Barbecue Marx v. 551 Ogden ( 2000 )

  • In the
    United States Court of Appeals
    For the Seventh Circuit
    No. 00-3110
    Barbecue Marx, Incorporated,
    551 Ogden, Incorporated,
    Appeal from the United States District Court
    for the Northern District of Illinois, Eastern Division.
    No. 00 C 3433--Elaine E. Bucklo, Judge.
    Argued November 7, 2000--Decided December 22, 2000
      Before Bauer, Coffey, and Easterbrook, Circuit Judges.
      Bauer, Circuit Judge. Barbecue Marx, Inc.
    ("Barbecue Marx"), owner of the barbecue
    restaurant SMOKE DADDY, sued for trademark
    infringement to prevent 551 Ogden, Inc. ("Ogden")
    from using the name "BONE DADDY" for its
    forthcoming barbecue restaurant. Barbecue Marx
    petitioned the district court for a preliminary
    injunction to prevent Ogden from using BONE DADDY
    while the underlying case was pending. The
    district court granted the preliminary injunction
    and Ogden now appeals. We reverse and remand.
    I.   Background
      Max Brumbach, a former musician, created the
    restaurant SMOKE DADDY and its parent
    corporation, Barbecue Marx. SMOKE DADDY, founded
    in 1994, is located on the Near West side of
    Chicago and features live music, mostly blues.
    The diner style, 1500 square foot restaurant
    seats 42 people. SMOKE DADDY’s logo features the
    words "SMOKE DADDY" sitting atop a pair of wings
    and smoke. Its slogans are "Wow," and "Wow, that
    sauce!" By all accounts, SMOKE DADDY is a
    successful restaurant. Not only does it make a
    tidy profit, but food critics have recognized it
    as one of the best barbecue restaurants in
    Chicago. While a substantial number of SMOKE
    DADDY’s customers come from the neighborhood in
    which it is located, it attracts some customers
    from other areas of the city and country. SMOKE
    DADDY initially advertised, but it now relies on
    word of mouth and restaurant reviews to attract
    new customers.
      Clifford and Mitchell Einhorn, the principles of
    Ogden, own the critically acclaimed restaurant
    the Twisted Spoke. The Twisted Spoke features an
    "irreverent" style; the restaurant has a biker
    theme and shows X-rated videos. In 1996, the
    Einhorns decided to open a barbecue restaurant.
    When they began to develop the restaurant’s
    concept, they fell back upon a name that Mitchell
    Einhorn initially hit upon in 1993: BONE DADDY.
    Einhorn was inspired by the movie The Nightmare
    Before Christmas, in which one character asks a
    drum-playing skeleton, "What’s up, bone-daddy?"
    By the time the Einhorns decided to use the name
    for their new restaurant, however, they were
    aware of SMOKE DADDY and had eaten there several
      The Einhorns chose to locate BONE DADDY a few
    blocks from the Twisted Spoke, and 1.4 miles away
    from SMOKE DADDY. They consulted a trademark
    attorney, not regarding the appropriateness of
    the name, but to register it as a trademark. BONE
    DADDY hired consultants to create an image and
    logo for the restaurant as well as contractors to
    prepare the restaurant space. The BONE DADDY logo
    features a pig dressed like a gangster, smoking
    a cigar and the words "BONE DADDY." Its slogans
    are sexually charged: "Ribbed for your Pleasure"
    and "Man, I boned a lot of pigs." The 5000 square
    foot restaurant features a bar and two dining
    rooms, decorated in a modern style. BONE DADDY
    plans to feature live entertainment, including
    bluegrass, acoustic, and adult oriented
    musicians, but does not plan to have blues
    performers. BONE DADDY has not yet opened,/1 but
    it planned to begin doing business in September
    or October of this year. In anticipation of BONE
    DADDY’s opening, the Einhorns publicized the
    restaurant on the summer menus at the Twisted
    II.   Discussion
      Of the five elements necessary to obtain a
    preliminary injunction, see Rust Env’t &
    Infrastructure Inc. v. Teunissen, 
    131 F.3d 1210
    1213 (7th Cir. 1997) (listing the elements of
    proof for a preliminary injunction), we focus on
    the threshold issue of whether Barbecue Marx has
    proven a reasonable likelihood of success on the
    merits. In a trademark infringement suit, the
    plaintiff must show that its mark is protected
    under the Lanham Act and that the challenged mark
    is likely to cause confusion among consumers. See
    Eli Lilly & Co. v. Natural Answers, Inc., No. 00-
    2000 WL 1735075
    , at *6 (7th Cir. Nov. 21,
    2000) (citations omitted); Platinum Home Mortg.
    Corp. v. Platinum Fin. Group Inc., 
    149 F.3d 722
    726 (7th Cir. 1998) (citation omitted). In this
    case, Ogden accepts that SMOKE DADDY is a
    protectable mark. However, it argues that the
    preliminary injunction was granted in error
    because Barbecue Marx did not meet its burden of
    proof with regard to the likelihood of confusion.
      To justify a preliminary injunction against a
    junior trademark, Barbecue Marx must show a
    greater than negligible chance of prevailing on
    the merits of the underlying infringement claim.
    See Platinum Home Mortg. Corp., 149 F.3d at 726
    (citing Curtis v. Thompson, 
    840 F.2d 1291
    , 1296
    (7th Cir. 1988)). Seven factors comprise the
    likelihood of confusion test: "(1) similarity
    between the marks in appearance and suggestion;
    (2) similarity of the products; (3) area and
    manner of concurrent use; (4) degree of care
    likely to be exercised by consumers; (5) strength
    of complainant’s mark; (6) actual confusion; and,
    (7) intent of defendant to ’palm off his product
    as that of another.’" Rust Env’t & Infrastructure
    Inc., 131 F.3d at 1216 (7th Cir. 1997) (citations
    omitted); see Smith Fiberglass Prods., Inc. v.
    Ameron, Inc., 
    7 F.3d 1327
    , 1329 (7th Cir. 1993)
    (citations omitted); Schwinn Bicycle Co. v. Ross
    Bicycles, Inc., 
    870 F.2d 1176
    , 1185 (7th Cir.
    1989) (citations omitted). Likelihood of
    confusion is a factual determination, and we will
    defer to the district court unless we find clear
    error. See Platinum Home Mortg. Corp., 149 F.3d
    at 726; August Storck K.G. v. Nabisco, Inc., 
    59 F.3d 616
    , 618 (7th Cir. 1995). Clear error exists
    if, based on the whole record, we are left with
    a firm conviction that the district court has
    made a mistake. See Rust Env’t & Infrastructure
    Inc., 131 F.3d at 1216 (citation omitted).
      The likelihood of confusion test is an
    equitable balancing test. While no single factor
    is dispositive, see Schwinn Bicycle Co., 870 F.2d
    at 1187, and courts may assign varying weights to
    each of the factors in different cases, see Smith
    Fiberglass Prods. Inc., 7 F.3d at 1329 (citation
    omitted), three of the factors are particularly
    important: the similarity of the marks, the
    defendant’s intent, and actual confusion, Eli
    Lilly & Co., 
    2000 WL 1735075
    , at *3.
      In determining whether to grant a preliminary
    injunction, the district court must weigh the
    evidence pertaining to each likelihood of
    confusion factor and balance the seven factors
    against each other. A preliminary injunction is
    a very serious remedy, "’never to be indulged in
    except in a case clearly demanding it.’" Schwinn
    Bicycle Co., 870 F.2d at 1184 (quoting Roland
    Mach. Co. v. Dresser Indus., 
    749 F.2d 380
    , 389
    (7th Cir. 1984) (italics omitted)). When a
    district court evaluates the likelihood of
    confusion, "the actual and reasoned weighing of
    the evidence is imperative and is inherent in a
    meaningful exercise of discretion[,]" Schwinn
    Bicycle, 870 F.2d at 1184, as is the explicit
    balancing of the test’s factors. The district
    court’s opinion, however, does not explain how
    the evidence was weighed or how the factors were
    balanced. As a consequence, we do not have the
    district court’s rationale before us, making our
    review for clear error significantly more
    difficult. We now turn to the likelihood of
    confusion test.
      A.   Similarity in Appearance and Suggestion
      The trial court focused most heavily on the
    first factor, finding that the BONE DADDY and
    SMOKE DADDY marks were confusingly similar in
    appearance and suggestion. The district court
    based its finding on the tonal similarities of
    the words "bone" and "smoke." Both words have a
    long "o" and are only one syllable long. Further,
    the district court found that both marks evoke
    images of "slow cooked, smoked barbecue, usually
    ribs on the bone." We agree that the words sound
    alike and evoke similar imagery. However, the
    district court did not discuss the impact of the
    written form of the marks.
      SMOKE DADDY’s rectangular mark depicts the words
    "SMOKE DADDY" on top of a pair of wings and
    smoke. In contrast, BONE DADDY’s mark prominently
    displays a pig clad like a gangster and the words
    "BONE DADDY." The marks are visually distinct.
    Because the public will encounter the marks in
    written as well as spoken form, we believe it is
    essential to consider the marks’ visual
    characteristics. The visual appearance
    significantly undercuts the strength of Barbecue
    Marx’s argument that the marks are similar in
    appearance and suggestion. However, because of
    the aural similarity between the marks, we find
    no clear error with regard to this factor.
      B.   Similarity of Products
      The second factor is the similarity of the
    products. The district court addressed the second
    factor by noting that both SMOKE DADDY and BONE
    DADDY serve, or plan to serve, the same product:
    barbecue. This is true. However, the record
    contains evidence of differences in the
    restaurants’ ambiances and themes. SMOKE DADDY,
    a small restaurant, seating only 42, and
    decorated in a 1950s style, focuses heavily on
    blues music. In contrast, BONE DADDY styles
    itself as an "irreverent" restaurant, using such
    sexually charged slogans as "ribbed for your
    pleasure" and "man, I boned a lot of pigs." This
    style closely mirrors that of the Twisted Spoke.
    BONE DADDY’s interior has a very different feel,
    and its stronger emphasis on food differentiates
    its style from that of SMOKE DADDY. Although the
    district court did not consider this evidence, we
    cannot conclude that the judge’s finding on the
    similarity of products factor constituted clear
    error, but it certainly weakens this factor’s
    strength in favor of Barbecue Marx in the final
    weighing of the factors.
     C.   Area and Manner of Concurrent Use
      The district court weighed the third factor,
    area and manner of concurrent use, in favor of
    Barbecue Marx. The court emphasized that BONE
    DADDY and SMOKE DADDY are located generally in
    the same neighborhood because they are 1.4 miles
    apart and may serve many of the same customers.
    In this case, however, context is key. SMOKE
    DADDY is located in Wicker Park and BONE DADDY is
    situated in River West. These neighborhoods are
    in the heart of Chicago. In such a densely
    populated area, 1.4 miles is quite a distance,
    especially in an area crowded with dozens of
    restaurants, as these neighborhoods are. We find
    that the district court committed clear error
    when it weighed this factor in favor of Barbecue
      D. Degree of Care Likely to be Exercised by
      The district court also weighed the fourth
    factor, degree of care likely to be exercised by
    consumers, in favor of Barbecue Marx. We believe
    this is clear error. The district court based its
    finding on the idea that "although a careful
    patron might look up the address, write it down,
    and follow directions, some others might hop in
    the cab or car and wing it--perhaps to the wrong
    restaurant." There is little convincing evidence
    on the record to support this conclusion.
    Barbecue Marx argues that many people do not
    consider a $20 dinner expensive, and may forget
    the precise name of a restaurant recommended to
    them. These arguments are not persuasive. Reviews
    by food critics show that SMOKE DADDY is a
    critically acclaimed restaurant. The record
    reflects that most of SMOKE DADDY’s customers are
    "barbecue afficionados." We can expect that
    customers will exercise a reasonable degree of
    care when planning to dine at a restaurant of
    SMOKE DADDY’s caliber. Therefore, we find that it
    was clear error for the district court to weight
    this factor in favor of Barbecue Marx.
      E.   Strength of Ogden’s Mark
      The district court does not address the
    strength of Barbecue Marx’s mark. We believe this
    factor should be weighed in favor of Barbecue
    Marx. Barbecue Marx has used the mark SMOKE DADDY
    for six years and has built a reputation for good
    barbecue, as its rave reviews in restaurant
    guides and ability to depend on word-of-mouth
    advertising demonstrate.
      F.   Actual Confusion
      The sixth factor is actual confusion. The
    complainant does not have to prove this element
    with evidence of actual confusion, but must
    provide some type of evidence. See Libman Co. v.
    Vining Industries, Inc., 
    69 F.3d 1360
    , 1363 (7th
    Cir. 1995) ("But our point is only that a finding
    of likely confusion can no more be based on pure
    conjecture or a fetching narrative alone than any
    other finding on an issue on which the proponent
    bears the burden of proof."). Because BONE DADDY
    has not yet opened its doors, it would be
    exceedingly difficult for Barbecue Marx to find
    evidence of actual confusion. However, this
    difficulty does not excuse Barbecue Marx from the
    requirement that it must provide some evidence if
    the court is to weigh this factor in favor of
    Barbecue Marx. See Eli Lilly & Co., 
    2000 WL 1735075
    , at *6. Barbecue Marx could have
    conducted a survey using a hypothetical question
    asking would-be consumers to compare the two
    restaurants. It could have solicited testimony
    from an expert in marketing or psychology.
    Because the record contains no evidence to
    support a finding in favor of Barbecue Marx on
    the actual confusion factor, we conclude that the
    district court committed clear error when it
    weighed this factor in favor of Barbecue Marx.
      G. Intent to Palm Off the Product as that of
      The last factor is the intent of the defendant
    to palm off the product as that of another. The
    district court addressed this factor by noting in
    its recitation of the facts that BONE DADDY’s
    creators knew of the name’s similarity to SMOKE
    DADDY before they began planning to open BONE
    DADDY. The district court, however, did not
    consider this factor in its balancing. The record
    shows that Ogden derived the inspiration for the
    name BONE DADDY from the animated film The
    Nightmare Before Christmas. Ogden admits that its
    owners had eaten at SMOKE DADDY before they acted
    on the BONE DADDY concept and discussed the
    similarity of the two names. However, this
    knowledge alone is not enough to show intent on
    the part of Ogden. Ogden advertised the
    forthcoming opening of BONE DADDY at its other
    restaurant, the Twisted Spoke. BONE DADDY’s
    planned "irreverent" atmosphere mirrors the
    reputation of the Twisted Spoke, a "family biker
    bar" which shows X-rated videos, more closely
    than it does that of SMOKE DADDY. Further, it is
    relevant to note that BONE DADDY’s location is
    closer to the Twisted Spoke than it is to SMOKE
    DADDY, neutralizing an inference of bad intent
    that could be derived from the proximity of BONE
    DADDY to SMOKE DADDY. Given the evidence on the
    record, we conclude that this factor supports
    Ogden’s argument against the preliminary
      H.   Balancing the Factors
      Upon considering each of the factors, we
    believe that there is not enough evidence on the
    record to support a preliminary injunction. The
    key factors in this case are lack of evidence
    regarding Ogden’s intent and actual confusion on
    the part of consumers, and a reasonably high
    level of customer care. These factors strongly
    militate against imposing a preliminary
    injunction. Barbecue Marx’s showing that it has
    a strong mark, and the relatively weak showing in
    Barbecue Marx’s favor of similar products and
    similar marks cannot fill enough of the
    evidentiary void to justify a preliminary
    III.   Conclusion
      Because the record does not establish that
    Barbecue Marx has a more than negligible chance
    of prevailing on the merits, we REVERSE the
    judgment and REMAND for further proceedings not
    inconsistent with the views expressed herein.
    /1 Since oral argument, the Einhorns have opened
    their barbecue restaurant under the appellation
    "The Rib Restaurant Without a Name."