Janet Travis, Inc. v. Preka Holdings, LLC.

• Decision Date: 31 July 2014
• Docket Number: Docket No. 315560.
• Citation: 856 N.W.2d 206,306 Mich.App. 266
• Parties: JANET TRAVIS, INC v. PREKA HOLDINGS, LLC.
• Court: Court of Appeal of Michigan — District of US

306 Mich.App. 266

856 N.W.2d 206

JANET TRAVIS, INC

v.PREKA HOLDINGS, LLC.

Docket No. 315560.

Court of Appeals of Michigan.

Submitted June 4, 2014, at Detroit.

Decided July 31, 2014, at 9:10 a.m.

Aidenbaum Schloff and Bloom PLLC (by Jay M. Schloff, Bingham Farms) for plaintiff.

Anthony Della Pelle, Southfield for defendant.

Before: WILDER, P.J., and SAAD and KIRSTEN FRANK KELLY, JJ.

Opinion

SAAD, J.

Defendant appeals the trial court's order that denied its motion for summary disposition and granted plaintiff's request for a permanent injunction. For the reasons stated below, we affirm.

I. NATURE OF THE CASE

This action is a trademark-infringement suit. Michigan courts have protected trademark rights since the nineteenth century, initially under the common law of unfair competition. Michigan law has offered this protection for the benefit of two related groups: business owners, and the consuming public. Business owners, who invest significant amounts of money and effort to convince consumers to identify their marks with their products and services, needed a remedy against competitors who sought to free ride on this accumulated goodwill by copying or pirating already established marks.¹ Consumers, who associated and expected a certain level of service and quality with certain marks, needed protection from imposters who copied or pirated already established marks to “pass off” their goods and services as those of the business associated with the marks.² For this reason, trademark law has always involved the advancement of two distinct but related interests: the private right of the trademark holder to prevent others from using its mark to pass off their goods or services as its own, and the public right to protection from this deceptive practice.³

Accordingly, Michigan courts have defined a “trademark” as any “peculiar ... device” or symbol used by a manufacturer or service provider to distinguish its goods or services from those of others.⁴ And courts protected a manufacturer or service provider's exclusive right to use a trademark “to protect [its] good will against the sale of another's product as [its own]” and “to prevent confusion of the public regarding the origin of goods of competing vendors.”⁵

These interests inform the nature of plaintiff's action and the necessary proofs to protect its trademark. In actions for trademark infringement, courts require a plaintiff to show that (1) its mark was valid (i.e., was being used in the market and was “distinctive,” in that consumers associated the mark at issue with plaintiff's business), (2) plaintiff had priority in the mark (i.e., had used it before defendant), (3) defendant's allegedly infringing mark was likely to confuse consumers as to the source of defendant's products or services, and (4) defendant used the allegedly infringing mark.⁶ Through these requirements, courts ensure that only words, devices, and symbols that function as trademarks—that is, those that consumers actually identify with a certain business owner's products or services—receive legal protection.⁷ Those words, devices, and symbols that consumers do not identify with a particular business owner's products or services are left unprotected, so that new competitors and entrepreneurs could use these brand and trade names to fairly describe their products and services.

As American business became more sophisticated and new technologies enabled marketing and branding to take place at a national level, several states and the federal government codified the common law of trademarks. These statutes generally retain the common-law doctrines and principles on which they were based, and do not ordinarily disturb or eliminate the common law of trademarks as a remedy,⁸ but they also create registration schemes for trademarks for better organization and ease of dispute resolution in the courts.⁹ And, consistent with the national trend toward codifying trademark law, the Michigan Legislature enacted the Trademark Act (“the Act”) in 1970, MCL 429.31 et seq., and it is this statute that concerns our Court today.

In this case, plaintiff owns a restaurant and has used a surname, “Travis,” as a mark in connection with the food-service industry since the 1940s. It registered the “TRAVIS”¹⁰ mark with the state in 1996 under MCL 429.34. This dispute arose in 2011, when defendant began to operate a restaurant called “Travis Grill” in the same geographical area as plaintiff's restaurant and licensees. Plaintiff sued defendant for trademark infringement under MCL 429.42 in Macomb Circuit Court, and the court granted an injunction under MCL 429.43 against defendant's further use of “Travis”-related marks. Defendant appealed its loss in our Court, and argues that the injunction should be reversed because plaintiff's trademark is not valid.

As at common law, a plaintiff who alleges trademark infringement under MCL 429.42 must show: (1) its mark is valid, (2) it has priority in the mark, (3) it is likely consumers will confuse defendant's mark with its own, and (4) defendant used the allegedly infringing mark. Because multiple individuals can possess the same surname, and thus might need use of the surname in a business capacity, Michigan courts generally do not give legal protections to surnames used as marks.¹¹ However, if a surname-mark acquires “secondary meaning”—i.e., if the consuming public comes to associate the mark with “the product of some particular person or factory or business” (for example, “McDonald's”)—the surname-mark may be entitled to protection under MCL 429.42.¹² As noted, the burden of showing a mark's validity usually falls on the plaintiff, but if the plaintiff registers its mark under the Act, then the burden shifts to the defendant to demonstrate that the plaintiff's surname-mark is not valid.

In this case, plaintiff's mark was registered, and, therefore, defendant has the burden of showing that plaintiff has either not used the “Travis” mark or that it is not distinctive because it lacks secondary meaning to consumers.

Because defendant provides no convincing evidence that plaintiff's mark is not valid, and because plaintiff offers the remaining evidence necessary to show infringement under MCL 429.42, we reject defendant's appeal and affirm the order of the trial court.

II. FACTS AND PROCEDURAL HISTORY

This dispute involves marks used in connection with the promotion of plaintiff and defendant's respective restaurant and food-service businesses. Plaintiff and its predecessors have used the mark “TRAVIS” in connection with the advertising and operation of various family-owned restaurants since 1944. Plaintiff registered the mark with the state in 1996, and the registration remains valid through 2016. In 2011, defendant bought a restaurant licensed to use plaintiff's “TRAVIS” mark, but defendant purchased only the restaurant—it did not negotiate with plaintiff to retain the license to use the “TRAVIS” mark. It is unclear whether defendant checked with the Michigan trademark office before or at the time it purchased its restaurant, as defendant could have easily discovered plaintiff's registration of the “TRAVIS” mark in connection with the restaurant industry. Instead, defendant filed a certificate of assumed name with the state, changed the name of the restaurant from “Travis of Chesterfield” to “Travis Grill,” and used the latter name on its menus and advertising.¹³ It also advertised a “famous Travis burger” on its menu, with the implicit admission that the “Travis” name has identifiable value in the restaurant business.

After plaintiff discovered defendant's use of the “Travis Grill” and “famous Travis burger” marks, it filed suit against defendant for trademark infringement under MCL 429.42. Specifically, it alleged that its “TRAVIS” mark was distinctive and possessed secondary meaning to consumers, and that defendant's use of the “Travis Grill” and “famous Travis burger” marks thus confused consumers, who would wrongly believe that defendant's restaurant was owned, operated, licensed, or otherwise affiliated with plaintiff. In addition to evidence of its registration and longstanding use of the “TRAVIS” mark, plaintiff also submitted affidavits from consumers, which stated that they believed defendant's restaurant was affiliated in some way with plaintiff's. Plaintiff asked the trial court to enjoin defendant's use of the “TRAVIS”-related marks.

Defendant responded with a motion for summary disposition, and claimed that the plain language of MCL 429.42 allowed a distinction between use of plaintiff's admittedly protected “TRAVIS” mark and defendant's “Travis Grill.”¹⁴ It also argued that the “TRAVIS” mark had not acquired “secondary meaning,” and thus did not constitute a valid trademark under MCL 429.31 et seq.

In February 2013, the trial court correctly held that the “TRAVIS” mark had acquired secondary meaning and was thus a valid trademark under MCL 429.31 et seq. It accordingly denied defendant's motion for summary disposition and granted plaintiff's request for a permanent injunction against defendant's use of the marks, a decision we affirm.

III. STANDARD OF REVIEW

A. SUMMARY DISPOSITION

A trial court's decision on a motion for summary disposition is reviewed de novo. Johnson v. Recca, 492 Mich. 169, 173, 821 N.W.2d 520 (2012). If the trial court does not specify under which specific subrule it granted or denied a motion for summary disposition, and it considered material outside the pleadings, we review the decision under MCR 2.116(C)(10). Cuddington v. United Health Servs., Inc., 298 Mich.App. 264, 270, 826 N.W.2d 519 (2012). A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Joseph v. Auto Club Ins. Ass'n, 491 Mich. 200, 206, 815 N.W.2d 412 (2012). “This Court reviews the motion by considering the pleadings, admissions, and other evidence submitted by the parties in the light most favorable to the nonmoving party.” Auto Club Group Ins....