Delta Western Group, LLC v. Ruth's Chris Steak Houses ( 2001 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
DEC 18 2001
TENTH CIRCUIT
PATRICK FISHER
Clerk
THE DELTA WESTERN GROUP,
LLC,
Plaintiff-Counter-Defendant-
Appellant,
DANIEL B. McCAULEY; DONALD
E. LITTLE,
Plaintiffs-Appellants, No. 00-4163
(District of Utah)
v. (D.C. No. 00-CV-45-C)
RUTH’S CHRIS STEAK HOUSES,
Defendant-Appellee,
RUTH U. FERTEL, INC.,
Defendant-Counter-Claimant-
Appellee.
ORDER AND JUDGMENT *
Before KELLY, Circuit Judge, BRORBY, Senior Circuit Judge, and MURPHY,
Circuit Judge.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
In this trademark infringement case arising under the Lanham Trademark
Act of 1946 (“Lanham Act”), specifically 15 U.S.C. §§ 1114(1) and 1125(a),
plaintiffs-appellants Delta Western Group, LLC, Daniel B. McCauley, and Donald
E. Little (collectively “DWG”) appeal an order from the United States District
Court for the District of Utah granting a preliminary injunction in favor of
defendants-appellees Ruth U. Fertel, Inc. and Ruth’s Chris Steak Houses
(collectively “RUFI”). Exercising appellate jurisdiction under 28 U.S.C. §
1292(a)(1), this court affirms.
At the time of the original complaint, DWG owned the U.S. Prime Steak
House, a restaurant in Park City, Utah. RUFI is the owner of the Ruth’s Chris
Steak House chain. RUFI is also the owner of a registered service mark which
features the words “U.S. Prime” in all-capital, block lettering tilted at an upward
angle and surrounded by two concentric circles. DWG filed this suit challenging
the validity of RUFI’s “U.S. Prime” service mark. RUFI filed a counterclaim and
a motion for injunctive relief, alleging that DWG’s use of the name “U.S. Prime”
in its restaurant and products infringed on RUFI’s registered mark, in violation of
the Lanham Act. The district court granted RUFI’s motion to dismiss DWG’s
complaint for failure to state a claim upon which relief can be granted. Following
a preliminary injunction hearing, the district court enjoined DWG from using the
-2-
mark “U.S. Prime” on its restaurant, products, advertisements, and other materials
in an order filed on September 28, 2000.
On appeal, DWG makes several challenges to the district court’s
determinations of the validity of RUFI’s registered mark and DWG’s
infringement. Specifically, DWG argues that the district court erred in (1) failing
to consider whether RUFI’s mark was generic; (2) concluding that RUFI’s mark
had acquired secondary meaning; (3) determining that there was a likelihood of
confusion between DWG and RUFI’s marks; and (4) failing to consider
adequately DWG’s defenses based on RUFI’s disclaimer of a prior mark and
RUFI’s allegedly unclean hands.
This court reviews the grant of a preliminary injunction for abuse of
discretion. See Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234,
1243 (10th Cir. 2001). A district court abuses its discretion if it “commits an
error of law, or is clearly erroneous in its preliminary factual findings.” Id.(quotation omitted). The district court’s determination of the level of
distinctiveness is a question of fact reviewed for clear error. See Boston Beer
Co. v. Slesar Bros. Brewing Co. , 9 F.3d 175, 180 (1st Cir. 1993). A
determination of whether a mark has acquired secondary meaning is also a
question of fact reviewed for clear error. See J.M. Huber Corp. v. Lowery
Wellheads, Inc. , 778 F.2d 1467, 1470 (10th Cir. 1985) . In general, likelihood of
-3-
confusion is a question of fact subject to clear error review. See Heartsprings,
Inc. v. Heartspring, Inc ., 143 F.3d 550, 553 (10th Cir. 1998); Beer Nuts, Inc. v.
Clover Club Foods Co. , 805 F.2d 920, 923 n.2 (10th Cir. 1986).
As a preliminary matter, this court denies DWG’s motion to supplement the
record on appeal with materials not before the district court at the preliminary
injunction hearing. See Fed. R. App. P. 10(e) (authorizing modification of the
record only to extent necessary to “truly disclose[] what occurred in the district
court”); United States v. Kennedy , 225 F.3d 1187, 1191 (10th Cir. 2000) (“This
court will not consider material outside the record before the district court.”).
Turning to the merits, DWG first contends that the district court erred by
failing to determine the relative distinctiveness of the mark. In its order, the
district court stated that “RUFI’s U.S. Prime service mark seems to be either
‘descriptive’ or ‘suggestive,’ indicating some quality or ingredient of the goods.”
This court therefore finds no merit in DWG’s argument.
As for DWG’s arguments that the district court erred in concluding that
RUFI’s mark had acquired secondary meaning and that there existed a likelihood
of confusion between DWG’s and RUFI’s marks, this court concludes that the
district court’s factual determinations on these issues were not clearly erroneous.
The district court did not explicitly address DWG’s disclaimer defense in
its order granting a preliminary injunction. Here, however, there are no disputed
-4-
facts underlying the disclaimer defense. Because remand to the district court
would needlessly consume judicial resources, this court addresses the merits of
the disclaimer defense. See McCord v. Bailey , 636 F.2d 606, 613 (D.C. Cir.
1980). A disclaimer of a federal registration disavows any exclusive right to use
the disclaimed words except within the composite mark. See Pizzeria Uno Corp.
v. Temple , 747 F.2d 1522, 1529 (4th Cir. 1984). DWG concedes that RUFI has
not disclaimed the “U.S. Prime” mark RUFI seeks to enforce. Apparently, DWG
relies on the disclaimer of one of RUFI’s earlier registered marks. Disclaimer of
a previous mark, however, does not affect the validity of a subsequent
registration without a disclaimer if the disclaimed matter has become distinctive.
See 15 U.S.C. § 1056(b) (“No disclaimer . . . shall prejudice or affect the
applicant’s or registrant’s rights then existing or thereafter arising in the
disclaimed matter, or his right of registration on another application if the
disclaimed matter be or shall have become distinctive of his goods or services.”).
DWG does not present any argument to rebut the application of 15 U.S.C. §
1056(b) in this case. Accordingly, we find no merit to DWG’s disclaimer
defense.
Finally, this court concludes that the district court did not abuse its
discretion in declining to address DWG’s unclean hands defense. DWG’s
defense rests heavily on its claim that RUFI falsely advertised the grade of beef
-5-
allegedly depicted in a Ruth’s Chris advertisement. This claim, however, is not
substantiated in DWG’s briefs or supported by the portions of the record cited.
See Gamble, Simmons & Co. v. Kerr-McGee Corp ., 175 F.3d 762, 773 n.5 (10th
Cir. 1999) (“In the absence of sufficient citation to record support for a party’s
allegations, we decline to search for the proverbial needle in a haystack.”).
The United States District Court for the District of Utah did not abuse its
discretion and its order granting a preliminary injunction is therefore
AFFIRMED .
ENTERED FOR THE COURT
Michael R. Murphy
Circuit Judge
-6-