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Archive for August, 2012

What’s in a name? Why trademarking your business name can save you costly litigation fees.

In a city with an established and buzzing restaurant scene, eateries in Washington, D.C. rely on their names to promote their dishes and gain clientele.  Ben’s Chili Bowl conjures up thoughts of a salty half smoke at the U Street establishment, and the name Sweetgreen is likened to a gourmet salad with fresh, local ingredients. Thus, restaurants should protect their names as fiercely as they do their secret recipes.

A restaurant may protect its name by filing for trademark protection under the Lanham Trademark Act (15 U.S.C.A. § 1125).  Trade names under the Act are distinctive designations used to identify businesses. The purpose in protecting trade names is multifaceted. Infringement of a trade name may result in unfair trade because one party is unjustly appropriating the identity of another and as a result, the goods or benefits of another.  Further, infringement threatens the interests of the business by putting its reputation at risk. Consumers are also protected by the Act because protecting trade names promotes quality, service and good will by assuring businesses that they will be able to reap the benefits of a positive reputation.

At what point is a name unique enough to warrant protection under the Lanham Trademark Act?  Trade names can either be generic, descriptive, or suggestive, arbitrary, or fanciful.  A generic mark is ineligible for trademark protection.  For example, a restaurant named Pizza Place is unlikely to prevail against a restaurant named Pizza Corner for trademark infringement.  A descriptive mark describes a characteristic of the product and is only eligible for protection if it has a “secondary meaning.”  To acquire a “secondary meaning,” consumers must understand that the name does not refer to the ordinary meaning, but to a particular business that the mark identifies.  It is best for a restaurant if their name is considered suggestive, arbitrary, or fanciful.  These names are inherently unique and distinctive, thus protected under the Lanham Act.

In 2007, a lawsuit from Northern Virginia pitted Buffalo Wing Factory against defendants who opened a restaurant named Buffalo Wings House.  See Buffalo Wild Wings Factory, Inc. v. Mohd, 622 F.Supp.2d 325, 335-36 (E.D. Va. 2007).  The plaintiff had a valid and existing trademark registration for the mark “Buffalo Wings Factory” and had spent a considerable amount since opening in 2000 advertising its mark in local newspapers and print media, and on local radio stations. The defendant’s name and menu were substantially similar to that of Buffalo Wings Factory, both restaurants were casual dining restaurants with sports themes, both had similar color schemes, and were located in strip malls. Most importantly, customers continuously confused the two establishments; some attempting to use coupons from defendant’s restaurants at Buffalo Wings Factory.  Produce vendors and suppliers were also confused. The parties settled out of court, and signed a consent order included both monetary terms and injunctive provisions requiring the defendant to change its  trademarks, tag lines, signs, menu and product offerings, and to drop several of its copied sauces.

The touchstone of granting protection under the Lanham Act to a mark is whether there is a “likelihood of confusion.” In the Buffalo Wings Factory case, it was evident that customers and vendors alike confused the two restaurants, supporting the plaintiff’s complaint. Courts balance several factors in deciding whether a name is likely to confuse customers. These factors include: the distinctiveness of the first mark, the similarity between the two marks, the similarity of the goods or services the marks identify, the similarity of the facilities used for business, the defendants intent, and actual confusion the marks may cause.

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