Coach House Restaurant, Inc. v. Coach & Six Restaurants, Inc.
Opinion of the Court
Petitioner, The Coach House Restaurant, Inc. (Coach House) seeks to cancel the federal registration of the servicemark owned by the registrant, The Coach and Six Restaurants, Inc. (Coach and Six). The Trademark Trial and Appeals Board (TTAB) es-topped the petition because it found that petitioner had acquiesced in registrant’s use of the mark. Petitioner appealed the decision to the United States District Court for the Northern District of Georgia and added new claims of servicemark infringement and unfair competition. Relying on the findings and conclusions of the TTAB, the district court granted summary judgment in favor of the registrant. Petitioner appeals to this Court for review. We reverse the grant of summary judgment and remand the case to the district court for trial.
Facts
In 1953, Coach House began using the “coach and six horses” logo as a service mark for The Coach House Restaurant in New York, New York. In 1962, registrant opened The Coach and Six Restaurant in Atlanta, Georgia. The corporate president of Coach House is Leon Lianides. Lianides was also instrumental in formation of Coach and Six, although Harold Soloff was the majority owner of the Coach and Six corporation at its inception. Moreover, Lianides served on Coach and Six’s board of directors until 1963 and was a shareholder of the registrant until 1968.
Because registrant could not afford to have a new logo created for the restaurant, Lianides suggested that the “coach and six horses” logo be used. Registrant has been continuously using the logo since that time. At one point during registrant’s use of the “coach and six horses” logo, Lianides suggested that Soloff discontinue the affiliation between the two restaurants. Lian-ides was apparently concerned that the quality of registrant’s restaurant had di
Thereafter, and unbeknownst to petitioner, Coach and Six applied for and received a federal registration of its servicemark on December 29, 1981. The registered mark comprises two components as shown below: (1) the “coach and six horses" logo underlain by (2) the words “The Coach and Six Restaurant.”
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The registered mark appropriates the identical “coach and six horses” logo that petitioner uses as its logo.
Petitioner discovered the registration which appropriated its logo and objected to it by February 23, 1983. Coach House petitioned the TTAB to cancel the registration of the service mark because Coach House has the prior trade identity rights in the mark. In the initial proceeding, the TTAB determined that petitioner had acquiesced in registrant’s use of the mark.
On review, the district court
Petitioner appeals to this Court citing three issues: that the TTAB and the district court erred in finding that petitioner was barred by acquiescence from cancel-ling the registration, the district court erred in finding both no likelihood of confusion and that registrant committed no fraud on the PTO. Registrant asserts that the TTAB and the district court were correct and that petitioner has filed a frivolous appeal.
Standard of Review
A district court may not reverse findings of the TTAB, “unless the contrary is established by testimony which in character and amount carries thorough conviction.”
The district court granted summary judgment to registrant on the cancellation claim because petitioner failed to present new evidence that would impugn the TTAB’s ruling that petitioner was estopped by acquiescence. Consequently, the grant of summary judgment on the cancellation petition indicates that the district court, relying on the TTAB’s factual findings, concluded that there was no abuse of discretion in the TTAB’s decision. Although the unfair competition and infringement claims were initially brought before the district court, the court relied on the findings of the TTAB and granted summary judgment on the new claims also in favor of the registrant.
Accordingly, we review the district court grant of summary judgment to determine if genuine issues of material fact are involved and whether the registrant was entitled to judgment as a matter of law and equity.
Petition to Cancel
In order to prosecute successfully a petition for cancellation, petitioner must prove: (1) That it has standing to petition for cancellation because it is likely to be damaged, and (2) that there are valid grounds for discontinuing registration.
Because the mark at issue has been on the federal Principal Register in registrant’s name for less than five years, the mark may be cancelled if petitioner can prove that the registration should have been barred in the first instance under Lanham Act § 2.
1. Acquiescence in Registration Defense
The district court adopted the TTAB equitable decision to estop the petition to cancel the registration because petitioner had acquiesced in the registrant’s use for such a long time. Because acquiescence is an equitable defense, it will be reviewed for an abuse of discretion.
Acquiescence is a doctrine which is very similar to laches. Both are equitable defenses that are recognized in inter partes proceedings before the TTAB
The defense of acquiescence requires proof of three elements: (1) That petitioner actively represented that it would not assert a right or a claim; (2) that the delay between the active representation and assertion of the right or claim was not excusable; and (3) that the delay caused the registrant undue prejudice.
Although petitioner actively represented that the registrant could use its logo, petitioner did not represent or imply that it would allow registrant to register the petitioner’s service mark on the federal Principal Register. Therefore, no period of delay could have begun running as to registration, until petitioner had notice that registrant was doing something that would generate a claim or right of petitioner. Because registration on the federal principal register is constructive notice of registrant’s claim of ownership,
The registration was awarded to registrant on December 29, 1981, and petitioner discovered the registration and objected to it by February 23, 1983. Thus, the period of delay as to registration was, at most, just over a year. Despite their surprise in seeing its logo on the Principal Register, petitioner was able to object in a short period of time. According to these facts, the period of delay is not unreasonable and
The absence of one element of the acquiescence case is sufficient to deny the equitable relief requested.
The equities of this case weigh heavily in favor of petitioner on the issue of acquiescence in the registration. Therefore, we conclude that the record facts show that the TTAB abused its discretion by estop-ping petitioner from pursuing the cancellation proceeding because of petitioner’s acquiescence in use. Consequently, registrant’s defense of acquiescence as to registration fails in a court of equity.
2. Grounds for Cancellation
Because we conclude that the acquiescence in registration defense does not estop plaintiff’s cancellation petition, we turn to the merit of the cancellation petition. In order to cancel a registration under Lanham Act Section 2(d) in this case, petitioner must prove: (1) that the registered mark resembles petitioner’s mark,
a. Resemblance
It is evident that the registered mark resembles petitioner’s mark because both marks utilize the identical logo. Despite the TTAB’s finding that the two marks were not sufficiently similar to cause confusion, which we will address later, the record shows that the two marks do possess identical logos. Thus, based on the evidence in the record, the first element of resemblance appears to be satisfied.
b. Priority of Trade Identity Rights
Unrefuted evidence indicates that petitioner first used the mark in 1952, and registrant began using the mark in 1962, ten years later. Clearly, petitioner was the first to use the mark. However, petitioner must have obtained trade rights in the mark prior to registrant’s first use.
A business will obtain rights in the mark upon first use only if the mark is inherently distinctive.
The distinctiveness of the mark at issue refers to how easily customers identify petitioner’s mark with the represented services. There are four categories of distinctiveness listed in ascending order of distinctiveness: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful.
If a court finds that the term is descriptive, and hence not inherently distinctive, petitioner must establish that a secondary meaning attached before registrant began using the logo in order to obtain trade identity rights.
(1) [T]he length and manner of its use;
(2) the nature and extent of advertising and promotion; (3) the efforts made by the plaintiff to promote a conscious connection in the public’s mind between the name and the plaintiffs ... business; and (4) the extent to which the public actually identifies the name with the plaintiffs [service].37
Both the distinctiveness categorization
c. Likelihood of Confusion
The last element required to successfully prosecute a registration cancellation petition is that the mark is likely to cause confusion when used to represent registrant’s business. At trial, the TTAB explained that although petitioner presented evidence of actual confusion, there was no evidence that confusion stemmed from the use of the “coach and six horses” logo. Moreover, the TTAB found it significant that petitioner asserted only his logo against registration of the registrant’s mark, contending that the identity of the two logos would cause inevitable confusion. Consequently, the TTAB compared only petitioner’s logo without the word portion, “The Coach House,” against the registered mark which comprised both the logo and the word mark “The Coach and Six Restaurant.” The TTAB determined that the word portion is-the most distinctive component of most service marks, especially in
Although the TTAB found that there was no inevitability of confusion, all that must be shown to cancel registrant’s registration is that there is a likelihood of confusion.
The TTAB’s factual basis for finding no inevitability of confusion is that actual confusion was not sufficiently proved and that the registered mark and petitioner’s mark are not sufficiently similar. However, our precedent requires utilization of a more comprehensive multifactor analysis.
The distinctiveness of the mark has been previously discussed with respect to the priority of trade identification rights. Regarding the confusion issue, a very distinct mark which holds a formidable place in the consumer psyche is more susceptible to confusion from similar marks. Accordingly, distinct marks are afforded more protection from confusingly similar marks.
As to the similarity of the marks, the logo portion on the two marks are identical. The TTAB compared only petitioner’s logo to the registered mark which comprises both the logo and the name because petitioner only asserted that its logo mark should have prevented the registration. The TTAB’s finding that the addition of the word mark in the registered mark somehow operates to detract from the identity of the logos and render the two marks sufficiently dissimilar causes us confusion. Because both marks use an identical logo, the marks must be very similar, regardless of the attendant name of the restaurant. Consequently, we are left with a thorough conviction that the TTAB finding that the marks are not very similar is erroneous. Accordingly, we cannot accept the TTAB finding on this factor.
Although both marks represent restaurants, the TTAB made no finding on wheth
Although the TTAB did not directly address the next factor, a close similarity exists in the restaurants themselves. This similarity was influenced by Mr. Lianides who was the sole owner of Coach House and was one of the shareholders and directors of Coach and Six from its inception in 1962 until 1968. The TTAB found that “Mr. Lianides was the guiding force in setting up the new restaurant, training the personnel, including the cook, and designing the menu as well as the restaurant decor.” Evidently, registrant’s restaurant was modeled to emulate the same ambiance and provide the same cuisine as does the petitioner’s restaurant. Therefore, it appears that both restaurants are similar.
Because the similarity of customers was not addressed by the TTAB, this factor requires more attention. It would seem that the similar menu and ambience utilized in both restaurants would attract the same customers. Registrant points out that confusion should be mitigated because petitioner’s restaurant is located in New York and registrant’s restaurant is located in Georgia. However, petitioner correctly answers that geographical remoteness between the two services is irrelevant when one party is seeking a federal registration. We agree because Section 7(b) of the Lanham Act
As to the similarity of advertising, the TTAB found that “[tjhere was some crossover advertising in the form of references to [petitioner’s restaurant] in [registrant’s] menus, in matchbooks and in a framed article from Gourmet magazine hanging in [the] lobby” of registrant’s restaurant. The TTAB made no findings as to the medium of advertising used by both parties other than the finding that both restaurants were critically acclaimed in the newspapers. Hence, this factor demands more attention.
The findings of the TTAB indicate that registrant did not adopt petitioner’s logo with an intent to cause confusion. However, at the time the identical logo was adopted by registrant, Mr. Lianides was petitioner’s sole owner and a shareholder and director of the newly formed Coach and Six. The initial impetus behind using the same logo was to save cost, but it is evident that there was also a joint effort between registrant and petitioner to link the two restaurants together. This effort is demonstrated by the TTAB finding that Mr. Lianides was very influential in designing the ambiance and the accoutrements of the restaurant.
Although we do not believe these facts evince an intent to cause confusion per se, we conclude that the adoption of the identical mark, facilitated through what was then a friendly relationship, was one of a series of steps designed to create a connection in the customer’s mind between the two restaurants. We agree with the finding of the TTAB that the original intent in adopting the identical logo was not to cause confusion. However, the fact that the logo was adopted with an initial intention to link the two restaurants together does support a finding of a likelihood of confusion.
By comprehensively analyzing the likelihood of confusion issue through the multi-factor method required in this Circuit, we conclude that there are several genuine issues of material fact which should be tried by the district court. Moreover, the servicemark resemblance and the priority of trade identity rights elements present several genuine issues of material fact. Consequently, we remand the cancellation petition to the district court to hold a trial to resolve these factual issues.
Servicemark Infringement and Unfair Competition Claims
The district court also granted summary judgment against petitioner’s newly instituted servicemark infringement and unfair competition claims. The district court first concluded that the prima facie cases of the two new claims were not satisfied because it found no likelihood of confusion which is a requisite element of both claims. The court found no likelihood of confusion by deferring to the TTAB’s finding that there was no inevitability of confusion. The district court concluded, in the alternative, that petitioner was estopped by laches from asserting the two new claims against the registrant.
1. Acquiescence as to Use
The district court’s conclusion that petitioner was estopped by laches from suing registrant for service mark infringement and unfair competition, has merit. We note that acquiescence, instead of laches, is the proper defense in this context because petitioner actively consented to registrant’s use of the “coach and six horses” logo.
Acquiescence to one’s use of a trademark is analogous to an implied license to use the mark.
The same three elements applied in the acquiescence in registration are applica
The TTAB also found that by advertising and using the mark for twenty years, registrant accumulated “extensive goodwill [in] the business associated with that mark, in reliance upon the lack of objection from petitioner.”
2. Inevitability of Confusion
Although petitioner has acquiesced in use of their logo by the registrant, the public interest in preventing confusion around the marketplace is paramount to any inequity caused the registrant.
The TTAB did find that there was no inevitability of confusion, but they did not use the multifactor analysis required in this Circuit. As stated earlier, the district court must review the TTAB decision to see if it comports with the result compelled by the multifactor analysis. Although the standard of confusion required for a finding of inevitability of confusion is an increment higher than that required for a finding of a likelihood of confusion, we have already seen that the confusion issue presents genuine issues of material fact. Therefore, we reverse the grant of summary judgement and remand the issue to the district court to conduct a multifactor analysis of the confusion issue to see if the result comports with the TTAB result.
The inevitability of confusion issue has a complexion different from the likelihood of confusion issue because the latter determination was relevant to cancellation proceedings before the PTO. This present inevitability of confusion inquiry is pertinent to an infringement and unfair competition litigation, which places the geographical remoteness issue in a different perspective.
As stated earlier, the geographical remoteness issue is not relevant to the likelihood of confusion regarding the cancellation petition because the registration of a servicemark presumes that the registrant has the unlimited right to use the service-mark anywhere in the United States. Therefore, in examining the merits of a cancellation petition, the registered mark must be judged against challenging marks as if the registered mark was being used everywhere in the nation.
On the other hand, in an unfair competition action, especially where the plaintiff’s mark is not registered, there is no presumption that the mark is being used nationwide. Accordingly, the inevitability of confusion inquiry pertains to whether the public interest in preventing similar marks from confusing those consumers in
Furthermore, if geographical remoteness is proved, the Tea Rose-Recta-nus doctrine may be invoked. The doctrine, in effect, states that although geographical remoteness can minimize the likelihood of confusion, if the alleged infringer has appropriated the mark with a purpose inimical to the interest of the plaintiff, the remoteness of use may be disregarded.
3. Claims may be Revived
In the event that petitioner prevails on the cancellation petition and proves the inevitability of confusion required to survive the estoppel by acquiescence in use at trial, the district court will have to address petitioner’s newest claims of service-mark infringement and unfair competition. To prove servicemark infringement, petitioner must prove: (1) That registrant used a term in commerce (2) in connection with their services (3) which is likely to be confused with the term (4) in which petitioner possesses the right to use to designate their services.
The district court granted summary judgment in both the unfair competition and infringement claims, because the TTAB found that the two marks posed no inevitability of confusion. We conclude that the district court erred by deferring to the TTAB’s finding of no inevitability of confusion to preclude the servicemark infringement and unfair competition lawsuit. Although a likelihood of confusion is an essential element of the cause of action,
However, in order for petitioner to be able to prove its infringement and unfair competition claims, an inevitability of confusion must be proved to avoid being es-topped by acquiescence in use. Because a showing of inevitable confusion requires proof of a higher standard of confusion than does a likelihood of confusion, the latter is subsumed by a showing of inevitable confusion. Therefore, if inevitable confusion is shown at trial a likelihood of confusion is deemed established by issue preclusion.
Remaining Issues
Petitioner asserts that the TTAB erred in finding that registrant committed no fraud
Registrant asserts that petitioner filed a frivolous appeal. We conclude there is nothing farther from the truth and deny registrants Rule 38 motion for attorney fees.
Conclusion
We conclude that the TTAB abused its discretion by estopping petitioner’s cancellation proceedings because of acquiescence in registration. The petition is not es-topped by acquiescence, and petitioner shall be allowed to prove servicemark resemblance, priority of trade identity rights and a likelihood of confusion at trial before the district court. With regard to the cancellation petition, geographical remoteness is not relevant to the likelihood of confusion.
We conclude that the district court erred by relying on a TTAB finding of no inevitability of confusion to preclude a finding of the requisite likelihood of confusion, and thereby dismissing the servicemark infringement and unfair competition claims. However, the claims may be estopped by acquiescence in use if petitioner fails to prove an inevitability of confusion. If inevitable confusion is proved, the likelihood of confusion is established by issue preclusion. Geographical remoteness is relevant to the confusion issues pertaining to the servicemark infringement and unfair competition claims.
We AFFIRM the TTAB’s findings that no fraud was committed on the PTO by registrant, and that petitioner has not filed a frivolous appeal.
Accordingly, the summary judgment granted by the district court is REVERSED and REMANDED for trial.
. The Coach House Restaurant, Inc. v. The Coach and Six Restaurants, Inc., 223 USPQ 176 (TTAB 1980).
. Id. at 178.
.Review by the district court is permitted by Lanham Act § 21(b)(1), 15 U.S.C. § 1071(b)(1) (1988).
. 757 F.2d 1176, 1180, 226 U.S.P.Q. 123, 125 (11th Cir.), cert. denied 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985).
. Id. at 1181, 226 U.S.P.Q. at 126 (originated in Morgan v. Daniels, 153 U.S. 120, 125, 14 S.Ct. 772, 773, 38 L.Ed. 657 (1894)).
. Boire v. Int'l Bhd. of Teamsters, 479 F.2d 778, 792 (5th Cir. 1973).
. Id.
. Fed.R.Civ.P. 56(c).
. Freedom Sav. & Loan, 757 F.2d at 1181, 226 U.S.P.Q. at 126.
. Samples v. City of Atlanta, 846 F.2d 1328, 1331 (11th Cir. 1988).
. Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 1026, 213 USPQ 185, 187 (CCPA 1982).
. See Lanham Act § 14(1), 15 U.S.C. § 1064(1).
. Plastilite Corp. v. Kassnar Imports, 508 F.2d 824, 826, 184 U.S.P.Q. 348, 350 (CCPA 1975).
. 15 U.S.C. § 1052(d) (1988) via Lanham Act § 3, 15 U.S.C. § 1053 (1988).
. Boire, 479 F.2d at 792.
. Lanham Act § 19, 15 U.S.C. § 1069 (1988).
. Hitachi Metals Int'l Ltd. v. Yamakyu Chain Kabushiki Kaisha, 209 USPQ 1057, 1067 (TTAB 1981). The distinction may be significant because in a general case a party who is guilty of active consent may be found less deserving of relief than a party guilty of mere passive consent.
. See Conagra, Inc. v. Singleton, 743 F.2d 1508, 1517, 224 U.S.P.Q. 552, 558 (11th Cir. 1984). This prima facie case is modified from the lach-es prima facie case set forth in Conagra. Although Conagra involved the defense of laches in an infringement case and the case at bar involves the defense of acquiescence in a cancellation proceeding, the two doctrines are sufficiently cognate to justify recognition of a prima facie case in similar circumstances.
. Lanham Act § 22, 15 U.S.C. § 1072 (1988).
. Conagra, 743 F.2d at 1517, 224 U.S.P.Q. at 559.
. 15 U.S.C. § 1052(d).
. Towers v. Advent Software, Inc., 913 F.2d 942, 946, 16 U.S.P.Q.2d 1039, 1042 (Fed.Cir. 1990).
. 15 U.S.C. § 1052(d).
. Towers, 913 F.2d at 946, 16 U.S.P.Q.2d at 1042.
. 1 J. McCarthy, TRADEMARKS AND UNFAIR COMPETITION § 16:2 (2d. ed. 1984).
. Id.
. American Television & Communications Corp. v. American Communications & Television, Inc., 810 F.2d 1546, 1548, 1 U.S.P.Q.2d 2084, 2085 (11th Cir. 1987).
. Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1183, 207 U.S.P.Q. 278, 282 (5th Cir. 1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1516, 67 L.Ed.2d 816 (1981).
. American Television & Communication Corp. v. American Communications & Television, Inc., 810 F.2d 1546, 1548, 1 U.S.P.Q.2d 2084, 2086 (11th Cir. 1987).
. Id.
. Id.
. Id.
.Id.
. Co-Rect Products, Inc. v. Marvy! Advertising Photography, Inc., 780 F.2d 1324, 1330, 228 U.S. P.Q. 429, 431 (8th Cir. 1985).
. AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1536 n. 14 (11th Cir. 1986).
. Conagra, 743 F.2d at 1513, 224 U.S.P.Q. at 555.
. Soweco, 617 F.2d, at 1183 n. 12, 207 U.S.P.Q. at 282 n. 12.
. Aloe Creme Laboratories, Inc. v. Milsan, Inc., 423 F.2d 845, 849, 165 U.S.P.Q. 37, 41 (5th Cir.) cert. denied, 398 U.S. 928, 90 S.Ct. 1818, 26 L.Ed.2d 90, reh’g denied, 400 U.S. 856, 91 S.Ct. 23, 27 L.Ed.2d 95 (1970).
. 3 U.S.P.Q.2d 1553 (TTAB 1987).
. The district court concluded the TTAB’s finding involved no genuine issue of material fact and that the applicable law entitled registrant to a judgment on the inevitability of confusion issue.
. Lanham Act § 2(d), 15 U.S.C. § 1052(d).
. Safeway Stores, Inc. v. Safeway Discount Drugs, Inc., 675 F.2d 1160, 1164, 216 U.S.P.Q. 599, 602 (11th Cir. 1982).
. See Wesco Mfg., Inc. v. Tropical Attractions of Palm Beach, Inc., 833 F.2d 1484, 1489, 5 U.S.P. Q.2d 1190, 1194 (11th Cir. 1987) (remanded because district court completely disregarded the multifactor analysis in finding no likelihood of confusion).
. Id.
. Jellibeans, Inc. v. Skating Clubs of Georgia, Inc., 716 F.2d 833, 840, 222 U.S.P.Q. 10, 18 (11th Cir. 1983).
. 15 U.S.C. § 1057(b) (1988).
. Giant Food, Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565, 1568 (Fed.Cir. 1983).
. American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619, 626, 136 U.S.P.Q. 286, 292 (5th Cir. 1963); Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d 358, 365, 121 U.S.P.Q. 430, 432 (2d Cir. 1959).
. (Emphasis added).
. Hitachi Metals, 209 U.S.P.Q. at 1067.
. Conagra, 743 F.2d at 1516, 224 U.S.P.Q. at 557.
. Id. (citing Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526 (1888)).
.Id.
. Id. at 1517, 224 U.S.P.Q. at 558.
. Coach House Restaurant, 223 USPQ at 178.
. Iodent Chemical Co. v. Dart Drug Corp., 207 USPQ 602, 607 (T.T.A.B. 1980).
. Id.
. Id. at 606.
. See Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 415, 36 S.Ct. 357, 361, 60 L.Ed. 713 (1916) (superseded by statute in irrelevant part Foxtrap, Inc. v. Foxtrap, Inc., 217 U.S.App.D.C. 130, 671 F.2d 636, 215 U.S.P.Q. 1105 (1916)).
. El Chico, Inc. v. El Chico Cafe, 214 F.2d 721, 725, 102 U.S.P.Q. 267, 270 (5th Cir. 1954).
. Hanover Star Milling, 240 U.S. at 415, 36 S.Ct. at 361.
. Lanham Act § 43(a), 15 U.S.C. § 1125(a) (1988).
. Freedom Sav. & Loan Ass’n, 757 F.2d at 1186, 226 U.S.P.Q. at 130.
. Lanham Act § 43(a), 15 U.S.C. § 1125(a).
. Lanham Act § 38, 15 U.S.C. § 1120 (1988).
. Fed.R.App.P.
Reference
- Full Case Name
- COACH HOUSE RESTAURANT, INC. v. COACH AND SIX RESTAURANTS, INC.
- Status
- Published