What image pops into your head when you think of Seventh Circuit Chief Judge Frank Easterbrook? A man sitting at a dark wood bench, wearing a beard and black robe, hurling harsh questions at a lawyer, possibly you? Nothing?
Blawgletter bets you didn't just say to yourself that you see a guy munching a KFC drumstick or wolfing down a Whopper with cheese and finishing with a frosty Coca-Cola. And yet just today the Seventh Circuit issued an opinion that suggests in His Honor a more than casual acquaintance with fast food.
The case involved a trademark question. The owner of a shop licensed the shop's name to relatives, including one who agreed to pay $75,000 a year for the right to use the name. But nothing in the license gave the shop owner the right to control quality at the relative's shop. Chief Judge Easterbrook, agreeing with the district court, held that the "naked licensing" killed the licensor's rights in the mark and barred his claim for infringement against the licensee. Eva's Bridal Ltd. v. Halanick Enterprises, Inc., No. 10-2863, slip op. at 4 (7th Cir. May 10, 2011).
As the Chief explained (with ellipses missing):
There is no rule that trademark proprietors must ensure "high quality" goods — or that "high quality" permits unsupervised licensing. "Kentucky Fried Chicken" is a valid mark, though neither that chain nor any other fast-food franchise receives a star (or even a mention) in the Guide Michelin. The sort of supervision required for a trademark license is the sort that produces consistent quality.
A person who visits one Kentucky Fried Chicken outlet finds that it has much the same ambiance and menu as any other. A visitor to any Burger King likewise enjoys a comforting familiarity and knows that the place will not be remotely like a Kentucky Fried Chicken outlet (and is sure to differ from Hardee's, Wendy's, and Applebee's too). The tradmark's function is to tell shoppers what to expect — and whom to blame if a given outlet falls short.
A person who visited Eva's Bridal of Oak Lawn and then Eva's Bridal of Orland Park might not have found a common ambiance of means of doing business. And though the shops may have had many designers in common, this would not distinguish an "Eva's Bridal" shop from any other briadl shop; the trademark would not be doing any work if identical dresses could be purchased at Macy's or Nordstrom, and the "Eva's Bridal" shops were dissimilar except for some products that many retailers carried. Safeway could not license its marks to a corner grocery store, while retaining no control over inventory, appearance, or business methods, just because every grocery store is sure to have Coca-Cola and Wheaties on the shelf.
Id. at 4-5 (emphasis in original, including the italics for Guide Michelin).