Woodroast Systems v. Restaurants Unlimited

• Decision Date: 18 May 1992
• Docket Number: Civ. No. 4-92-65.
• Citation: 793 F. Supp. 906
• Parties: WOODROAST SYSTEMS, INC., Plaintiff, v. RESTAURANTS UNLIMITED, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

793 F. Supp. 906

WOODROAST SYSTEMS, INC., Plaintiff, v. RESTAURANTS UNLIMITED, INC., Defendant.

Civ. No. 4-92-65.

United States District Court, D. Minnesota, Fourth Division.

May 18, 1992.

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David Richard Fairbairn, Thomas J. Stueber, Kinney & Lange, Minneapolis, Minn., for plaintiff.

Cecilia Marie Michel, Bruce Howard Little, Popham, Haik, Schnobrich & Kaufman, Minneapolis, Minn., Thomas Tyson, Bruce E. O'Connor, Thomas D. Theisen, F. Ross Boundy, Christensen, O'Connor, Johnson & Kindness, Seattle, Wash., for defendant.

ORDER

DOTY, District Judge.

This matter is before the court on defendant's motion for summary judgment and plaintiff's motion for a preliminary injunction. Based on a review of the file, record and proceedings herein, the court denies defendant's motion for summary judgment and grants plaintiff's motion for a preliminary injunction.

BACKGROUND

Plaintiff Woodroast Systems, Inc. ("WSI") owns and operates a restaurant in Minneapolis, Minnesota under the name "Shelly's Woodroast Restaurant." WSI also owns three United States Service Mark Registrations for restaurant services, each of which contains the phrase "woodroast."¹ WSI believes that its service marks are closely identified with Shelly's Woodroast Restaurant and its founder, Sheldon F. Jacobs.

Defendant Restaurants Unlimited, Inc. ("RUI") owns and operates twenty-two restaurants in seven states, including Palomino in Minneapolis, Minnesota. RUI uses the phrase "wood roasted" on some menus, including those at Palomino, to describe various food selections.²

WSI asserts three claims based on RUI's use of that phrase:

1. Service mark infringement in violation of 15 U.S.C. §§ 1051-1127;

2. False designation of origin in violation of 15 U.S.C. § 1125(a); and

3. Deceptive trade practices in violation of Minn.Stat. §§ 325D.43-48.

RUI moves for summary judgment on all of WSI's claims. RUI first contends that WSI's service mark infringement claim fails for three reasons: WSI's service marks are invalid because the combination of the terms "wood" and "roast" to describe foods roasted over a wood fire constitutes a generic use; RUI's use of the phrase "wood roasted" is a fair use under the Lanham Act; and RUI's use of that phrase does not create a likelihood of confusion between RUI's services and WSI. RUI similarly argues that WSI's claim pursuant to 15 U.S.C. § 1125(a) fails because RUI's description of various foods as "wood roasted" does not constitute a false designation of origin likely to cause confusion but rather a generic or fair use of that phrase. RUI finally argues that WSI's state law claim fails for the same reasons that its federal claims fail. RUI thus asks the court to dismiss WSI's complaint, declare that RUI's use does not infringe on WSI's service marks or constitute an unfair or deceptive practice, hold that WSI's service marks are invalid and order the United States Trademark Register to cancel those marks.

WSI responds that material fact disputes exist concerning whether the service mark "woodroast" is generic, whether RUI's use of the term "wood roasted" is a fair use and whether the similarity between the phrases causes consumer confusion. WSI further moves for a preliminary injunction prohibiting RUI's use of the phrase "wood roasted" during the pendency of this action,³ arguing that it is likely to succeed on the merits because the "woodroast" mark is both strong and incontestable. WSI further argues that it will be irreparably harmed by RUI's continued infringement and that the balance of equities favors an injunction because if granted, RUI would merely have to reprint it menus. WSI finally contends that an injunction would serve the public interest by preventing consumer confusion. The court will address each motion in turn.

DISCUSSION

1. RUI's Motion for Summary Judgment

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This standard mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which requires the trial judge to direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Stated in the negative, summary judgment will not lie if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. at 2510. In order for the moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56(c). A fact is material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Id. at 250, 106 S.Ct. at 2511. The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings, but must set forth specific facts sufficient to raise a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Moreover, if a plaintiff cannot support each essential element of its claim, summary judgment must be granted because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Id. at 322-23, 106 S.Ct. at 2552-53. With this standard at hand, the court will consider RUI's motion for summary judgment.⁴

A. WSI's Claim of Service Mark Infringement

The relative strength of trademarks and service marks⁵ is broken into four broad categories for purposes of legal recognition: (1) arbitrary or fanciful; (2) suggestive; (3) descriptive; and (4) generic. See, e.g., Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 939 (10th Cir.1983) (citing Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183 (5th Cir.1980)). The categorization of a given term is a factual determination, WSM, Inc. v. Hilton, 724 F.2d 1320, 1326 (8th Cir.1984) (citing Soweco, 617 F.2d at 1183 n. 12), involving the examination of two factors: (1) the distinctiveness of a mark; and (2) the extent to which the mark is recognized by the relevant consuming class. See, e.g., Aveda Corp. v. Evita Marketing, Inc., 706 F.Supp. 1419, 1428 (D.Minn.1989) (citing 2 J. McCarthy, Trademarks and Unfair Competition § 11:1 (2d ed. 1984)). The distinctiveness of a mark is measured by its tendency to identify the services sold under the mark as emanating from a single, although possibly anonymous, source. Beer Nuts, 711 F.2d at 940 (citing Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 380 (7th Cir.), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976)). An arbitrary or fanciful mark is "a word, either unknown or completely out of common usage, coined for the sole purpose of identifying products in the market place." Aveda, 706 F.Supp. at 1428 (citing Blisscraft of Hollywood v. United Plastics Co., 294 F.2d 694 (2d Cir.1961)). Those marks are deemed the strongest "because their inherent novelty creates a substantial impact on the buyer's mind." Id. Suggestive marks subtly indicate something about the product, thus a mark is deemed suggestive if it requires imagination, thought or perception to reach a conclusion concerning the nature of the goods. Beer Nuts, 711 F.2d at 939 n. 5. A descriptive mark immediately conveys characteristics, qualities or other features of a product and can be protected only if it has become distinctive by acquiring some secondary meaning. General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 625 (8th Cir.1987) (citing Co-Rect Prods. v. Marvy! Advertising Photography, 780 F.2d 1324, 1329 (8th Cir.1985)). A generic term does not indicate the source of a service, but merely defines a type, genus or class of services, and is not entitled to any protection. Id.

RUI contends that WSI's service mark infringement claim fails because the term "woodroast" is generic.⁶ WSI argues, however, that the term "woodroast" is strongly suggestive because it identifies the restaurant services provided as emanating from a particular source, Shelly's Woodroast. WSI further contends that the strong association between the mark and Shelly's Woodroast is evidenced by the local and national publicity that WSI has received concerning its restaurant and woodroast cooking style. WSI thus argues that the mark is entitled to broad protection. WSI further contends that summary judgment is inappropriate because its "woodroast" mark is incontestable and thus presumed valid.

A certificate of registration for a service mark provides prima facie evidence of the validity of the mark, the registration of the mark, the registrant's ownership of the mark and the registrant's exclusive right to use the mark in commerce. 15 U.S.C. § 1057(b).⁷ Moreover, a mark that meets certain requirements, primarily continuous use for five years after registration, becomes "incontestable". Id. § 1065. Incontestability provides conclusive evidence of the mark's validity, its registration, the registrant's ownership in the mark and the registrant's exclusive right to use the mark in commerce. Id. § 1115(b). Thus, it provides a method for a registrant to quiet title to the ownership of its mark. Park 'N Fly v. Dollar Park & Fly, Inc., 469 U.S. 189, 198-202, 105 S.Ct. 658, 663-66, 83 L.Ed.2d 582 (1985). An incontestable mark may also be used offensively to enjoin another's infringement. Id. at 205, 105 S.Ct. at 667.

Incontestability,...