Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc.
1997 WL 569404, 122 F.3d 1379 (1997)
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Rule of Law:
In a trademark infringement dispute, a court must resolve all related infringement claims between the parties, including new claims that arise when the factual circumstances change mid-litigation, by applying the established seven-factor test for likelihood of confusion.
Facts:
- Lone Star Steakhouse & Saloon, Inc. (LSS & S) held a federally registered trademark for 'LONE STAR CAFE' since 1981.
- A separate entity, Lone Star Steaks, began using the mark 'LONE STAR STEAKS' in January 1984.
- LSS & S was also using the mark 'LONE STAR STEAKHOUSE & SALOON' for its restaurants.
- The initial trademark dispute between the parties centered on the similarity between 'LONE STAR STEAKHOUSE & SALOON' and 'LONE STAR STEAKS'.
- Following an early court order, LSS & S ceased using the 'LONE STAR STEAKHOUSE & SALOON' mark in Georgia and began operating its restaurants under its older 'LONE STAR CAFE' mark.
- Both restaurants served a similar type of food, identified as Texas cuisine.
- There was some evidence of actual consumer confusion between the two establishments after LSS & S began using the 'LONE STAR CAFE' mark.
Procedural Posture:
- The initial trademark dispute was litigated in the U.S. District Court.
- The district court entered a preliminary injunction enjoining LSS & S from using its 'LONE STAR STEAKHOUSE & SALOON' mark.
- The district court then granted LSS & S's petition to use its 'LONE STAR CAFE' mark instead.
- Lone Star Steaks filed a motion for summary judgment seeking a permanent injunction.
- The district court granted Lone Star Steaks a permanent injunction, but did not analyze the potential infringement between the 'LONE STAR STEAKS' and 'LONE STAR CAFE' marks.
- A panel of the U.S. Court of Appeals for the Eleventh Circuit initially affirmed the district court's decision.
- LSS & S, as appellants and cross-appellees, filed a suggestion for a rehearing en banc with the Eleventh Circuit.
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Issue:
Did the district court err by granting a permanent injunction without first determining whether one party's use of its 'LONE STAR STEAKS' mark was likely to cause consumer confusion with the other party's newly-adopted 'LONE STAR CAFE' mark, after the latter mark came into use as a result of a prior court order in the same litigation?
Opinions:
Majority - Per Curiam
Yes. The district court erred by failing to address the related claim of infringement that arose between the 'LONE STAR CAFE' and 'LONE STAR STEAKS' marks. The resolution of one trademark infringement claim without regard for related claims that arise during the litigation is improper. By complying with the court's preliminary injunction, LSS & S changed the relevant facts by switching to its 'LONE STAR CAFE' mark, which created a new infringement question that the district court was obligated to resolve. The court must analyze the seven factors for determining likelihood of confusion, especially since evidence suggested potential confusion between the two marks. The case is therefore remanded for the district court to conduct this analysis.
Analysis:
This opinion emphasizes that trademark litigation is dynamic and a court's analysis must adapt to factual changes that occur during the proceedings. It solidifies the principle from Sun-America Corp. that courts cannot adjudicate infringement claims in a vacuum; all related and active infringement issues between the parties must be resolved. By remanding the case for a full application of the seven-factor confusion test, the court reinforced the non-discretionary nature of this analysis. This decision serves as a procedural safeguard, ensuring that a party's compliance with an injunction doesn't inadvertently lead to an unresolved infringement issue being overlooked.
