condominium basis and serve as rental agents for the lot owners desiring to rent their lots to transients. Defendants' facilities accommodate persons having travel trailers or recreational vehicles; they provide no motel accommodations. Since 1966, defendants have used the marks Holiday Out and Holiday Out in America. During 1967, defendants also used the mark The Nation's Campground, the use of which was then terminated.

On January 23, 1967, Holiday Out in America filed an application in the United States Patent Office for registration of its mark Holiday Out for services described as "maintaining and operating campground facilities for campsite owners." The examiner found there was no likelihood of confusion between the mark Holiday Out and any other registered mark. The mark was then published in the official Gazette for the purpose of opposition. Holiday Inn filed an opposition to the registration on July 23, 1968. The marks Holiday Inn of America and Holiday Inns of America were not registered in the Patent Office until June 25, 1968, almost two years after defendants' first use of Holiday Out. The Trademark Trial and Appeal Board dismissed the opposition because the contemporaneous use of plaintiff's marks and defendants' mark "is not reasonably calculated to cause confusion or mistake or to deceive."

Pursuant to 15 U.S.C. § 1071(b)(1), by this civil action filed in the district court, plaintiff sought review of the Trademark Trial and Appeal Board's decision. Plaintiff also claimed service mark infringement, unfair competition, deceptive trade practices, injury to its business reputation, and dilution of its marks. After hearing the evidence, the trial court found there was no likelihood of confusion, mistake, deception, "palming off" of plaintiff's established reputation, or dilution of its marks. The court upheld the Trademark Trial and Appeal Board's decision which dismissed plaintiff's opposition to defendants' registration of Holiday Out and denied any relief to the plaintiff on its other claims. We agree.

The central issue regarding plaintiff's trademark infringement claim is whether the marks used by the defendants cause the likelihood of confusion or misunderstanding as to the source of defendants' services. See B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d 1254 (5 Cir. 1971); Sears, Roebuck and Co. v. Johnson, 219 F.2d 590 (3 Cir. 1955). Likelihood of confusion or misunderstanding is a question of fact. Hence, the trial court's findings will not be set aside unless clearly erroneous. Rule 52(a) F.R.Civ.P.; John R. Thompson Co. v. Holloway, 366 F.2d 108 (5 Cir. 1966); Sun-Maid Raisin Growers of California v. Sunaid Food Products, Inc., 356 F.2d 467 (5 Cir. 1966).

Plaintiff's evidence to show the likelihood of confusion or misunderstanding begins with a comparison of the three marks Holiday Out, Holiday Out in America, and The Nation's Campground used by the defendants with three of its own service marks, Holiday Inn, Holiday Inn of America, and The Nation's Innkeeper. Other evidence introduced by plaintiff included nine letters and a memorandum of a telephone call¹ purporting to evidence actual confusion, the results of a survey, and the video deposition of an expert philologist and lexicographer. The trial judge considered all of this evidence but concluded it merited little weight. Plaintiff contends that a proper analysis of this evidence required a finding of infringement.

The results of the survey conducted for Holiday Inn were admitted to show the state of mind of people when shown a placard bearing the words "Holiday Out." Although this circuit once held evidence of a poll to be inadmissible as hearsay, Sears, Roebuck & Co. v. All States Life Insurance Co., 246 F.2d 161 (5 Cir. 1957), the district court properly admitted the survey evidence in this case, leaving the format of the questions and the manner of conducting the survey for consideration as to the weight of this evidence. See Zippo Mfg. Co. v. Rogers Imports, Inc., 216 F.Supp. 670 (S.D.N.Y.1963)²; Manual for Complex Litigation, §§ 2.71 and 2.712; and Vandenburgh, Trademark Law and Procedure, § 5.52 (2 ed. 1968). In this case the trial court found that the survey degenerated into a mere word-association test entitled to little weight because the format failed to account for the number of responses attributable to use of the word "Holiday" as distinguished from the service mark Holiday Out.

Plaintiff admits that the word "Holiday" is used, alone or in combination with words other than "Inn," throughout the United States, including the states of Tennessee and Florida, to designate motels and restaurants not affiliated in any way with plaintiff. The common word "Holiday" is of weak trademark significance. E. g., El Chico, Inc. v. El Chico Cafe, 214 F.2d 721, 725 (5 Cir. 1954). Indeed, in a footnote in its opinion denying Holiday Inn's opposition, the Trademark Trial and Appeal Board noted that in a civil action against plaintiff's use of Holiday Inn by the owner of the service mark Holiday Motor Hotels, Holiday Inn defended that suit "on the ground that `Holiday is a common word and it has been and is widely used by others' for motel services."

However, due to plaintiff's extensive advertising and its success in developing a large chain of motels throughout the United States, it is likely that many persons asked to associate a business organization with the word "Holiday" would think of "Holiday Inn." We agree with the trial court that the failure of the survey to consider the effect that the word "Holiday" alone had on the responses and the techniques employed in conducting the survey rendered this evidence of slight weight. For a similar situation, see Miles Laboratories, Inc. v. Frolich, 195 F.Supp. 256 (S.D.Cal.), aff'd, 296 F.2d 740 (9 Cir. 1961), cert. denied, 369 U.S. 865, 82 S.Ct. 1030, 8 L. Ed.2d 84 (1962).

Plaintiff relies heavily upon the testimony of a noted lexicographer that the words "in" and "out" are intertwined in their meanings, so that one is normally defined with respect to the other. The contention is that a person seeing or hearing the word "out" will echo in his mind the word "in," which is pronounced the same as "inn." Thus, it is asserted that a person seeing the words "Holiday Out" would think of the words "Holiday Inn." However, the lexicographer's testimony clearly shows that the context of words must be considered and that the word "out" would not necessarily evoke the word "in" except in certain contexts. The trial court correctly found that the manner of...