| [1] | UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT |
| [2] | No. 79-3650 |
| [3] | 1980.C05.41966 <http://www.versuslaw.com>; 615
F.2d 252 |
| [4] | April 8, 1980 |
| [5] | AMSTAR CORPORATION,
PLAINTIFF-APPELLEE, v. DOMINO'S PIZZA, INC. AND ATLANTA PIZZA, INC., PIZZA ENTERPRISES, INC. AND PIZZA SERVICES, INC., HANNA CREATIVE ENTERPRISES, INC., DEFENDANTS-APPELLANTS. |
| [6] | Appeal from the United States District Court for the Northern District
of Georgia. |
| [7] | Newton, Hopkins & Ormsby, Todd Deveau, William H. Needle, Atlanta,
Ga., Beaman & Beaman, Jackson, Mich., George M. Hopkins, Atlanta, Ga.,
Miles J. Alexander, Jerre B. Swann, Virginia S. Taylor, Atlanta, Ga., for
defendants-appellants. |
| [8] | Browne, Beveridge, DeGrandi, Kline & Lunsford, Julius R. Lunsford,
Jr., J. Rodgers Lunsford, III, Atlanta, Ga., Cooper, Dunham, Clark,
Griffin & Moran, Gerald W. Griffin, Norman H. Zivin, New York City,
for plaintiff-appellee. |
| [9] | Before Ainsworth and Henderson, Circuit Judges, and Hunter,*fn*
District Judge. |
| [10] | Author: Ainsworth |
| [11] | Amstar Corporation brought this suit asserting trademark
infringement and unfair competition against Domino's Pizza, Inc. (DPI) and
several of its franchisees*fn1
to enjoin their use of Amstar's federal registration of the
"Domino" trademark. The complaint is based on allegations that defendants'
use of the mark "Domino's Pizza" in connection with the sale of fast-food
delivered hot pizza pies constitutes trademark infringement and a false
designation of origin or representation in violation of the Trademark Act
of 1946, 15 U.S.C. § 1051 et seq.;*fn2
also that said use constitutes unfair competition in violation of the
Georgia Uniform Deceptive Trade Practices Act, Ga.Code Ann. § 106-701 et
seq., and dilutes the distinctive quality of plaintiff's mark "Domino" in
violation of the Georgia anti-dilution statute, Ga.Code Ann. § 106-115.*fn3
Defendants denied that plaintiff was entitled to any equitable relief,
asserted trademark misuse by plaintiff, and counterclaimed for
cancellation of plaintiff's registration of the "Domino" mark for salt.*fn4
The district court ruled in favor of plaintiff, dismissed defendants'
counterclaim, and permanently enjoined defendants' use of the names
"Domino" or "Domino's Pizza." Defendants then filed this appeal. We
reverse because we find that the district court's decision was
fundamentally erroneous since it was predicated on a holding that there
was a likelihood of confusion between the use of "Domino's Pizza" by
defendants in connection with pizza store services and the use of "Domino"
by plaintiff in connection with the sale of sugar and individual packets
of condiment items. |
| [12] | I. Background of Dispute |
| [13] | Amstar Corporation holds several federal registrations
for the widely known "Domino " trademark,*fn5
and the mark has been used since the turn of the century on plaintiff's
various sugar products. Since 1965, plaintiff has also packaged
single-serving (portion-control) envelopes of salt, pepper, sugar,
mustard, ketchup, mayonnaise, jams and jellies, salad dressings, taco
sauce, honey, cranberry sauce, tartar sauce and table syrup under the
"Domino" mark. Plaintiff has spent more than $54 million since 1947 in
advertising and promoting its "Domino" products, and as a result there is
wide public recognition of the mark as a source of sugar products.
Amstar's non-sugar, single-serving condiment packages
introduced in 1965 have become the nation's largest line of
portion-control items, with sales currently running at a rate of about $14
million per year. |
| [14] | Defendant DPI is the nation's largest chain of fast-food delivered
pizza pie outlets, with 287 stores in 30 states and current sales
exceeding $43 million annually. The chain has used the name "Domino's
Pizza" since early in 1965. Prior to that date, the pizzeria from which
the chain grew was known as "Dominick's," named after its founder,
Dominick Devarti. Devarti sold his pizzeria located in Ypsilanti, Michigan
to Thomas Monaghan in December of 1960. In 1963 Devarti withdrew his
permission to use the name "Dominick's," and for an interim period
Monaghan called the store "Ypsilanti Dominick's." During this period
Monaghan searched for a suitable new name for his pizzeria. In 1965 an
employee suggested the name "Domino's Pizza," and Monaghan adopted the
name immediately. At trial, Monaghan stated that he selected the name
because it sounded Italian, it resembled "Dominick's," and he was unaware
of any other pizzerias using the name. The company initially prospered,
and in 1967 the first "Domino's Pizza" franchise was sold. By the end of
1969, there were 42 "Domino's Pizza" stores in operation in three
states. |
| [15] | The plaintiff first became aware of DPI on June 24, 1970 when
defendants' "Domino's" and "Domino's plus design" marks were published in
the Official Gazette of the Patent Office, pending registration of the
marks by the U. S. Patent Office. Pursuant to 15 U.S.C. § 1063,
plaintiff filed notices of opposition to registration of the marks. DPI at
the time was in serious financial difficulty, and the oppositions were not
answered. Registration of the marks was therefore refused by the Patent
Office. |
| [16] | In early 1971 plaintiff's counsel wrote to DPI's predecessor, Domino's
Inc., requesting that the "Domino's Pizza" mark be changed. Domino's Inc.
did not respond to the letter, and plaintiff took no further action at
that time. Plaintiff did, however, order credit reports on DPI for the
next three years which were used in monitoring DPI's
business. |
| [17] | In 1972 and 1974 DPI again sought to register the trademark "Domino's
Pizza" with the U. S. Patent Office. The mark was passed for publication
in the Official Gazette of the Patent Office on each occasion, signifying
that an examiner of the office had concluded that the mark was entitled to
registration, 15 U.S.C. § 1062(a). Plaintiff filed notices of
opposition to each of the foregoing applications, and defendant withdrew
each application. Plaintiff ultimately filed this suit against DPI in
September 1975. |
| [18] | In a lengthy memorandum of Findings of Fact and Conclusions of Law,
the district court held that the defendants were guilty of trademark
infringement (15 U.S.C. § 1114(1)), false designation of origin
(15 U.S.C. § 1125(a)), and dilution, unfair competition and
deceptive trade practices under Georgia law. The court detailed at length
the plaintiff's use of the "Domino" trademark in connection with sugar,
and more recently with portion-control items. It found that "(consumers)
are highly likely to associate any food products sold or available for
sale in supermarkets, groceries or other food stores under the DOMINO mark
with the DOMINO food products sold by plaintiff." Finding of Fact No. 31.
It further concluded that "(a)s a result of plaintiff's widespread use,
advertising and promotion of the DOMINO trademark on a great variety of
food products, the consuming public is very likely to believe that
DOMINO's Pizza, sold in a separate food store outside of the supermarket,
is in some way or manner sponsored by or affiliated with, or connected
with, or emanates from plaintiff." Finding of Fact No. 61. The court found
that the mark "Domino's Pizza" is "so similar to plaintiff's famous mark
DOMINO in sound and appearance that the public cannot always perceive any
differences between them." Finding of Fact No. 63. The court concluded
that, as a matter of law, "(u)se of virtually identical marks for food
products distributed to and in food stores to the consuming public is
likely to result in confusion, mistake or deception." Conclusion of Law
No. 10. |
| [19] | On appeal, defendants contend the district court erred in concluding
that use of virtually identical marks for food products is likely to
result in confusion or deception, and defendants also contend that the
court erred "by misapplying or failing to apply the critical factors to be
weighed in assessing likelihood of confusion." Brief for Appellants at 10.
Plaintiff Amstar contends that the court's finding of
likelihood of confusion or mistake is not clearly erroneous, and must
therefore be sustained by this court. Plaintiff contends that this finding
is substantiated by many factors, including the notoriety and strength of
the "Domino" mark, the confusing similarity of the marks "Domino's Pizza"
and "Domino," the related nature of defendants' goods and services to
those of plaintiff, the fact that customers for both plaintiff's and
defendants' goods are the general consuming public, the existence of some
actual confusion, and the results of two surveys which tend to confirm the
likelihood of confusion. |
| [20] | Based on the record before us, we are convinced that the trial court
erred in enjoining defendants' use of the mark "Domino's Pizza." We
therefore reverse the decision of the district court, and vacate the
injunction entered against defendants. |
| [21] | II. Standard of Review |
| [22] | Initially, we must determine the appropriate standard of review
applicable to the district court's finding of likelihood of confusion. The
determination as to whether confusion is likely has been held to present a
question of law, Fleischman Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 152 (9th Cir. 1963), cert. denied, 374 U.S. 830, 83 S. Ct. 1870, 10 L. Ed. 2d 1053 (1963); a mixed question of law and
fact, B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d
1254, 1261 (5th Cir. 1971), and a question of fact, T.G.I.
Friday's v. International Restaurant Group, Inc., 569 F.2d 895, 899 (5th Cir. 1978). This circuit has held that likelihood
of confusion is a question of fact which can only be set aside if clearly
erroneous. T.G.I. Fridays, supra ; Fed.R.Civ.P. 52(a). The record in the
present case indicates that the district court's finding of likelihood of
confusion is clearly erroneous. |
| [23] | The court's 54-page memorandum of Findings of Fact and Conclusions of
Law was copied almost verbatim from proposed Findings of Fact and
Conclusions of Law submitted by plaintiff's counsel. While the practice of
allowing counsel for the prevailing party to write the trial judge's
opinion has not been proscribed by this circuit, it should nevertheless be
discouraged. Even though the court, in adopting plaintiff's findings and
conclusions, stated that it had "individually considered" them and adopted
them because it "believed them to be factually and legally correct," a
cursory reading of the district court's memorandum leaves one with the
impression that it was indeed written by the prevailing party to a bitter
dispute. While the "clearly erroneous" rule of Fed.R.Civ.P. 52(a) applies
to a trial judge's findings of fact whether he prepared them or they were
developed by one of the parties and mechanically adopted by the judge, "we
can take into account the District Court's lack of personal attention to
factual findings in applying the clearly erroneous rule." Wilson v.
Thompson, 593 F.2d 1375, 1384 n.16 (5th Cir. 1979).
See also James v. Stockham Valves & Fittings Co., 559 F.2d
310, 314 n.1 (5th Cir. 1977); Volkswagen of America, Inc. v.
Jahre, 472 F.2d 557, 559 (5th Cir. 1973). As was
stated in James : |
| [24] | "(T)he appellate court can feel slightly more confident in concluding
that important evidence has been overlooked or inadequately considered"
when factual findings were not the product of personal analysis and
determination by the trial judge. 559 F.2d at 314
n.1, quoting Louis Dreyfus & Cie. v. Panama Canal Co., 298
F.2d 733, 738 (5th Cir. 1962). |
| [25] | A finding of fact is clearly erroneous "when although there is
evidence to support it, the reviewing court on the entire evidence is left
with the definite and firm conviction that a mistake has been committed."
United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542, 92
L. Ed. 746 (1948). "In other words, we reverse when the result
in a particular case does not reflect the truth and the right of the
case." Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 501 (5th Cir. 1979). Such is the case here. Having
reviewed all the evidence in this case in light of established legal
precedent, we are left with the definite and firm conviction that the
district court was mistaken in concluding that defendants' use of the mark
"Domino's Pizza" is likely to cause confusion, mistake or
deception. |
| [26] | III. Likelihood of Confusion |
| [27] | Infringement of a registered mark is governed by the provisions of 15
U.S.C. § 1114(1), which imposes liability against "use . . .
likely to cause confusion, or to cause mistake, or to deceive." The same
test is applicable to the deceptive trade practices claim, Ga.Stat.Ann. §
106-701 et seq.; Baker Realty Co. v. Baker, 228 Ga. 766, 187 S.E.2d 850,
852 (1972), and common law unfair competition, Holiday Inns, Inc. v.
Holiday Out in America, 481 F.2d 445, 449 (5th Cir.
1973); B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d
1254, 1262 (5th Cir. 1971). Likewise, defendants' use of the
mark "Domino's Pizza" can represent a false designation of origin or false
description, proscribed by 15 U.S.C. § 1125, only if
defendants' use of the mark is likely to be confused with plaintiff's
"Domino" mark. Boston Professional Hockey Ass'n, Inc. v. Dallas Cap and
Emblem Mfg., Inc., 510 F.2d 1004, 1013 (5th Cir.),
cert. denied, 423 U.S. 868, 96 S. Ct. 132, 46 L. Ed. 2d 98 (1975). Plaintiff's
claims against defendants, except the dilution claim, therefore, turn on
the determination of whether defendants' use of the mark "Domino's Pizza"
is likely to cause confusion, mistake, or deception. |
| [28] | In this circuit likelihood of confusion is determined by evaluating a
variety of factors including the type of trademark at issue; similarity of
design; similarity of product; identity of retail outlets and purchasers;
identity of advertising media utilized; defendant's intent; and actual
confusion. |
| [29] | Roto-Rooter Corporation v. O'Neal, 513 F.2d 44,
45 (5th Cir. 1975), citing Continental Motors Corp. v. Continental
Aviation Corp., 375 F.2d 857 (5th Cir. 1967);
American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619 (5th Cir. 1963); Sears, Roebuck & Co. v. All States
Life Insurance Co., 246 F.2d 161 (5th Cir.), cert.
denied, 355 U.S. 894, 78 S. Ct. 268, 2 L. Ed. 2d 192 (1957). See also
Restatement of Torts § 729 (1938).*fn6 |
| [30] | An evaluation of these factors leads us to conclude that defendants'
use of the trademark "Domino's Pizza" presents no likelihood of confusion,
mistake, or deception. |
| [31] | 1. Type of trademark |
| [32] | We consider, first, whether "Domino" is a "strong" or a "weak" mark
since the strength and distinctiveness of plaintiff's mark is a vital
consideration in determining the scope of protection it should be
accorded. "Strong marks are widely protected, as contrasted to weak
marks." Lunsford, Julius R., Jr., "Trademark Basics," 59 Trademark Rep.
873, 878 (1969). |
| [33] | At trial, defendants introduced into evidence or tendered into court
some 72 third-party registrations of the mark "Domino" in the U. S. Patent
Office. Brief for Appellant at 18-24. These registrations were for such
products as canned fruits, citrus, cigarettes, cheese, wheat flours,
chrome-tanned leather, canned sardines, animal feed, envelopes, pencils,
fishing line, candy mints, whiskey, ladies' hosiery and haircream. In
addition, defendants presented extensive evidence of 15 third-party uses
of the "Domino" mark from 1885 until the present. These uses included
"Domino" cigarettes and matches, which are currently sold in grocery
stores, two restaurants currently operating under the "Domino's" mark, a
small chain of supermarkets in the Bronx, New York, with sales of
$3,900,000 in 1976, and a "Domino Donut Mix" distributed by General Mills
to commercial bakers since 1959. The district court dismissed these and
other third-party uses as either long abandoned; remote as to goods or
geography; small, obscure and localized; or used only in shipments to the
trade. We do not believe that such extensive third-party use and
registration of "Domino" can be so readily dismissed. The impact of such
evidence is not dispelled merely because "Domino" cigarettes and matches
are not leading brands, or because some uses of the mark "Domino" by third
parties have not been related to food products. As was stated by one
commentator, "If the owner of KODAK should permit its use by others on
washing powders, shoes, candy bars, or cosmetics, or if The Coca-Cola
Company should permit COCA-COLA or COKE to be used for rain coats,
cigarette lighters, golf balls, or jewelry not of its manufacture, it
would not take long for even these giants in the trademark world to be
reduced to pigmy size." Lunsford, supra at 878-79. As stated in comment g
to the Restatement of Torts § 729 (1938), "The greater the number of
identical or more or less similar trade-marks already in use on different
kinds of goods, the less is the likelihood of confusion . . . ." The
extensive third-party uses documented in this case were entitled to much
greater weight than were accorded them by the district court. See
Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d 496, 505 (5th Cir. 1979) (multiple uses of mark "World"
discussed in denying injunctive relief); American Heritage Life Ins. Co.
v. Heritage Life Ins. Co., 494 F.2d 3, 13 (5th Cir.
1974) (multiple uses of "Heritage" discussed in denying injunctive
relief); Holiday Inns, Inc. v. Holiday Out in America, 481 F.2d
445, 448 (5th Cir. 1973) (multiple uses of "Holiday" discussed
in denying injunctive relief). |
| [34] | Defendants do not contend, nor does this court hold, that plaintiff's
mark is not a distinctive, well-known mark for its sugar and related
products. The third-party uses and registrations discussed above merely
limit the protection to be accorded plaintiff's mark outside the uses to
which plaintiff has already put its mark. American Sugar Co. v. Texas Farm
Products Co., 159 U.S.P.Q. 679, 681 (T.T.A.B.1968);*fn7
Scott Paper Co. v. Scott's Liquid Gold, Inc., 598 F.2d 1225 (3rd Cir.
1978) (plaintiff's ownership of the mark "Scott" as applied to paper
products does not preclude defendant's use of "Scott" on furniture
polish). |
| [35] | Additional support for the conclusion that the mark "Domino" should be
accorded only limited protection outside of plaintiff's sugars and related
food products can be derived from the nature of the mark itself. "Domino,"
in spite of the district court's finding that it is "not primarily a
surname," Finding of Fact No. 98, is indeed the surname of a good number
of people, as a glance at a local telephone directory can verify. The word
is a common English name for a game, a hooded costume, a type of mask, and
a theory of political expansion. Thus, "Domino" is not a coined word, is
not purely fanciful, and while its application to sugar may be
arbitrary,*fn8
it is still not to be accorded the same degree of protection given such
coined and fanciful terms as "Kodak" or "Xerox." Armstrong Cork Co. v.
World Carpets, Inc., 597 F.2d 496, 505 (5th Cir.
1979) (wide use of mark "World" results in little likelihood of
confusion); Holiday Inns, Inc. v. Holiday Out in America, 481
F.2d 445, 448 (5th Cir. 1973) (common word "Holiday" is of weak
trademark significance); El Chico, Inc. v. El Chico Cafe, 214
F.2d 721, 725 (5th Cir. 1954) (27 trademark registrations of
"El Chico," along with fact it was the name of a Moorish king of Granada
in 1482, and is the name of a Mexican town and a river in the Philippines,
make the term a weak trade name deserving limited
protection). |
| [36] | 2. Similarity of design |
| [37] | "Similarity of appearance is determined on the basis of the total
effect of the designation, rather than on a comparison of individual
features." Restatement of Torts § 729, comment b (1938). Considering the
total effect of the respective marks, there is little similarity between
plaintiff's and defendants' marks. As shown below, and as found by the
district court, plaintiff's mark "almost always is presented on a bias
with respect to the horizontal." Finding of Fact No. 14. |
| [38] | TABLE |
| [39] | Defendants' mark, far from suggesting plaintiff's mark, is
stylistically and typographically distinguishable. |
| [40] | TABLE |
| [41] | We must also consider the commercial impression created by the mark as
a whole. Seabrook Foods, Inc. v. Bar-Well Foods, Ltd., 568 F.2d 1342, 1346
(Cust. & Pat.App.1977); Colgate-Palmolive Co. v. Carter-Wallace, Inc.,
432 F.2d 1400, 1402, 56 C.C.P.A. 973 (1970). "It is the overall impression
that counts." Armstrong Cork Co. v. World Carpets, Inc., 597
F.2d 496, 502 (5th Cir. 1979). "Domino," in possessive form,
next to the word "pizza," produces a commercial impression quite different
from the same mark placed next to "sugar." "Domino" is derived from Latin,
is an Italian surname, and in combination with "pizza" creates an Italian
connotation. "The setting in which a designation is used affects its
appearance and colors the impression conveyed by it." Restatement of Torts
§ 729, comment b (1938). The impression conveyed by defendants' use of
"Domino's Pizza" is substantially different from that created by
plaintiff's use of "Domino Sugar." |
| [42] | Additionally, the U. S. Patent Office has made, on three separate
occasions, an initial determination that DPI is entitled to register the
mark "Domino's Pizza." DPI applied to register "Domino's" or "Domino's
Pizza" plus corresponding designs three different times. Each time, a
trademark examiner in the office determined that DPI was entitled to have
the mark registered. See 15 U.S.C. § 1062(a). The trademark
examiner on one of these occasions wrote that "(a) search of the Office
records fails to show that the mark, when applied to applicant's services,
is confusingly similar to any registered mark." Record on Appeal at 2815.
At the time this search was made, plaintiff had registered "Domino" for
sugar, mustard, ketchup, salt and pepper. Id. |
| [43] | 3. Similarity of products |
| [44] | The district court stated in some detail its view of the similarities
between defendants' pizza and plaintiff's sugar, salt, mustard, ketchup
and other condiments. The court at one point went so far as to state the
"consuming public considers sugar to be a related food product to pizza."
Finding of Fact No. 84. However, we fail to see any great similarity
between the respective parties' wares. "About the only things they have in
common are that they are edible." California Fruit Growers Exchange v.
Sunkist Baking Co., 166 F.2d 971, 973 (7th Cir.
1947). |
| [45] | 4. Identity of retail outlets and purchasers |
| [46] | Dissimilarities between the retail outlets for and the predominant
consumers of plaintiff's and defendants' goods lessen the possibility of
confusion, mistake, or deception. The dissimilarities here are
substantial. |
| [47] | Plaintiff's "Domino" sugar products are distributed to the public
primarily through grocery stores; defendants' pizzas and soft drinks are
distributed exclusively through fast-food outlets specializing in home
delivery or customer pickup, but offering no facilities for sit-down
service. Plaintiff attempts to narrow the gap between itself and
defendants by arguing that its single-serving sugar packets, and more
recently its line of single-serving condiments, are widely used in
fast-food outlets and restaurants. Thus, it argues, the public has come to
associate the mark "Domino" with restaurants and fast-food establishments.
While the argument carries some weight, it is insufficient to overcome
basic differences between plaintiff's and defendants' modes of
distributing their products. |
| [48] | Although "Domino" sugar and individual condiment packages are
distributed to the public through restaurants and fast-food chains, they
are not sold to the public by plaintiff but are generally distributed to
customers by the restaurant owners. Amstar is not engaged in
the direct sale of condiment packages to the public. In contrast,
"Domino's Pizza" products are sold directly to the public through
"Domino's Pizza" outlets. While the public may decide to purchase a pizza
based on its perception of "Domino's Pizza" quality, it is unlikely anyone
would choose to frequent or avoid a restaurant because of the brand of
condiment packages carried by the restaurant. Thus, while
Amstar might broadly be classified as "in the restaurant
business," it is in that business at a different level than
defendants. |
| [49] | There are substantial dissimilarities between the predominant
purchasers of plaintiff's and defendants' products. According to surveys
presented at trial, "Domino's Pizza" patrons are primarily young (85.6%
under 35 years of age), single (61%) males (63.3%). This coincides with
the fact that 75% of the "Domino's Pizza" stores throughout the country
are situated in college campus towns or around military bases where the
advertising for "Domino's Pizza" is directed to the 18- to 34-year-old
single male. In contrast, "Domino" sugar purchasers are predominantly
middle-aged housewives. |
| [50] | 5. Identity of advertising media utilized |
| [51] | The district court made extensive findings of fact regarding
plaintiff's advertising of its "Domino" mark. The court found
Amstar advertised extensively in nationally circulated
magazines, newspapers and trade journals, and spent substantial sums of
money on radio and television commercials. It stated "DOMINO is the only
sugar on network television every week." Finding of Fact No. 23. In
contrast to plaintiff's broadly based national advertising, defendants'
advertising has a completely different focus. Because over 80% of
defendants' pizza sales involve free delivery, defendants' advertising is
of two principal types: (i) store signs, flyers, delivery car signs and
other like materials designed for maximum impact in the 1.5-mile delivery
area of a "Domino's Pizza" outlet, and (ii) "Yellow Page" ads. Unlike the
national audience sought by Amstar, defendants' advertising
is targeted at young, male college students. |
| [52] | The substantial dissimilarities between plaintiff's and defendants'
advertising campaigns tend to negate any inference of unfair competition
or trademark infringement. Defendants' advertising program is geared to
seek out and exploit a highly localized and rather specialized class of
consumers. Defendants have not sought to mine the good will established by
plaintiff. In short, hardly anyone would confuse a "Domino" sugar ad with
a "Domino's Pizza" sales pitch, nor would they likely believe the two
advertisements emanated from the same source, considering the significant
differences between the advertisements in message content and
presentation. |
| [53] | 6. Defendants' intent |
| [54] | The intent of defendants in adopting the "Domino's Pizza" mark is a
critical factor, since if the mark was adopted with the intent of deriving
benefit from the reputation of "Domino" that fact alone "may be sufficient
to justify the inference that there is confusing similarity." Restatement
of Torts § 729, comment f (1938). Bad faith in the adoption and use of a
trademark normally involves the imitation of packaging material, use of
identical code numbers, adopting of similar distribution methods or other
efforts by a party to "pass off" its product as that of another. Kentucky
Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d
368, 382-83 (5th Cir. 1977). There is no evidence that
defendants have ever attempted to "pass off" their goods as those of
plaintiff. Evidence introduced at trial established that the name
"Domino's Pizza" was adopted because Mr. Monaghan had been told he could
no longer use the name "Dominick's," the new name sounded Italian, and it
was quite close to the old name. Although Monaghan was aware of "Domino"
sugar at the time, he was unaware of any other pizzerias by that name.
There is no evidence the name was adopted with any intent to confuse,
mislead, or deceive the public.*fn9 |
| [55] | 7. Actual confusion |
| [56] | Although evidence of actual confusion is not necessary to a finding of
likelihood of confusion, it is nevertheless the best evidence of
likelihood of confusion. Roto-Rooter Corp. v. O'Neal, 513 F.2d
44, 46 (5th Cir. 1975). The evidence of actual confusion in
this case is minimal. Plaintiff's evidence of actual confusion amounted to
two verbal inquiries as to whether "Domino's Pizza" was related to
"Domino" sugar, and one misaddressed letter.*fn10
In view of the fact that both plaintiff's and defendants' sales currently
run into the millions of dollars each year, these isolated instances of
actual confusion are insufficient to sustain a finding of likelihood of
confusion. Armstrong Cork Co. v. World Carpets, Inc., 597 F.2d
496, 506 (5th Cir. 1979); Scott Paper Co. v. Scott's Liquid
Gold, Inc., 589 F.2d 1225, 1231 (3rd Cir. 1978).
Indeed, the fact that only three instances of actual confusion were found
after nearly 15 years of extensive concurrent sales under the parties'
respective marks raises a presumption against likelihood of confusion in
the future. FS Services, Inc. v. Custom Farm Services, Inc., 325
F. Supp. 153, 162 (N.D.Ill.1970), aff'd, 471 F.2d 671 (7th Cir. 1972). |
| [57] | At trial, both parties introduced survey evidence on the issue of
likelihood of confusion. The trial court characterized the defendants'
survey as "about as contrived a survey as I have ever run across,"*fn11
but found plaintiff's survey "properly conducted and fair." Finding of
Fact No. 90. Our own examination of the survey evidence convinces us that
both surveys are substantially defective. |
| [58] | Plaintiff's survey was made by Dr. Russ Haley, Professor of Marketing
at the University of New Hampshire. It was conducted in ten cities among
female heads of households primarily responsible for making food
purchases. Each participant was shown, in her own home, a "Domino's Pizza"
box and was asked if she believed the company that made the pizza made any
other product. If she answered yes, she was asked, "What products other
than pizza do you think are made by the company that makes Domino's
Pizza?" Finding of Fact No. 90(d). Seventy-one percent of those asked the
second question answered "sugar." |
| [59] | While the possible confusion level shown by the Haley study is high,
there are several defects in the survey which significantly reduce its
probative value. First, one of the most important factors in assessing the
validity of an opinion poll is the adequacy of the "survey universe," that
is, the persons interviewed must adequately represent the opinions which
are relevant to the litigation. American Basketball Ass'n v. AMF Voit,
Inc., 358 F. Supp. 981, 986 (S.D.N.Y.), aff'd, 487 F.2d 1393 (2d Cir. 1973), cert. denied, 416 U.S. 986, 94 S. Ct. 2389, 40 L. Ed. 2d 763 (1974); Hawley Products Co. v.
United States Trunk Co., 259 F.2d 69, 77 (1st Cir.
1958). The appropriate universe should include a fair sampling of those
purchasers most likely to partake of the alleged infringer's goods or
services. American Basketball, supra ; Hawley Products, supra. Of the ten
cities in which the Haley survey was conducted, eight had no "Domino's
Pizza" outlets, and the outlets in the remaining two had been open for
less than three months. Additionally, the persons interviewed consisted
entirely of women found at home during six daylight hours who identified
themselves as the member of the household primarily responsible for
grocery buying. As plaintiff's sugar is sold primarily in grocery stores,
participants in the Haley survey would have been repeatedly exposed to
plaintiff's mark, but would have had little, if any, exposure to
defendants' mark. Furthermore, the survey neglected completely defendants'
primary customers young, single, male college students. Thus, we do not
believe that the proper universe was examined, and the results of the
survey must therefore be discounted. Handbook of Recommended Procedures
for the Trial of Protracted Cases, 25 F.R.D. 351, 429
(1960). |
| [60] | Of additional concern, plaintiff's survey was a "word association"
test. Participants in the survey were confronted with the "Domino's Pizza"
mark, and more or less asked if it brought anything else to mind. We have
previously held that such a procedure degenerates "into a mere
word-association test entitled to little weight." Holiday Inns, Inc. v.
Holiday Out in America, 481 F.2d 445, 448 (5th Cir.
1973). We do not believe the Haley survey presents any meaningful evidence
of likelihood of confusion.*fn12 |
| [61] | The trial court discounted defendants' survey for largely the same
reasons just discussed it was conducted on the premises of "Domino's
Pizza" outlets and therefore did not examine a proper survey universe, and
the questioning procedures used were improper. Thus, defendants' survey is
likewise not probative of the presence or absence of confusion.*fn13 |
| [62] | Accordingly, we conclude that the trial court was clearly in error
when it held defendants' use of the trademark "Domino's Pizza" was likely
to cause confusion, mistake, or deception. In the absence of any solid
evidence of actual confusion, the limited strength of the "Domino" mark
outside plaintiff's line of sugars and portion-control condiments compels
the opposite conclusion, especially in light of the marked dissimilarities
between plaintiff and defendants in trademark design, products, retail
outlets, purchasers and advertising. We also note that plaintiff has not
been vigilant in protecting its rights in the "Domino" mark. Since it
first began using the mark, it has failed to object to 72 third-party
registrations of "Domino." When infringing third-party uses of the mark
have become known, as in General Mills' use of "Domino" on a widely
distributed doughnut mix, plaintiff has written letters requesting
discontinuance of the mark, but has never brought suit against any such
infringement until now. As noted by the district judge in the course of
the trial, plaintiff "has not maintained, has not policed its mark." Tr.
1664. Plaintiff brought this suit after nearly ten years of simultaneous
use of the mark "Domino" by Amstar and DPI. A trademark
owner that strongly believed its customers were being deceived would
hardly have remained idle for such an extended period of
time. |
| [63] | Our conclusion that there is no likelihood of confusion in this case
is fatal to most of plaintiff's claims. With no likelihood of confusion,
there can be no trademark infringement, 15 U.S.C. § 1114(1).
Since there is no likelihood of confusing defendants' goods with those of
plaintiff's, the false designation of origin claim also falls. 15 U.S.C. §
1125; Boston Professional Hockey Ass'n, Inc. v. Dallas Cap and
Emblem Mfg. Co., Inc., 510 F.2d 1004 (5th Cir.),
cert. denied, 423 U.S. 868, 96 S. Ct. 132, 46 L. Ed. 2d 98 (1975). Common law
unfair competition turns primarily on likelihood of customer confusion,
and therefore defendants must prevail herein on that issue. Holiday Inns,
Inc. v. Holiday Out in America, 481 F.2d 445 (5th
Cir. 1973); B. H. Bunn Co. v. AAA Replacement Parts Co., 451
F.2d 1254 (5th Cir. 1971). Finally, the crux of a complaint
based on the Georgia Uniform Deceptive Trade Practices Act is the
likelihood of confusion between goods. Baker Realty Co. v. Baker, 228 Ga.
766, 187 S.E.2d 850 (1972). This claim also is without
merit. |
| [64] | IV. Dilution |
| [65] | Georgia's anti-dilution statute protects against "dilution of the
distinctive quality of the trade-mark . . . notwithstanding the absence of
competition between the parties or of confusion as to the source of goods
or services . . . ." Ga.Code Ann. § 106-115. Dilution, as we have
previously noted, occurs "where the use of the trademark by the subsequent
user will lessen the uniqueness of the prior user's mark with the possible
future result that a strong mark may become a weak mark." Holiday Inns,
Inc. v. Holiday Out in America, 481 F.2d 445, 450
(5th Cir. 1973). The concept is not applicable in this situation, however,
because "it has been determined that the marks themselves are not
confusing," id., and as discussed at length previously, "Domino," outside
plaintiff's line of sugars and portion-control items, has already become a
weak mark. Plaintiff's claim against defendants under the Georgia statute
is therefore invalid. |
| [66] | V. Conclusion |
| [67] | In reversing the district court and vacating the injunction entered
against defendants, we do not intimate that the mark "Domino," as applied
to plaintiff's sugars and portion-control items, is not a widely known
mark deserving substantial protection. However, "(t)he right granted to
the owner of a registered trademark is a monopoly and should not be
extended unless the owner is clearly entitled thereto." S. C. Johnson
& Son, Inc. v. Johnson, 266 F.2d 129, 136 (6th
Cir.), cert. denied, 361 U.S. 820, 80 S.
Ct. 65, 4 L. Ed. 2d 65 (1959). Since
defendants' use of the mark "Domino's Pizza" is not likely to confuse,
mislead, or deceive the public, the district court's order and injunction
to the contrary are set aside, and the judgment is |
| [68] | REVERSED. |
|
| |
| Judges Footnotes | |
|
| |
| [69] | *fn*
District Judge of the Western District of Louisiana, sitting by
designation. |
|
| |
| Opinion Footnotes | |
|
| |
| [70] | *fn1
Atlanta Pizza, Inc.; Pizza Enterprises, Inc.; Pizza Services, Inc.; and
Hanna Creative Enterprises, Inc. As found by the district court, all the
foregoing corporations with the exception of Hanna Creative Enterprises,
Inc., are now defunct. Findings of Fact Nos. 6, 7. |
| [71] | *fn2
Provisions of the Trademark Act pertinent to this litigation provide:
Any person who shall, without the consent of the registrant (a) use in
commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark in connection with the sale, offering for sale,
distribution, or advertising of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or
to deceive; or (b) reproduce, counterfeit, copy, or colorably imitate a
registered mark and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising
of goods or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive. shall be liable in a
civil action by the registrant for the remedies hereinafter provided.
Under subsection (b) of this section, the registrant shall not be entitled
to recover profits or damages unless the acts have been committed with
knowledge that such imitation is intended to be used to cause confusion,
or to cause mistake, or to deceive. 15 U.S.C. § 1114(1). Any
person who shall affix, apply, or annex, or use in connection with any
goods or services, or any container or containers for goods, a false
designation of origin, or any false description or representation,
including words or other symbols tending falsely to describe or represent
the same, and shall cause such goods or services to enter into commerce,
and any person who shall with knowledge of the falsity of such designation
of origin or description or representation cause or procure the same to be
transported or used in commerce or deliver the same to any carrier to be
transported or used, shall be liable to a civil action by any person doing
business in the locality falsely indicated as that of origin or in the
region in which said locality is situated, or by any person who believes
that he is or is likely to be damaged by the use of any such false
description or representation. 15 U.S.C. §
1125(a). |
| [72] | *fn3
The Georgia Uniform Deceptive Trade Practices Act provides in part:
(a) A person engages in a deceptive trade practice when, in the course
of his business, vocation, or occupation, he: (1) Passes off goods or
services as those of another; (2) Causes likelihood of confusion or of
misunderstanding as to the source, sponsorship, approval, or certification
of goods or services; (3) Causes likelihood of confusion or of
misunderstanding as to affiliation, connection, or association with, or
certification by, another; (4) Uses deceptive representations or
designations of geographic origin in connection with goods or services;
(5) Represents that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits, or quantities that they do
not have or that a person has a sponsorship, approval, status,
affiliation, or connection that he does not have; (6) Represents that
goods are original or new if they are deteriorated, altered,
reconditioned, reclaimed, used, or secondhand; (7) Represents that goods
or services are of a particular standard, quality, or grade, or that goods
are of a particular style or model, if they are of another; (8) Disparages
the goods, services, or business of another by false or misleading
representation of fact; (9) Advertises goods or services with intent not
to sell them as advertised; (10) Advertises goods or services with intent
not to supply reasonably expectable public demand, unless the
advertisement discloses a limitation of quantity; (11) Makes false or
misleading statements of fact concerning the reasons for, existence of, or
amounts of price reductions; or (12) Engages in any other conduct which
similarly creates a likelihood of confusion or of misunderstanding. (b) In
order to prevail in an action under this Chapter, a complainant need not
prove competition between the parties or actual confusion or
misunderstanding. (c) This section does not affect unfair trade practices
otherwise actionable at common law or under other statutes of this State.
(Acts 1968, pp. 337, 338.) Ga.Code Ann. § 106-702. The Georgia
anti-dilution statute provides: Every person, association, or union of
working men adopting and using a trade-mark, trade name, label or form of
advertisement may proceed by suit and all courts having jurisdiction
thereof shall grant injunctions, to enjoin subsequent use by another of
the same or any similar trade-mark, trade name, label or form of
advertisement if there exists a likelihood of injury to business
reputation or of dilution of the distinctive quality of the trade-mark,
trade name, label, or form of advertisement of the prior user,
notwithstanding the absence of competition between the parties or of
confusion as to the source of goods or services; except that the
provisions of this section shall not deprive any party of any vested
lawful rights acquired prior to the effective date of this section. (Acts
1955, pp. 453, 454.) Ga.Code Ann. § 106-115. |
| [73] | *fn4
Defendants' counterclaim for cancellation of the "Domino" mark for salt is
based on its contention that the registration was obtained through false
representations concerning the date of first use in commerce of "Domino"
salt on June 4, 1964. Defendants contend they are damaged by this
registration because it is the only "Domino" registration for non-sugar
products which purports to show a first use date prior to that of the
first use date of the mark "Domino's Pizza" by DPI on February 12,
1965. |
| [74] | *fn5
Plaintiff is the owner of the following trademark registrations issued by
the U.S. Patent and Trademark Office:
Trademark Reg. No. Registration Date Goods DOMINO 37,082 9/17/01
(renewed Hard sugar design 1931, 1951, 1971) DOMINO 37,177 10/8/01
(renewed Hard sugar 1931, 1951, 1971) DOMINO 73,099 3/16/09 (renewed Hard
sugar 1929, 1949, 1969) DOMINO 812,656 8/9/66 Portion-control mustard
DOMINO 812,657 8/9/66 Portion-control ketchup DOMINO 813,101 8/16/66 Salt
DOMINO 813,113 8/16/66 Portion-control pepper DOMINO 920,834 9/21/71 Jams
and jellies DOMINO 927,856 1/25/72 Salad dressing, mayonnaise. cucumber
relish DOMINO 1,108,831 12/12/78 Non-dairy powdered cream
substitute |
| [75] | *fn6
The Restatement of Torts lists the following as important factors in
determining confusing similarity:
(a) the degree of similarity between the designation and the trade-mark
or trade name in (i) appearance; (ii) pronunciation of the words used;
(iii) verbal translation of the pictures or designs involved; (iv)
suggestion; (b) the intent of the actor in adopting the designation; (c)
the relation in use and manner of marketing between the goods or services
marketed by the actor and those marketed by the other; (d) the degree of
care likely to be exercised by purchasers. Restatement of Torts § 729
(1938). |
| [76] | *fn7
In American Sugar Co. v. Texas Farm Products Co., 159 U.S.P.Q. 679, 681
(T.T.A.B.1968), American Sugar (predecessor in interest to
Amstar) opposed registration by Texas Farm Products of the
mark "Domino" for use on its cattle feed. The evidence established that
American Sugar sold various sugar syrups and byproducts (principally
blackstrap molasses) under the "Domino" mark, which were used in
conjunction with or alone as cattle feed. The Trademark Trial and Appeal
Board refused registration by Texas Farm Products, holding that both
American Sugar's "Domino" products and Texas Farm Products' feed went
through the same channels of trade to the same consumers. Texas Farm
Products had contended that third-party uses of "Domino" limited American
Sugar's rights in the mark. The Appeal Board's response to that argument
is instructive here:
Applicant also contends that "DOMINO" is a weak mark as evidenced by
the third party registrations and uses thereof hereinbefore referred to.
This contention would be relevant, however, only if opposer were seeking
protection of the mark in a field other than that in which it had
previously been used, and such is not here the case. 159 U.S.P.Q. at 681.
Thus, the Appeal Board, while denying registration to Texas Farm Products,
acknowledged that extensive third-party use of the mark "Domino" might
mandate a different result if Amstar sought protection of
the mark in a field "other than that in which it had previously been
used." As Amstar has never used the "Domino" mark in
connection with the sale of fast-food delivered pizzas, this is such a
case. |
| [77] | *fn8
At one time, "Domino" as applied to plaintiff's sugar was descriptive, not
arbitrary. There is evidence that, near the turn of the century, plaintiff
sold domino-shaped pieces of hard sugar in half bales. Tr.
213-14. |
| [78] | *fn9
Counsel for plaintiff conceded at trial that defendants did not adopt
"Domino's Pizza" with an intent to deceive, although the mark was adopted
with knowledge of plaintiff's use of "Domino." Tr. 1547. |
| [79] | *fn10
The two verbal inquiries were made to employees of DPI who were asked if
DPI was related to Amstar. The misaddressed letter was
received by a DPI employee from a doctor who had treated him. The doctor's
bill was addressed to "Domino Sugar." Record on Appeal at
2819. |
| [80] | *fn11
The judge's comment was made during a hearing held November 2, 1979 on a
motion by defendants to stay the district court's injunction pending this
appeal. Hearing Tr. 63. |
| [81] | *fn12
Other courts have rejected surveys performed by Dr. Haley as slanted or
biased. American Footwear Corp. v. General Footwear Company, Ltd., 609 F.2d 655, 660-61 n.4 (2d Cir. 1979); Charles
Revson, Inc. v. Max Factor & Co., 76 Civ. 5215, Findings of Fact Nos.
101-08 (S.D.N.Y.1977); Philip Morris, Inc. v. R. J. Reynolds Tobacco Co.,
188 U.S.P.Q. 289, 293-94 (S.D.N.Y.1975). |
| [82] | *fn13
The actual results of defendants' survey are disputed. Plaintiff argues
the survey shows a 6.8% confusion level, and the court in copying
plaintiff's proposed Findings of Fact adopted that argument. Defendants
argue the survey showed an actual confusion level of only 0.4%. They
contend the 6.8% figure can be derived only by eliminating all respondents
to the survey who were either not familiar with "Domino" sugar or who
responded "don't know" when asked if the same entity made both "Domino"
sugar and "Domino's Pizza." They argue that such a procedure is as
unwarranted as excluding the percentage of "undecided" voters in a
political poll. While we note the conflict between plaintiff and
defendants on this issue, our holding discounting the survey evidence in
this case makes it unnecessary for us to resolve
it. |