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STEAK & BREW, INC. v. BEEF & BREW RESTAURANT

February 15, 1974

STEAK & BREW, INC., PLAINTIFF,
v.
BEEF & BREW RESTAURANT, INC. AND WESLEY LING, DEFENDANTS.



The opinion of the court was delivered by: Robert D. Morgan, Chief Judge.

  DECISION AND ORDERS

By its complaint herein, plaintiff seeks to enjoin defendants' further use of the name "Beef & Brew" in their operation of a restaurant located in Rock Island, Illinois. Count I of the complaint is based upon the provisions of Section 43(a) of the Lanham Trademark Act. 15 U.S.C. § 1125(a). Count II is grounded upon the Illinois Trademark Statute. Ill.Rev.Stat. 1973, ch. 140, § 8 et seq. Count III is grounded upon the common law of trademark infringement and unfair competition.

Jurisdiction of Count I of the complaint is conferred by the provisions of Title 15, United States Code, § 1121. Dependent jurisdiction of Counts II and III attaches by virtue of the provisions of Title 28, United States Code, § 1338(b), the same being joined with a controversy arising under the trademark laws of the United States.

The cause was tried by the court without a jury. It is now before the court upon the evidence adduced and upon the briefs, proposed findings of fact and conclusions of law submitted by the respective parties.

The essence of plaintiff's complaint is its position that it possesses the exclusive right to use the word "Brew," in conjunction with the generic name of an entree item, in restaurant operations. The factual background of the litigation, within the framework of which the legal issues must be decided, is largely not disputed.

Plaintiff is a Delaware corporation, with its principal place of business in New York City, New York. Defendant, Beef & Brew Restaurant, Inc., is an Iowa corporation, with its principal place of business in Rock Island, Illinois. Defendant, Wesley Ling, is a resident of Rock Island. He and his wife are the sole owners, and the only officers and directors, of the defendant corporation.

In 1969, Longchamps, Inc., plaintiff's predecessor in interest, began the promotion, development and operation of a chain of restaurants under the name "Steak & Brew." Each of those restaurants embodied the concept of a limited-menu steakhouse, set in the atmosphere of an English public house. The forte of the Steak & Brew marketing concept was, and is, a moderately priced meal, consisting of a steak, unlimited salad, and all of the beer that the customer wants.

At about the same time, another chain of restaurants was begun by plaintiff*fn1 under the name "Roast Beef & Brew." The format and atmosphere of operation were, in all respects, parallel to that of Steak & Brew, except that roast beef, not steak, was the featured menu item.*fn2

Neither "Steak & Brew" nor "Roast Beef & Brew" has been registered by plaintiff under the federal trademark statutes. Registration of the mark "Steak & Brew" has been obtained by plaintiff in several states, including Illinois.

In July, 1970, a Steak & Brew restaurant began operation in Peoria, Illinois, under a franchise granted to Steak and Shake, Inc., a corporation then controlled by Longchamps. That operation continued until in the fall of 1971, at which time Longchamps disposed of its interest in Steak and Shake and the franchise was revoked.

In 1971, defendant Ling obtained the incorporation of the defendant, Beef & Brew Restaurant, Inc. That corporation commenced the operation of a restaurant in Rock Island, Illinois, under the name "Beef & Brew" in April 1971. The format of Beef & Brew is also quite clearly based on an English pub theme. The restaurant features a limited menu of steak and beef entrees and a salad bar. No alcoholic beverage is included in the price fixed for meals. Beer and other alcoholic beverages are supplied at the customer's request and at his added expense.

The geographic area in which the single Beef & Brew restaurant operates is commonly known as the Quad-Cities area. That area encompasses Rock Island County, Illinois, and its principal cities of Rock Island, Moline and East Moline, and Scott County, Iowa, with its principal cities of Davenport and Bettendorf. The city of Rock Island is approximately one hundred miles distant from the city of Peoria, Illinois.

Continuously since 1969, plaintiff has invested substantial sums of money in promotion and advertising to make its "Brew" chains of restaurants a financial success. With the exception that it did, in 1969, place one advertisement in a national magazine soliciting franchises, plaintiff's advertising has been limited to the areas in which its restaurants were located.

Beginning in about July 1970, the Peoria Steak & Brew restaurant was advertised rather extensively in the only Peoria daily newspaper and on one Peoria television station and one Peoria radio station. Ads were also placed in a Shrine Circus program and in a promotional publication made available to visitors in the city of Peoria.

In the critical pre-April 1971 period, plaintiff's "Steak & Brew" operation had attracted substantial media attention. Plaintiff tendered in evidence two restaurant trade periodicals, both published in 1969, which contained feature articles about Longchamps and its "Steak & Brew" concept. Defendant objected to each of such exhibits (Plaintiff's 11a and 11b) upon the ground that there was lacking any foundation proof that Mr. Ling had seen those feature articles. That objection to admission was taken for decision with the case. The objections are overruled and the exhibits are admitted. Each is relevant to proof of the publicity and notoriety attached to plaintiff's use of its trade names. Other exhibits ...


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