Monday, June 15, 2015

Precedential No. 15: TTAB Refuses Concurrent Use Registration of DELMONICO'S For Restaurant Services

Concluding that there would be a likelihood of confusion even in Applicant Southwestern Management's current territory (upstate New York), the Board dismissed this proceeding seeking a concurrent use registration for the mark DELMONICO'S. for "restaurant services." Southwestern, the junior user but first to file an application to register, sought a nationwide registration except for the areas of use of the Defendants. However, the renown of the Defendant's restaurants (one in New York City (DELMONICO'S, the heir apparent to the historical restaurant of that name, the other based in New Orleans (DELMONICO) and promoted by Chef Emeril Lagasse) made it likely that confusion would occur even if Applicant's registration for "restaurant services" were limited to upstate New York. Southwestern Management, Inc. v. Ocinomled, Ltd. and Emeril’s Food of Love Productions, LLC, 115 USPQ2d 1007 (TTAB 2015) [precedential].

Applicant Southwestern operated four restaurants (Syracuse, Albany, Utica, and Rochester, New York), specializing in Italian food and steak. Defendants Ocinomed [OL] owns DELMONICO'S in downtown Manhattan, having taken the name of an historic New York restaurant that closed in about 1990. Although OL does not claim to own the goodwill of that restaurant, it does invoke a "cultural connection" to it, offering several dishes attributed to the historic eatery: Lobster Newburg and Baked Alaska, for instance. Defendant Emeril's [EFOL] operates two DELMONICO restaurants, one in New Orleans and one in Las Vegas, offering food with a Creole influence.

Although Southwestern claimed that its seniority of use entitled it to the lion's share of the United States, the Board found that Southwestern was not the senior user of the mark. OL began use of DELMONICO'S in New York City on May 13, 1998, just two days before Southwestern's first use date, and EFOL's predecessor-in-interest acquired rights in the DELMONICO mark in 1997.

Concurrent use proceedings are governed by Section 2(d) of the Lanham Act, which permits the grant of concurrent registrations, under appropriate restrictions as to "mode or place of use of the marks or the goods."

There are two 'conditions precedent to the issuance of concurrent registrations,' specifically: (1) that the party seeking registration be entitled to use the mark in commerce, notwithstanding concurrent use by others; and (2) that there be no likelihood of confusion, mistake or deception in the marketplace as to the source of the relevant goods or services resulting from the continued concurrent use of the trademark. In re Beatrice Foods Co., 429 F.2d 466, 166 USPQ 431, 435-36 (CCPA 1970).

The applicant has the burden of proof to establish its entitlement to a concurrent use registration. The rights of the parties are determined based on the facts existing as of the close of the testimony period.

EFOL contended that Southwestern's use of the mark was not "lawful," as required by Section 2(d), because it was not adopted in good faith. EFOL pointed to Southwestern's use of another EFOL trademark, BAM!, at about the same time. The Board observed, however, that even if Southwestern had known of EFOL's use of BAM!, that did not support a finding that it knew of EFOL's use of the DELMONICO mark. And even if Southwestern had knowledge of EFOL's use of DELMONICO, that does not necessarily disprove good faith adoption, since Southwestern "could have believed that its adoption was sufficiently remote so as to make confusion unlikely."

The determination as to whether Southwestern is entitled to a concurrent use registration requires an assessment as to whether confusion can be avoided by the imposition of "conditions and limitations as to the mode or place of use of the marks or the [services] on or in connection with which such marks are used." 15 U.S.C. Section 105(2). The only limitations proposed by Southwestern were geographical: Southwestern claimed the entire Unites States except for specific areas in New York, Louisiana, and Nevada, conceding those areas to the defendants.

The Board pointed out that a junior user may prove, in an appropriate case, that it is entitled to the entire United States with the exception of the senior user's territory. [See, for example, the Three Palms and Boi Na Braza cases]. The fact that Southwestern was the first to file for registration is a factor pointing in its direction, since the CAFC and the Board have discussed a policy of favoring the first to apply, but it is a factor that is "very much subordinate to the statutory considerations at the heart of a concurrent use analysis, i.e., the determinations as to whether a party is entitled to use its mark and as to whether confusion is not likely."

Any policy favoring those who apply for registration cannot, alone, automatically establish a party’s entitlement to use its mark in the majority of the geographic United States if consumer confusion is likely to result, in contravention of Section 2(d).

Southwestern, the Board found, has demonstrated its right to uses its mark, in its current manner, in its current locations, but a determination of the geographic scope of a concurrent use registration requires a full analysis of the likelihood of confusion issue.

The Board saw no meaningful difference between the singular and plural forms of DELMONICO, deemed the marks "obviously virtually identical in appearance and sound," and "essentially identical in meaning and overall commercial impression."

The identification of goods in the subject application, "restaurant services," encompasses the services offered by both defendants. Southwestern pointed to the differences in actual services: its moderately priced meals versus the high-end restaurants of EFOL offered by a celebrity chef and the high end Manhattan restaurant associated with a particular historic location.

Although the trial testimony about the differences in the restaurants suggested that there might be a basis for coexistence without likelihood of confusion, none of the parties suggested a way in which Southwestern's restaurant services could be specifically defined in a registration so as to avoid confusion with the type of restaurants operated by the defendants.

The Board next looked to the fame and renown of each of the parties respective marks, since that has a obvious bearing on the likelihood of confusion analysis. Southwestern's restaurants have a reputation local in nature. OL, however, "enjoys an peculiar form of renown because the press and public are very willing to conflate the identities of OL's restaurant with that of the historic Delmonico previously located at the same address." Although there is no business relationship between OL and the historic restaurant, "members of the public (and sometimes the press) do not necessarily appreciated the niceties of trademark ownership and continuity of business goodwill." In any case, the fact that OL's restaurant emulates the historic venue has produced "a heightened degree of interest and excitement among the press and public, which has redounded to the benefit of OL."

With regard to EFOL, through the fame of its principal, Emeril Lagasse, its DELMONICO mark has "a very substantial degree of renown throughout much of the United States." His celebrity resulted in substantial interest in his re-opening of the DELMONICO restaurant in New Orleans, and through numerous media appearances he has extensively promoted his two DELMONICO restaurants. Credit card and reservation records established that customers from across the country patronize the restaurants. In sum, although the evidence fell short of proving fame for Section 2(d) purposes, it demonstrated that the reputation of EFOL's mark "has spread throughout a substantial portion of the United States." Several incidents of actual confusion demonstrated that its reputation reached into New York state.

The Board found that upstate New York is not so remote that its denizens would be insulated from the reputation of EFOL's restaurants. OL established a "fairly widespread reputation," particularly strong in New York City and surely strong enough to reach Albany, New York. Consequently, the Board concluded that even if Southwestern's territory were limited to upstate New York, a likelihood of confusion would arise from the concurrent use of the involved marks.

In short, Southwestern failed to carry its burden of proof to show that confusion is not likely. The Board hastened to add that its determination did not, in some respects, take into account actual marketplace conditions, and affects only the issue of registrability and not Southwestern's right to use the mark.

And so the Board dismissed the proceeding, denying Southwestern the registration requested.

Read comments and post your comment here.

TTABlog note: What's the next step? For whom?

Text Copyright John L. Welch 2015.


At 8:59 AM, Blogger RT said...

So if the Board only mentions "actual marketplace conditions," is applicant bound by other sub-elements of the likely confusion findings? How could it not be? Also, what factors are included in "actual marketplace conditions," I wonder?


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