Steak Umm Co. v. Steak 'EM UP, Inc., 09-2857

THE STEAK UMM COMPANY, LLC, Plaintiff v. STEAK 'EM UP, INC., Defendant

NO. 09-2857

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

August 23, 2011

CIVIL ACTION

MEMORANDUM

STENGEL, J.

This trademark infringement action was filed by The Steak Umm Company, Inc., against Steak 'Em-Up, Inc. Steak Umm is a national seller of frozen steak and hamburger products. Steak 'Em-Up is a pizza shop and deli in South Philadelphia. Steak Umm alleges that Steak 'Em-Up has infringed its "Steak Umm" trademark by using the phrase "steak 'em-up" in its store name and advertising. Steak Umm has filed federal claims under the Lanham Act for infringement, unfair competition, and false designation of origin, as well as federal and state trademark dilution claims. The parties have filed cross motions for summary judgment. For the reasons outlined below, Steak Umm's motion will be denied and Steak 'Em-Up's motion will be granted in part and denied in part.

I. BACKGROUND

Steak Umm produces frozen sliced steak and hamburger products for sale in grocery stores. Defendant's Separate Statement of Uncontestable Facts ("Def. S.U.F.") ¶¶ 31, 34. It alleges that, since opening in October of 2005, Steak 'Em-Up has been infringing its trademarks. Id. at ¶ 59; Plaintiff's Statement of Uncontested Facts ("Pl. S.U.F.") ¶¶ 1,14. Steak 'Em-Up is a restaurant and grocery store that has takeout and delivery services. Def. S.U.F. ¶ 55.

Steak Umm has marketed and sold frozen steak products using the "Steak Umm" mark since 1975. Pl. S.U.F. ¶ 4. Its mark was registered in 1976. Id. at ¶ 7. Steak Umm is currently owned by Sergei Szortyka, who took over Steak Umm in May 2006 when his company, Quaker Maid Meats, Inc., acquired it. Def. S.U.F. ¶ 25. Quaker Maid Meats acquired Steak Umm solely for its customer list and intellectual property, and not for any of its actual assets or equipment. Szortyka Dep. 29:22-25, Sep. 21, 2010. Steak Umm's products are sold throughout the United States. Pl. S.U.F. ¶ 10. Steak Umm advertises in print, on national television, and on the internet through its website. Id. at ¶ 11.

Steak 'Em-Up was opened in October 2005 by its founder and owner, Michael Lane. Def. S.U.F. ¶¶ 54, 61. Lane began planning for the store in 2003. Id. at ¶ 55. Around this time, he began brainstorming names for the store. Id. at ¶ 56. He eventually settled on "Steak 'Em-Up," a play on the phrase "stick 'em-up." Id. at ¶¶ 57-58. Along with the name, Lane developed a logo, an old-time cartoon gangster holding a hoagie¹ as if it were a gun, to accompany the name in advertisements. Id. Steak 'Em-Up advertises in a local paper, on local television, through its website, and by distributing menus locally. Id. at ¶ 74.

Steak Umm became aware of the alleged infringement when its founder, Gene Gagliardi, saw advertisements for Steak 'Em-Up and called Szortyka to ask if they were related to Steak Umm. Szortyka Dep. 16:19-19:21. Upon learning of the ad, Szortyka had his lawyer run aGoogle search for the term "steak um up." Id. at 22:9-13. Some of the top hits from this search refer to a "Steak Um Up" store at Steak 'Em-Up's address.² Pl. S.U.F. ¶ 20.

Steak Umm filed its initial complaint on June 25, 2009, seeking both injunctive relief and monetary damages. During discovery, Steak Umm hired an expert, Robert Klein, who conducted a survey of local consumers. Steak Umm argues that Mr. Klein's survey supports its contention that there is a likelihood of confusion, as it shows that 12.9% to 24.1% of consumers would believe Steak 'Em-Up sells Steak Umm products. Id. at ¶¶ 27-28. In response, Steak 'Em-Up retained its own expert, Michael Rappeport, to critique the survey. Mr. Rappeport concluded that no more than 10% of consumers are likely to be confused, although he did not conduct a survey of his own. Id. at ¶¶ 29-31. Following the close of discovery, Steak Umm filed an amended complaint on May 4, 2011, withdrawing some of its claims against Steak 'Em-Up. Its Lanham Act and state and federal dilution claims remain. Id. at ¶ 25.

II. STANDARD OF REVIEW

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A factual dispute is "material" only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For an issue to be "genuine," a reasonable fact-finder must be able to return a verdict in favor of the non-moving party. Id.

A party seeking summary judgment initially bears responsibility for informing the court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.317, 322 (1986). A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing relevant portions of the record, including depositions, documents, affidavits, or declarations, or showing that the materials cited do not establish the absence or presence of a genuine dispute, or showing that an adverse party cannot produce admissible evidence to support the fact. FED. R. CIV. P. 56(c). Summary judgment is therefore appropriate when the non-moving party fails to rebut the moving party's argument that there is no genuine issue of fact by pointing to evidence that is "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.

Under Rule 56, the court must view the evidence presented in the motion in the light most favorable to the opposing party. Anderson, 477 U.S. at 255. The court must decide not whether the evidence unmistakably favors one side or the other, but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Id. at 252. If the non-moving party has exceeded the mere scintilla of evidence threshold and has offered a genuine issue of material fact, then the court cannot credit the movant's version of events against the opponent, even if the quantity of the movant's evidence far outweighs that of its opponent. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). "The summary judgment standard is not affected when the parties file cross-motions for summary judgment." Diebold, Inc. v. Continental Cas. Co., 719 F.Supp.2d 451, 461 (D.N.J. 2010). Such motions "are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist." Id. (citingTransportes Ferreos de Venez. II CA v. NKK Corp., 239 F.3d 555, 560 (3d Cir. 2001) (internal quotations omitted)). If review of the record reveals no genuine issue of material fact, it is appropriate to enter judgment in favor of the deserving party. Id. (citing Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998)).

III. DISCUSSION

The Third Circuit has called summary judgment in trademark cases "the exception." Country Floors, Inc. v. P'ship of Gepner and Ford, 930 F.2d 1056, 1062-63 (3d Cir. 1991). Other Circuits agree. See AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 616 (7th Cir. 1993) ("[A] motion for summary judgment in trademark infringement cases must be approached with great caution."); Clicks Billards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1265 (9th Cir. 2001) (observing that summary judgment on the likelihood of confusion issue is disfavored and is "routinely submitted for jury determination as a question of fact"); Interstellar Starship Services, Ltd. v. Epix Inc., 184 F.3d 1107, 1109 (9th Cir. 1999) ("Because of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena.").

A. Counts One and Two - Infringement and Unfair Competition

Counts One and Two of Steak Umm's complaint allege trademark infringement under 15 U.S.C. §§ 1114-1118 and unfair competition/false designation of origin under 15 U.S.C. § 1125(a). Claims for trademark infringement and unfair competition are analyzed under identical standards. A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir 2000). To prove a prima facia case under either section, a plaintiff must show that: (1) thetrademark that is being infringed is valid, (2) the plaintiff owns the trademark in question, and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion. Id. The validity and ownership of the "Steak Umm" mark are not contested.

The success of Counts One and Two therefore depends on Steak Umm's ability to show that there is a likelihood of confusion caused by Steak 'Em-Up's name and logo. This is a source confusion case, meaning Steak Umm's claim is premised upon the allegation that consumers will believe Steak 'Em-Up is affiliated with or related in some way to Steak Umm or that it uses Steak Umm's products.³ To prove this element, a plaintiff need not show actual confusion, only that confusion is likely. Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 472 (3d Cir. 1994). In the Third Circuit, the ten-part Lapp test determines whether there is a likelihood of consumer confusion between goods, whether they directly compete or not.⁴ A & H Sportswear, 237 F.3d at 215; Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983). The Lapp factors are:

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 and other factors indicative of the care and attention expected of consumers when making a purchase;

4) The length of time the defendant

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