Frisch's Restaurant, Inc. v. Shoney's Inc.

759 F.2d 1253
Court of Appeals for the Sixth Circuit·Decided April 25, 1985·No. No. 84-3240·Published·Cited by 5 cases

Opinions

KRUPANSKY, Circuit Judge.

Plaintiff-appellant Frisch’s Restaurants, Inc. (Frisch’s) initiated this proceeding alleging a cause of action under the Lanham (Trademark) Act, 15 U.S.C. § 1125(a), seeking monetary damages, and injunctive relief against defendant-appellee Shoney’s Inc. (Shoney’s) enjoining Shoney’s from constructing or continuing to operate any restaurant under the name “Shoney’s” in states in which Frisch’s has the exclusive right to use the “Big Boy” trademark. The district court issued a thirty-two page opinion denying the injunction and there followed this timely appeal. Frisch’s Restaurants, Inc. v. Shoney’s Inc., No. 1-82-834 (S.D.Ohio, Mar. 7, 1984) (Holschuh, J.).

For twenty-five years, Shoney’s had been licensed to use the “Big Boy” trademarks to promote its restaurants in West Virginia, Virginia, North Carolina, South Carolina, Tennessee, Georgia, Alabama, Mississippi, Arkansas, Louisiana, and Missouri. In those states, Shoney’s operated or sublicensed 381 “Shoney’s Big Boy Restau[1263]*1263rants”. Frisch’s has the exclusive “Big Boy” rights in Ohio, Kentucky, Indiana, and Florida.

In 1982, and thereafter, Shoney’s launched food service operations in Kentucky and Florida under the tradename of “Shoney’s Towne and Country Restaurant”. Frisch’s charged that the operation of “Shoney’s Towne and Country” restaurants in the territory reserved to it for the use of the “Big Boy” mark violated the Lanham Act because of the public’s association of the name “Shoney’s” with “Big Boy”.

The case is before this court upon timely appeal from the district court’s order denying Frisch’s motion for a preliminary injunction against Shoney’s enjoining the use of the “Shoney’s” name outside the Shoney’s “Big Boy” license area.

This circuit has enunciated four elements which must be considered and “carefully balanced” in deciding to issue or withhold a preliminary injunction. Mason County Medical Ass’n v. Knebel, 563 F.2d 256, 264 (6th Cir.1977);

1. Whether the movant has shown a strong or substantial likelihood or probability of success on the merits.
2. Whether the movant has shown irreparable injury.
3. Whether the preliminary injunction could harm third parties.
4. Whether the public interest would be served by issuing the preliminary injunction.

563 F.2d at 261 (citing cases). See also In re DeLorean Motors Co., 755 F.2d 1223 (6th Cir.1985); USACO Coal Co. v. Carbomin Energy, Inc., 689 F.2d 94 (6th Cir. 1982); Mobil Corp. v. Marathon Oil Co., 669 F.2d 366, 368 (6th Cir.1981). The standard of appellate review of a district court order granting or denying a preliminary injunction is whether it abused its discretion. Tate v. Frey, 735 F.2d 986, 990 (6th Cir.1984). See also, e.g., In re DeLorean Motors Co., supra; Friendship Materials Inc. v. Michigan Brick, Inc., 679 F.2d 100, 102 (6th Cir.1982); Adams v. Federal Express Corp., 547 F.2d 319 (6th Cir.1976). Rigid adherence to the “abuse of discretion” standard is required to avoid untoward disruption of the progression of lawsuits as the lower court decision “was in no sense a final disposition”. Tate v. Frey, 735 F.2d at 990 (citing Securities and Exchange Comm’n v. Senex Corp., 534 F.2d 1240 (6th Cir.1976); Brandeis Machinery and Supply Corp. v. Barber-Green Co., 503 F.2d 503 (6th Cir.1974)). See, e.g., In re DeLorean Motors Co., supra.

Of course, the Mason County criteria “do not establish a rigid and comprehensive test for determining the appropriateness of preliminary injunctive relief”. Tate v. Frey, 735 F.2d at 990 (quoting Friendship Materials, Inc. v. Michigan Brick, Inc., 679 F.2d at 102). See also Roth v. Bank of the Commonwealth, 583 F.2d 527, 537 (6th Cir.1978), cert. dismissed, 442 U.S. 925, 99 S.Ct. 2852, 61 L.Ed.2d 292 (1979). “[T]he four considerations applicable to preliminary injunction decisions are factors to be balanced, not prerequisites that must be met.” In re DeLorean Motor Co., 755 F.2d at 1229. Cf. Roth v. Bank of the Commonwealth, 583 F.2d at 537-38 (quoting Metropolitan Detroit Plumbing & Mechanical Contractors Ass’n v. H.E.W., 418 F.Supp. 585, 586 (E.D.Mich.1976)). In the case at bar, the district court concluded that “Frisch’s has failed to demonstrate a likelihood of success on the merits”, and denied injunctive relief without consideration of whether the remaining three factors might nevertheless have counseled in favor of the injunction. On appeal the parties have again addressed Frisch’s ability or lack thereof to support its probability of success on the Lanham Act claim.

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), provides:

(a) Any person who shall ... use in connection with any goods or services ... a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce ... shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person [1264]*1264who believes that he is or is likely to be damaged by the use of any such false description or representation.

The Congress enacted the Lanham Act to make “actionable the deceptive and misleading use of marks in ... commerce ... [and] to protect persons engaged in such commerce against unfair competition”. 15 U.S.C. § 1127. The Sixth Circuit has previously concluded that false representations about the origin of goods or services are actionable under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Federal-Mogul Bower Bearings, Inc. v. Azoff, 313 F.2d 405, 408 (6th Cir.1963). In Federal-Mogul,

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Frisch's Restaurant, Inc. v. Shoney's Inc., 759 F.2d 1253 (6th Cir. 1985).

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