Lone Star Steakhouse v. Longhorn

United States Court of Appeals,

Eleventh Circuit.

Nos. 94-8700, 95-8656 and 95-8767.

LONE STAR STEAKHOUSE & SALOON, INC., Plaintiff-Counterdefendant-Appellant,

v.

LONGHORN STEAKS, INC., Defendant-Appellee.

Lone Star Steaks, Inc., Plaintiff-Counterdefendant-Appellee,

v.

Lone Star Steakhouse & Saloon of Georgia, Inc., Lone Star Steakhouse & Saloon, Inc.,
Defendants-Counterclaimants-Appellants.

Lone Star Steakhouse & Saloon, Inc., Plaintiff-Counterdefendant-Appellant, Cross-Appellee,

v.

Longhorn Steaks, Inc., Defendant-Appellee, Cross-Appellant.

Lone Star Steaks, Inc., Plaintiff-Counterdefendant-Appellee, Cross-Appellant,

v.

Lone Star Steakhouse & Saloon of Georgia, Inc., Lone Star Steakhouse & Saloon, Inc.,
Defendants-Counterclaimants-Appellants, Cross-Appellees.

Lone Star Steakhouse & Saloon, Inc., Plaintiff-Counterdefendant-Appellee,

v.

Longhorn Steaks, Inc., Defendant-Counterclaimant-Appellant.

Lone Star Steaks, Inc., Plaintiff-Counterdefendant-Appellant,

v.

Lone Star Steakhouse & Saloon of Georgia, Inc., Lone Star Steakhouse & Saloon, Inc.,
Defendants-Counterclaimants-Appellees.

Sept. 25, 1997.

Appeals from the United States District Court for the Northern District of Georgia. (Nos. 1:93-CV-
2936-ODE, 1:93-CV-2938-ODE), Orinda D. Evans, Judge.

Before COX and BLACK, Circuit Judges, and FAY, Senior Circuit Judge.

ON SUGGESTION OF REHEARING EN BANC.
 PER CURIAM:

In its suggestion of rehearing en banc, appellants and cross-appellees, Lone Star Steakhouse

& Saloon, Inc. and Lone Star Steakhouse & Saloon of Georgia, Inc. (hereinafter, collectively

referred to as "LSS & S"), essentially argue that the district court and our original panel opinion,

published at 106 F.3d 355 (11th Cir.1997), did not address whether appellee and cross-appellant,

Lone Star Steaks,1 and its mark LONE STAR STEAKS was likely to cause consumer confusion with

LSS & S's LONE STAR CAFE mark.2 After reconsidering LSS & S's argument, we are now

convinced that the district court procedurally overlooked LSS & S's position. Likewise, it appears

that we neglected to fully address the issue. Upon further review, we supplement our prior opinion

and remand the case to the district court for a de novo consideration of whether or not continued use

of both the LONE STAR STEAKS mark and the LONE STAR CAFE mark will likely cause

consumer confusion.

Initially, the trademark dispute in this case centered around the marks LONE STAR

STEAKHOUSE & SALOON and LONE STAR STEAKS. Indeed, the district court's analysis and

our prior opinion focused on whether LSS & S's federally registered LONE STAR CAFE mark

could be extended to offer priority and protection to LSS & S's LONE STAR STEAKHOUSE &

SALOON mark. The district court rejected LSS & S's contention and consequently enjoined them

from using its LONE STAR STEAKHOUSE & SALOON mark. We affirmed this portion of the

district court's ruling and LSS & S's suggestion of rehearing does not challenge this decision.

However, because the district court found that LSS & S was not using its LONE STAR CAFE mark

1
During the course of this litigation and appeal, Longhorn Steaks, Inc., acquired Lone Star
Steaks' two restaurants and converted one of the Lone Star Steaks' restaurants into a Longhorn
Steaks' restaurant.
2
From the record before us, it appears that LSS & S did not file a petition for rehearing by the
panel, see Fed.R.App.P. 40, but instead filed a suggestion for rehearing en banc. See
Fed.R.App.P. 35. Nonetheless, we, the prior panel, and not the en banc court, take this
opportunity to correct and modify our earlier opinion.

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as a service mark, it was unnecessary to consider whether Lone Star Steaks and its LONE STAR

STEAKS mark was causing customer confusion with LSS & S's LONE STAR CAFE mark.

Thereafter, LSS & S petitioned the district court for permission to use its alleged superior

LONE STAR CAFE mark. The district court granted LSS & S's petition and LSS & S eventually

began using the LONE STAR CAFE mark in Georgia instead of the LONE STAR STEAKHOUSE

& SALOON mark. Lone Star Steaks then filed a motion for summary judgment seeking a

permanent injunction against LSS & S. At this point, both the district court and our subsequent panel

opinion failed to realize the legal significance of LSS & S's use of the LONE STAR CAFE mark as

a service mark. Without resolving whether the LONE STAR STEAKS mark infringed upon LSS

& S's recent use of its LONE STAR CAFE mark, the district court granted Lone Star Steaks a

permanent injunction.

By complying with the district court's preliminary injunction order and the clarification order

authorizing the use of the LONE STAR CAFE mark, the facts relevant at the preliminary injunction

stage had changed by the time of Lone Star Steaks' motion for summary judgment. Furthermore,

while the district court resolved the infringement claims present during the preliminary injunction

(between LONE STAR STEAKHOUSE & SALOON and LONE STAR STEAKS), it failed to

determine the related claim of infringement between LONE STAR CAFE and LONE STAR

STEAKS. This omission was erroneous. This Court has previously found that the resolution of one
trademark infringement claim without regard for related claims of infringement is improper.

SunAmerica Corp. v. Sun Life Assur. Co., 77 F.3d 1325, 1342 (11th Cir.1996). Pursuant to

SunAmerica, when Lone Star Steaks filed its motion for summary judgment and since by this time

LSS & S was using its LONE STAR CAFE mark, the district court should have considered the

infringement issue concerning LONE STAR CAFE and LONE STAR STEAKS. To the extent our

prior opinion overlooked this issue, we modify our opinion to reflect the analysis of the issues as

required in SunAmerica and now turn our attention to whether the LONE STAR STEAKS mark

might be infringing upon the LONE STAR CAFE mark.

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 To prevail on a trademark or service mark infringement claim, a plaintiff must show (1) that

its mark has priority and (2) that the defendant's mark is likely to cause consumer confusion. Dieter

v. B & H Industries of Southwest Florida, Inc., 880 F.2d 322, 326 (11th Cir.1989) (citing 15 U.S.C.

§ 1114(1)(a)). In our case, LSS & S may satisfy the priority requirement needed to succeed in an

infringement claim. Under the facts of our prior opinion, the 1981 federally registered LONE STAR

CAFE mark is prior and superior to the LONE STAR STEAKS mark, which was first used in

January of 1984. Indeed, the district court acknowledged that Lone Star Steaks "probably cannot

establish that it is substantially likely to succeed on the merits of an argument that its LONE STAR

STEAKS mark has priority over [LSS & S's] LONE STAR CAFE mark." R4-48-4. However, this

is contingent upon the resolution of the attacks concerning the acquisition of the LONE STAR

CAFE mark and possible abandonment raised by Lone Star Steaks.

The second requirement needed to prevail in an infringement claim is whether the use of the

LONE STAR STEAKS mark is likely to cause consumer confusion. In other words, LSS & S must

also prove that there is a likelihood that the public will find the LONE STAR STEAKS mark

confusingly similar to LSS & S's LONE STAR CAFE mark. In determining the likelihood of

confusion between the two marks, we require a district court to analyze the following seven factors:

(1) type of mark, (2) similarity of mark, (3) similarity of the products the marks represent, (4)

similarity of the parties' retail outlets and customers, (5) similarity of advertising media used, (6)
defendant's intent and (7) actual confusion. Dieter v. B & H Industries of Southwest Florida, Inc.,

880 F.2d 322, 326 (11th Cir.1989); Freedom Sav. and Loan Ass'n v. Way, 757 F.2d 1176, 1182

(11th Cir.), cert. denied, 474 U.S. 845, 106 S.Ct. 134, 88 L.Ed.2d 110 (1985). Of these seven

factors, we consider the type of mark and the evidence of actual confusion to be the two most

important factors. Dieter, 880 F.2d at 326. In reviewing the evidence, there are no set rules as to

how much evidence of confusion is needed; rather, a district court "must take into consideration the

circumstances surrounding each particular case." Id. at 326 n. 3 (citing Jellibeans, Inc. v. Skating

Clubs of Georgia, Inc., 716 F.2d 833, 844 (11th Cir.1983)).

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 In the case before us, the district court did not make an explicit ruling regarding the

likelihood of confusion between the two marks. The district court merely stated that it was "not

convinced that the LONE STAR STEAKS mark and the LONE STAR CAFE mark were

confusingly similar." R4-48-4. Although the district court was uncertain whether the marks were

confusingly similar, there is evidence in the record to suggest that the two marks did cause some

actual consumer confusion, see R5-68-2-4 (affidavit of the general manager of Lone Star Cafe

restaurant noting two specific instances of customer confusion), both restaurants utilize the same

words "LONE STAR" in their restaurants' names, and both serve a similar type of food, Texas

cuisine.

Because the law of this circuit requires a district court to fully consider the seven factors

listed above in determining the likelihood of confusion between two marks and because from the

record before us it appears that there are genuine issues concerning the acquisition of and possible

abandonment of the LONE STAR CAFE mark, we vacate our previous affirmance of the district

court's order granting Lone Star Steaks a permanent injunction and remand the case to the district

court to determine whether LSS & S acquired and maintained the validity of the LONE STAR

CAFE mark, as well as whether or not the LONE STAR STEAKS and LONE STAR CAFE marks

are confusingly similar. In addition, because this modified ruling may change the award of profits

and attorneys' fees recoverable under the Lanham Act, the district court may revisit these issues if
necessary.

Our prior opinion is supplemented and modified and this matter is remanded for proceedings

consistent with this discussion.

MODIFIED AND REMANDED.

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