*1 INC., PHIPPS BROS. d/b/a Restaurant, Family Appellant,
Plaintiff and GAS, INC., AND OIL
NELSON’S d/b/a Korner, Defendant Nelson’s Appellee.
No. 18008. Dakota.
Supreme Court of South 16, 1993.
Argued March 24, 1993.
Decided Nov.
Rehearing Denied Jan. Mines, and Jeremi-
Robert G. Services, Legal Dakota Plains ah J. Davis of Pierre, plaintiff appellant. Porter, Gene R. Bushnell Donald A. Hill, Costello, Porter, Heisterkamp and Bushnell, ap- City, for defendant Rapid pellee.
WUEST, Justice. de- from a circuit court’s appeals
Plaintiff in- there was no trademark termination that Kountry Korner fringement Nelson’s Restaurant. against We reverse.
886 liquor. Although urges
FACTS also sell Nelson food only service the stores consists (hereinafter Arnold and Patricia food,” “fast the reveals that the record estab- Country Phipps) began operating the Corner promoted regularly as lishments restau- Family Springs, Restaurant South breakfasts, chicken, serving pizza, rants ribs using Dakota in 1984. Prior to “ Specials.” Daily other ‘Homemade’ name, Phipps permis- Corner obtained Advertisements inform readers that food can businessperson sion ran of a Texas who sev- they may out or carried be “Seated in by eral name. restaurants same The Air Conditioned Comfort.” Family Restaurant is well- Springs known in the Hot and southern against filed suit for Nelson trade- good Black Hills areas and has established infringement mark requesting monetary reputation positive among will resi- damages injunction prohibit an Nelson enjoys dents in the area and substantial busi- continuing from to use the name ness from the tourist trade. Korner. The trial court found Nelson. Phipps appeals raising three which issues (hereinaf- Oil Defendant Nelson’s and Gas noting address while additional facts where Nelson) operated gas ter three station/conve- necessary. stores, including service, nience restaurant under the name “Food n Fuel.” These Dakota, Edgemont, stores were South as ANALYSIS nearby well as the towns of Lusk and Sun- It been has stated that in a trademark dance, Wyoming. was Nelson con- case, infringement “A ‘trademark’ is not that by corporation tacted a Minnesota with busi- infringed. infringed which is isWhat is the using nesses the same name and advised public right of the to be free of confusion and using Nelson to cease the name n “Food synonymous right of a trademark owner possible infringe- Fuel” due to a trademark product’s reputation.” his control James employee ment. Nelson held contest to Inc., Burrough Ltd. v. Sign Beefeater, name, select a new chose (7th Cir.1976). 274 South Da “Kountry Korner.” Nelson was familiar with adopted kota virtually has what is the univer Corner establishment in Hot governing sal infringe standard trademark questioned regarding ment —whether there is a of confu likelihood similarity prior of the two names institu- Out, among sion consumers. Time promotion change. tion and of the name Ne- Karras, (S.D.1986); see
vertheless,
proceeded
plans
Nelson
with
1114;2
§
also 15 U.S.C.
Sun Banks
Fla. v.
adopt
the name “Nelson’s
Korner”
Loan,
Sun Fed. Sav. &
651 F.2d
for his businesses.1
(5th Cir.1981);
Co.,
SquirtCo.
Seven-Up
Cir.1980).
(8th
Restaurant is
628 F.2d
“It is
family-oriented
pa-
generally
inquiry
establishment where
said that
the relevant
is
trons
‘ordinarily prudent
are seated at tables and served
purchaser’
whether an
likely
waiters and waitresses. The Nelson
would be
to be misled or confused as to
gasoline, petroleum prod-
Korner stores sell
goods
ques
source
services
ucts,
greeting
toiletries and
cards and rent
tion.”
European
Health Indus. v.
(D.S.D. (1980))
video
Spas,
cassettes. The South Dakota stores
Act,
pending,
In the fall of
while the suit was
the "likelihood
Lanham
of confusion”
"Kountry
Nelson constructed an additional
Kor-
appears
universally
test
to have been
Custer,
ner” at
South Dakota.
actions,
infringement
trademark
even where
brought under state
has
law. This court
stated
infringement
frequently
2. Trademark
cases are
purpose
recognizing
right
that "The
to the
brought under the Lanham Act. Pertinent lan-
use of a mark is to avoid a
likelihood
confu-
guage
person
of this federal law states that a
who
among
sion
the consumers.” Time
"colorably
registered
imitate[s]
mark” such
Sunline, Inc.,
N.W.2d at
SweeTarts
"likely
that the
use
to cause
... shall
(8th Cir.1967) (stating
380 F.2d
be
§
liable
a civil action.”
15 U.S.C.
1114(l)(b).
1125(a)(1)(A).
universally
applied
"the test
See
whether there is a
also U.S.C.
present
brought
consumers.”)).
among
While the
case was not
under
likelihood
Heublein,
See,
Corp.
e.g.,
David Sherman
question
mixed
law and
fact.
(8th Cir.1965)).
Group,
“Actual Homeowners
Inc. v. Home Market
HOOD
TO THE
to every
single
CONFUSION
vant
and that no
questions
Pact,
Law,
mixed
fact.
Id.
Question
TSC
A Question
Tí
or Both?
Ky.L.J.
Indus.,
(1984-85)
Northway,
426 U.S.
(discussing
likeli-
2126, 2132,
(1976)).
96 S.Ct.
well businessman. 489) Carpets, 438 World F.2d Id. area 2. There some at an was added). produced ample (emphasis regarding radio station whether of actual confusion to meet the bur- evidence previously Korner Corner or had note that the trial proof. We also den participated special promotion. in a importance placed to on appears have in- locations were began the fact the business Corner customers correctly twenty apart. find no designating the their than miles payee on more arbitrary authority radius designating personal cheeks as Korner. Oth- excuse trademark any distance that would er customers asked whether should Therefore, “K”, we hold spell infringement. the name with “C” or a indicat- proof for likeli- Phipps met burden ing that there was another (or Korner) Edgemont. in hood against the defendant who summary judgment restaurants Country Properties, on Kitchen In Country Kitchen.” granted Country adopted the "Bill’s infringement had the issue to confusion, evidentiary court on rulings. and reverse the trial discretion on its See Hanson, (S.D.
this issue.
State v.
456 N.W.2d
Olesen,
(S.D.
1990);
State v.
N.W.2d
II.
AN
WAS PHIPPS ENTITLED TO
1989);
Bawdon,
N.W.2d
State
NEL-
INJUNCTION PROHIBITING
(S.D.1986). However,
present matter,
NAME
SON FROM USING THE
if
consequential damages
issue
issue is
KOUNTRY KORNER?
re-tried,
the court is free
reconsider its
relief,
injunctive
order to obtain
“[I]n
ruling
subpoena.
on
See SDCL 37-6-24
registrants
trademark
must meet the same
(allowing damages
injunction
in
addition
legal
infringement
applied
standard of
that is
action).
infringement
Further,
trademark
in common
trademark infringement.”
parties
note
briefs
ad
Cashways,
John
Co. v. Payless
Deere and
our
punitive
dressed
statutes on
damages.
(8th
Cir.1982);
681 F.2d
opinion,
application
our
no
has
109-1091;
SquirtCo.,
Armstrong
628 F.2d at
consequential damages incidental to the is
Carpets,
Cork Co. v. World
injunction.
of an
suance
(5th Cir.1979).
496, 499
“A
in
permanent
junction
only way
prevent
is the
the likeli
MILLER, C.J.,
SABERS, J.,
concur.
public
hood that the
will be
misled.”
Indus.,
at 869. We also note
HENDERSON, J.,
part
concurs in
case,
that in
infringement
a trademark
“Ac
part.
dissents
damages
tual
not be
need
shown
order to
AMUNDSON, J., dissents.
Clothes,
injunctive
obtain
relief.” Howards
Inc.
Corp.,
v. Howard Clothes
236 Minn.
HENDERSON,
(concurring
Justice
n. 8
Because we
part; dissenting
part).
reverse on the issue of
confu
likelihood of
*6
two-day
April, 1992,
a
After
trial in
the
sion, we instruct
circuit
the
court to enter
factually
(Finding
trial court
found
of Fact
injunction
opinion.
consistent with this
#35)
“reasonably prudent
that
customers
III. DID
TRIAL
THE
ERR IN
COURT
confuse Plaintiffs business with
QUASHING THE SUBPOENA DUC-
Defendant’s.”
ES TECUM WHICH SOUGHT PRO-
exists, however,
DUCTION
There
a “likelihood of con-
OF
FINAN-
NELSON’S
PROFITS,
fusion”
the
Family
CIAL
between
Corner
RECORDS AND
TO
in
BE
Restaurant
USED FOR
Nelson’s
CALCULATION OF
CONSEQUENTIAL
Edge-
Korner establishments
in
DAMAGES?
mont,
nearby
and two
Wyoming
Custer
com-
trial, Phipps
Prior
brought
a sub
munities.
poena
pre
duces
requesting
tecum
Nelson’s
years’
vious four
income tax
my opinion,
returns. Our
In
the circuit court entered
court,
motion,
statute
upon
fact,
allows the
finding
plus
thirty-four
above
“quash modify
subpoena
more,
or
contrary
if
unrea
it is
to the “likelihood of confu
oppressive.”
and, thus,
sonable and
clearly
SDCL
15-6-
sion” rule
was
erroneous.
45(b)(1).
moved,
Law,
upon
Nelson so
a tele
via
Conclusions of
based
these erro
phonic hearing,
granted
findings,
motion
neous
became mistakes of law.
quash.
granting
Labor,
D.,
Dept.
order
the motion
Unemp.
Permann
Ins.
o
(S.D.1987).
rationale,
fails to state the court’s
and n
these sell Nelsons
cards, beer, wine, welding supplies, liquor,
. supplies, rentals, automotive movie groceries, items, night
souvenir crawlers and fast food.
There is seating Edgemont limited their operation they
fast food cater where to the employees Burlington
railroad Northern. operated
These outlets are under the name Korner, open of Nelson’s and are Neyton BALTODANO, Dr. Plaintiff twenty-four day. hours a Appellant, There was a amount scant of evidence produced by regarding the issue of example confusion. dealt One with custom- NORTH CENTRAL HEALTH who ers issued checks their food wilt- INC., SERVICES, Defendant ing “Kountry Korner” rather than “Coun- Appellee.
try really Corner.” But does show con- Nos. on part fusion these individuals? obviously These customers wanted to dine at Supreme Court South Dakota. family a traditional restaurant did by choosing Also, Phipps’ restaurant. Argued Oct. *8 part record showed some on the inadvertence Decided Dec. delivery persons. day In this age, say would dare that most individuals and receipt
businesses encounter delivery
something fact, that was not ordered. one clearly
invoice in this case had the Nelson it, delivery person
name on but the seemed disregard that fact. These minimal in- of alleged certainly
stances did not ordinary provident
disclose confusion of the
purchaser family style of a dinner. It businesses,
obvious these two due to the operation,
nature of their attempt distinct entirely
garner parts of different the food International,
dollar market. Wuv’s
