BONANZA INTERNATIONAL, INC. v. DOUBLE "B" No. 3-71-Civ-216.
331 F.Supp. 694 (1971)
BONANZA INTERNATIONAL, INC., Plaintiff, v. DOUBLE "B"., a corporation, and Glenn Bennett, an individual, Defendants.
United States District Court, D. Minnesota, Third Division.
September 30, 1971.
David W. Thurston, St. Paul, Minn., for defendants.
MEMORANDUM AND ORDER
DEVITT, Chief Judge.
This matter is here on plaintiff's motion for a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure. Plaintiff alleges defendant has infringed his registered service marks, engaged in practices constituting unfair competition and violated a covenant not to compete. Plaintiff seeks injunctive relief restraining defendant from using the service marks, any signs, literature, or other property referring to or simulating the layout or method of operation of plaintiff's restaurants; from continuing to advertise itself as a franchised dealer of plaintiff; from engaging in unfair competition with plaintiff; and from engaging in the "low cost" steak dinner business within an
Plaintiff is engaged in the business of franchising "Bonanza Sirloin Pit" restaurants which specialize in "low cost" steak meals. The franchise operations are located in thirty states and include 208 units, two in the Minneapolis-St. Paul metropolitan area. In March of 1966 the area distributor for plaintiff's predecessor in interest entered into a licensing agreement with the individual defendant acting on behalf of the corporate defendant pursuant to which defendant began operation of a franchised restaurant at the location in question.
In April of 1968 plaintiff's local area distributorship was discontinued and defendant was directed to forward sales reports and royalties directly to plaintiff in Dallas, Texas.
Plaintiff claims that as a result of the similarity of appearance and method of operation between the restaurant operated by defendant and plaintiff's restaurants, confusion results as to whether defendant's restaurant is in fact one franchised by plaintiff. In addition plaintiff claims that the name "Bonanza" and the design, furnishings, fixtures, decor, layout, menu, and method of operation have all acquired a secondary meaning in that substantial numbers of individuals associate these items with restaurants franchised by plaintiff. Plaintiff bases this contention on the large amounts it has spent nationally on advertising, the technical assistance it provides its franchisees, and the customer goodwill it has worked to build.
Although the amount of advertising engaged in is one factor to be used in determining if an item has developed secondary meaning, the existence of secondary meaning is ultimately determined by a review of all factors involved in a given situation. Goodyear Tire & Rubber Co. v. H. Rosenthal Co.,
On these facts plaintiff has not shown that either the name "Bonanza" or its method of operation has acquired a secondary meaning. In addition plaintiff has not shown it has gained a protectable business interest in the sale of its franchises in this area.
Plaintiff next seeks to enjoin defendant from breaching the covenant not to compete contained in the licensing agreement.
Plaintiff finally asks that the items bearing the registered service marks be delivered by defendant to plaintiff for destruction. Defendant's request here is based on 15 U.S.C. § 1118.
Therefore the preliminary injunction restraining defendant from using plaintiff's registered service marks or items bearing these marks issued September 1, 1971 is continued in effect. The remainder of plaintiff's motion for a preliminary injunction is denied. This memorandum constitutes the findings of fact and conclusions of law required by Rule 52 of the Federal Rules of Civil Procedure.
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