Matador Motor Inns, Inc. v. Matador Motel, Inc.

• Decision Date: 06 June 1974
• Docket Number: Civ. No. 478-73.
• Citation: 376 F. Supp. 385
• Parties: MATADOR MOTOR INNS, INC., Plaintiff, v. MATADOR MOTEL, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

376 F. Supp. 385

MATADOR MOTOR INNS, INC., Plaintiff, v. MATADOR MOTEL, INC., Defendant.

Civ. No. 478-73.

United States District Court, D. New Jersey.

June 6, 1974.

Capehart & Scatchard, by Thomas H. Morgan, Camden, N. J., Newton, Hopkins & Ormsby, by George M. Hopkins, Atlanta, Ga., for plaintiff.

Archer, Greiner & Read, by Robert G. Harbeson, Haddonfield, N. J., Howson & Howson, by Charles M. Allen and Lewis F. Gould, Jr., Philadelphia, Pa., for defendant.

OPINION

On Cross Motions for Summary Judgment

COHEN, Chief Judge:

What's a Matador? Of late, this question has reverberated throughout the living rooms of the nation causing great concern for television afficionados, taxicab drivers, and parking attendants. Inasmuch as the instant controversy does not deal with automobiles but motels, the aforementioned concern must remain unresolved. An analogous question, however, will be addressed by this Court: Who is the real Matador?

This is an action for infringement of service marks and false designation of origin pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., and for unfair competition.

The controversy centers around the use of the name MATADOR, with a stylized "M" and the remainder of the letters in a block format, in conjunction with the figure of a matador, holding a red cape placed above the lettering, all of which is displayed in an archway. (hereinafter service mark cluster).

Plaintiff is a Delaware corporation¹ which presently owns nine hotels—all of which are located in southern states.² At the time defendant allegedly began infringing plaintiff's service marks, however, plaintiff only owned three motels — two in South Carolina and one in Georgia. Plaintiff is the owner of two federally registered service marks: 946,968 (restaurant services) — first used in commerce on February 13, 1969, registration issued on November 7, 1972 and 946,966 (motel services) — first used in commerce on May 7, 1969, ownership acquired by plaintiff on June 20, 1972.

Plaintiff alleges that the defendant has infringed upon its above service marks and has engaged in unfair competition by duplicating said service marks in conjunction with motel services in New Jersey.

The defendant, a New Jersey corporation, operates a motel in Wildwood, New Jersey under the name MATADOR. This is the only motel operated by defendant. In addition to the name MATADOR, the defendant also uses a matador figure — although somewhat different from plaintiff's. This name and figure cluster are used by the defendant on advertising brochures and postcards. Defendant first used this service mark cluster on July 10, 1970 when the motel opened and obtained a New Jersey trademark registration on April 29, 1970.

Plaintiff alleges its causes of action in a four count complaint: 1) service mark infringement, 15 U.S.C. § 1114; 2) false designation of origin and false description, 15 U.S.C. § 1125(a); 3) unlawful use of trade name, 15 U.S. C. § 1126; and 4) unfair competition — both common law and pursuant to 15 U. S.C. § 1126. The complaint seeks both monetary damages and injunctive relief.

Both parties to this dispute have filed motions for summary judgment. The Court heard oral argument on these motions on April 11, 1974. At the conclusion of the arguments, the parties were granted additional time to file supplemental memoranda on the issues. This has been done and the dispute is now ripe for resolution.

COUNT ONE

Plaintiff alleges that defendant has violated 15 U.S.C. § 1114 which states in part:

(1) Any person who shall, without the consent of the registrant — (a) use in commerce any . . . copy, or colorable imitation of a registered mark in connection with the sale, offering for sale . . . or advertising of any . . . services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive;

. . . . . .

shall be liable in a civil action by the registrant . . . .

This claim of violation is based on defendant's use of a close facsimile of plaintiff's service mark cluster in connection with the defendant's own motel business.

Defendant, on the other hand, admits that plaintiff is the senior user of the registered mark but contends that it has a valid defense to the instant action by reason of 15 U.S.C. § 1115(b)(5) which states in part:

If the right to use the registered mark has become incontestable under section 1065 of this title, the registration shall be conclusive evidence of the registrant's exclusive right to use the registered mark in commerce . . . except when one of the following defenses . . . is established:

. . . .

(5) That the mark whose use by a party is charged as an infringement was adopted without knowledge of the registrant's prior use and has been continuously used by such party or those in privity with him from a date prior to registration of the mark under this chapter or publication of the registered mark under subsection (c) of section 1062 of this title: Provided, however, That this defense or defect shall apply only for the area in which such continuous prior use is proved; . . . .

The gravamen of this defense is that since plaintiff's two service marks were registered after the defendant had used the mark MATADOR in connection with its motel operation, there can be no liability for infringement. Plaintiff's marks were not registered with the United States Patent Office or acquired from another company until 1972, while defendant obtained a New Jersey registration of MATADOR and commenced its motel operations in 1970. Defendant bases its claim of adoption without knowledge of plaintiff's prior use on the affidavit and answers to interrogatories of Mrs. Bonanni — the surviving owner of New Jersey MATADOR. In these documents Mrs. Bonanni states that she and her husband chose the name MATADOR for their motel without knowledge of plaintiff's activities.

On its face this would seem to be a perfectly valid defense; plaintiff, however, has raised a number of arguments which allegedly invalidate this defense for defendant.

Plaintiff first contends that inasmuch as section 1115(b)(5) indicates that the right to use the mark must be incontestable and since plaintiff's mark is not yet incontestable, the defense is unavailable to defendant. This contention is without merit. 15 U.S.C. § 1065 indicates that for a mark to be incontestable it must have "been in continuous use for five consecutive years subsequent to the date of such registration . . . ." Obviously, five years have not elapsed since the registration of plaintiff's marks and therefore they are not as yet incontestable.

It would be patently absurd for this Court to rule that an incontestable service mark is subject to a statutory defense while a contestable one is not. An incontestable mark, by definition, enjoys greater procedural protection than one of a lesser status. Tillamook County Creamery Ass'n v. Tillamook Cheese and Dairy Ass'n, 345 F.2d 158 (9th Cir.), cert. denied, 382 U.S. 903, 86 S.Ct. 239, 15 L.Ed.2d 157 (1965). If this be the case, clearly a defense to an infringement action based on an incontestable service mark must also be applicable to a contestable mark. Avon Shoe Co. v. David Crystal, Inc., 171 F.Supp. 293, 299 (S.D.N.Y.1959), aff'd, 279 F.2d 607 (2d Cir. 1960), cert. denied, 364 U.S. 909, 81 S.Ct. 271, 5 L.Ed.2d 224 (1960).

Next, plaintiff contends that since the president of defendant corporation, the individual who actually signed the New Jersey papers relating to registration of the mark, is deceased, evidence of his state of mind is inadmissible as hearsay; therefore, defendant cannot rely on innocent adoption as a defense. This argument would be quite compelling but for two facts: 1) Mrs. Bonanni, wife of the deceased president of defendant, was also a part owner of the business at the time the New Jersey state registration was obtained. Therefore, she is clearly competent to testify as to her own state of mind at the time of registration and has done so; 2) on an evidentiary basis, plaintiff cannot postulate, as it attempts to do, that Mr. Bonanni did know of the plaintiff's motel operations. This would present as much of a hearsay problem as Mrs. Bonanni's testimony. In short, plaintiff cannot do what it objects to Mrs. Bonanni's doing. Therefore, the position of neither party shall benefit or be harmed by the state of mind of Mr. Bonanni. In conclusion, the defense of innocent adoption is available to defendant based on Mrs. Bonanni's own state of mind and her impressions during the proceedings.

Plaintiff devotes much time and energy to discussing the collocations of common features between plaintiff's and defendant's motel advertising. Plaintiff argues that the mere fact of exact reproduction of its service mark clusters by defendant is sufficient to show willful infringement. The general proposition propounded by plaintiff is undoubtedly accurate. Dumore Co. v. Richards, 52 F.2d 311 (W.D.Mich.1930), aff'd, 52 F.2d 312 (6th Cir. 1931); 3 Callmann, Unfair Competition, Trademarks, and Monopolies, § 82.1(h) at 711 n. 64 (3d ed. 1969). However, in the case at bar these collocations of common features are not at all as extensive as plaintiff would have the Court believe. Both parties utilize a man with a cape with red and black coloring. Additionally, the lettering of the word MATADOR is nearly identical. Defendant, however, despite plaintiff's contention, does not place this figure in an archway, although the man is positioned above the word. Moreover, plaintiff no longer uses the stylized "M" because it increases the cost of signs too greatly.

Defendant asserts that its corporate owners determined that their motel should have a Spanish or Mediterranean motif. Subsequently, a brochure³ was called to their attention which contained a certain style door titled MATADOR. Defendant seized upon this concept and decided to use that name for their motel since it characterized the design motif...