Anyways, it turns out that Giordano's pizzeria, a local famous pizza chain with great deep dish pizza, was faced with a dilemma common to businesses throughout the world: a rival business wants to confuse your customers into thinking they are somehow affiliated or are your business. They ride on the coattails of excellence and often ruin great reputations with less than stellar offerings. Lets face it, stealing someone's name is a free way to get the benefits of a great trademark (consumer trust and confidence in the good/service). This is called trademark dilution. It is also trademark infringement.
As the Chicago Tribune reports, Giordano's sued its rival, Giordano Fresh & Crispy Pizza Co. after sending a cease and desist letter. A cease and desist letter is often sent prior to instituting suit because it is cheaper to do this than sue but also to establish intentional infringement, which allows for trebling of damages under federal trademark law.
In their lawsuit, Giordano's notes there was actual customer confusion when customers ordered from the rival pizzeria thinking they'd be getting authentic Giordano's pies but instead were delivered substandard fare. Their logos, according to the customer, were similar enough that he was confused.
A business can obtain a trademark in several ways. A common law trademark is created the moment a business or person uses a mark in commerce locally. Common law marks are less useful for enforcement because unlike federal marks, damages are not presumed, the Mark is restricted to areas where it is commercially being used, and seniority strongly governs.
Federal marks require registration. The Lanham Act, Section 43 of forbids any false designation of origin and states:
[a]ny person who, on or in connection with any goods or services… uses in commerce any word, term, [or] name… or any false designation of origin… which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or in commercial advertising… shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1).
To succeed on the merits of its trademark infringement claims, Giordano's must show: (1) that its Marks are valid trademarks they owned; and (2) Defendant’s use of the Infringing Mark creates a likelihood of confusion. Ty, Inc. v. Jones Group, Inc., 237 F. 3d 891, 897 (7th Cir. 2001). “The ‘keystone’ of trademark infringement is ‘likelihood of confusion’ as to source, affiliation, connection or sponsorship of goods or services among the relevant class of customers and potential customers.” Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 957 (7th Cir. 1992).
The Seventh Circuit has applied a multi-factor test in order to evaluate whether a likelihood of confusion exists between two marks: (1) the similarity of the marks in appearance and suggestion; (2) the similarity of the products (do I need to find services here?); (3) the area and manner of concurrent use; (4) the degree of care likely to be used by consumers; (5) the strength of the plaintiff’s mark; (6) whether any actual confusion exists; and (7) the defendant’s intent to palm off its goods as those of the plaintiffs.” off its goods as those of the plaintiffs.” Ty, Inc., 237 F.3d at 897-898.
None of these factors by itself is dispositive of a likelihood of confusion, and different factors will weigh more heavily depending on the facts and circumstances of each individual case. Id. Even though no one factor is decisive, the similarity of the marks, the intent of the defendant, and evidence of actual confusion are the “most important factors” in a likelihood of confusion case. Id.
In this case, Giordano's, from the limited information in this article, seems to be making its case for trademark infringement and dilution. The names of the pizzeria's are similar but a name alone cannot be used to exclude without more. As indicated above, each factor is weighed, and none of them alone are dispositive. The fact customers are confused, that Giordano's mark is so much stronger and more famous, the relative advertising budgets, the similarity of their product offers, and the fact that Defendant seems to be palming off substandard pizza's using Giordano's name all seem to neatly fit within the Du Pont factors outlined by the 7th Circuit above. As such, this is a fascinating case of a very public trademark action by a well known local chain.
If you own or operate a business that seeks to enforce or obtain trademarks, do not hesitate to contact a trademark attorney like those at Nair Law LLC.