Mil-Mar Shoe Company, Incorporated v. Shonac Corporation
75 F.3d 1153 (1996)
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Rule of Law:
A term that is commonly used to name or designate a kind of goods or services is a generic term. Generic terms cannot receive trademark protection, regardless of whether they have acquired a secondary meaning in the minds of consumers.
Facts:
- Since at least 1970, Mil-Mar Shoe Company, Inc. ('Mil-Mar') has operated a chain of seventeen retail shoe stores in the Greater Milwaukee area under the name 'Warehouse Shoes.'
- Mil-Mar registered 'Warehouse Shoes' as a trademark with the Wisconsin Secretary of State and spends over a million dollars annually advertising the name.
- Shonae Corporation ('Shonae') operates a national chain of twenty warehouse-type shoe stores under the name 'DSW Shoe Warehouse.'
- Shonae has a U.S. trademark for its name but was required by the U.S. Patent & Trademark Office to disclaim any exclusive right to the phrase 'Shoe Warehouse' by itself.
- In May 1995, Mil-Mar learned that Shonae planned to open a 'DSW Shoe Warehouse' store in the Greater Milwaukee area, three blocks from one of Mil-Mar's stores.
- Mil-Mar's and Shonae's stores are virtually identical in business model: large, high-volume retail stores selling a wide variety of discounted name-brand shoes.
- Shonae presented evidence that thousands of retail businesses nationwide, including hundreds of shoe stores, use the word 'warehouse' in their names.
Procedural Posture:
- Mil-Mar Shoe Company, Inc. sued the Shonae Corporation in Wisconsin state court for trade name and trademark infringement.
- Mil-Mar sought a temporary restraining order (TRO) and a preliminary injunction to stop Shonae from using the name 'DSW Shoe Warehouse.'
- The state court granted the TRO pending a hearing.
- Shonae, the defendant, removed the case to the U.S. District Court for the Eastern District of Wisconsin based on diversity jurisdiction.
- After a hearing, the district court granted Mil-Mar's motion for a preliminary injunction, enjoining Shonae from using 'DSW Shoe Warehouse' or confusingly similar names in the Milwaukee area.
- Shonae, the defendant-appellant, appealed the district court's grant of the preliminary injunction to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Is the term 'Warehouse Shoes' a generic term that cannot receive trademark protection?
Opinions:
Majority - Flaum, Circuit Judge
Yes, 'Warehouse Shoes' is a generic term that cannot receive trademark protection. The court holds that 'Warehouse Shoes,' like 'Shoe Warehouse,' is a generic term that designates a type or genus of retail store—one that sells shoes in high volume from a large facility at discount prices. The court rejected the district court’s finding that the term was merely descriptive. It relied on dictionary definitions and, more importantly, extensive evidence of widespread use of the word 'warehouse' by thousands of other retailers to show that the public commonly understands the term to refer to this type of business. Generic terms are in the public domain and cannot be exclusively appropriated as a trademark, even if they have developed a secondary meaning. Because Mil-Mar's name is generic, it has no probability of success on the merits of its infringement claim.
Analysis:
This decision reinforces the bright-line rule that generic terms are ineligible for trademark protection, regardless of their market recognition or secondary meaning. It clarifies that the classification of a term as 'generic' versus 'descriptive' depends on its common usage to name a type of product or service, not merely to describe a quality. The court's reliance on widespread third-party use of 'warehouse' in retail provides a practical guide for future cases, signaling that if competitors commonly use a term to identify a business model, it is likely generic and free for all to use. This protects competitors' ability to accurately describe their own businesses and prevents any single company from monopolizing common language.
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