Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC

• Decision Date: 20 December 2012
• Docket Number: No. 10–15140.,10–15140.
• Citation: 702 F.3d 1312
• Parties: MILLER'S ALE HOUSE, INC., Plaintiff–Appellant, v. BOYNTON CAROLINA ALE HOUSE, LLC, Defendant–Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

702 F.3d 1312

MILLER'S ALE HOUSE, INC., Plaintiff–Appellant,

v.BOYNTON CAROLINA ALE HOUSE, LLC, Defendant–Appellee.

No. 10–15140.

United States Court of Appeals, Eleventh Circuit.

Dec. 20, 2012.

Harvey W. Gurland, Jr., Duane Morris, LLP, Miami, FL, Joseph W. Bain, Jerold I. Schneider, Novak, Druce & Quigg, LLP, Wesley Alan Lauer, J. Rodman Steele, Jr., Akerman Senterfitt, LLP, West Palm Beach, FL, Gregory P. Gulia, Vanessa C., Hew, Robert Terry Parker, Duane Morris, LLP, New York CIty, for Plaintiff–Appellant.

Anthony J. Biller, David E. Bennett, Emily Michele Haas, Coats & Bennett, PLLC, Cary, NC, Hudson Carter Gill, Jeffrey L. Hochman, Johnson, Anselmo, Murdoch, Burke, Piper & Hochman, PA, Fort Lauderdale, FL, for Defendant–Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT and MARTIN, Circuit Judges, and DAWSON,^* District Judge.

TJOFLAT, Circuit Judge:

“[T]here is no better friend to any merchant than a fair competitor.” ¹ Intellectual property law walks a fine line in its quest to preserve such fair competition. On the one hand, it respects the policy of free copying and the free economic competition such copying encourages. See1 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 1:2 (4th ed. 2012). On the other hand, it creates a set of exceptions—such as patents, trademarks, and copyrights—that protect consumers from deception and confusion. See id.§§ 1:2, 2:2. Thus, trademark law allows merchants to label their products with source-identifying marks and to protect those marks from infringement, see id. § 2:2, while at the same time maintaining competition by disallowing trademarks in generic terms, see Blau Plumbing, Inc. v. S.O.S. Fix–It, Inc., 781 F.2d 604, 609 (7th Cir.1986) (“To allow a firm to use as a trademark a generic word ... would make it difficult for competitors to market their own brands of the same product.”).

We are called on today to determine whether Miller's Ale House, Inc. (“Miller's”), a restaurant chain with a location in Boynton Beach, Florida, has common law trademark rights in the term “ale house” and trade dress rights in the interior decoration of its restaurants and, if so, whether its competitor, Boynton Carolina Ale House, LLC, (“Boynton Carolina”), violated Section 43(a) of the Trademark Act of 1946 (the “Lanham Act”), 15 U.S.C. § 1125(a) (2006), ² and the Copyright Act § 106, 17 U.S.C. § 106, when it adopted a name, decor, and a floor plan similar to Miller's own.

The United States District Court for the Southern District of Florida granted summary judgment in favor of Boynton Carolina on all claims.³ Miller's, appealing the court's ruling, argues that the court erred as a matter of law in finding its trademark infringement claim barred by issue preclusion, in finding its trade dress not to be inherently distinctive, and in finding its and Boynton Carolina's floor plans not to be substantially similar.⁴ We find no error in the challenged rulings and affirm.

I.

Miller's opened its first restaurant/sports bar in 1988. Since that time, Miller's has successfully expanded to approximately fifty locations, with the vast majority in Florida. Each Miller's location has a different name, but all use some geographic prefix—such as a city, street, or neighborhood—followed by the term “Ale House.” For example, the Boynton Beach location is named “Boynton Ale House.” Each of Miller's restaurants includes several common features that contribute to the overall image of the brand. In 1998, Miller's predecessor in interest copyrighted five different floor plans used in its various locations. Each of these floor plans contains a different arrangementof the decorative elements common to Miller's restaurants.

Boynton Carolina is a licensee of LM Restaurants, Inc., a restaurant management company located in Raleigh, North Carolina. LM Restaurants created the Carolina Ale House brand, opening the first restaurant in 1998. Unlike the Miller's chain, each Carolina Ale House restaurant displays on its exterior signs the same name, “Carolina Ale House,” with the word “Carolina” in a smaller font.

In 2008, the events that led to this litigation began. Boynton Carolina obtained a license from LM Restaurants to open a Carolina Ale House branded restaurant in Boynton Beach, Florida, on Congress Avenue. At this time, Miller's “Boynton Ale House” was already operating a restaurant on Congress Avenue a little over a mile from the planned Boynton Carolina location. The Boynton Ale House employed many of the same common features found in other Miller's restaurants.

Prior to opening, Boynton Carolina substantially renovated its building's interior, which had previously been used as a Tony Roma's restaurant. In doing so, Boynton Carolina added many of the features of Miller's restaurants, including walls paneled with dock wood, an exposed kitchen, a bar located at the center of the restaurant topped with a soffit, “high-top” tables in a portion of the restaurant, and the color red for the restaurant's name on its exterior and menus. Furthermore, Boynton Carolina, like Miller's, prefixed many menu items with its name and dressed its staff in dark polo shirts and khakis. Nevertheless, the exterior and interior appearances of Boynton Carolina and Miller's Boynton Ale House differ in several significant ways. Most notably, Boynton Carolina is located in a stand-alone building while the Boynton Ale House is attached to other shops. Boynton Carolina also features a large outdoor area, while Miller's Boynton Ale House has no such area.

II.

We review a district court's grant of summary judgment de novo. Dippin' Dots, Inc. v. Frosty Bites Distribution, LLC, 369 F.3d 1197, 1208 (11th Cir.2004). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

The moving party bears the initial burden of demonstrating the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Though we must view all evidence and reasonable inferences in the light most favorable to Miller's as the nonmoving party, “[t]he mere existence of a scintilla of evidence in support of [its] position will be insufficient.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (internal quotation marks omitted).

Thus, Rule 56 “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. at 2552;Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1356 (11th Cir.2007). As a result, courts may “isolate and dispose of factually unsupported claims,” which is “[o]ne of the principal purposes of the summary judgment rule.” Celotex, 477 U.S. at 323–24, 106 S.Ct. at 2553.

III.

We first address Miller's claim that Boynton Carolina violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), when it infringed on Miller's alleged trademark in the term “ale house.”⁵ Miller's has not registered the term “ale house” as a trademark. However, “the use of another's unregistered, i.e., common law, trademark ‘can constitute a violation of section 43(a) of the Lanham Act.’ ” Crystal Ent. & Filmworks, Inc. v. Jurado, 643 F.3d 1313, 1320 (11th Cir.2011) (alterations omitted) (quoting Conagra, Inc. v. Singleton, 743 F.2d 1508, 1512 (11th Cir.1984)).

In order to prevail, Miller's must show that (1) its mark is valid and thus protectable and (2) Boynton Carolina adopted an identical or similar mark that made consumers likely to confuse the two restaurants. Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1216 (11th Cir.2000). The starting point for an assessment of the validity of a mark is to query whether or not the purported mark is distinctive. See Welding Servs., 509 F.3d at 1357 (noting that protection is only available to “distinctive” marks).

We recognize four gradations of distinctiveness: fanciful or arbitrary, suggestive, descriptive, and generic. Am. Television & Commc'ns Corp. v. Am. Commc'ns & Television, Inc., 810 F.2d 1546, 1548 (11th Cir.1987). Marks that are fanciful or arbitrary or suggestive are deemed to be inherently distinctive. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 2757, 120 L.Ed.2d 615 (1992). A descriptive term acquires distinctiveness, called “secondary meaning,” when “ ‘the primary significance of the term in the minds of the [consuming] public is not the product but the producer.’ ” Welding Servs., 509 F.3d at 1358 (quoting Am. Television, 810 F.2d at 1549) (alteration in original). In general, a generic term cannot be appropriated from the public domain and thus cannot receive trademark protection. Id.;Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir.1976) (noting that the Lanham Act offers no “secondary meaning” exception for generic terms).

The Fourth Circuit, in previous litigation between the parties at hand, ⁶ found that the words “ale house” were “generic words for a facility that serves beer and ale, with or without food, just as are other similar terms such as ‘bar,’ ‘lounge,’ ‘pub,’ ‘saloon,’ or ‘tavern.’ ” Ale House Mgmt., Inc. v. Raleigh Ale House, Inc., 205 F.3d 137, 141 (4th Cir.2000). The District Court held that Miller's claim was barred by issue preclusion. We agree.

A.

The Fourth Circuit case began when Miller's filed suit in 1998 ...