Louangel, Inc. et al v. Darden Restaurants, Inc. et al
Filing
178
ORDER granting 103 Motion for Partial Summary Judgment; denying 132 Motion to Strike.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(sscotch, )
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
LOUANGEL, INC.; dba LONGHORN
STEAKHOUSE RESTAURANT, et al,
Plaintiffs,
VS.
DARDEN RESTAURANTS, INC., et al,
Defendants.
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§ CIVIL ACTION NO. 2:12-CV-00147
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ORDER ON MOTION FOR
PARTIAL SUMMARY JUDGMENT ON ABANDONMENT
Before the Court is “Plaintiffs’ Motion for Partial Summary Judgment on
Defendants’ Abandonment of Early Marks” (D.E. 103).
In connection with their
response to this Motion, Defendants filed their Motion to Strike the Declaration of
Ronald B. Whitten (D.E. 132), a Declaration that was attached as summary judgment
evidence to Plaintiffs’ Motion. For the reasons set out below, the Motion to Strike is
DENIED and the Motion for Partial Summary Judgment is GRANTED.
FACTS
In 1981, Defendants operated restaurants named “Long Horn Steaks” in states in
the Eastern part of the country. Defendants registered what will be referred to as the
“Bongo” style trademark for its steak restaurant, using the name Long Horn Steaks as
three separate, stacked words in a bold, chunky font and substituting Bongo,1 a babyfaced cartoon cow’s head with vertical horns, as the “o” in “Long” and a cartoon t-bone
1
The cartoon cow was named Bongo after a contest. D.E. 124-3, p. 5.
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steak as the “t” in “Steaks,” followed in 1992 by a similar horizontal version of the
trademark:
This trademark will be referred to as the “Bongo” trademark. In 1995, wanting a more
“upscale” image and with major expansion plans, Defendants broadened their menu and
registered a new trademark using a minimalist or more abstract rendering of the outline of
a steer’s head with horizontal horns, and with “LongHorn” as one word over
“steakhouse” in a sleeker font:
This trademark will be referred to as the “Minimalist” trademark.
In between the Defendants’ Bongo and Minimalist trademark registrations,
Plaintiffs began the use of their own logos in 1989, for their “Longhorn Restaurant” with
a steer’s head rendering as a prominent design feature. The steer’s head design has
horizontal horns and is somewhat more detailed than Defendants’ Minimalist logo, but
not as cartoonish as the Defendants’ Bongo logo:
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Plaintiffs operated their restaurants exclusively in the Corpus Christi, Texas area.
This lawsuit was precipitated by Defendants’ plans to expand into the Corpus
Christi market, with local advertising and the sale of Defendants’ LongHorn Steakhouse
gift cards at Corpus Christi retail stores. Both Plaintiffs and Defendants have alleged
trademark infringement claims against each other.
Plaintiffs seek partial summary
judgment that Defendants abandoned their 1981 and 1992 Bongo trademarks, thereby
eliminating any claim to infringement of those marks and rendering Plaintiffs’ trademark
prior in time to the Minimalist trademarks.
Plaintiffs have supplied the Court with the Defendants’ corporate representative
testimony, which explains a concerted effort in 1994-95 to remodel the restaurants to
eliminate the Bongo or roadhouse styling and adopt a more upscale image.
They
removed neon signs and taxidermy, with the exception of a steer head over the bar. D.E.
103-4, pp. 4-5. They changed red vinyl tablecloths and red cloth in the booths to tan or
earth-tone fabrics. D.E. 103-7, pp. 8-9. Instead of neon lighting, they changed to
warmer, golden-toned lighting. Id., p. 9-10. They changed the exterior signage from the
Bongo trademark to the Minimalist trademark. Id., p. 11. Specifically, Shelly Welch
testified that the effort was to “evolve the brand,” modernize it, and rethink market
strategy to create broader appeal. D.E. 103-3, p. 8.
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This was confirmed by George McKerrow, Jr. They “reimaged” “lots of things,”
including uniforms, china, décor, food offerings, size of the buildings as well as the logo.
D.E. 103-4, p. 4. It was an “evolution of the brand to make it and keep it competitive”
and to avoid confusion with the earlier iteration of the restaurant. Id. They performed a
chain-wide renovation changing the dark rustic paneled interior to a brightly lit beige
interior. Id., p. 5. More specifically, “The process was considered to be bringing the
brand more upscale and more universally acceptable.” Id., p. 4.
In what Defendants’ representatives admit was an “evolution of the brand,” they
intentionally undertook to change the commercial impression of their trademark. They
renovated existing restaurants, removing the Bongo trademark from signage, menus, and
other items in favor of those bearing the Minimalist logo. According to their Annual
Report of 1997, this process took place over three years, beginning in 1994 and ending in
1997. D.E. 103-6, p. 8. See also, D.E. 103-4, pp. 4-5; 103-7, p. 11. According to Shelly
Welch, who served as Brand Manager and was thereafter promoted to her current
position as Senior Vice-President-Brand Management, she began work at the Defendants’
organization in 2007 and had not seen the Bongo trademark in use for exterior signage,
menus, or uniforms during her tenure. D.E. 103-7, pp. 3-6.
Defendants maintain that the Bongo trademark was in use within the last three
years,2 citing:
(1) the doctrine of tacking between the Bongo trademark and the
Minimalist trademark; (2) internal corporate documents, anniversary celebrations, and
2
Defendants recite a number of usages that extended into the 2000s, but which ended before 2010. Because
nonuse within three years is the test, those usages are irrelevant to the current inquiry.
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training programs; (3) photographs and a wine menu hanging on the walls of two of their
restaurants; (4) redemption of a gift certificate; (5) a restaurant that closed in June, 2010;
and (6) exterior signage for their Jacksonville, Florida restaurant that is in current
operation. As demonstrated below, none of these claims involve the requisite use to
avoid a finding of abandonment.
DISCUSSION
A. The Burden and Standard of Proof for Determination of Abandonment
Pursuant to the Lanham Act, a trademark shall be deemed abandoned “[w]hen its
use has been discontinued with intent not to resume such use. Intent not to resume may
be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie
evidence of abandonment.” 15 U.S.C. § 1127. According to the Fifth Circuit, the initial
burden of proof is on the party claiming abandonment. Upon proof of nonuse, the owner
of the mark has the burden to demonstrate that circumstances do not justify the inference
of intent not to resume use. Vais Arms, Inc. v. Vais, 383 F.3d 287, 293 (5th Cir. 2004);
Exxon Corp. v. Humble Exploration Co., 695 F.2d 96, 99 (5th Cir. 1983). Any such intent
to resume use must be shown to have been formulated or maintained within the threeyear window. E.g., ITC Limited v. Punchgini, Inc., 482 F.3d 135, 149 n.9 (2nd Cir. 2007).
Defendants seek to elevate the Plaintiffs’ hurdle through application of a “burden
of strict proof,” citing American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619, 624 (5th
Cir. 1963). However, American Foods does not apply here. In American Foods, the
district court was presented with a question of likelihood of confusion with respect to a
request for injunctive relief. The alleged abandonment, having to do with the strength or
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weakness of the trademark, was based on issues regarding naked licensing—whether the
trademark owner had licensed or allowed others to use the trademark and thereafter failed
to control the quality of the goods. Id. at 624-25. The question had been fully tried with
the court issuing findings of fact regarding “naked licensing.”
The fact that the “strict proof” burden relates to the particular issues involved in
“naked licensing” and not to the issue of nonuse here, as Plaintiffs argue, is clarified by
the language in other cases that cite American Foods, such as Taco Cabana International,
Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1121 (5th Cir. 1991), aff’d, 505 U.S. 763, 112
S.Ct. 2753 (1992), also cited by Defendants: “But Two Pesos faces a stringent standard
because finding a ‘naked license’ signals involuntary trademark abandonment and forfeits
protection.” Taco Cabana, 932 F.2d at 1121 (citing American Foods). “Abandonment
due to naked licensing is ‘involuntary’ because, unlike abandonment through non-use,
referred to in subsection 1127(1), an intent to abandon the mark is expressly not required
to prove abandonment under subsection 1127(2).” Exxon Corp. v. Oxxford Clothes, Inc.,
109 F.3d 1070, 1080 (5th Cir. 1997).
Thus the Defendants’ argument for a strict burden does not apply because the
source of the argument involves a different set of issues.3 When interpreting the facts to
find an unintentional, involuntary abandonment under “naked licensing,” a higher burden
of proof for forfeiture actions is appropriate. But no such reasoning requires the same
3
The same analysis disposes of the holding in Moore Business Forms, Inc. v. Ryu, 960 F.2d 486, 489 (5th Cir.
1992). The district court’s application of a “strict burden” to intentional abandonment in Re/Max Int’l, Inc. v.
Trendsetter Realty, LLC, 655 F.Supp.2d 679, 714 (S.D. Tex. 2009) appears to be an anomaly, applying the holdings
of involuntary abandonment cases to a case of voluntary abandonment.
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strict burden of proof when the issue is a voluntary or intentional relinquishment of a
trademark.
Plaintiffs claim to have demonstrated nonuse for far more than three years—since
1995. The required three-year window that they claim, however, is from May 11, 2009
to May 11, 2012. Defendants’ corporate representative was unable to recite any usage of
the Bongo trademark in that three-year window; Defendants’ discovery responses
indicate that no sales have taken place using the Bongo trademark in the last five years;
and Defendants have failed to renew their second Bongo trademark within the time
deadline for doing so. D.E. 103, pp. 8-9.
Defendants have asserted certain recent usage—including at the present time—and
correctly recite that even “minor or sporadic use” will defeat a claim of abandonment.
Equibrand Corp. v. Reinsman Equestrian Products, Inc., No. 3:07-CV-0536-P, 2007 WL
1461393, *7 (N.D. Tex. May 17, 2007). Defendants argue that, contrary to Plaintiffs’
representation, the second Bongo trademark does not require renewal until June, 2013
and that it will be renewed by that deadline. D.E. 126-8. They further fault Plaintiffs for
failing to credit evidence disclosed in supplemental discovery responses.
Thus, this action focuses on whether the claimed usages qualify to protect a
trademark from abandonment, where “ ‘[u]se’ of a mark means the bona fide use of such
mark made in the ordinary course of trade, and not made merely to reserve a right in a
mark.” 15 U.S.C. § 1127. Defendants further assert concrete plans to use the Bongo
trademarks in the near future, thus exhibiting an intent to resume after any dormancy in
use. Each of these arguments will be addressed below.
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B. Tacking
One of the Defendants’ arguments for claiming current usage of the Bongo
trademark is their claim that the Minimalist trademark tacks on to the Bongo trademark
so that their current Minimalist signage and logo-bearing items constitute use of the
Bongo trademark as well. This Court has previously considered Defendants’ argument
that their Minimalist and Bongo trademarks can be tacked in order to relate backward and
take advantage of the 1984 trademark registration. The Court has rejected that claim and
the analysis will not be repeated here.
See Order on Motion for Partial Summary
Judgment on Tacking (D.E. 135). The Court holds that Defendants may not rely on the
doctrine of “tacking” to make current uses of their Minimalist trademark qualify as uses
of the Bongo trademark.
C. Internal Corporate Documents, Anniversary
Celebrations, and Training Programs
A trademark, to be subject to protection, must be “used in commerce,” which is
defined by the Lanham Act as follows:
For purposes of this chapter, a mark shall be deemed to be in
use in commerce—
(1) on goods when-(A) it is placed in any manner on the goods or their
containers or the displays associated therewith or on
the tags or labels affixed thereto, or if the nature of the
goods makes such placement impracticable, then on
documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and
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(2) on services when it is used or displayed in the sale or
advertising of services and the services are rendered in
commerce, or the services are rendered in more than one State
or in the United States and a foreign country and the person
rendering the services is engaged in commerce in connection
with the services.
15 U.S.C. § 1127.
In demonstrating “use in commerce,” Defendants argue that the Bongo trademark
is displayed in a 2010 Annual Report that is available at their website: www.darden.com.
That Annual Report is available under a tab for “Investors,” after selecting the “Financial
Information” link.
It shows pictures of restaurants using the Bongo trademark,
juxtaposed against pictures of the restaurant using the Minimalist trademark in a series of
pages devoted to the evolution of the company’s brands.
Defendants have not demonstrated that anything about the Annual Report or those
pictures has anything to do with a commercial transaction involving the sale or
advertisement appurtenant to the sale of goods or services provided by the Defendants’
restaurants. See generally, Shatel Corp. v. Mao Ta Lumber and Yacht Corp., 697 F.2d
1352, 1356 (11th Cir. 1983) (discussing the nature of “commerce” subject to federal
regulation through the Lanham Act).
“[A] mark is used in commerce only if it
accompanies services rendered in commerce.” Sensient Technologies Corp. v. SensoryEffects Flavor Co., 613 F.3d 754, 762 (8th Cir. 2010) (quoting Int'l Bancorp, LLC v.
Societe des Bains de Mer et du Cercle des Estrangers a Monaco, 329 F.3d 359, 364 (4th
Cir. 2003)).
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At least one court has already noted that use of a trademark in an Annual Report is
insufficient to show “use in commerce.” Stop & Shop Supermarket Co. v. Big Y Foods,
Inc., 943 F.Supp. 120, 122 n.2 (D. Mass. 1996). Acknowledging the past in corporate
anniversary celebrations with a “Journey book” displaying the old trademark, displays in
conjunction with Manager in Training presentations, or “Brand Books” and “Brand
Videos” in new manager onboarding processes are all internal company uses and get no
closer to a commercial transaction with customers or the identification of the source of
goods or services for restaurant guests than does an Annual Report. Exhibit 52, D.E.
130-1, -2, -3. The Court holds that internal corporate uses do not constitute “commercial
uses” to defeat a claim of abandonment.
D. Photographs and a Wine Menu as Interior Décor.
Defendants’ first Bongo trademark is on display in two of its restaurants located in
Georgia. Plaintiffs characterize this display as nothing more than memorabilia that is part
of the western décor on the walls of the restaurant. Plaintiffs’ investigator, Ronald B.
Whitten went to the restaurant as a customer, photographed the items hanging on the
wall, and inquired about the wine list and whether he could order from it, learning that he
could not.
Defendants have objected to Whitten’s affidavit testimony and photographic
exhibits as they were obtained without Defendants’ permission and were, according to
Defendants, unauthorized ex parte contacts. Motion to Strike, D.E. 132 (citing Fed. R.
Civ. P. 30, 34). Defendants cite a number of cases, none of which involve entering a
public business and making observations as any guest of that business could do. See In
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re Tucker, 224 F.3d 766 (5th Cir. 2000) (attorney sent employee to harass debtor and
obtain a reaffirmation agreement in violation of the automatic stay of bankruptcy
proceedings and as an ex parte contact with represented party); United States v. Reed,
106 F.3d 396 (5th Cir. 1997) (attorney made deliberate misrepresentations to the court
and, additionally, spoke with the criminal defendant without counsel present specifically
to induce a plea agreement); United States v. Thomas, 342 B.R. 758, 761 (S.D. Tex.
2005) (party did not actually contact the opposing, represented, party or its counsel; issue
was failure to provide notice); In re Stomberg, No. 10-41603, 2013 WL 142396, *20
(S.D. Tex. Jan. 10, 2013) (no relevant facts).
Plaintiffs respond that Rules 30 and 34 recite that a party “may” file formal
discovery requests regarding entry upon land for the purpose of obtaining discovery
regarding another party’s facility. However, formal discovery is not the only method
permitted. Simington v. Menard, Inc., 210-CV-00269, 2012 WL 3288745, *4 (N.D. Ind.
Aug. 9, 2012). Nothing in the Federal Rules of Civil Procedure bars parties from access
to public places, even if the public place is a subject of the litigation.
The Court finds that there is no violation of the rules of procedure when a property
is open to the public and the person entering the property to make observations behaves
in no other way than any other member of the public would behave. Furthermore, the
evidence that Whitten obtained is consistent with Defendants’ corporate representative’s
testimony (D.E. 103-7, 137), is not tainted by “ex parte” contact, and is of a type
commonly admitted. E.g., Hubbard v. Barnhart, 225 Fed.Appx. 721, 723, 2007 WL
870393, *1 (9th Cir. March 23, 2007); Dehne v. Hill, 220 Fed.Appx. 730, 732, 2007 WL
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570420, *2 (9th Cir. February 20, 2007). The Court DENIES the Defendants’ Motion to
Strike.
Plaintiffs are correct that items of historical memorabilia or decoration do not
present evidence of a trademark’s use in commerce. Lone Star Steakhouse & Saloon,
Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 361, opinion modified on reh’g, 122 F.3d
1379 (11th Cir. 1997) (per curiam). To be a valid service mark, it must be “used to
identify or distinguish the services being offered.” Id. The Lone Star court held that the
interior wall décor was not a commercial use as a matter of law. Id.
Defendants challenge the holding of the Lone Star case, saying that it was
remanded on the issue of abandonment and settled before final resolution, thus
eliminating any precedential effect of the relevant holding. D.E. 125, p. 26. The opinion
on rehearing expressly modifies and supplements the earlier opinion, but does not in any
way alter the holding relied on above. 122 F.3d at 1381-82. Thus as a subsidiary matter
that impacts the remaining abandonment issues, it would have constituted “law of the
case” had the case not been settled. E.g., Crowe v. Smith, 261 F.3d 558, 562 (5th Cir.
2001). This Court holds that nothing about the subsequent history of the Lone Star case
called that court’s ruling (declining to treat interior décor as a trademark usage) into
question.
Defendants seek to distinguish this case from Lone Star by characterizing the
décor at issue here as prominent interior signage. They liken the use of the historical
photographs and wine menu to interior “signs,” which could be used to maintain older
trademarks, such as in the case of trademark renewal specimens offered for the “I’m
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Speedee” for McDonald’s (D.E. 130-12, -13), the “Big Boy” figure for Elias Brothers
Restaurants (D.E. 130-14, -15), the block “Taco Bell” sign for that restaurant (D.E. 13016, -17), and the “Edibles and Elixirs” sign for the Applebee’s Restaurant (D.E. 130-18m
-19).
However, in each of those instances, the trademarks were presented in a sign
format, in which attention is drawn to the trademark as an active element in the
transaction of goods or services offered. Here, the trademarks appear in a cluster of items
hung on the walls with other western décor offering ambiance, but not source
identification. The displays of the Bongo trademark in the décor do not welcome the
guests to this restaurant, do not identify this restaurant to the public, and do not identify
goods or services for commercial transactions.
While there is some argument over whether wine could be ordered from the
Bongo-bearing wine menu hanging on the wall—at the prices listed there—the simple
answer is that it could not. D.E. 137. The items are nothing but décor. The Court holds
that the décor items do not represent trademark usage that would defeat the Plaintiffs’
abandonment claim.
E. Redemption of Gift Certificate
Defendants direct the Court to their recent redemption of a gift certificate bearing
the Bongo trademark. While the certificate was redeemed within the last three years, it
was issued July 13, 1993. D.E. 126-1; 127-8. Gift certificates are now gift cards bearing
the Minimalist trademark. There is no evidence that any Bongo-styled gift certificates or
cards have been issued in the relevant three-year window.
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The parties have not offered any authorities regarding gift certificate redemption
as a “use in commerce” and the Court has not found any in an independent search.
Nonetheless, it is clear that the restaurant engages in the transaction relevant to the
maintenance of its business at the time it receives payment and issues the certificate or
card. The business does not control the exact time of the customer’s redemption of the
gift. As businesses change and close, customers take their chances on receiving the value
represented by the gift certificate or card.
Under such circumstances, focusing on the relevant transaction being that by
which goods or services are sold, the date of redemption is immaterial. The Court holds
that the redemption of the 1993 gift certificate does not reflect usage of the Bongo
trademark within the three-year window. Any other treatment would allow the issuance
of gift cards to maintain trademarks ad infinitim, as it is commonly known and reported
by the National Retail Federation that a percentage of gift cards may never be redeemed,
but remain outstanding. “Perhaps the greatest benefit to retailers is that a sizable number
of consumer gift card purchases are never redeemed.”4
F. Exterior Signage on Florida Restaurants.
Defendants represent that the words, “LongHorn Steaks” or “Longhorn
Steakhouse” remained on exterior signage for an Ocala, Florida restaurant until June,
2010. D.E. 125-2; 126-1, p. 10; 126-11, pp 5-6. Defendants have also submitted pictures
of a “LongHorn Steaks” sign that is still standing near a Jacksonville, Florida restaurant.
The record reflects that neither of those alleged trademark usages included the Bongo
4
http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1090&parent_id=958&peer_rev=1&nrf_or=0
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face and only the latter includes the t-bone steak substitute for the “t” in “steaks.” D.E.
126-1, pp. 5, 10; 126-10, 126-12.
No pictures of the Ocala restaurant have been supplied.
One picture of the
Jacksonville restaurant sign includes the actual restaurant in the background. D.E. 12611, reproduced at D.E. 125, p. 11. The trademarks on the free-standing sign nearer the
restaurant and on the restaurant itself are Minimalist renderings. The sign that includes
the other businesses at that location is the only sign that uses any part of the Bongo
trademarks.
Because the signs that Defendants rely upon for usage currently or within the
three-year window do not include the steer’s head of the Bongo trademark, they
preemptively suggest that it is a non-materially altered version of their trademark.
Certainly, if this version of the trademark is not materially altered, its use as exterior
signage could be sufficient to defeat the abandonment claim.5 Patsy’s Italian Restaurant,
Inc. v. Banas, 658 F.3d 254, 268 (2nd Cir. 2011) (exterior sign on restaurant is a “use in
commerce”); Cumulus Media, Inc. v. Clear Channel Communications, 304 F.3d 1167,
1174-75 (11th Cir. 2002) (exterior signage prevented finding of abandonment as a matter
of law).
The question is whether the removal of the steer’s head is a material alteration.
Defendants assert that there is no material alteration because the dominant element of the
5
Plaintiffs contend that this exterior sign is not a “service mark usage” because it does not show an association
between the mark and the services for which registration was sought. D.E. 139, pp. 7-8. See In re the Sorting Table,
LLC, 77582484, 2012 WL 2364340, *2 (Trademark Tr. & App. Bd. June 11, 2012); In re Duratech Industries, Inc.,
13 USPQ2d 2052, 1989 WL 274420 (Trademark Tr. & App. Bd. November 17, 1989). Because the Court holds that
the alleged trademark usage involves a material alteration, the Court need not reach this issue.
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Bongo trademark is the word, “LongHorn” and the descriptive terminology, “steaks.”
Bongo, himself, is “inconsequential.” D.E. 125, p. 30. First, Defendants had to disclaim
any trademark in the word “steaks.” D.E. 126-3, -4, -7, -8. Thus that word cannot be a
dominant feature.
Second, as discussed in the Court’s ruling on tacking (D.E. 135), because the
Bongo trademarks are composite marks, it is not just the word “LongHorn” that is
important or dominant. Even the change from the Bongo to the Minimalist steer’s head
was found to constitute a material alteration after considering all of the authorities cited.
Surely the elimination of the steer’s head altogether is a material alteration. Amstar
Corp. v. Domino’s Pizza, Inc., 615 F.2d 252, 261 (5th Cir. 1980) (stylistic elements in a
composite trademark require it to be considered as a whole); Paris Glove of Canada, Ltd.
v. SBC/Sporto Corp., 84 U.S.P.Q. 1856, 2007 WL 2422997 (Trademark Tr. & App. Bd.
August 22, 2007) (same). The Court holds that the signage on the Florida restaurants
does not constitute usage of the Bongo trademarks in the three years preceding this
action.
G. Intent to Resume
Having found that none of the proffered usages of the Defendants’ first and second
“Bongo” trademarks are “uses in commerce” as defined by the Lanham Act, the Court
finds that the Plaintiffs have satisfied their initial burden of proof. 15 U.S.C. § 1127.
The only argument available to the Defendants to support maintaining those marks is an
“intent to resume” usage. Id. Defendants first fault Plaintiffs for not offering evidence
against Defendants’ intent to resume use of the Bongo trademarks. This argument is
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moot because, if Plaintiffs succeed in showing nonuse for three years, they have made a
prima facie case that includes an inference of intent not to resume. Id. They do not have
any further burden until Defendants defeat the three-year nonuse allegation or provide
some evidence of intent to resume.
Second, Defendants rely on their evidence of actual use, which they claim
demonstrates not only current use but is either evidence of intent to resume or makes
intent to resume a moot point. Because the Court has determined that Defendants’
evidence of continuing use does not qualify as “use in commerce” or is not a use of the
trademarks in unaltered form, then that same evidence is incapable of showing an intent
to resume and does not make the need for evidence of such intent a moot point.
Last, Defendants rely on the Declaration of Shelly Welch (D.E. 125-4, p. 2),
reciting a plan to place the Bongo versions of their trademarks on their website and on
their children’s menu in the next few months—well after the three-year window at issue
here. D.E. 125, p. 35. Token use or a use arranged simply to reserve rights in a service
mark are not valid usages and an intent to make such use does not necessarily qualify as
an intent to resume active use in commerce even when formulated within the three-year
window. See 15 U.S.C. § 1127; Exxon Corp. v. Humble Exploration Co., 695 F.2d 96,
100 (5th Cir. 1983).
With respect to the Exxon case, on remand the district court evaluated the evidence
with specific attention to the “intent to resume” and found that the evidence of intent was
sufficient to defeat the prima facie case of abandonment.
Exxon Corp. v. Humble
Exploration Co., 592 F.Supp. 1226 (N.D.Tex. 1984) (Exxon II). The court noted several
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factors that affected the determination of intent that arose in other abandonment cases.
As was true in Exxon II, the Defendants in this case were not forced out of business or
deprived of the use of the Bongo trademarks by matters outside their control; they
intentionally undertook to evolve their brand, making it more “upscale” with a wider
appeal. This factor weighs against Defendants’ intent to resume. As in Exxon II, there
are no regulatory barriers to the use of the Bongo trademarks. This factor weighs against
Defendants’ intent to resume.
Where this case departs from the Exxon II scenario is on the issue that salvaged
Exxon’s intent to resume: ongoing efforts from the time the trademark changed to make
active commercial use of the old trademark. Here, the evidence of the Defendants’ past
shows systematic abandonment of the Bongo trademarks. The appearances that remain
are either nostalgic décor and historical retrospectives or vestiges of the materially altered
trademark that, without Bongo, were not so offensive to the new branding as to require
removal.
There is no evidence, as there was in Exxon II, of an active plan orchestrated by
the marketing department, beginning at the time the trademarks were replaced and
continuing until the objective was achieved, of reviving the old trademark in commercial
use.
Instead, Defendants rely on the declaration of Shelly Welch, who states:
“Defendants have concrete, current plans to further their current use of the versions of
their LONGHORN mark depicted below:
[picturing the Bongo trademarks].
For
example, Defendants will be placing these versions of their LONGHORN mark on
Defendants’ website located at www.longhornsteakhouse.com in the next few months.”
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She also indicated the intent to create a new children’s menu using the old logos. This is
the entirety of the Defendants’ proffer on this issue.
Defendants’ evidence is clearly insufficient to raise a fact issue on intent to resume
use of the Bongo trademarks because: (1) it fails to show any effort or intent formulated
within the three-year window; (2) it includes statements in the most conclusive of terms
both with respect to the intent and the proposed future use; and (3) it fails to show any
association between the trademark and any bona fide commercial transaction.
The
evidence is insufficient to raise a fact issue that Defendants intended to resume active
commercial use of either of the Bongo-styled trademarks between May 11, 2009 and May
11, 2012.
CONCLUSION
For the reasons set out above, the Court DENIES Defendants’ Motion to Strike the
Declaration of Ronald B. Whitten (D.E. 132). The Court GRANTS Plaintiffs’ Motion for
Partial Summary Judgment on Defendants’ Abandonment of Early Marks (D.E. 103). It
is therefore ORDERED that:
1. Defendants’ First Mark is abandoned;
2. Reg. No. 1,320,021 is cancelled;
3. Defendants’ Second Mark is abandoned; and
4. Reg. No. 1,741,952 is cancelled.
ORDERED this 5th day of June, 2013.
___________________________________
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE
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