Barbecue Marx v. 551 Ogden ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-3110
Barbecue Marx, Incorporated,
Plaintiff-Appellee,
v.
551 Ogden, Incorporated,
Defendant-Appellant.
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
times.
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
Spoke.
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-
1375, 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
Marx.
D. Degree of Care Likely to be Exercised by
Consumers
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
Another
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
injunction.
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
injunction.
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."