Charcoal Steak House of Charlotte, Inc. v. Staley

Annotate this Case

139 S.E.2d 185 (1964)

263 N.C. 199

CHARCOAL STEAK HOUSE OF CHARLOTTE, INC. v. Lawrence STALEY.

No. 262.

Supreme Court of North Carolina.

December 16, 1964.

*186 Plumides & Plumides and Richard L. Kennedy, Charlotte, for plaintiff.

Fleming, Robinson & Bradshaw, Charlotte, for defendant.

SHARP, Justice.

This appeal presents only one question: Taking all the evidence as true, does it entitle *187 plaintiff to an injunction restraining defendant from using the words charcoal steak house in his business name?

We are concerned here with a trade name. "Whether the name of a (business) * * * is to be regarded as a trade-mark, a trade-name, or both, is not entirely clear under the decisions. To some extent the two terms overlap, but there is a difference, more or less definitely recognized, which is that, generally speaking, the former is applicable to the vendible commodity to which it is affixed, the latter to a business and its good will." American Steel Foundries v. Robertson, 269 U.S. 372, 380, 46 S. Ct. 160, 162, 70 L. Ed. 317, 321. At common law generic, or generally descriptive, words and phrases, as well as geographic designations, may not be appropriated by any business enterprise either as a tradename or as a trademark. Such words are the common property and heritage of all who speak the English language; they are publici juris. If the words reasonably indicate and describe the business or the article to which they are applied, they may not be monopolized. Union Oyster House v. Hi Ho Oyster House, 316 Mass. 543, 55 N.E.2d 942; AMDUR, TRADE-MARK LAW AND PRACTICE 112 (1st ed. 1948); 52 AM. JUR., Trademarks, Tradenames, and Trade Practices §§ 57, 60 (1944); 87 C.J.S., Trade-Marks, Trade-Names and Unfair Competition §§ 33, 34 (1954); Annot., Protection of descriptive word or phrase as trademark or on the ground of unfair competition, L.R.A. 1918A, 961.

Notwithstanding this rule, equity will always protect a business from unfair competition and the public from imposition. Yellow Cab Co. v. Creasman, 185 N.C. 551, 117 S.E. 787. Unfair competition amounts to this: "One person has no right to sell goods as the goods of another, nor to do other business as the business of another, and on proper showing (one) will be restrained from so doing." Dyment v. Lewis, 144 Iowa 509, 513, 123 N.W. 244, 245, 26 L.R.A.,N.S., 73, 79.

Although a generic word or a geographic designation cannot become an arbitrary trademark, it may nevertheless be used deceptively by a newcomer to the field so as to amount to unfair competition, Cleveland Opera Co. v. Cleveland Civic Opera Ass'n, 22 Ohio App. 400, 154 N.E. 352, and the prohibition against any right to the exclusive use of such a word or designation has been modified by the "secondary meaning" doctrine. This was fashioned to protect the public from deception, Surf Club v. Tatem Surf Club, 151 Fla. 406, 10 So. 2d 554, and is but one facit of the law of unfair competition.

When a particular business has used words publici juris for so long or so exclusively or when it has promoted its product to such an extent that the words do not register their literal meaning on the public mind but are instantly associated with one enterprise, such words have attained a secondary meaning. This is to say, a secondary meaning exists when, in addition to their literal, or dictionary, meaning, words connote to the public a product from a unique source. It has been suggested, however, that when a descriptive word or phrase has come to mean a particular entrepreneur, the term secondary meaning is inaccurate because, in the field in which the phrase has acquired its new meaning, its so-called secondary meaning has become its primary, or natural, meaning. G. & C. Merriam Co. v. Saalfield, 198 F. 369 (6th Cir.).

The law will afford protection against the tortious appropriation of tradenames and trademarks alike. American Steel Foundries v. Robertson, supra, 269 U.S. at 380, 46 S. Ct. at 162, 70 L. Ed. at 321. To establish a secondary meaning for either, a plaintiff must show that it has come to stand for his business in the public mind, that is, "that the primary significance of the term in the minds of the consuming public is not the product but the producer." Kellogg Co. v. Nat. Biscuit Co., 305 U.S. 111, 118, 59 S. Ct. 109, 113, 83 L. Ed. 73, 78. But even though generic, or descriptive, *188 words, when used alone, have come to have a secondary meaning, "a competitor may nevertheless use them, if he accompanies their use with something which will adequately show that the first person or his product is not meant." Union Oyster House v. Hi Ho Oyster House, supra, 316 Mass. at 544, 55 N.E.2d at 943. For a full discussion of the legal principles and the collected cases, see Annot., Doctrine of secondary meaning in the law of trademarks and of unfair competition, 150 A.L.R. 1067 (1944).

In Union Oyster House, supra, the Massachusetts court held that the words oyster house are in common use in the English language and denote a restaurant in which the serving of oysters is featured. The court dismissed plaintiff's suit to enjoin defendant from using the words oyster house in its business name. The difference between that case and this one is only the difference between an oysterhouse and a steak house. Here, plaintiff's manager testified: "The term steak house means to me a place that features steaks. The term charcoal steak means to me how the steak is prepared or was prepared by the method of using charcoal in preparation." The manager's understanding is ours and, we believe, also that of the general public. The name Charcoal Steak House is no more original than it is unusual or fanciful; it is literally descriptive of the product which both plaintiff and defendant stress in their respective restaurants. How else could defendant describe his restaurant to the public, or plaintiff its? Throughout the country the term charcoal steak house is found in the name of so many restaurants giving emphasis to steaks that we may take judicial notice of its meaning and common usage, even though, unlike oysterhouse, it has not yet been defined, qua noun, in dictionaries.

Plaintiff states in its brief: "It is uncontroverted * * * that the words charcoal steak house are in their primary sense descriptive, they are publici juris, and all the world may use them; but it is the contention of the plaintiff appellant that the words as used by it have come to have a secondary meaning in regard to its business within the area of Charlotte, Mecklenburg County, North Carolina." Undoubtedly this is an accurate statement of the law, so far as it goes, and of what plaintiff contends. Although plaintiff employed the name Charcoal Steak House in Charlotte before defendant came to town, it did not originate the name, nor was it the first to use it in the area. Merely to be the first to use a descriptive name, even if it acquires a secondary meaning, does not give the first user an unqualified right to engross it. Even if the words charcoal steak house had acquired a secondary meaning so as specifically to connote plaintiff's restaurant in Charlotte, plaintiff still would not be entitled to have defendant restrained from making any use whatever of words admittedly publici juris. All plaintiff could reasonably ask of the court is that defendant be required to do what he has already done, namely, so designate his restaurant as to prevent reasonably intelligent and careful persons from being misled. When defendant affixed his name, Staley's, to his identifying sign in letters larger than those of "Charcoal Steak House," he created a dissimilarity which should preclude any confusion culminating in injury to any of plaintiff's rights. Surf Club v. Tatem Surf Club, supra.

Nothing in the record suggests the probability that the public will confuse the two restaurants. Unfair competition is "the child of confusion." Cleveland Opera Co. v. Cleveland Civil Opera Ass'n, supra. The evidence fails even to hint at any bad faith or any attempt on defendant's part to deceive, either in his business sign or in his location. And, all the while, plaintiff remains at its old standsurely its satisfied customers will be able to find their way back. Should they wend their way to defendant's restaurant, also, for the sake of variety or comparison, any loss to plaintiff will be damnum absque injuria. Within our competitive economy there is, in the Charlotte area, indeed "room for good service *189 by both." Bingham School v. Gray, 122 N.C. 699, 30 S.E. 304, 41 L.R.A. 243. As Denny, J. (now C. J.), said in Carolina Aniline & Extract Co. v. Ray, 221 N.C. 269, 273, 20 S.E.2d 59, 61: "The test (of unlawful competition) is simple, and lies in the answer to the question: Has the plaintiff's legitimate business been damaged through acts of the defendants which a court of equity would consider unfair?" In this case the answer is, No.

The judgment of nonsuit is

Affirmed.