Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC

Citations: 745 F. Supp. 2d 1359; 2010 U.S. Dist. LEXIS 106664; 2010 WL 3943550Docket: Case 09-80918-CIV

Court: District Court, S.D. Florida; October 5, 2010; Federal District Court

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Miller's Ale House, Inc. operates a chain of over 40 family-friendly sports bar restaurants in Florida for more than 20 years, using a consistent branding strategy that includes a geographic prefix followed by "ALE HOUSE," such as "JUPITER ALE HOUSE." The restaurants' names are prominently displayed in red letters on their exteriors, and "ALE HOUSE" branding extends to menu items like "Ale House Loaded Fries." Common features across locations include specific server uniforms, a centralized bar area, and an open kitchen design. Miller's has also copyrighted several of its restaurant floor plans and actively promotes its brand through a shared website, social media, and local sponsorships. The case concerns the Defendant's motion for summary judgment, with the Court evaluating the facts in a light most favorable to the Plaintiff.

Miller's has previously sponsored professional sports teams, including the Florida Marlins and Miami Dolphins, and engages in co-branding with beer companies like Miller's Brewing and Budweiser, promoting events through radio commercials. As a result of these marketing efforts, many Florida residents associate "Ale House" solely with Miller's establishments. In April 2008, Boynton Carolina Ale House, LLC (BCAH) opened a restaurant called "Carolina Ale House" in Boynton Beach, Florida, approximately one mile from Miller's "BOYNTON BEACH ALE HOUSE." BCAH operates under a license from LM Restaurants, Inc., which manages the Carolina Ale House brand across several states. 

BCAH uses a similar red logo prominently featuring "Ale House," displayed on its building and employee uniforms, and offers menu items prefixed with "Ale House." The layout of BCAH mimics Miller's, including a centrally located bar and open kitchen, and both establishments offer similar services and promotions, such as coupons and pay-per-view events. Since BCAH's opening, confusion has arisen among customers, leading to incidents where patrons mistakenly visited one restaurant thinking it was the other or attempted to use coupons from one at the other. 

In response, on June 16, 2009, Miller's filed a lawsuit alleging trademark and trade dress infringement under Florida law and the Lanham Act, along with claims of copyright infringement, unfair competition, and trademark dilution in Florida.

Miller's 'ALE HOUSE' branding has been previously litigated in federal court, specifically in a 1998 case where Ale House Management, Inc. (AHM) sued Raleigh Ale House, Inc. for trademark infringement. AHM claimed that the use of 'ale house' in Carolina Ale House violated its trademark rights, but the U.S. District Court for the Eastern District of North Carolina granted summary judgment to RAHI, which was affirmed by the Fourth Circuit, ruling that 'ale house' is a generic term not eligible for trademark protection. Since that case, over 20 new Miller's locations have opened, becoming the predominant users of 'Ale House' in Florida. Local dining guides and directories show that 'Ale House' is commonly associated with Miller's restaurants, yet other establishments, like a Carolina Ale House in Weston and a Palm Beach Ale House, also use the term. BCAH, a party in the current case, argues for summary judgment on several grounds, including that 'ale house' is generic, Miller's trade dress is unprotectable, and there is no evidence of unfair trade practices or substantial similarity between floor plans. Additionally, BCAH contends that collateral estoppel prevents Miller from pursuing its trademark, trade dress, and copyright claims. The summary judgment standard under Federal Rule of Civil Procedure 56(c) allows for judgment when there is no genuine issue of material fact.

A rational trier of fact cannot find for the non-moving party if the record as a whole does not support such a conclusion, indicating there is no genuine issue for trial. The party seeking summary judgment must initially inform the court of the basis for their motion and identify record portions demonstrating the absence of a genuine material fact issue. There is no requirement under Rule 56 for the moving party to support their motion with affidavits or similar materials negating the opponent's claims; rather, they can meet their burden by showing an absence of evidence supporting the non-moving party's case. Once the moving party fulfills this obligation, the non-moving party must provide evidence that a material fact is genuinely disputed. A mere scintilla of evidence is insufficient; there must be enough for a jury to reasonably find in favor of the opposing party. The non-moving party must do more than demonstrate metaphysical doubt regarding material facts. When deciding on a summary judgment motion, the court must view evidence and reasonable inferences in the light most favorable to the non-moving party and refrain from weighing conflicting evidence or making credibility determinations. However, if the evidence from the non-moving party is merely colorable or not significantly probative, summary judgment may still be granted.

Regarding Miller's trademark infringement claim against BCAH for using the term "ale house," Miller alleges violations under Section 43(a) of the Lanham Act, which addresses the likelihood of confusion regarding affiliation or origin of goods or services. To succeed in a trademark infringement claim, a plaintiff must demonstrate (1) the validity of their trademark and (2) that the defendant has adopted a similar mark that is likely to confuse consumers. The validity of a trademark is determined by its distinctiveness, which must be capable of distinguishing the applicant's goods from others to be registered.

Marks are classified by the Supreme Court into five categories of distinctiveness based on their strength: 1) generic, 2) descriptive, 3) suggestive, 4) arbitrary, and 5) fanciful. Fanciful marks are the strongest, consisting of invented words or symbols for trademark use, while generic marks are the weakest, referring to a general class of products or services, such as "liquor store." The genericness of a term is determined by public perception, specifically whether it is viewed primarily as a designation of the article itself. For example, "blinded veterans" is deemed generic when referring to previously sighted veterans, and "chicken tenders" is assessed based on consumer understanding in the fast food context.

In the case of BCAH versus Miller's, BCAH contends that the Fourth Circuit's ruling in *Ale House Management, Inc. v. Raleigh Ale House, Inc.* prevents Miller's from claiming "ale house" is not generic for establishments serving ale or beer. Miller’s counters that issue preclusion does not apply since the Fourth Circuit ruling pertained to North Carolina, whereas this matter involves Florida. Miller's further argues that the context, time, and consumer base differ, allowing them to claim protectability for their "ALE HOUSE" mark.

Generic terms cannot be registered as trademarks, even if they are somewhat associated with a specific brand. Courts maintain that the public has a right to use generic terms, and these cannot be monopolized by any entity. There are rare instances where a term previously deemed generic may be recaptured as a trademark, as illustrated in *Singer Mfg. Co. v. Briley*, where the term "Singer" evolved in consumer perception from generic to a distinctive mark indicating quality sewing machines, thus allowing for trademark protection.

Issue preclusion in trademark law, formerly known as collateral estoppel and direct estoppel, prevents the re-litigation of factual or legal issues that have been definitively resolved in a previous court ruling, even if the issue arises in a different claim. This doctrine serves to protect parties from the burden of re-litigating identical issues and promotes judicial efficiency. In the Eleventh Circuit, issue preclusion applies if: (1) the issue is identical to one previously litigated; (2) it was actually litigated in the prior case; (3) it was essential to the prior judgment; and (4) the party against whom it is asserted had a full and fair opportunity to litigate it. 

In Miller's case, the argument against issue preclusion references Opryland USA Inc. v. Great American Music Show, Inc., where the Federal Circuit ruled that a prior finding of genericness did not prevent a party from presenting new evidence regarding public perception in trademark proceedings. The Opryland decision emphasized that while the Board had dismissed Opryland's opposition based on a previous ruling, it erred by not allowing evidence regarding the current public perception of the term "opry." 

Miller's asserts that changed circumstances can nullify issue preclusion, as highlighted in Gaylord Entertainment Co. v. Gilmore Entertainment Group, where significant changes since the original ruling rendered issue preclusion inapplicable. Consumer perception of trademarks can evolve over time, necessitating careful consideration to avoid the constant re-litigation of trademark validity, as noted in various cases.

Courts typically require claimants to demonstrate a "significant intervening factual change" for the validity of a mark to be relitigated. In challenging a prior determination of genericness, a plaintiff must provide evidence that the term in question has lost its generic meaning. In this case, BCAH has successfully shown that "ale house" remains a generic term, supported by evidence of multiple establishments using the term and dictionary definitions confirming its generic status. BCAH's expert, Dr. Ronald Butters, identified numerous restaurants using "ale house" in their names, reinforcing the argument for its generic nature.

Miller's contends that due to regional and temporal differences, issue preclusion should not apply. However, the court disagrees, stating that evidence of consumer perception must be demonstrated on a national level, not just in Florida. While Miller's provided testimony from Florida customers associating "ale house" with its restaurants and noted its advertising efforts, it failed to present evidence of how the term is perceived outside Florida. Consequently, the court finds that Miller's market position has not significantly changed since the prior case, where it was identified as a Florida-based chain with 21 locations in the state.

Miller's has significantly increased its locations in Florida over the past ten years but has not made substantial inroads into other markets or engaged in national advertising. This contrasts with the Singer Mfg. Co. v. Briley case, where extensive national sales contributed to the recapture of a trademark. Miller's lacks evidence of a prolonged national presence that would affect consumer perception of the term 'ale house.' Furthermore, evidence presented, such as South Florida phone books and webpage directories not categorizing 'ale house,' fails to demonstrate a change in the term's generic meaning. Anecdotal evidence of confusion from former employees and customers at Miller’s Boynton location is insufficient to establish the protectability of the mark, as such evidence does not adequately reflect the general public's perception. The limited scope of the confusion evidence does not support the claim that 'ale house' has lost its generic meaning. Consequently, the court finds Miller's evidence inadequate as a matter of law to support a jury trial, resulting in the dismissal of Miller's trademark infringement claim based on issue preclusion. Regarding Miller's trade dress infringement claim, while trade dress can be federally protected, the distinctiveness of the design or packaging must identify the product with its source.

Trade dress encompasses the overall image of a product, including its size, shape, color, texture, graphics, and sales techniques, and is protected under Section 43(a) of the Lanham Act. Miller's alleges that BCAH has infringed its trade dress by copying its interior decor, layout, and red logos. BCAH counters that Miller's claim is barred by issue preclusion, referencing a prior ruling where Miller's interior floorplan was deemed neither unique nor unusual and lacked sufficient evidence for a proprietary claim.

Miller's now asserts that its menu design, interior decor, and staff appearance also constitute distinctive trade dress. The court finds that Miller's new claims are not precluded, as they differ from the previously contested elements. To establish trade dress infringement, a plaintiff must demonstrate that the product designs are confusingly similar, primarily non-functional, and either inherently distinctive or having acquired secondary meaning.

Miller's argues its trade dress is distinct, while BCAH contends it is generic and thus unprotectable. The Eleventh Circuit assesses distinctiveness based on factors such as commonality of design and uniqueness in the field. The total impression of the trade dress, rather than isolated elements, is crucial for analysis. The court concludes that Miller's claimed trade dress is not unique or unusual, noting the commonality of the interior features and signage, which render them too generic to warrant protection.

Miller's claimed trade dress is considered too typical of the sports bar and grill genre to be deemed distinctive, leading the Court to rule that it is not inherently distinctive. To establish secondary meaning, several factors must be considered, including the duration and manner of use, advertising efforts, and public recognition of the product name. Miller's trade dress, including its restaurant interiors, lacks both inherent and acquired distinctiveness. The Court noted that Miller's evidence supporting secondary meaning was insufficient, as it primarily related to the term "ale house," which was deemed generic and unprotectable. No systematic consumer survey was conducted, and the evidence of actual confusion presented did not connect Miller's restaurant decor to its brand. Consequently, the Court determined that Miller's failed to demonstrate that its trade dress is recognized by consumers, thus ruling it non-protectable. Additionally, under Section 1125(a) of the Lanham Act, a plaintiff can pursue a claim for false advertising based on misleading representations, even without a valid trademark or trade dress.

In Babbit Electronics, Inc. v. Dynascan Corp., the Eleventh Circuit outlined the requirements for a false advertising claim under Section 43(a)(1)(B) of the Lanham Act, which include: (1) the opposing party's advertisements must be false or misleading; (2) they must deceive or have the capacity to deceive consumers; (3) the deception must materially affect purchasing decisions; (4) the misrepresented product or service must affect interstate commerce; and (5) the plaintiff must demonstrate injury due to the false advertising.

In the case at hand, Miller's alleges that BCAH's coupons are misleading because they state they are "valid at participating Palm Beach Area locations," with Miller's asserting that this statement deceives consumers by implying a connection to their restaurants. BCAH counters that the coupons are not misleading since there is a Carolina Ale House in Weston, Florida, although Miller's claims Weston is not included in the "Palm Beach Area."

The court emphasizes that evaluating advertisement falsity requires examining the overall message in context rather than in isolation. The coupons clearly list valid locations along with the Carolina Ale House branding, leading the court to conclude that the coupons are not literally false. Furthermore, false advertising can also involve claims that, while literally true or ambiguous, create a misleading impression. However, Miller's failed to provide substantial evidence, like consumer surveys or market research, to prove that a significant portion of consumers held the false belief suggested by BCAH's advertisements. Anecdotal evidence of customer confusion was deemed insufficient to establish the claim.

Miller's has not demonstrated a genuine issue of material fact regarding claims that BCAH's coupons are misleading. Additionally, Miller's alleges that BCAH unfairly copied its dining promotions and events, such as pay-per-view fight nights, suggesting a false affiliation with Miller's. However, even if BCAH intended to replicate Miller's promotions, legal standards dictate that such actions do not constitute unfair competition unless protected by intellectual property rights. BCAH does not claim any affiliation with Miller's in its advertising, and merely copying unprotected dining specials does not amount to unfair competition under the Lanham Act. 

Regarding Miller's copyright infringement claim, two elements must be proven: ownership of a valid copyright and evidence of copying original elements of the work. Without direct proof of copying, Miller’s could demonstrate access and substantial similarity. It claims that BCAH infringed its copyrighted floor plan "Ale House Floor Plan Five," but the Court agrees with BCAH that the plans are not substantially similar. Although courts are typically cautious in granting summary judgment in copyright cases due to the subjective nature of similarity assessments, non-infringement can be determined as a matter of law if no reasonable jury could find substantial similarity. In architectural works, the Copyright Act's definition excludes common features, allowing for summary judgment when similarities pertain only to non-copyrightable elements.

The court analyzes the similarity between two architectural floor plans, noting that minor differences are more significant in this context than in other art forms. Miller's alleges that BCAH's floor plan is substantially similar to its "Ale House Floor Plan Five." At a broad overview, both plans share common features such as restroom and kitchen placements, a central bar, and seating arrangements. However, for copyright infringement, the comparison must focus on the protected expression level. The court finds that, despite some superficial similarities, the specific arrangements of design elements between the two plans are markedly different. Key distinctions include the relative locations of the central bar, seating configurations, bathroom access, and outdoor areas. The court concludes that the architectural works receive only "thin" protection, and the differences are substantial enough that no reasonable jury could determine substantial similarity. Therefore, Miller's copyright infringement claim is dismissed, and the defendant's motion for summary judgment is granted.

All federal claims made by Miller have been resolved, leading the Court to decline supplemental jurisdiction over Miller's state law unfair competition claims, and it will issue a separate judgment. Miller's claim to trademark rights regarding a family of marks using "ALE HOUSE" could be undermined if the term is deemed generic, which would invalidate the entire mark. Miller's is identified as the successor to AHM, the original plaintiff in a related Fourth Circuit case, establishing a privity or substantive relationship that allows for issue preclusion. The Court references several decisions regarding generic terms, noting that common restaurant names may not be listed under specific headings in directories but are still considered generic. It also highlights that some circuits do not accept consumer survey evidence in determining genericness unless the name is coined. The District Court fully adopted RAHI's memorandum, which did not argue that Miller's trade dress is generic. The functionality of certain restaurant features, such as a central bar and open kitchen, is acknowledged, but the Court will review Miller's overall interior design as a composite for trade dress protection. While consumer surveys are not mandatory for proving trade dress infringement, they can significantly influence public perception. BCAH argues that issue preclusion should bar Miller's copyright claim, but the Court determines that since BCAH's floor plan was not reviewed in the prior case, the legal issues differ. Additionally, while BCAH claims Miller's failed to show evidence of access to its floor plans, the Court finds that the works are not substantially similar and does not need to resolve the access issue.