A Tale of Two “Huts” in Clifton by Ryan McGonigle

Somewhere near the banks of the oft-overflowing Passaic River in Clifton, New Jersey, there exists a roadside greasy spoon known for its fried “ripper” hot dogs known as Rutt’s Hut (hereinafter, “Rutt’s”).  Rutt’s has been around since 1928 and has been featured in The New York Times, numerous television shows and was listed in the book 1,000 Places to See in the USA and Canada Before You Die.[1] That being said, the author grew up less than ten miles from Rutt’s and has never been there.  Nonetheless, it clearly has a following and can relish in its status a veritable New Jersey icon.

Magliette Calcio Personalizzate Pantaloncini

Clifton, New Jersey is a city in Passaic County, New Jersey incorporated in 1917 with a total area of 11.4 square miles.[2] Within that expanse and less than 5 miles distant, an entity known as Adam’s Bagel & Deli (“Adam’s”) operated another roadside restaurant.  In January 2011, the owners of that restaurant changed their name to Mutt’s Hutt (hereinafter, “Mutt’s”).[3] According to news sources, the name change from Adam’s to Mutt’s was brought about because “co-owner Ed Madsen had held a trademark on it since 2006 and wanted to use it.”[4] In anticipation of the change from Adam’s to Mutt’s in January of this year, the owners of the restaurant allegedly disseminated advertising locally with a MUTT’S HUT logo of a “happy dog” within a hot dog bun—a visual that could not have been too palatable to the owners of Rutt’s.  The Mutt’s Hut logo appeared as follows:

RUTT’S PROVES THAT ITS BITE IS WORSE THAN ITS BARK

Rutt’s, the holder of an incontestable trademark registration for its restaurant services, demurred to Mutt’s use of its trademark, sending a cease and desist letter to advise that Mutt’s was barking up the wrong tree.[5] In order to be effective, a cease and desist letter has to have teeth—e.g., the threat of litigation to show the recipient of the letter that the subject matter of the letter is not a trifling matter.  In other words, the sender has to show the recipient that its bite is indeed worse than its bark.

Last week, Rutt’s did just that by filing a complaint in the United States District Court for the District of New Jersey entitled, Rutt’s Hut, Inc. v. Mutt’s Hut International, Adam’s Bagel & Deli, Magdi Muhammad and Ed Madsen, No. 2:11-01350 (D.N.J. filed March 9, 2011)(hereinafter, “the Action”).  The Action, which sounds in federal trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §1051 et seq. and corresponding state statutory and common law claims, seeks preliminary and permanent injunctive relief, damages under 15 U.S.C. §1117(a) and attorneys’ fees, amongst other things.[6]

OUT OF THE FRYING PAN AND INTO…INJUNCTIVE RELIEF?

In the Third Circuit, likelihood of confusion between two trademarks is said to exist when “consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark.”[7] Specifically, Courts within our Circuit look at a ten-factor test first enunciated by the Third Circuit Court of Appeals in Interpace Corp. v. Lapp, Inc.[8] The Lapp factors, as the likelihood of confusion test came to be called, include:

“(1)     the degree of similarity between the owner’s mark and the alleged infringing mark;

“(2)     the strength of the owner’s mark;

“(3)     the price of the goods [or services] and other factors indicative of the care and attention expected of consumers when making a purchase;

“(4)     the length of time the defendant has used the mark without evidence of actual confusion arising;

“(5)     the intent of the defendant in adopting the mark; [and]

“(6)     the evidence of actual confusion;

“(7)     whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media;

“(8)     the extent to which the targets of the parties’ sales efforts are the same;

“(9)     the relationship of the goods in the minds of consumers, whether because of the near-identity of the products, the similarity of function, or other factors[;] and

“(10)   other facts suggesting that the consuming public might expect the prior owner to manufacture a product in the defendant’s market, or that he is likely to expand into that market.”[9]

The single most important of these factors—Lapp factor No. 1—turns upon what is known in trademark circles as the “look, sound and meaning” of the marks.[10] In so doing, the court will make “an effort…to move into the mind of the roving consumer[,]”[11]—which in this case is anyone traveling about the City of Clifton and/or in the Route 21/Route 3-New Jersey Parkway corridor.  Toward that end, “the overarching question is whether the marks, ‘viewed in their entirety,’ are confusingly similar.”[12]

Phonetically, the marks are similar but not identical.  Courts have held that one-letter phonetically-different marks can be confusingly similar to one another.[13] However, an evaluation of Lapp factor No. 1 will also include “the manner in which the marks are used.”[14] In the Action here, both marks are used in connection with restaurant services and—more specifically—to sell hot dogs.  Further still, both are conveniently within the City of Clifton.  The plaintiff also alleges actual confusion, which shouldn’t be surprising given the proximity of the two restaurants.

Nevertheless, it shouldn’t go unnoticed, however, that there is a nexus of sorts with the sale of hot dogs and the dominant portion of the defendant’s mark—Mutt’s. Is that enough to avoid liability for trademark infringement under the Lanham Act?  As Professor McCarthy put it, “[s]imilarity of appearance between marks is really nothing more than a subjective ‘eyeball’ test.”[15] The marks themselves, naturally, are:

Because the author doesn’t have a dog in this fight, it suffices to say that some defendants have gotten away with having their kibble and eating it too, e.g., having phonetically-similar trademarks.  In E.&J. Gallo Winery v. Cantile Rallo, S.p.A., 430 F.Supp.2d 1064 (E.D.Ca. 2005), the trademarks—both in use in connection with wine—were GALLO and RALLO.[16] The defendant there—who sold its goods in U.S. commerce for some fifty (50) years—pointed out that although “the words ‘Gallo’ and ‘Rallo’ only differ by a single letter[, they] are no more likely to be confused than are the words ‘giver’ and ‘river.’”[17] Because of that, the court held that “Rallo has presented enough evidence concerning the dissimilarity of the allegedly conflicting marks to prevent the issue of a valid defense being decided as a matter of law at this stage.”[18]

SHOULD MUTT’S HUT ROLL OVER AND PLAY DEAD?

Although examples of phonetic similarity and non-infringement do not abound, a court in our own backyard found that EASY SLIDE and GLIDE were dissimilar for dental floss:

“The Court finds a further distinction in appearance between the words glide and slide to the extent that the first letter is different in each word.  See Cortex Corp. v. W.L. Gore & Associates, Inc., 1993 WL 217185 (Fed. Cir. 1993)(finding ‘Cortex’ and ‘Gore-Tex’ dissimilar in appearance). Thus, the Court is persuaded that the appearance of the marks, when written, is not likely to confuse relevant consumers.”[19]

As such, there is a danger to plaintiff that its claims will not pass mustard [sic]. Nevertheless, the less than five (5) miles separating the plaintiff and defendants—all within the same town—should factor prominently in the Court’s decision.  Thus, the RALLO versus GALLO and “SLIDE” versus “GLIDE” examples above will not likely benefit Mutt’s here because of the proximity of the services (both in terms of distance and sort of services rendered under the marks) in connection with identical products served—hot dogs.

No matter how the Court decides this one, niche market and hometown heroes such as Rutt’s should take that as a signal to look to expand upon their fame (newly-found or otherwise) and seek private label agreements for products complementary to the services rendered.  It is not unheard of for restaurants to sell eponymously-labeled sauces, processed meats or entrees.  Seeking trademark registrations for such products outside of International Class 042 or 043 (encompassing restaurant services) will only serve to strengthen one’s brand and if your client has a laundry list of trademarks to cite, it might scare off local imposters at the cease and desist stage.