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Burris Carpet Plus, Inc. v. Burris

June 30, 2010

BURRIS CARPET PLUS, INC., PLAINTIFF, APPELLANT AND CROSS-APPELLEE
v.
JERROD BURRIS, DEREK BURRIS, AND DAN BURRIS, DEFENDANTS, APPELLEES AND CROSS-APPELLANTS



Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Karen Kosanda Braaten, Judge.

The opinion of the court was delivered by: VandeWalle, Chief Justice.

AFFIRMED.

[¶1] Burris Carpet Plus, Inc. ("BCP"), appealed and Jerrod Burris, Derek Burris, and Dan Burris (collectively "Burrises") cross-appealed from a district court order and judgment granting the Burrises' motion for summary dismissal and denying BCP's motion for summary judgment. BCP also appealed from a district court order partially granting its motion to compel discovery. We affirm.

I.

[¶2] BCP is a North Dakota corporation, which was incorporated in June 2000. BCP is involved in retail flooring sales and has a retail location in Grand Forks. BCP does business and advertises under the name "Burris Carpet Plus." Don Burris is BCP's president and sole shareholder. Don Burris has worked in the flooring industry since approximately 1974.

[¶3] The Burrises are all related to Don Burris. Jerrod and Derek Burris are Don Burris's children, and Dan Burris is Don Burris's brother. The Burrises are all involved in the flooring industry and have used the name "Burris" in various flooring related businesses.

[¶4] In 1988, Dan Burris started a carpet cleaning business in East Grand Forks, Minnesota, called Burris Quality Carpet Cleaning. The business name was registered with the Minnesota Secretary of State. Derek Burris bought part of this business from Dan Burris in 2001, and operated the business in the Grand Forks area while Dan Burris operated the business in the Erskine, Minnesota area. Derek Burris has continued to operate the business using the name Burris Quality Carpet Cleaning and other similar names, including D.J. Burris Quality Carpet Cleaning and Burris Carpet Cleaning. Derek Burris rented space for his carpet cleaning business from BCP in BCP's retail location. His rent included the use of BCP's secretarial staff to answer phone calls for his business and schedule appointments. Derek Burris moved out of BCP's retail location in December 2005.

[¶5] Between 1993 and December 2001, Jerrod Burris installed carpet using the name Burris Carpet Installation. Jerrod and Dan Burris have installed flooring and carpet together since December 2001, using the name Jerrod & Dan Burris Flooring Installation and other similar names, including Jerrod Burris Flooring Installation, Burris Carpet Installation, and J&D Carpet Installation. In 2000, Jerrod and Dan Burris began installing flooring for BCP as independent contractors. Their relationship with BCP was terminated in late 2006.

[¶6] Between late 2006 and March 2007, Jerrod Burris sold carpet in the Grand Forks area, using the names D.J. Burris Quality Carpet Cleaning & Sales, Burris Carpet, Burris Carpet Sales, Burris Carpet Installation, Jerrod and Dan Burris Flooring Installation, and Burris Quality Carpet.

[¶7] On March 15, 2007, BCP received a Certificate of Trademark Registration for "Burris (the word)" as a trademark to be used with "miscellaneous services." In the registration, BCP claimed the mark had been used on store fronts, vehicles and advertisements since January 1, 1974, and in North Dakota since March 1, 1999.

[¶8] In September 2007, BCP sued the Burrises for trademark infringement, false designation of origin, and unfair competition, seeking damages and injunctive relief. BCP requested discovery and later filed a motion to compel discovery. In July 2008, after an earlier hearing, the district court partially granted BCP's motion to compel. BCP amended its complaint in April 2008, adding claims of infringement of a registered business name, infringement of a registered trade name, and conspiracy.

[¶9] BCP moved for summary judgment, and the Burrises responded and filed cross-motions for summary judgment. After arguments, the district court granted the Burrises' motions for summary judgment and dismissed all of BCP's claims. A judgment was subsequently entered.

II.

[¶10] Summary judgment is a procedural device used to promptly resolve a controversy on the merits without a trial if either party is entitled to judgment as a matter of law and the material facts are undisputed or if resolving the disputed facts would not alter the result. In re Estate of Dionne, 2009 ND 172, ¶ 8, 772 N.W.2d 891. "'Summary judgment is inappropriate if neither party is entitled to judgment as a matter of law or if reasonable differences of opinion exist as to the inferences to be drawn from the undisputed facts.'" KAT Video Prod., Inc. v. KKCT-FM Radio, 1997 ND 21, ¶ 5, 560 N.W.2d 203 (quoting Larson v. Baer, 418 N.W.2d 282, 286 (N.D. 1988)). Whether a district court has properly granted a motion for summary judgment is a question of law, which this Court reviews de novo on the record. Dionne, at ¶ 8.

[¶11] When we review a district court's decision on a motion for summary judgment, we view the evidence in a light most favorable to the party opposing the motion and give the opposing party all favorable inferences. KAT, 1997 ND 21, ¶ 5, 560 N.W.2d 203. In determining whether summary judgment is appropriate, the court may examine the pleadings, depositions, admissions, affidavits, interrogatories, and inferences to be drawn from the evidence. Id. The moving party must show there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. Abdullah v. State, 2009 ND 148, ¶ 9, 771 N.W.2d 246. A party resisting the motion for summary judgment "cannot merely rely on the pleadings or other unsupported conclusory allegations, but must present competent admissible evidence by affidavit or other comparable means which raises an issue of material fact." Id. "'In summary judgment proceedings, neither the trial court nor the appellate court has any obligation, duty, or responsibility to search the record for evidence opposing the motion for summary judgment.'" Id. (quoting Fish v. Dockter, 2003 ND 185, ¶ 15, 671 N.W.2d 819).

III.

[¶12] BCP argues the district court improperly granted the Burrises' motions for summary judgment on BCP's common law and registered trademark infringement claims. BCP claims it has a valid trademark for "Burris (the word)" and the Burrises infringed upon the mark. BCP contends the district court erred in concluding BCP's mark was not protected because it is a surname, finding BCP was not the first to use the mark, and ordering the cancellation of BCP's "Burris" trademark.

[¶13] The district court dismissed BCP's common law and statutory trademark claims, ruling the Burrises had all established they had used the word "Burris" in their various business names prior to BCP's incorporation and, to the extent the word "Burris" can be a protected trademark, the Burrises established they had prior use of the word. The court also concluded BCP did not "use" the mark as required for ownership because BCP only used the word as part of its corporate name. The court dismissed the trademark claims, finding "[a]s a matter of law, BCP is precluded from arguing it owns the name/word 'Burris' as it has failed to set forth facts supportive of its claim of use and ownership of the name/word 'Burris' and the undisputed evidence is that BCP was not the first to use or display the word/name in the marketplace."

[¶14] Trademarks and service marks may be registered and receive protection under N.D.C.C. ch. 47-22. A trademark is "any word, name, symbol, or device or any combination thereof adopted and used by a person to identify goods made or sold by that person and to distinguish them from goods made or sold by others." N.D.C.C. § 47-22-01(6). A service mark is "any word, name, symbol, or device or any combination thereof used by a person to identify and distinguish the services of one person, including a unique service, from the services of others, and to indicate the source of the services, even if that source is unknown." N.D.C.C. § 47-22-01(5). Any person who adopts and uses a mark may register the mark with the secretary of state. N.D.C.C. § 47-22-03.

[¶15] Any person who "use[s], without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of a mark registered under [N.D.C.C. ch. 47-22] . . . shall be liable to a civil action by the owner of such registered mark . . . ." N.D.C.C. § 47-22-11. Although N.D.C.C. ch. 47-22 provides for the registration of trademarks and service marks in North Dakota and provides a cause of action, it does not provide the substantive law protecting infringement, which stems from common law. KAT, 1997 ND 21, ¶ 6, 560 N.W.2d 203. Furthermore, statutory trademark law does not adversely affect a person's common law trademark rights. N.D.C.C. § 47-22-13.

[¶16] The purpose of trademark law is "'to prevent one person from passing off his goods or his business as the goods or business of another.'" KAT,1997 ND 21, ¶ 7, 560 N.W.2d 203 (quoting American Steel Foundries v. Robertson, 269 U.S. 372, 380 (1926)). To prevail on a trademark infringement claim, a plaintiff must first show it has a valid mark that merits protection. See Brennan's, Inc. v. Brennan's Restaurant, L.L.C., 360 F.3d 125, 129 (2d Cir. 2004); B&B Hardware, Inc. v. Hargis Indus., Inc., 569 F.3d 383, 387 n.2 (8th Cir. 2009). A valid trademark is a "distinctive mark, symbol, or designation used by a producer or manufacturer to identify and distinguish his services or goods from the services or goods of others." KAT, at ¶ 7.

[¶17] "Ownership rights in a trademark or trade name accrue when the mark or term is used or displayed in the marketplace." KAT, 1997 ND 21, ¶ 8, 560 N.W.2d 203. North Dakota statutory law requires the mark to be used by a person to identify the person's goods to be able to register the trademark or service mark. N.D.C.C. § 47-22-01(5) and (6). For purposes of N.D.C.C. ch. 47-25, a trademark is "used" when "it is placed in any manner on the goods or their containers or on the tags or labels affixed thereto and such goods are sold or otherwise distributed in this state." N.D.C.C. § 47-22-01. However, a mark that is primarily merely a surname shall not be registered unless the mark has become distinctive of the applicant's goods. N.D.C.C. § 47-22-02(5)(c).

[¶18] In order for BCP to establish that it has a valid trademark or service mark in the word "Burris" it must show that it used the mark in connection with the goods or services it provides. There was no evidence in the record that BCP has used the word "Burris" alone in connection with its goods or services. BCP only claimed to use the word "Burris" within its use of "Burris Carpet Plus." BCP contends its use of the phrase "Burris Carpet Plus" is sufficient to establish "use" of the word "Burris" for trademark purposes. However, the use of a corporate name is not "use" of each word in the name for trademark purposes. See Mars Musical Adventures, Inc. v. Mars, Inc., 159 F. Supp. 2d 1146, 1149 (D. Minn. 2001) (plaintiff did not show it had "used" the mark "Mars Music" because there was only evidence it used "Mars Musical Adventures" in its business and marketing history); Minnesota Mining & Mfg. Co. v. Minnesota Linseed Oil Paint Co., 229 F.2d 448, 455-56 (C.C.P.A. 1956) (the word "Minnesota" could not be registered a trademark because the word was only used on the goods as part of the corporate name). BCP failed to present any evidence it has "used" the mark in connection with its goods or services.

[¶19] Furthermore, for a mark to receive protection it must identify the provider of the goods or services, distinguishing the user's goods or services from the goods or services of others in the customers' minds. See Mars Musical Adventures, 159 F. Supp. 2d at 1148-49; First Bank v. First Bank System, Inc., 84 F.3d 1040, 1044-45 (8th Cir. 1996). The strength or distinctiveness of a mark refers to the mark's ability to identify the source of goods or services to which the mark is attached. See Brennan's, 360 F.3d at 130. A mark must be either inherently distinctive or it has to acquire distinctiveness through secondary meaning to receive protection. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-69 (1992).

[¶20] There are five categories of distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Two Pesos, 505 U.S. at 768. Marks that are suggestive, arbitrary, or fanciful are inherently distinctive and are entitled to protection. Id. at 768-69. An arbitrary or fanciful mark does not suggest or describe any characteristic of the goods or services with which it is used. KAT, 1997 ND 21, ¶ 12, 560 N.W.2d 203. A mark that is arbitrary or fanciful is considered the most distinctive or strongest mark and receives the greatest protection because the mark is identified with a particular product or service. Id. A mark is suggestive if it indicates something about the product, but does not describe the product. Id. Suggestive marks are also inherently distinctive and receive protection. Id. A mark is descriptive if it describes the nature, quality, or other characteristic of the goods or services on which the mark is used, and it receives protection only if the mark has achieved secondary meaning. Id. Generic marks, which are marks that "'refer to the genus of which the particular product is a species,'" generally are not protected marks. Two Pesos, at 768.

[¶21] When a proper name or surname is used as a mark it is considered a descriptive mark because it does not identify the product by itself. Brennan's, 360 F.3d at 131. See also AFL Philadelphia LLC v. Krause, 639 F. Supp. 2d 512, 526 (E.D. Pa. 2009); Chase Fed. Sav. and Loan Ass'n v. Chase Manhattan Fin. Servs. Inc., 681 F.Supp. 771, 779 (S.D. Fla. 1987). Because a surname is a descriptive mark, it must acquire secondary meaning to receive protection. Brennan's, at 131. Here, the mark BCP alleges the defendant's infringed consists solely of a surname. The word "Burris" is a descriptive mark and BCP must show the mark has achieved secondary meaning to receive protection.

[¶22] A plaintiff establishes that a mark has achieved secondary meaning by showing through "'long and exclusive use in the sale of the user's goods, the mark has become so associated in the public mind with such goods that the mark serves to identify the source of the goods and to distinguish them from those of others.'" B&B Hardware, 569 F.3d at 389 (Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 870 (8th Cir. 1994)). "Secondary meaning does not require the consumer to identify a source by name but does require that the public recognize the mark and associate it with a single source." Frosty Treats, Inc. v. Sony Computer Entm't America, Inc., 426 F.3d 1001, 1005 (8th Cir. 2005) Secondary meaning can be established through direct and circumstantial evidence. Id. at 1005-06. Direct evidence includes consumer testimony or surveys, and is the most probative. Id. at 1005. Circumstantial evidence can also be used, including evidence of exclusivity, length and manner of use of the mark, the amount and manner of advertising, the number of customers and sales, the plaintiff's established place in the market, and whether the defendant engaged in intentional copying. Id. at 1005-06.

[¶23] BCP failed to present any evidence that the public recognizes the "Burris" mark and associates it with a single source. BCP did not present any direct evidence, and its circumstantial evidence fails to raise a genuine issue of material fact. BCP claimed its evidence of the amount of advertising it has done demonstrates the word "Burris" has achieved secondary meaning. However, there was no evidence BCP used the term "Burris" alone in connection with its goods or services in its advertising. Cf. Therapy Products, Inc. v. Bissoon, 623 F. Supp. 2d 485, 494-95 (S.D. N.Y. 2009) (plaintiff failed to raise question of fact as to whether mark acquired secondary meaning, evidence showed little proof of advertising using the mark). All the parties involved in this case share the name "Burris" and there was no evidence the defendants intentionally copied the word "Burris." "'Selection of a mark with a common surname naturally entails a risk of some uncertainty and the law will not assure absolute protection.'" Chase Fed. Sav. and Loan Ass'n, 681 F. Supp. at 785 (quoting Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1231 (3d Cir. 1978)).

[¶24] While BCP used the word "Burris" as part of its business name, BCP failed to present sufficient evidence to create a material issue of fact that it has used the mark "Burris" in connection with its goods or services and that the mark has achieved secondary meaning. We conclude as a matter of law BCP does not own any rights to the mark "Burris (the word)," and therefore the district court properly granted summary judgment dismissing BCP's statutory and common law trademark infringement claims.

[¶25] Under N.D.C.C. § 47-22-08, the secretary of state shall cancel a trademark registration if a district court finds the registrant is not the owner of the mark or the registration was improperly granted, or when a district court orders cancellation of a registration on any ground. The district court properly ordered the cancellation of BCP's trademark registration.

IV.

[ΒΆ26] BCP argues the district court erred in dismissing BCP's claims for infringement of a registered trade name and of a registered business name. BCP contends its registered corporate name receives protection under N.D.C.C. ch. 10-19.1, the Business Corporation Act, and N.D.C.C. ch. 47-25, which regulates trade names. BCP claims its registered corporate name, "Burris Carpet Plus, Inc.," is entitled to trade name protection under N.D.C.C. ch. 47-25 even though the name is not a registered trade name because N.D.C.C. ch. 10-19.1 and N.D.C.C. ch. 47-25 cross-reference each other, a registered corporate name automatically receives protection ...


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