STUART ENTERPRISES INTERN. v. Peykan, Inc.

• Decision Date: 01 November 2001
• Docket Number: No. A01A1610.,A01A1610.
• Citation: 252 Ga. App. 231,555 S.E.2d 881
• Parties: STUART ENTERPRISES INTERNATIONAL, INC. et al. v. PEYKAN, INC. et al.
• Court: Georgia Court of Appeals

555 S.E.2d 881

252 Ga. App. 231

STUART ENTERPRISES INTERNATIONAL, INC. et al. v. PEYKAN, INC. et al.

No. A01A1610.

Court of Appeals of Georgia.

November 1, 2001.

Irvin, Stanford & Kessler, Gary R. Kessler, Atlanta, for appellants.

J. Hue Henry, Athens, for appellees.

ANDREWS, Presiding Judge.

Stuart Enterprises International, Inc. and Andrew H. Stuart (collectively "Stuart") sued Peykan, Inc. and Jamshid Ahmadipour (collectively "Ahmadipour") for breach of contract and other claims arising out of Stuart's purchase from Ahmadipour of an Athens' business known as "Munchie's Italian Restaurant." Ahmadipour counterclaimed, alleging that Stuart was in default on the promissory note delivered in connection with the purchase, and asking for attorney fees for stubborn litigiousness. The trial court directed a verdict for Ahmadipour for $63,004.99 on his claim under the promissory note. The jury returned a verdict for Ahmadipour on Stuart's claim of breach of contract, but awarded Stuart $360 on his claim for breach of the implied covenant of good faith and fair dealing. The jury awarded $23,000 to Ahmadipour on his litigiousness counterclaim. The trial court denied Stuart's motion for a judgment notwithstanding the verdict or a new trial, but entered a j.n.o.v. in favor of Ahmadipour.

On appeal, Stuart claims the trial court erred in (1) certain instructions to the jury regarding the sale of the "Munchie's" name, (2) granting Ahmadipour's motion for a j.n.o.v. on Stuart's claim for breach of the implied covenant of good faith, and (3) failing to grant his motion for a j.n.o.v. on Ahmadipour's stubborn litigiousness claim. We disagree, and for the reasons set forth below, we affirm.

1. At issue at trial was whether Ahmadipour breached the requirement of the asset purchase agreement that he sell to Stuart the assets of the business, including "the name Munchie's Italian Restaurant." Evidence shows that a third party had previously registered a trademark with the Secretary of State of Georgia on February 20, 1988, consisting of a Normandy blue and blush pink dragon and the word "Munchie's." Ahmadipour did not file a trademark with the Secretary of State, although he did register the trade name "Munchie's" with the Superior Court of Clarke County as required by OCGA § 10-1-490. Stuart argued that the prior registration of the trademark by a third party prevented Ahmadipour from selling the "Munchie's" name to Stuart in violation of the asset purchase agreement and that Stuart remained subject to suit for trademark violation if he tried to use the "Munchie's" name in the future.

At the charge conference, Stuart's counsel objected to the charge the trial court proposed to give to the jury regarding trademarks and trade names. Stuart asked the trial court to also charge the jury that a registered trademark is subject to civil action for infringement. The trial court refused to change its proposed charge to the jury to include the reference to trademark infringement, but did instruct the jury regarding the difference between trade names and trademarks because the trial court found some ambiguity with regard to the interests that the parties intended to be covered by the sale.

In this appeal, Stuart enumerates as error the trial court's failure to instruct the jury "that prior registration of the `Munchie's' name by a third party prevented [Ahmadipour] from selling the `Munchie's' name to Stuart." As so composed, this enumeration of error is clearly without merit. The prior registration of a trademark which included the word "Munchie's" would not prevent Ahmadipour from transferring the trade name "Munchie's Italian Restaurant," if this was the intent of the parties. A trade name and a trade mark are not identical interests. A trademark functions as an identifier of goods or services, while a trade name "primarily identifies the owner or operator of a business and may also be used to identify the goods handled by such owner." Gordy v. Dunwody, 209 Ga. 627, 632(2), 74 S.E.2d 886 (1953). A trademark logo is protected from infringement upon registration with the secretary of state, while trade name protection may be acquired by long and exclusive use. See OCGA § 10-1-450; Giant Mart Corp. v. Giant Discount Foods, 247 Ga. 775, 279 S.E.2d 683 (1981); Womble v. Parker, 208 Ga. 378, 67 S.E.2d 133 (1951). The trial court could not, as Stuart urges, instruct the jury that the prior registration of a mark including the name "Munchie's" prevented the transfer of the restaurant's name to Stuart. Such a charge amounts to a direction to the jury to find for Stuart on his breach of contract claim and ignores the difference between a trade name and a trade mark.

Even if we were to interpret Stuart's enumeration of error to encompass the argument made by trial counsel with regard to the trial court's charge, which was that such charge should include a reference to the available causes of action for a trademark violation, we find no error. The instruction that the trial court gave to the jury is accurate insofar as it describes the difference between a trade name and a trademark. There was no evidence presented that Stuart had been subject to, or threatened with, an action for infringement of a trademark by his use of the name "Munchie's Italian Restaurant." An addition to the charge describing the actions which may or may not be available to a third party for a hypothetical violation of her...