Amstar Corporation v. Domino's Pizza, Inc. And Atlanta Pizza, Inc., Pizza Enterprises, Inc. And Pizza Services, Inc., Hanna Creative Enterprises, Inc.

Amstar Corporation brought this suit asserting trademark infringement and unfair competition against Domino’s Pizza, Inc. (DPI) and several of its franchisees 1 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.; 2 also that said use constitutes unfair competition in violation of the *255 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. 3 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. 4 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.

I. Background of Dispute

Amstar Corporation holds several federal registrations for the widely known “Domi *256 no” trademark, 5 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.

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.

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 *257 financial difficulty, and the oppositions were not answered. Registration of the marks was therefore refused by the Patent Office.

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.

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.

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 “[cjonsumers 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, “[ujse 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.

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.

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.

II. Standard of Review

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 *258 149, 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. Fridays 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.

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:

“[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).

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.

III. Likelihood of Confusion

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, *259 turn on the determination of whether defendants’ use of the mark “Domino’s Pizza” is likely to cause confusion, mistake, or deception.

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.

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). 6

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.

1. Type of trademark

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).

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 *260 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).

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); 7 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).

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, 8 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).

2. Similarity of design

“Similarity of appearance is determined on the basis of the total effect of the desig *261 nation, 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.

Defendants’ mark, far from suggesting plaintiff’s mark, is stylistically and typographically distinguishable.