John R. Thompson Co. v. Holloway

• Decision Date: 07 October 1966
• Docket Number: No. 21710.,21710.
• Parties: JOHN R. THOMPSON CO., doing business as and through its wholly owned subsidiaries Holloway House, Inc., et al., Appellants, v. Mrs. Lee HOLLOWAY, Sr., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

366 F.2d 108 (1966)

JOHN R. THOMPSON CO., doing business as and through its wholly owned subsidiaries Holloway House, Inc., et al., Appellants, v. Mrs. Lee HOLLOWAY, Sr., et al., Appellees.

No. 21710.

United States Court of Appeals Fifth Circuit.

August 15, 1966.

Rehearing Denied October 7, 1966.

COPYRIGHT MATERIAL OMITTED

Jerome Gilson, Chicago, Ill., Richard G. Williams, Fort Worth, Tex., Dean A. Olds, Hume, Groen, Clement & Hume, Chicago, Ill., for appellants, Thompson, Walker, Smith & Shannon, Fort Worth, Tex., of counsel.

Howard E. Moore, Dallas, Tex., Toy A. Crocker, Crocker & McDonald, Fort Worth, Tex., for appellees.

Before RIVES, BROWN and MOORE,^* Circuit Judges.

RIVES, Circuit Judge:

The plaintiff-appellant (hereinafter plaintiff)¹ sought an injunction against the defendants-appellees (hereafter defendants) because of service mark and trademark infringement and unfair competition. After a full trial the district court entered judgment for the defendants and dismissed the plaintiff's complaint with prejudice. Still further the district court, upon a holding that this suit was brought without probable cause and with intent to harass the defendants, allowed the defendants a recovery from the plaintiff of attorney's fees in the amount of $7,250. We reverse as to the allowance of attorney's fees, and modify the judgment so as to provide that the dismissal of plaintiff's complaint shall be without prejudice to the filing of a supplemental complaint based upon the present record and on subsequently occurring events which may make it likely that the uses of the respective marks in connection with the services and goods in question are likely to cause confusion, deception or mistake. As so modified, we affirm the judgment for the defendants.

Plaintiff asserts one federal service mark registration and two federal trademark registrations for Holloway House, all registered in the United States Patent Office on the Principal Register. The service mark was registered in 1955 for restaurant service. The trademarks are for frozen foods of different kinds, one registered in 1956 and the other in 1962. In connection with the service mark and the earlier trademark, the plaintiff has complied with the provisions of 15 U.S.C. § 1065 pertaining to incontestability.²

The plaintiff, directly or through its subsidiaries, operates a total of thirty-seven restaurants under several different service marks.³ Its higher priced dining rooms are operated under the names "Henrici's" and "Tiffin Inn"; its "Coffee Houses" under the service mark "The Red Balloon"; and its cafeterias under the names of "Ontra" and "Holloway House." Since 1951 the plaintiff has established eleven Holloway House cafeteria-type restaurants successively in Kansas City, Missouri; Chicago, Illinois; Washington, D. C.; Milwaukee, Wisconsin; South Bend and Indianapolis, Indiana; Clayton and Crestwood, Missouri; and New Orleans, Louisiana. Plaintiff has not established a "Holloway House" cafeteria or any other restaurant in Texas. At the time of trial, Holloway House cafeterias had not extended further west than St. Louis, Missouri, and New Orleans, Louisiana. In 1959 the plaintiff gave some consideration to opening a Holloway House in Houston and one in Dallas, but in neither place did plaintiff actually open a restaurant.

The defendants operate as a family partnership under their surname "Holloway." They have only one place of business. That is located on Camp Bowie Boulevard in Fort Worth, Texas. They specialize in fried chicken. Approximately 90% of their food sales are fried chicken. Their restaurant is located on an interstate highway and they have placed road signs soliciting tourist trade. The evidence showed, however, that their customers were predominantly local people. Their dining room has a seating capacity for 225 customers. It is a restaurant with waitresses as distinguished from a cafeteria. The defendant's business was originally established in 1939 but under a different name. In 1961 defendants remodeled their restaurant and adopted their surname "Holloway" in its operation. They first had actual notice of plaintiff's operations and use of the name "Holloway House" on or about June 29, 1962, when plaintiff's attorney wrote a letter to defendants charging them with infringement. Admittedly, however, they made no inquiry to find whether the tradename "Holloway's" was available for use.

The defendants sell no frozen food of any type. Plaintiff markets its frozen foods under the "Holloway House" label through brokers. Its total national sales of frozen foods in 1963 amounted to $2,850,000.00, of which $32,000.00 was sold in Texas. The plaintiff's food broker in Dallas testified that he had never heard of any confusion of plaintiff's frozen foods with defendants' restaurant, and that the only time he ever heard of any conflict was after he learned of the present litigation.

As to the advertising done by the respective parties, the district court made findings as follows:

"Plaintiffs\' advertising of restaurant services under `Holloway House\' has been done exclusively through local newspapers in the cities where the cafeterias are operated under such name, and by point of purchase advertising, such as book matches, menus, and children\'s favors, such as balloons which are given away at the cafeteria. Plaintiffs have not advertised their restaurant services under `Holloway House\' in nationally circulated magazines, or other nationally distributed advertising media. Plaintiffs\' restaurant services under `Holloway House\' have not been advertised in the State of Texas or the Fort Worth, Texas, trade area. Plaintiffs\' service mark `Holloway House\' is not generally known to residents of the State of Texas or residents of the Fort Worth-Dallas, Texas trade area.

* * * * * *

"Defendants advertise principally in a Fort Worth, Texas, newspaper, the Star-Telegram. Defendants have advertised in a limited way over a Fort Worth radio station, and have a total of 26 road signs located principally on U.S. Highway 80 west of Fort Worth for a distance of about 100 miles and a few road signs on other highways leading into Fort Worth. Defendants also have signs in front of their place of business, with the name `Holloway\'s Fried Chicken Specialists\' thereon. In defendants\' advertising, wherein the name `Holloway\'s\' is used, the term `Fried Chicken Specialists\' is also prominently displayed therewith."⁴

The district court made much more detailed findings of fact, including the following:

"In view of the differences in the manner of use, advertising and sales by plaintiffs and defendants under their respective names, as specifically pointed out hereinbefore, it is concluded that there is no likelihood of confusion, mistake or deception of purchasers as to source resulting from the concurrent use of plaintiffs\' and defendants\' respective marks. Specifically it is concluded that the use of the name `Holloway\'s\' by defendants in the advertising and conduct of their restaurant services in the manner hereinbefore described, would not be likely to cause confusion, mistake or deception of purchasers with plaintiffs\' service mark and trademarks `Holloway House\' used in the manner hereinbefore pointed out, and therefore defendants have not infringed plaintiffs\' service mark and trademark registrations.

"Plaintiffs have not extended its restaurant business or advertised same under the name `Holloway House\' in the State of Texas or the Fort Worth-Dallas, Texas, trade area, and has offered no proof as to probable or needed expansion of same into said area."⁵

"There is no likelihood of confusion, mistake or deception as to source resulting from the use of `Holloway\'s\' on defendants\' restaurant, and the use of `Holloway House\' on plaintiffs\' frozen foods sold through grocery stores."

I.

There was no evidence of any actual confusion, deception or mistake. After a thorough study of the evidence, we are impressed that the case is close but we cannot set aside as clearly erroneous the district court's finding that there is no likelihood of confusion, mistake or deception of purchasers as to source resulting from the concurrent use of plaintiff's and defendants' respective marks.

As a basis for any relief, the plaintiff must prove that considering the marks in their entireties, the public is likely to confuse plaintiff and defendants as the respective sources of restaurant services and frozen foods.⁶ American Foods, Inc. v. Golden Flake, Inc., 5 Cir. 1963, 312 F.2d 619; Cf. Tisch Hotels, Inc. v. Americana Inn, Inc., 7 Cir.1965, 350 F. 2d 609; Standard Oil Co. (Kentucky) v. Humble Oil & Refining Co., 5 Cir.1966, 363 F.2d 945 (decided July 1, 1966).

Likelihood of confusion is a question of fact. The district court had superior opportunity to judge the credibility of the witnesses and to find the facts. There is support for its findings and they cannot now be set aside as clearly erroneous.⁷

II.

The plaintiff insists, however, that the district court based its decision on a serious misinterpretation of the Federal Trademarks Act; that the court misread the Act to find that it was impossible as a matter of law for Holloway's to infringe Holloway House. Enough has been quoted to sustain our judgment that construing the court's findings and conclusions as a whole, they were not influenced by any misunderstanding of the law.

However, we do agree with the plaintiff that a man has no absolute right to use his own name, even honestly, as the name of his merchandise or his business. As such it becomes a trade name or service mark subject to the rule of priority in order to prevent deception of the public.⁸

It is true that plaintiff's trademark should have been refused registration if it had been "primarily merely a surname." 15 U.S.C. § 1052. That was a question for the Patent Office before granting registration. As to the service mark and trademark...