IP Law Daily, TRADEMARK—M.D. Fla.: LongHorn Steakhouse’s ‘You Can’t Fake Steak’ slogan does not infringe seafood restaurant’s ‘You Can’t Fake Fresh’ mark, (Mar 28, 2017)

By Cheryl Beise, J.D.

A company that used the registered mark "You Can’t Fake Fresh" in connection with a dozen seafood restaurants located in Southwest Florida could not proceed with trademark infringement and related claims against the operator of the LongHorn Steakhouse restaurant chain for use of the slogan "You Can’t Fake Steak," the federal district court in Tampa has decided. The plaintiff failed to adduce sufficient evidence of customer confusion regarding the source, sponsorship, or origin of the parties’ restaurants to survive summary judgment (Phelan Holdings, Inc. v. Rare Hospitality Management, Inc., March 27, 2017, Moody, J.).

Phelan Holdings, Inc., is a family-owned company that owns operates Pinchers Crab Shack, a chain of 12 casual, beach-themed seafood restaurants located in Southwest Florida. In 2004, Phelan started using the slogan "You Can’t Fake Fresh" in advertising. In 2010, Phelan obtained federal registration for "You Can’t Fake Fresh" mark.

RARE Hospitality Management, Inc., operates the national LongHorn Steakhouse restaurant chain, consisting of 481 Western-themed casual steakhouse restaurants located in 41 states. In 2012, RARE began using the slogan "You Can’t Fake Steak" to promote its LongHorn Steakhouse restaurants. RARE was issued a federal registration for the mark in August 2015.

In October 2015, Phelan filed suit against RARE, asserting claims for federal trademark infringement, trademark dilution, and related claims under federal and Florida law. Phelan also requested cancellation of RARE’s "You Can’t Fake Steak" trademark registration. Before the court was RARE’s motion for summary judgment on Phelan’s claims, all of which depended on a finding of likelihood of confusion.

Reverse confusion. Phelan’s response to RARE’s summary judgment motion indicated that it was relying solely on a theory of reverse confusion, which occurs when a much larger defendant "saturates the market with a trademark similar or identical to that of a smaller, senior user." The Eleventh Circuit has not directly addressed reverse confusion, but the doctrine is presumed to apply in the circuit, the court said. A plaintiff alleging reverse confusion must still establish a likelihood of confusion. Although likelihood of confusion is a question of fact, it may be decided as a matter of law.

Likelihood of confusion. The court examined each of the seven factors used by courts in the Eleventh Circuit for determining likelihood of confusion: (1) strength of the mark; (2) similarity of the marks; (3) similarity of the products associated with the marks; (4) similarity of the parties’ retail outlets and customers; (5) similarity of advertising methods; (6) defendant’s intent; and (7) actual confusion. The court found that only the first two factors favored Phelan, the fourth factor was neutral, and the remaining factors favored RARE.

The strength of marks factor weighed in Phelan’s favor because it had used the mark for two decades and its federal registration had achieved incontestable status. Extensive third-party use of the phrase "You Can’t Fake ... “did not diminish the mark, in the court’s view. The similarity of marks factor also tipped slightly in Phelan’s favor, but only slightly. Phelan’s linguistics expert opined that the marks were similar from a linguistic point of view. However, the expert’s analysis focused on the first three words of the marks, while ignoring the distinguishing words "Fresh" and "Steak" and the fact that both parties’ used the names of their restaurants alongside the slogans.

The court deemed the similarity of the parties’ marketing channels and customers to be neutral. The parties’ restaurants were in close geographic proximity, but served different clienteles—tourists in Phelan’s case and local residents in RARE’s case.

The remaining factors all favored RARE. The most significant factors were the striking dissimilarities between the parties’ restaurants and the complete absence of consumer confusion. Pinchers Crab Shacks are "Florida style," with a beachy decor and a pastel color palate, whereas LongHorn Steakhouses are rancher-themed and decorated with cowboy art and a warm color palate. Phelan argued that the public could attribute both restaurants to a single source, but offered no evidence that a consumer hearing, seeing, or reading the two competing marks would believe that Pinchers Crab Shack and LongHorn Steakhouse were associated, the court said.

As for actual confusion, Phelan conceded that, despite four years of co-existence, it could not point to a single instance of consumer confusion. Instead, Phelan offered a consumer survey performed by its expert, purportedly showing between 13% and 26% likelihood of confusion between the parties’ respective slogans. However, the survey evidence was not probative. Phelan’s expert admitted that she tested for only forward confusion, soliciting responses from the junior user’s (RARE’s) customer base, i.e., local residents of the Southwest Florida market area. However, to test for reverse confusion, the survey should have focused on Phelan’s own customer base, comprised mostly of tourists to Southwest Florida, rather than Southwest Florida residents, the court said.

The court concluded that Phelan failed to adduce sufficient evidence upon which a reasonable jury could find a likelihood of confusion between the parties’ slogans. RARE was entitled to summary judgment on all of Phelan’s claims.

The case is No. 8:15-cv-02294-JSM-TBM.

Attorneys: Alan Frederick Wagner (Wagner, Vaughan & McLaughlin, PA) for Phelan Holdings, Inc. Frank G. Smith, III (Alston & Bird, LLP) and Kimberly A. Lopez (Akerman LLP) for Rare Hospitality Management, Inc.

Companies: Phelan Holdings, Inc.; Rare Hospitality Management, Inc.

Cases: Trademark FloridaNews