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Phelan Holdings, Inc. v. Rare Hospitality Management, Inc.

United States District Court, M.D. Florida, Tampa Division

March 27, 2017

PHELAN HOLDINGS, INC., Plaintiff,
v.
RARE HOSPITALITY MANAGEMENT, INC., Defendant.

          ORDER

          JAMES S. MOODY, JR., UNITED STATES DISTRICT JUDGE

         THIS CAUSE comes before the Court upon Defendant's Motion for Summary Judgment (Dkt. 28), Plaintiff's Response in Opposition (Dkt. 43), and Defendant's Reply (Dkt. 48). Upon review of the motion, response, reply, record evidence, and being otherwise advised in the premises, the Court concludes that Defendant's motion for summary judgment should be granted on all of Plaintiff's claims.[1]

         BACKGROUND

         This is a trademark infringement action between two casual dining restaurants. Specifically, Plaintiff Phelan Holdings, Inc. alleges that Defendant RARE Hospitality Management, Inc.'s use of the slogan “You Can't Fake Steak” in its advertising for its LongHorn Steakhouse restaurant chain is confusingly similar to Phelan's Pinchers Crab Shack's restaurant's slogan “You Can't Fake Fresh, ” to the extent that customer confusion regarding the source, sponsorship, or origin of the parties' restaurants is likely to occur. The relevant undisputed facts follow.

         Plaintiff Phelan Holdings, Inc., a family-owned company, owns and operates Pinchers Crab Shack, a chain of twelve casual seafood restaurants located in Southwest Florida. Pinchers Crab Shack's style and ambiance were designed to look like “an old seafood shack you'd find resting along the Gulf coast.” Pinchers Crab Shacks are bright, open air restaurants, painted in pastel colors. The walls are adorned with beachy, Florida-themed decorations, such as driftwood signs, mounted fish, large oars, and Caribbean artifacts.

         As its name suggests, Pinchers Crab Shacks are known as seafood restaurants. Approximately 70% of the food available on its menu is seafood, and its advertising focuses on its seafood offerings. The Pinchers Crab Shack chain is “obsessed” with the freshness of its seafood, and, in furtherance of that objective, Phelan obtained an ownership interest in fish purveyor Island Crab Company to supply fresh seafood to its restaurants. Phelan also operates a farm in Florida that supplies fresh vegetables to its restaurants.

         In 2004, Phelan developed the advertising slogan “You Can't Fake Fresh” to make clear to consumers that the focus of Pinchers Crab Shacks is on the freshness of its food. Phelan registered the “You Can't Fake Fresh” mark with the United States Patent and Trademark Office (USPTO) on February 16, 2010.

         Pinchers Crab Shack uses its “You Can't Fake Fresh” slogan in approximately 90% of its advertising, which consists primarily of billboards, print media, such as hotel pamphlets and newspapers, and online through Pinchers Crab Shack's website and social media outlets. Pinchers also advertises on television and on the radio in Southwest Florida, but to a much lesser extent. In every advertisement that uses the “You Can't Fake Fresh” slogan, the Pinchers Crab Shack name is also prominently displayed and/or mentioned. Pinchers Crab Shack's customers are mostly tourists to the Southwest Florida region.

         LongHorn Steakhouse restaurants are a chain of Western-themed casual steakhouse restaurants owned and operated by Defendant RARE Hospitality Management, Inc., an Orlando-based subsidiary of Darden Restaurants, Inc. The first LongHorn Steakhouse opened in 1981 in Atlanta, Georgia, and currently there are over 481 LongHorn Steakhouse restaurants located in 41 states. LongHorn Steakhouses are typically large, stand-alone restaurants located in suburban areas, and patronized most frequently by locals.

         The first LongHorn was designed as a Texas-style roadhouse. The atmosphere was relaxed: peanuts were provided at each table, and typically peanut shells were thrown on the floor. As the LongHorn brand began to expand, RARE decided to transition its image from that of a “roadhouse” to that of a steakhouse with the look and feel of a rancher's home. In that regard, LongHorn Steakhouses are designed using dark, warm colors, and “cowboy” art such as mounted skulls, spurs, and paintings of Western scenes. Its menu is still heavily focused on its steak offerings, which account for roughly 60-65% of its food sales. LongHorn Steakhouse's primary competitors are other casual steakhouses, with Texas Roadhouse and Outback Steakhouse being the chain's biggest competition.

         In 2012, RARE started working with Grey Advertising to develop a new, bold marketing campaign for the brand. In those meetings, Grey first presented the slogan “You Can't Fake Bold, ” but through collaborative discussions RARE and Grey coined the slogan “You Can't Fake Steak, ” which was chosen as the new advertising campaign to portray the brand's bold attitude. Thereafter in 2012, RARE started using the slogan “You Can't Fake Steak” to promote its LongHorn Steakhouse restaurants. RARE submitted an application with the USPTO to federally register this mark on May 3, 2015, and was granted federal registration for the mark on August 4, 2015. LongHorn Steakhouse's “You Can't Fake Steak” mark is used primarily in television commercials, but also appears on the company's website, social media posts, gift cards, coupons, and occasionally on billboards. In all of the advertisements that use the slogan “You Can't Fake Steak, ” the “LongHorn” name is also prominently displayed.

         On October 1, 2015, Phelan filed the instant lawsuit against RARE, asserting claims for: (1) Federal trademark infringement/unfair competition/false designation of origin/false description of fact; (2) trademark infringement/unfair competition/false designation of origin/false representation under Florida law; (3) violation of the FDUTPA; (4) injury to business reputation and dilution under Florida law; and (5) cancellation of RARE's federally registered trademark for “You Can't Fake Steak.” The record is undisputed that there is no actual evidence of a consumer being confused by RARE's use of “You Can't Fake Steak” to promote its LongHorn Steakhouses in light of Phelan's use of “You Can't Fake Fresh” to promote its Pinchers Crab Shacks. And the Court notes the USPTO found that the parties' marks were sufficiently dissimilar such that RARE's “You Can't Fake Steak” mark was granted a federal trademark registration even though Phelan's “You Can't Fake Fresh” mark was already federally registered.

         RARE now moves for summary judgment on all of Phelan's infringement claims, asserting that the record is devoid of any evidence of a likelihood of consumer confusion. With respect to Phelan's dilution claim, RARE contends that the record is bereft of any credible evidence that Plaintiff's “You Can't Fake Fresh” mark has achieved the level of notoriety necessary to sustain its dilution claim. The Court now turns to the relevant law.

         SUMMARY JUDGMENT STANDARD

         Motions for summary judgment should be granted only when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; “the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (emphasis in original). The substantive law applicable to the claimed causes of action will identify which facts are material. Id. Throughout this analysis, the court must examine the evidence in the light most favorable to the non-movant and draw all justifiable inferences in its favor. Id. at 255.

         Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324. The evidence must be significantly probative to support the claims. Anderson, 477 U.S. at 248-49 (1986).

         This Court may not decide a genuine factual dispute at the summary judgment stage. Fernandez v. Bankers Nat'l Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990). “[I]f factual issues are present, the Court must deny the motion and proceed to trial.” Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983). A dispute about a material fact is genuine and summary judgment is inappropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248; Hoffman v. Allied Corp., 912 F.2d 1379 (11th Cir. 1990). However, there must exist a conflict in substantial evidence to pose a jury question. Verbraeken v. Westinghouse Elec. Corp., 881 F.2d 1041, 1045 (11th Cir. 1989).

         DISCUSSION

         A. Phelan's Trademark Infringement Claims

         Phelan's response to RARE's summary judgment motion reflects that Phelan is dropping or abandoning any forward confusion claim and is asserting its trademark infringement claims solely under a theory of reverse confusion.[2] As ...


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