The plaintiff, the assignee of a registered trademark, asserts two causes of action for injunctive relief, one to restrain alleged infringement of its registered trademark by the defendant under 15 U.S.C. §§ 1114(1), 1125(a), and the other under state common law to restrain the defendant’s unfair competition in the alleged exploitation of plaintiff’s trademark, with jurisdiction based on 15 U.S.C. § 1121, and 28 U.S.C. § 1338. After a trial before the court, the district judge found that there was no infringement redressable under § 1114(1) and that, since the state common law action was basically the same as the federal infringement action, there was no common law violation.
I
The use of plaintiff’s tradename “Pizzeria Uno” began some forty years ago in Chicago; where Ike Sewell opened a restaurant using that tradename. This restaurant and its tradename acquired over the *1525 years a wide reputation, was favorably discussed by the food editors in national papers, and enjoyed a flattering exposure on national television programs. In 1978, Se-well in the name of the corporation Pizzeria Uno and Due International, Inc. (of which Sewell was the sole stockholder), applied to the Patent and Trademark Office for registration of the trademark “Pizzeria Uno” for “Restaurant Services, in class 42 (U.S. CL 100), with a disclaimer of any right to the exclusive use of the word ‘Pizzeria’ without detriment to any common law rights to the mark as a whole.” On April 11, 1978, the Patent Officé granted registration of the trademark, without requiring proof of secondary meaning. All title to the trademark, “including the registrations therefor, together with the goodwill of the business symbolized by said marks and the rights to recover for past infringement of said marks,” “throughout the entire world, excluding only the State of Illinois,” was thereafter transferred to the plaintiff. The purpose of the transfer was stated to be the promotion and exploitation of the trademark in providing restaurant and food services, particularly in the United States.
The plaintiff/appellant, in promoting the use of the trademark, as contemplated under its agreement, developed a standardized type of operation, with facilities and type of services of a unique quality. In this connection, it opened four wholly owned Pizzeria Uno restaurants and began to franchise others to operate such restaurants in various areas of the nation. Under the terms of the franchise, the operator was required to expend several hundreds of thousand dollars in furnishing the restaurants, to pay an annual license fee of five per cent of its gross, and to spend approximately two per cent of gross in advertising. As of the trial, the plaintiff had some eleven franchised operations, spread from Massachusetts in the East to California in the West and from Georgia in the South to Illinois and Michigan in the Midwest. In connection with its displays and advertisements for such franchised operations, the plaintiff and its franchisees emphasized “UNO” as the dominant word in the trademark. For this reason, the term “Pizzeria” in the trademark is about an eighth the size of the term “Uno” in all display materials and advertising signs used by either the plaintiff or its franchisees.
While the plaintiff presently has no franchisees in South Carolina, it has surveyed the market and is seeking to interest a franchisee or franchisees in operating one of its restaurants in such State.
II.
The defendant had worked in. the food distribution industry for about 14 years. During a part of that time, he had responsibility for the supervision of food establishments in the Chicago area, where the initial Pizzeria Uno was located. In July, 1981, he opened two restaurant establishments, one in Sumter, South Carolina, and the other, some fifty miles away, in Columbia, South Carolina, using in the operation of both the mark “Taco Uno.” In the latter part of August, 1981, he applied to the Patent and Trademark Office for trademark registration of the mark “Taco Uno” to be used for “restaurant services.” He certified in the application that the. first use of the mark was July 14, 1981 and stated that the “mark is used in connection with the services by being displayed on signs adjacent [to] the building.” By amendment, the defendant disclaimed “the word TACO apart from the mark as shown.” By letter dated March 16,1982, the Patent and Trademark Office refused registration of defendant’s mark “on the basis of Registration No. 1,089,458 for the mark Pizzeria Uno.” The defendant petitioned for reconsideration of this refusal in July, 1982. On the basis of such petition, the defendant’s mark was ordered published in the Official Gazette of the Patent and Trademark Office for the purpose of providing an opportunity for anyone believing he would be damaged by registration of the mark as requested by the defendant to file an opposition to the registration. The plaintiff, within due time, filed its statement of opposition with the Patent and Trademark Of *1526 fice. In that posture, the Patent and Trademark Office ordered the matter for hearing but deferred the actual hearing itself, awaiting the judgment in.-this proceeding which had been filed in the interim.
III.
After trial of this action, in which live and documentary evidence was adduced, the district court found that there was no infringement by the defendant. In reaching this conclusion, it began by finding that the term “UNO,” which it recognized to be the dominant word in the plaintiff’s trademark and defendant’s proposed registered mark, was both in itself and in conjunction with “Pizzeria” a descriptive or weak term similar to the term “KING” in “Burger King.” As a descriptive term, the mark, it accordingly found, was not entitled to “exclusive protection,” absent the establishment by appropriate proof of a secondary meaning, and it found further that there was no proof of a secondary meaning. This finding that the term “UNO” was weak and merely descriptive was supported, according to the district court’s reasoning, by the decision of the “Trademark Office examiners who are experts in applying the test of likelihood of confusion between two marks,” a conclusion which the district court found to be “entitled to great weight.” The district court, also, found that the operation of the two restaurants wa,s not similar, though the two do conduct their business “on the same retail level.” It held that, while there was “similarity in the advertising media used by both parties,” the nearest restaurant of the plaintiff to the South Carolina market, where defendant’s operations were centered, was Atlanta, Georgia. Finally, it found no proof of intentional infringement on defendant’s part or of any actual confusion. On the basis of these findings and conclusions, the district court dismissed plaintiff’s infringement claim. The plaintiff by this appeal, challenges these findings and conclusions of the district court.
IV.
A threshold issue is the standard for appellate review to be applied in reviewing the district court’s findings. While some courts have established in trademark cases different standards for review of “foundation” or “subsidiary” findings of fact and of findings of “ultimate facts,”
see Frisch’s Restaurants, Inc. v. Elby’s Big Boy,
*1527
Hightower,
Y.
With this standard of review resolved, we turn to the legal principles governing the grant of injunctive relief for infringement of a registered trademark such as that owned by the plaintiff. The circumstances under which such relief may be granted to the owner of a registered trademark are stated in § 1114(1), 15 U.S.C. Under that statute, the issue is “whether the use of the accused copy or colorable imitation of the registered mark is ‘likely to cause confusion, or to cause mistake, or to deceive.’ ” In applying the test, it is not necessary for the owner of the registered trademark to show actual confusion: ‘‘[t]he test is whether there is likelihood of confusion.”
Dwight S. Williams v. Lylcens Hosiery Mills,
To determine whether there is a likelihood of confusion under the trademark statute, courts generally consider a number of factors, which the district court, relying on
Sun-Fun Products v. Suntan Research & Development,
a) the strength or distinctiveness of the mark;
b) the similarity of the two marks;
c) the similarity of the goods/services the marks identify;
d) the similarity of the facilities the two parties use in their businesses;
e) the similarity of the advertising used by the two parties;
f) the defendant’s intent;
g) actual confusion.
We follow the district court in applying generally these factors, but we do so with the caution expressed in
Modular Cinemas of America, Inc. v. Mini Cinemas Corp.,
A.
The first and paramount factor under this set of factors is the distinctiveness or strength of the two marks. In determining such question, the courts have classified marks submitted for registration into four groups in an ascending order of strength or distinctiveness: 1. generic; 2. descriptive; 3. suggestive; and 4. arbitrary or fanciful.
Abercrombie & Fitch Co. v. Hunting World, Inc.,
“ ... a mark which is merely descriptive is considered to be weak and cannot be accorded trade mark protection without proof of secondary meaning, whereas a mark which is either suggestive or arbitrary is strong and presumptively valid.”
Gilson in his text expresses basically the same distinction in effect between the two terms. Under this formulation, descriptive marks are “narrowly circumscribed” in their legal protection and registrability and “are usually enforced only against closely similar marks which are used on virtually identical products,” while a suggestive mark “will ordinarily be protected against the use of the same or a confusingly similar mark on the same product, or related products, and even on those which may be considered by some to be unrelated but which the public is likely to assume emanate from the trade mark owner.” 1 Gilson, Trademark Protection and Practice, § 2.01, pp. 2-3 and 2-4 (1984) (Italics added).
*1528
This distinction between the two designations, is, as one court has remarked, “a difficult distinction to draw,”
Union Carbide Corp. v. Ever-Ready, Inc.,
188 U.S. P.Q. 623, 638,
“Generally speaking, if the mark imparts information directly, it is descriptive. If it stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive.”
Even with these definitions at hand, however, “[t]he line between descriptive and suggestive marks is scarcely ‘pikestaff plain’ ” and the distinction to be given the two terms is frequently “made on an intuitive basis rather than as a result of a logical analysis susceptible of articulation.”
Ever-Ready,
The presumption which registration thus gives the mark, though, does not preclude one charged with infringement from “collaterally attackpng] in an infringement action, either by way of an affirmative defense or by way of a counterclaim seeking cancellation of the registration,” if the mark has not become incontestable under § 1065(2), 15 U.S.C. § 1115(a), 15 U.S.C.; 1 Gilson,
Trade Mark Protection and Practice,
§ 4.04, p. 4-33 (1984 ed.);
Keebler Co. v. Rovira Biscuit Corp.,
Since often the mark is a composite term or figure, it is important in this connection to determine whether any part of the composite term has been disclaimed.
5
The effect of a disclaimer has been properly stated in
In re Franklin Press,
“The effect of a disclaimer is to disavow any exclusive right to the use of a specified word, phrase, or design outside of its use within a composite mark.”
Similarly, the Court in
In re Hercules Fasteners,
“The purpose of a disclaimer is to show that the applicant is not making claim to the exclusive appropriation of such matter except in the precise relation and association in which it appeared in the drawing or description.”
Where the proposed mark consists of but two words, one of which is disclaimed, the word not disclaimed is generally regarded
*1530
as the dominant or critical term in determining the distinctiveness or suggestiveness of the proposed mark.
See, for instance, American Throwing Co. v. Famous Bathrobe Co.,
Since we look primarily to the dominant word in a composite-word trademark, it has been generally held that where the dominant word is suggestive and is identical in the two marks, with a difference in the two marks only in the prefix, and where the product involved, though “not being identical,” “belong[s] to the same general class of merchandise” or service, there is such similarity as to create a likelihood of confusion.
See, Bon Ami Co. v. McKesson & Robbins,
“If all that a newcomer in the field need do in order to avoid the charge of confusing similarity is to select a word descriptive of his goods and combine it with a word which is the dominant feature of a registered trade-mark so that the borrowed word becomes the dominant feature of his mark, the registered trade-mark, made valuable and outstanding by extensive advertising and use, soon becomes of little value, and, of course, each of the subsequent initiating trade-marks (and there would be many) is of value only to the extent that its users are trading on the good will of the owner of the original registered trademark.”
In
American Throwing Co. v. Famous Bathrobe Co.,
“The situation resolves itself, therefore to a competition between two composite marks, one containing a prefix disclaimed as descriptive and a suffix which is remotely suggestive, the other containing a prefix different from the prefix in the first mark, but equally descriptive (and disclaimed), and a suffix identical to that of the first mark.
“It is clear from the foregoing that the prefixes ‘Wiper’ and ‘Knit’ are relegated to a position of minor importance as to the question of confusing similarity. Though the suffix ‘Kins’ is not as strong an indication of origin as a completely arbitrary or coined word might be, it nonetheless is the dominant part of each of the two marks. We are of the opinion that, considering the marks as a whole in light of the foregoing, the average purchaser of infants’ wear would likely be confused as to the origin of appellant’s ‘Knit-Kins.’ ” [Emphasis in text]
Another indication of distinctiveness in a trademark consisting of a word singly or in conjunction with another is the frequency of prior use of the word in other marks,
*1531
particularly in the same field of merchandise or service.
Arrow Distilleries, Inc. v. Globe Brewing Co.,
“The inferences, to which the name naturally gives rise, have encouraged so wide a use and so frequent a registration for many different articles that there is little danger that its mere use, even in the closely related field of beers and cordials, will indicate a common origin or endanger the reputation of the plaintiff’s goods.”
The same thought found expression in
Armstar Corp. v, Domino’s Pizza, Inc.,
“The greater the number of identical or more or less similar trade-marks already in use on different kinds of goods, the less is the likelihood of confusion.”
In
King-Size, Inc. v. Frank’s King Size Clothes, Inc.,
Again, in'
Shoe Corporation. of America v. Juvenile Shoe Corp.,
“In determining whether a word or syllable has a descriptive or suggestive significance as applied to merchandise it is proper to take notice of the extent to which it has been used in trademarks by others on such merchandise.”
In those cases where the proposed trademark is a foreign word, the courts generally apply what is familiarly known as “the doctrine of foreign equivalents” in determining descriptiveness versus suggestiveness. Under this doctrine, “foreign words are translated into English and then tested for descriptiveness or genericness,” “by seeing whether that foreign word would be descriptive [of the product] to that segment of the purchasing public which is familiar with that language,” 1 McCarthy,
Trade-marks and Unfair Competition,
§ 11.14, p. 464-65 (2d ed. 1984 Lawyers Coop.), or, as a leading authority has phrased it, by testing whether a “word [sought to be registered] taken from a well-known foreign modern language, which is, itself, descriptive of a product, will be so considered when it is attempted to be registered as a trade-mark in the United States for the same product,”
In Re Northern Paper Mills,
Thus, prior to the decision in
Northern Paper Mills,
the Second Circuit had decided in
McKesson & Robbins v. Charles H. Phillips Chemical Co.,
The doctrine most often has arisen in suits for infringement, where the issue is confusion with an existing trademark. Thus,
In Re Maclin-Zimmer-McGill Tobacco Co.,
“What does ‘Cordon Bleu’ really mean to the American public and what does ‘Blue Ribbon’ mean? The French term is not so unusual to the American public because it is defined in American Dictionaries. Funk & Wagnalls New Standard Dictionary of the English Language defines that term as ‘the blue ribbon of the order of the Holy Ghost, the highest order of the old French monarchy’, and as ‘a person regarded as entitled to a badge of eminent distinction; specif., a first class cook, particularly a woman cook.’
“The term ‘Blue Ribbon' figuratively refers to an honor or award gained for prominence and, literally, signifies a blue ribbon awarded the first place winner in a competition____
“On the basis of dictionary definitions ■ we are of the opinion that ‘Blue Ribbon’ and ‘Cordon Bleu’ would not have the same significance to the American public and that the marks ‘BLUE RIBBON' and ‘CORDON BLEU’ create different commercial impressions. We conclude, therefore, that the ownership of a registration of ‘BLUE RIBBON’ for edible nuts does not preclude opposer from asserting damage resulting from the registration of ‘CORDON BLEU’ for edible nuts.”
In essence, as these cases indicate, the doctrine applies where the foreign word is so descriptive of a product or is so much the equivalent of an existing common product as to create the likelihood of confusion. As Professor McCarthy has warned, unless the doctrine is given such an application, the- doctrine “can result in a finding quite out of place with the reality of customer perception.” (p. 466)
*1533 B.
From this review, certain rules may be deduced for guidance in deciding whether a mark is descriptive or suggestive. The first step in the application of such rules is to ascertain whether the mark is descriptive of some characteristics of the product or whether it merely intimates or suggests some idea of the product. In the use of this test, as applied to a composite word, one part of which has been disclaimed, we look to the term not disclaimed as the dominant term and determine distinctiveness largely on the basis of that dominant term, giving minimum weight, if any, to the non-dominant prefix, especially if the prefix is a descriptive word. Whether the dominant term is suggestive or merely descriptive is most easily resolved by considering whether it is a word in common use, and one often employed in describing a product. An integral part of this inquiry-is the frequency, or lack of frequency, in the use of such word in identifying the product. If the proposed mark is a foreign word, consideration of the applicability of the “doctrine of foreign equivalents” is generally resorted to. Finally, we turn to and give great weight to the action of the Patent and Trademark Office in its determination of whether the term is descriptive or suggestive, and its determination may be ascertained by whether the mark was registered without proof of secondary meaning, i.e., found the mark suggestive.
C.
Applying these rules to the mark in question, we conclude that the district court clearly erred in finding that the plaintiffs mark was not suggestive but descriptive. In reaching our conclusion, we, as apparently did the district court, identify as the dominant word in the two marks the word “Uno.” We reach this conclusion because “Pizzeria” and “Taco” are both disclaimed. Moreover, the plaintiff, in its advertising has reduced the value of the prefix “Pizzeria” in its mark by printing it in type considerably less conspicuously than the word “Uno” in all its advertising and signs. Further, “Uno” is not a term in common use in English which describes or identifies any product or characteristics of a product. The district court found it to be in common use because it was to be found in the
Random House Dictionary of the English Language Unabridged
(1967 ed.). UNO is in the English section of this Dictionary and the definition there is “United Nations Organization,” which clearly is not what either party intended by their mark.
See
p. 1558. The citation given in the district court’s opinion for a definition of the word “Uno” is to the /iafo'cm-English section of the Dictionary, p. 1810. There the
Italian
word is defined as “1.
art.
a, an 2,
num.,
one.” If we resort to the “doctrine of foreign equivalents” the term “Uno” is not to be translated as equivalent to our colloquial term “Number One” in the sense of the “best;” but the translation is merely “one,” no more and no less. There is not the slightest evidence or even suggestion that this word, which is a part of “that soft bastard Latin” which Lord Byron admiringly declared, “melts like kisses from a female mouth,” was ever used either in its Latin or Italian version, to mean the “best” or as descriptive of any product or was so understood by anyone familiar with either the Latin or Italian language. Never either in Italy, so far as this record shows, nor in this country, had anyone sought so much as to use, much less to register, the word “Uno” as a trade-name descriptive of the “best” product. There is thus no extensive use of the word as either a trademark or tradename, whether in Italy or here, such as was the case of “Arrow” in
Arrow Distilleries,
Finally, we look to the action of the Patent and Trademark Office. The Trademark Office granted plaintiffs mark registration without requiring proof of secondary meaning. Such action on the Office’s part was a determination that plaintiff’s mark was suggestive and not descriptive.
See Ever-Ready,
Considering all the factors to be evaluated in resolving whether plaintiff’s mark is suggestive or descriptive, we are convinced it was plain error to find that the mark was not suggestive. 9 In reaching its conclusion, the district court gave no weight to the fact that the plaintiff’s predecessor in title had been granted registration without proof of' secondary meaning and had assumed incorrectly that the burden of proof rested on the plaintiff.
D.
By finding the plaintiff’s trademark descriptive and that plaintiff had proved no secondary meaning for its mark, the district court had in effect held the plaintiff’s trademark invalid as descriptive. It did discuss other factors, though it cannot be said that its decision turned on its consideration of these factors. Nor do we think such factors particularly material to the resolution of this case. Because the district court discussed them, however, we consider them. The first of these other factors was the similarity of the two marks. Admittedly, the dominant word in both marks in this case is “Uno.” This identity of the dominant term in both marks is a strong indicator of that similarity in appearance and sound which would result in confusion. Such conclusion that there was likelihood of confusion based on similarity of the two marks is supported by the decision in
Clinton Detergent Co. v. Procter & Gamble Co.,
A third factor considered by the district court under the formula for finding likelihood of confusion was similarity of services and facilities. In that connection, it is obvious that the products and services provided by the two companies serve the same purpose. One offers Italian cuisine, and full bar, in a sit-down restaurant. The other offers drive-through and counter service for Mexican fast food. In
Clinton,
“However, it has of recent years been recognized that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner’s reputation, whose quality no longer lies within his own control. This is an injury even though the borrower does not tarnish it, or divert any sales by its use....” (p. 974)
Similarity of advertising is another factor evaluated by the district court. The advertising media used by the two companies are the same (primarily newspaper and radio), but the areas where they advertise are different. Taco Uno advertises only in South Carolina, whereas Pizzeria Uno does not advertise specifically in South Carolina, although it advertises in national media and in Georgia papers which reach South Carolina. There is thus a possibility that a consumer could see or hear advertisements for both establishments, ■ and could think them related, although unless and until Pizzeria Uno expands into South Carolina, the number of consumers who encounter advertisements for both would be limited. Given the present unlikelihood of geographic overlap in advertisements, we cannot consider this factor of decisive importance.
The intent of the defendant is sometimes a major factor in infringement cases. If there is intent to confuse the buying public, this is strong evidence establishing likelihood of confusion, since one intending to profit from another’s reputation generally attempts to make his signs, advertisements, etc., to resemble the other’s so as deliberately to induce confusion.
See, e.g., Holiday Inns, Inc. v. Holiday Inns,
VI.
Viewing the evidence as a whole, we are of the opinion that the district
*1536
court’s finding that there was no likelihood of confusion between the two marks, under the rule for appellate review as spelt out in Part IV, was clearly erroneous. It does not follow, however, that injunctive relief is in order. In
Armand’s Subway, Inc. v. Doctor’s Associates, Inc.,
Notes
. The reason for establishing a suggestive category in this connection was stated in
Abercrombie & Fitch v. Hunting World, Inc.,
"The category of ‘suggestive’ marks was spawned by the felt need to accord protection to marks that were neither exactly descriptive on the one hand nor truly fanciful on the other — a need that was particularly acute because of the bar in the Trademark Act of 1905, 33 Stat. 724, 726, (with an exceedingly limited exception noted above) on the registration of merely descriptive marks regardless of proof of secondary meaning.”
. Under the Trademark Act of 1905, there was a statutory prohibition against registration of a merely descriptive term.
Beckwith v. Commissioner of Patents,
"... the case falls within the proviso of the Registration Act of 1905, declaring that no mark consisting merely, of words or devices which are descriptive of the goods with which they are used or of the character or quality of such goods shall be registered under the terms of the act.”
This was changed by the Lanham Act, § 1052(f), 15 U.S.C., the effect of which is stated in
Park'N Fly v. Park & Fly, Inc.,
"... The Patent and Trademark Office may not refuse registration except upon grounds enumerated in § 1052, the only relevant one of which is § 1052(e)(1), denying protection to a trademark that is ‘merely descriptive' of the goods. This restriction is modified, however, by § 1052(f), allowing registration for a mark ‘which has become distinctive of the applicant’s goods,’ i.e., has acquired secondary meaning.”
. The factors for determining whether secondary meaning has attached are listed in
Southwestern Bell Tel.Co. v. Nationwide Independent
*1529
Directory Service, Inc.,
To same effect, see Boden Products, Inc. v. Doric Foods,
. This presumption may be overcome, according to early decisions, only by clear and convincing evidence, but under the modern rule the standard is by a preponderance of the evidence.
Vuitton et fils
S.A. v.
J. Young Enterprises, Inc.,
. Disclaimer is a well recognized practice in trademark registration. Often the mark submitted for registration is a composite term, consisting of "registrable subject matter in conjunction with matter which was merely descriptive, or geographically descriptive, and therefore unregistrable.” The Patent Office administratively began the practice of "allowing such unregistrable matter to be disclaimed, so that the mark as a whole might be registered,” although as a complete term the mark included unregistrable descriptive matter. This administrative practice received judicial sanction in
Beckwith v. Commissioner of Patents,
. This fact was noted in Application of
Blue Lake Producers Cooperative,
.
But see, Le Blume Import Co. v. Coty,
“But we think that a word which is not in general or common use, and is unintelligible and non-descriptive to the general public, although it .may be known to linquists and scientists, may be properly regarded as arbitrary and fanciful and capable of being used as a trademark or trade-name.”
. "El Gallo” is "rooster” in Spanish.
. It could be plausibly argued that UNO is not merely "suggestive,” as that term has been used in trademark litigation, but is also "fanciful.”
Cf., Stork Restaurant v. Sahati,
. For the same reason, we affirm as of this time, the denial by the district court of relief in the State (South Carolina) common law unfair competition action. For a contrary view in this regard, however,
see, Stork Restaurant v. Sahati,
“It (the plaintiff) is entitled to have its name protected in full, not modified by other people's names and, at least, on the facts before us, not limited by distance.”