By Thomas Long, J.D.
The City of New Orleans and the New Orleans Building Corporation (NOBC) have been granted a preliminary injunction by the federal district court in New Orleans, barring the lessee of the St. Roch Market—which operated a food hall in the space—from using the name as a service mark for food halls in locations other than the New Orleans facility and a food hall the lessee had opened in Miami. Although the mark "St. Roch Market" had geographic significance in New Orleans and was not inherently distinctive, it had acquired secondary meaning as a specific food hall through continuous use for over a century. The City and NOBC were deemed the senior users of the mark, and the court found that they were likely to succeed in showing that the lessee’s use of the mark in other cities created a likelihood of confusion as to sponsorship, affiliation, or connection. The loss of control over the quality of services rendered under the mark constituted a sufficient risk of irreparable harm to warrant an injunction, in the court’s view (Helpful Hound, L.L.C. v. New Orleans Building Corporation, August 7, 2018, Vance, S.).
St. Roch Market. The original St. Roch Market at 2831 St. Claude Street was one of the few remnants of the once-extensive network of public markets in New Orleans. Founded in 1838, the market occupied a structure designed and built in 1875. The City of New Orleans leased stalls in St. Roch market to food vendors until 1945. From 1945 until the 1990s, the City leased the market to the Lama family, who first operated a seafood market and restaurant on the site before converting the space to a supermarket in 1954. The City then leased to a different tenant, which operated a market and restaurants there, until the facility was damaged by Hurricane Katrina in 2005. The City renovated the market between 2012 and 2014, contributing over $500,000 of the $3.2 million cost of the project.
In September 2014, NOBC leased the building to Bayou Secret, LLC. The lease required Bayou Secret to operate a full-service restaurant and fresh foods market using multiple vendors in a "stalls" concept. An exhibit to the lease provided that Bayou Street was permitted to use the existing logo for the market. Bayou Secret did open and still operated a food hall on the site.
Bayou Secret opened a second food hall in New Orleans in 2018, called "Auction House Market." Bayou Secret allegedly displayed a marketing banner there bearing the "St. Roch Market" mark in December 2017; it was removed at the request of the NOBC. Also in 2018, Bayou Secret and related entities opened a food hall in Miami, called "St. Roch Market." Helpful Hound purportedly had plans to open additional facilities under the name in other cities.
Trademark dispute. Helpful Hound, L.L.C. (allegedly a member of Bayou Secret) applied to register the mark "St. Roch Market" in April 2017. The USPTO refused registration on the Principal Register on the ground that it was primarily merely geographically descriptive. The mark was registered on the Supplemental Register. In April 2018, the City and Helpful Hound filed competing applications for "St. Roch Market." Those applications were pending.
Helpful Hound filed suit against the City and NOBC seeking declarations of noninfringement of the "St. Roch Mark" and that the registration of the service mark was proper. The City and NOBC then filed suit against Bayou Secret, Helpful Hound, related entities, and their individual principals, asserting trademark infringement and dilution, among other things. The City and NOBC moved for a preliminary injunction barring the defendants from using "St. Roch Market" or any confusingly similar name at any location other than 2831 St. Claude Street in New Orleans and the defendants’ Miami location.
Protectability of mark. The court first assessed whether the City and NOBC were likely to succeed on the merits of their trademark claims. The parties’ agreed that the "St. Roch Market" service mark was protectable, but the court addressed the issue because the USPTO had refused to register it on the Principal Register on geographic descriptiveness grounds. The court distinguished between use of the mark in New Orleans and prospective use of the mark in other cities. Like the USPTO, the court found that use of the mark in New Orleans was geographically descriptive because the mark identified the place where the services were provided. However, potential consumers in other cities likely would not make the same association between the services and the place. St. Roch was not generally recognizable among the American public, the court said. Therefore, as used outside of the New Orleans area, the mark was inherently distinctive.
Because the City and NOBC had only used the mark in New Orleans, they were required to show secondary meaning. In the court’s view, the undisputed evidence of the lengthy use of the mark in connection with the provision of food had caused the mark to acquire secondary meaning as a specific food market in New Orleans. The fact that the defendants intended to capitalize on this recognition elsewhere indicated further that they themselves believed the mark had secondary meaning in New Orleans. Therefore, the City and NOBC were likely to succeed in showing that the mark, as they had used it in New Orleans, was protectable.
Senior use. The parties disagreed as to whose use of the mark was senior. It was undisputed that the City had leased the market to tenants since the 19th century. Although the uses of the market had evolved over time, each prior use was substantially identical to its present use as a food hall, in the court’s view. The critical question was whether the landlord (the owner of the building) had seniority over the tenant (the operator of the food hall). This question generally was decided on a case-by-case basis. In this case, the court found that the City was the prior user of the mark. The City’s use of the mark had not been transitory, and the mark achieved secondary meaning well before the defendants acquired the lease in 2014. The City designed and built the market and invested in its restoration. It was not necessary for the City to operate a specific business in the building in order to own the building’s name, the court said. Furthermore, the 2014 lease placed limitations on Bayou Secret’s use of the premises, including requirements that Bayou Secret would have to obtain permission from the NOBC or the City to make any changes to the building or business, or to the building’s signage. These restrictions bolstered the court’s finding that the City and NOBC owned the mark.
Likelihood of confusion. The City and NOBC were likely to succeed in establishing a likelihood of confusion, the court said, which meant they were likely to succeed on the merits of their trademark infringement claim. Although the parties were not necessarily in direct competition because the City and NOBC had no plans to open "St. Roch Market" food halls in other cities, that was not necessary to find a likelihood of confusion, the court said. Confusion as to sponsorship, affiliation, or connection could result. The parties’ marks were identical, and the services at issue were similar. The defendants’ intent in deriving benefits from the reputation of the plaintiffs’ reputation also weighed in favor of finding a likelihood of confusion.
Breach of trademark license. The City and NOBC also sought a preliminary injunction based on breach of trademark license. This essentially was a state-law breach of contract claim. According to the City and NOBC, the defendants’ use of the mark outside St. Roch Market in New Orleans violated the 2014 lease. In the court’s view, the defendants’ mark use in connection with food halls in other cities "obviously" exceeded the scope of the license in the lease. Therefore, the City and NOBC were likely to succeed on the merits of this claim.
Irreparable harm. The record supported a showing of the requisite irreparable harm, the court found. The defendants had appropriated a mark that the City had maintained for over a century, causing the City and NOBC to lose control of the quality of services rendered under the mark.
Balance of hardships. Without an injunction, the City and NOBC could face damage to their reputation and goodwill, the court said. An injunction would cause the defendants to sustain hardship—they would be unable to use their preferred name for the food halls they planned to open in other cities—but this harm would be self-inflicted because they did not have the right to use the mark in the first place. Also, an injunction would not prevent them from opening food halls, just from calling them "St. Roch Market." Accordingly, the balance of hardships favored the City and NOBC.
Public interest. A preliminary injunction would serve the public interest by preventing unfair competition and protecting intellectual property, the court said. These values outweighed the public’s interest in competition and free exchange of ideas. Moreover, the court said, St. Roch Market was a public institution with a rich history, and the reputation of the facility and the goodwill associated with its name belonged to the public. Louisiana law explicitly recognized the City’s right to use the name of public facilities owned by the City, and to exclude others from using those names. Accordingly, the court granted the City and NOBC’s motion for a preliminary injunction.
This case is No. 2:18-cv-03500-SSV-JCW.
Attorneys: Sharonda R. Williams (Fishman Haygood, LLP) for Helpful Hound, L.L.C. Kerry Ann Murphy (Lasky Murphy LLC) for New Orleans Building Corp. Cherrell Simms Taplin, City Attorney's Office, for City of New Orleans.
Companies: Helpful Hound, L.L.C.; New Orleans Building Corp.; City of New Orleans
MainStory: TopStory Trademark LouisianaNews
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