T.M.T., LLC v. Midtown Market Wine & Spirits, LLC, 011921 MSCA, 2019-CA-01199-COA

Docket Nº2019-CA-01199-COA
Opinion JudgeGREENLEE, J.
Party NameT.M.T., LLC D/B/A MIDTOWN WINE & SPIRITS, A MISSISSIPPI REGISTERED SERVICE MARK APPELLANT v. MIDTOWN MARKET WINE & SPIRITS, LLC APPELLEE
AttorneyATTORNEY FOR APPELLANT: ANNA KATHLEEN RUSH ATTORNEYS FOR APPELLEE: MATTHEW D. MILLER NICHOLAS KANE THOMPSON
Judge PanelBEFORE BARNES, C.J., GREENLEE AND WESTBROOKS, JJ. BARNES, C.J., CARLTON AND WILSON, P.JJ., WESTBROOKS, LAWRENCE AND McCARTY, JJ., CONCUR. McDONALD, J., CONCURS IN RESULT ONLY WITHOUT SEPARATE WRITTEN OPINION. SMITH, J., NOT PARTICIPATING.
Case DateJanuary 19, 2021
CourtCourt of Appeals of Mississippi

T.M.T., LLC D/B/A MIDTOWN WINE & SPIRITS, A MISSISSIPPI REGISTERED SERVICE MARK APPELLANT

v.

MIDTOWN MARKET WINE & SPIRITS, LLC APPELLEE

No. 2019-CA-01199-COA

Court of Appeals of Mississippi

January 19, 2021

DATE OF JUDGMENT: 07/02/2019

FORREST COUNTY CHANCERY COURT HON. SHEILA HAVARD SMALLWOOD TRIAL JUDGE.

ATTORNEY FOR APPELLANT: ANNA KATHLEEN RUSH

ATTORNEYS FOR APPELLEE: MATTHEW D. MILLER NICHOLAS KANE THOMPSON

BEFORE BARNES, C.J., GREENLEE AND WESTBROOKS, JJ.

GREENLEE, J.

¶1. T.M.T., LLC, a Mississippi limited liability company doing business as Midtown Wine & Spirits, filed this appeal from the Forrest County Chancery Court's judgment. In this case over the use of a trade name and service mark, the court found that T.M.T. had the right to use the service mark "Midtown Wine & Spirits," that Midtown Market Wine & Spirits LLC did not infringe on T.M.T.'s service mark, and that "no likelihood of confusion" existed concerning the identity or association between the two businesses. The court denied T.M.T.'s requests for preliminary and permanent injunctions as well as attorney's fees. The court also denied T.M.T.'s request for sanctions. T.M.T. appeals, claiming the chancery court erred by finding that its mark was generic, that Midtown Market Wine & Spirits had not infringed on T.M.T.'s mark, and that T.M.T. was not entitled to an injunction. Finding no error, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2. T.M.T. (Midtown Wine & Spirits), which we will hereinafter call "T.M.T./Midtown," and Midtown Market Wine & Spirits, which we will hereinafter call "Midtown Market," are both liquor stores located in the Midtown area of Hattiesburg, Mississippi.[1] This case concerns whether one business is allowed the sole use of the term "Midtown" in its service mark.

¶3. On June 17, 2016, Michael Harrington filed a "Certificate of Formation" for a business with the Mississippi Secretary of State, creating T.M.T., LLC. On June 30, 2016, the newly formed T.M.T./Midtown signed a lease agreement for a building located on Hardy Street in Hattiesburg, Mississippi. T.M.T./Midtown desired to open a liquor store called "Midtown Wine & Spirits." A month later, the State of Mississippi issued T.M.T./Midtown an alcoholic beverage permit under the requested name, Midtown Wine & Spirits. In February 2017, T.M.T./Midtown opened its liquor store under the name "Midtown Wine & Spirits" and made its first sale. The name "Midtown Wine & Spirits" does not appear on the Certification of Formation or any of the company's annual reports. T.M.T./Midtown used the service mark "Midtown Wine and Spirits" in late February 2017. In September 2018, T.M.T./Midtown registered its service mark of Midtown Wine & Spirits with the Mississippi Secretary of State. At the time, the Mississippi Secretary of State issued T.M.T., LLC a "Certificate of Service Mark Registration" for the phrase: "Midtown Wine & Spirits with Skyline Logo."

¶4. In May 2018, four months prior to T.M.T./Midtown registering its service mark of Midtown Wine & Spirits, Dr. Ted Harden Jr. filed a Certificate of Formation with the Mississippi Secretary of State forming "Midtown Market Wine & Spirits LLC." Dr. Harden testified that he chose the name "Midtown Market Wine & Spirits" because the owners of the Midtown Market shopping center in Hattiesburg approached him with the opportunity to open a liquor store under the name "Midtown Market." Dr. Harden then applied for an alcoholic beverage permit for "Midtown Market Wine & Spirits LLC" from the Alcoholic Beverage Control division of the Mississippi Department of Revenue.

¶5. Harrington contacted Dr. Harden in August 2018, requesting that Dr. Harden change his business's name. Dr. Harden refused, explaining that he had already registered his business name, signed a lease that required the business to bear the name "Midtown Market," and applied for an alcohol permit. Although Harrington filed an objection, the Mississippi Department of Revenue issued Dr. Harden's permit under the name of "Midtown Market Wine & Spirits LLC."

¶6. Midtown Market Wine & Spirits, located in the Midtown Market shopping center, opened for business in the summer of 2018 using a logo incorporating a corkscrew, the phrase "Midtown Market Wine & Spirits," and its address and phone number on a green background.

¶7. According to Harrington, after the opening of Midtown Market, there were several instances of customer confusion. Vendors delivered invoices meant for Midtown Market to T.M.T./Midtown. At one point, T.M.T./Midtown received an order from the Mississippi Department of Revenue; however, the shipping label bore Midtown Market's name. The Mississippi Department of Revenue also accidentally placed Midtown Market's name on T.M.T./Midtown's online account page. Regarding online confusion, a mix-up with both businesses' telephone numbers occurred on Yelp.com, and T.M.T./Midtown received a negative review on Google meant for Midtown Market. T.M.T./Midtown also received phone calls in which the callers intended to contact Midtown Market.

¶8. In November 2018, Dr. Harden received a demand letter from T.M.T./Midtown's legal counsel insisting that he refrain from using the name "Midtown Market Wine & Spirits LLC." Again, Dr. Harden refused. In December 2018, T.M.T./Midtown filed a complaint requesting an injunction against Dr. Harden's business, "Midtown Market Wine & Spirits." T.M.T./Midtown sought to restrain Dr. Harden from using a trade name similar to "Midtown Wine & Spirits," which T.M.T./Midtown alleged would be likely to mislead, deceive, and create confusion in the public's mind. Dr. Harden denied having any knowledge of T.M.T./Midtown's name, business, or store, and he denied having any malicious intent. A trial commenced on May 14, 2019, and upon its conclusion, the chancery court took the matter under advisement.

¶9. In its "Order and Final Judgment" dated July 2019, the court made detailed findings of fact and conclusions of law. The court declared that although T.M.T./Midtown had the right to use the service mark "Midtown Wine & Spirits," it further found that the term "Midtown" in the parties' names was generic and geographical and not susceptible to protection. The court specifically found that "Midtown Wine & Spirits" and "Midtown Market Wine & Spirits" were not so similar as to deceive the public and that no likelihood of confusion existed; therefore, the use of the name "Midtown Market Wine & Spirits" did not infringe on T.M.T./Midtown's service mark of "Midtown Wine & Spirits." Now T.M.T./Midtown appeals the chancery court's determination that its mark was generic, that Midtown Market had not infringed on T.M.T./Midtown's mark, and that T.M.T./Midtown was not entitled to an injunction.

STANDARD OF REVIEW

¶10. The review of a chancellor's findings on appeal is limited. McNeil v. Hester, 753 So.2d 1057, 1063 (¶21) (Miss. 2000) (citing Reddell v. Reddell, 696 So.2d 287, 288 (Miss. 1997)). If supported by substantial evidence, a chancellor's factual findings will not be disturbed unless the chancellor abused his discretion, was manifestly wrong, clearly erroneous, or applied an erroneous legal standard. Varnell v. Rogers, 198 So.3d 1278, 1280 (¶7) (Miss. Ct. App. 2016). Questions of law are reviewed de novo. Biglane v. Under the Hill Corp., 949 So.2d 9, 14 (¶17) (Miss. 2007).

DISCUSSION

I.

Whether the chancery court erred by finding that Midtown Market had not violated Mississippi's Trademark Laws.

¶11. Mississippi's trademark laws protect registered trademarks. Miss. Code Ann. § 75-25-1 (Rev. 2016). The Act defines a service mark as any word, name, symbol or device or any combination there of used by a person to identify and distinguish the services of one person, including a unique service, from the services of others, and to indicate the source of the services, even if that source is unknown . . . .

Id. § 75-25-1(b). The statute considers a service mark "used" when it is "used or displayed in the sale or advertising of services, and the services are rendered in [the] state." Id. § 75-25-1(h)(2). If the mark is registered with the state, the statute provides specific remedies for infringement. Id. § 75-25-23.

¶12. A trademark right develops through the use of the mark, "not from mere adoption." Daumit Stores Inc. v. Brown, 249 Miss. 528, 163 So.2d 466, 470 (1964); see Russell v. Caroline-Becker Inc., 142 N.E.2d 899, 902 (Mass. 1957). A person may create an unregistered trademark, but that fact alone does not give him the right to prevent others from using it. Id. Although T.M.T./Midtown used the service mark "Midtown Wine and Spirits" for the first time in late February 2017, it did not register its service mark until September 2018-well after Midtown Market had registered its name as a limited liability company with the Mississippi Secretary of State. A person may not bar others from using the mark "if the likelihood of confusion between his product and the infringers is minimal or non-existent[.]" Union Nat. Bank of Tex., Laredo v. Union Nat. Bank of Tex., Austin, 909 F.2d 839, 843 (5th Cir. 1990). Therefore, one of the essential questions in a trademark infringement action is whether the contested mark is likely to cause confusion. Citizens Nat'l Bank of Meridian v. Citizens Bank of Philadelphia, 157 F.Supp.2d 714, 716 (S.D.Miss. 2001).

¶13. Trademark infringement claims consider the likelihood of confusion concerning the source of goods or services. Miss. Code Ann. § 75-25-23 (Rev. 2016). The court determines the likelihood of confusion, evaluating several factors, "including the type of trademark at issue, the similarity of design; similarity of service; [the] identity of service facilities and customers;...

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