Wiener King, Inc. v. Wiener King Corp.
| Decision Date | 09 January 1976 |
| Docket Number | Civ. No. 75-1018. |
| Citation | 407 F. Supp. 1274 |
| Parties | WIENER KING, INC., Plaintiff, v. The WIENER KING CORPORATION et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
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Bain, Gilfillan & Rhodes, Newark, N. J., for plaintiff.
This action involves the respective rights of the parties to certain trade and service marks and the interaction of the common law of trademarks with the Lanham Act (15 U.S.C. Sec. 1051 et seq.).
Plaintiff, a New Jersey corporation (WKNJ), has its principal place of business in Flemington, New Jersey, where since 1962 it has operated a restaurant facility under the name "Weiner King," (N.B. "ei"), using the design "Weiner King" and a crown. It sues to enjoin the defendants from using within New Jersey the name "Wiener King," (N.B. "ie") and the design "Wiener King" and a crown in, on and at restaurants which will, when opened, specialize in selling the same product plaintiff sells, "hot dogs".
The defendants are as follows:
Defendant The Wiener King Corporation (WKNC) is a corporation organized under the laws of the State of North Carolina and has its principal place of business in Charlotte, North Carolina.
Defendant Operational Systems, Inc., is a corporation organized under the laws of the State of Delaware with its principal place of business in New Jersey.
Defendant Jed Associates is a corporation organized under the laws of the State of New Jersey with its principal place of business in New Jersey.
Defendant Robert Alex is an individual residing at 6 Appletree Lane, East Brunswick, New Jersey, and is president of defendant Operational Systems, Inc.
Defendant Cary Alex is an individual residing at 25 Monroe Place, Brooklyn, New York, and is a principal in defendant Operational Systems, Inc.
Defendant Joseph Diaz is an individual maintaining a real estate practice in Bloomfield, New Jersey, and is the registered agent of defendant Jed Associates.
Defendant Frank M. Leo is an individual residing in Nutley, New Jersey, and is president of defendant Jed Associates.
Plaintiff's complaint alleges (Count I) that plaintiff is the prior user of the disputed trade and service marks, having first used them in 1962; defendant WKNC did not use its marks until 1970, in North Carolina; WKNC now proposes to enter into business in New Jersey, through the sale of franchises for restaurant facilities similar to plaintiff's, using as the name of such facilities the allegedly infringing marks, all with knowledge of plaintiff's pre-existing rights to the exclusive use of said marks; the other defendants are involved in the proposed franchising; and defendants' proposed action constitutes a false designation of origin and a false representation, and otherwise is in violation of plaintiff's rights under 15 U.S.C. Sections 1125(a) and 1126. Jurisdiction is claimed under 15 U.S.C. Sec. 1121.
The remaining counts claim "Common Law Unfair Competition" with jurisdiction under 28 U.S.C. Sec. 1338(b) (Count II); "New Jersey Unfair Competition" under pendent jurisdiction principles (Count III); "New Jersey Trademark Infringement" under pendent jurisdiction principles (Count IV); and "New Jersey Fraudulent Advertising" under pendent jurisdiction principles (Count V).
In addition to the injunctive relief sought, plaintiff seeks accounting of profits, costs, and cancellation of WKNC's federally registered marks, under 15 U.S.C. Sections 1064(a) and 1119.
Defendants' answer denied the material allegations of the complaint, including the averments of subject matter jurisdiction. The defendants WKNC, Jed Associates, Diaz and Leo also counterclaimed under the Lanham Act and under the common law, claiming plaintiff's Beach Haven "Wiener King" facility infringes WKNC's registered service mark.
This court has subject matter jurisdiction over the claim asserted in Count I of the complaint under 15 U.S.C. Sections 1121 and 1125(a), although not under Section 1126. L'Aiglon Apparel v. Lana Lobell, Inc., 214 F.2d 649 (3d Cir. 1954); and will, in the exercise of its discretion, assume jurisdiction over the remaining pendent state claims. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).
Before addressing the issues in the case at bar it is noted that the plaintiff and defendant WKNC are also contesting in the Patent and Trade Mark Office. Plaintiff there seeks to register its own marks and cancel WKNC's 1972 registrations. WKNC seeks concurrent registration, under which WKNJ would be granted use in Hunterdon County, New Jersey, and WKNC would be granted use in the balance of the United States. On November 7, 1975, these proceedings, having been consolidated, were stayed by the Trademark Trial and Appeal Board until this suit is concluded. It is further noted that the parties in this proceeding have suggested that this court deal with the cancellation and concurrent registration problems.
At the outset of suit, upon plaintiff's application, this court preliminarily enjoined defendants from using their mark in New Jersey within 20 miles of Flemington and within 20 miles of Beach Haven. At the same time, the parties were advised that this court saw as a critical issue the extent of plaintiff's trade territory wherein it was entitled to protection as a prior user of its mark. Accordingly, the parties were instructed to submit statistical data and other information to illumine this area of dispute.
Thereafter the parties pursued discovery, pre-tried the matter, stipulated numerous facts, and submitted the case to this court for final determination following submission of briefs and oral argument.
To expedite disposition of this matter I am placing this opinion into the record.
Most of the critical facts have been stipulated. The parties have also agreed that the court may consider as in-court testimony certain depositions and affidavits.
The parties also have tendered for the record certain statistical studies and reports purporting to show traffic flow in the Flemington, New Jersey, area; the tourist "draw" of Flemington; the business done — by customers' residences — by certain Flemington industries; and customer surveys at plaintiff's restaurants.
All of this material will be accepted in evidence. All of it has relevance, and is entitled to some weight and, of course, except as to plaintiff's questionnaires, hearsay objections were waived (Tr. Dec. 10, 1975, 57 et seq.).
As to the questionnaires — and customers' responses thereto — they are admitted over defendants' hearsay objection. Id., 58. Plaintiff had actual customers indicate where they resided. What better way is there to ascertain where people who patronize plaintiff's restaurants reside? While it is true that a certain amount of facetiousness crept into a limited number of responses, the court is confident that the results can be relied upon to the extent that they reveal broad percentages and trends of use. There is no suggestion that customers from the vicinity of Flemington were induced to fabricate their responses to reflect they came from afar. On the other hand, as to the meaning and weight to be given to this evidence, it supports only the argument that people from various points, driving by, drew up and visited plaintiff's restaurant. Doubtless many if not all from the Flemington area went to plaintiff's restaurant. People from Bergen or Essex County or other remote points, so far as the evidence indicates, did not leave their homes for a snack at the Weiner King; no claim is made of such uniqueness of specialty as would induce this activity. At best, from plaintiff's point of view, while driving in the area, people stopped for the light meal plaintiff offers. Then, having been exposed to the "Weiner King" mark of identification, they now serve as means of carrying plaintiff's name home into their areas of residence. It is on this basis that all of plaintiff's data will be considered. Cf. Zippo Manufacturing Co. v. Rogers Imports, Inc., 216 F.Supp. 670, 683 (S.D.N. Y.1963); and see authorities cited in Grotrian, Helferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975).
Insofar as the Roper poll is concerned, I find it of very little assistance in dealing with the issue presented here. Accordingly, it will be given little weight.
From the stipulated facts, and those developed by the submissions and generally uncontested, the following are adjudged to be critical.
Plaintiff was the first user but has never obtained federal registration for its mark, first used in Flemington, New Jersey, in 1962; plaintiff opened a second Flemington facility in 1967, first expanded beyond Flemington when it opened a facility in Beach Haven, New Jersey, in 1973, and opened a fourth facility, in Flemington, in 1975.
Defendant WKNC, second user, innocently adopted its mark in North Carolina in 1970, and obtained federal registrations by May in 1972; no opposition had been filed to such registration and by May 1972 WKNC had 11 "Wiener King" company-owned restaurants in operation. At oral argument WKNC's counsel stated there were now 61 restaurants open, 9 under construction, and 35 under site development, in 20 states. Many of these have come about, of course, after WKNC first learned of plaintiff's mark. Plaintiff has not sought, however, to enjoin any one of them until this suit was brought.
WKNC first learned in late 1972 of the incorporation of plaintiff in New Jersey in 1966 under the name Wiener King, Inc., and first learned in July 1972 of plaintiff's use on Highway 31-202 of the words "Weiner King" within a crown-shaped design. At this time WKNC had not yet come into, and, apparently, had not made plans to come into New Jersey.
After learning of plaintiff's use of its mark in Flemington, WKNC offered for sale,...
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