Taco John's International, Inc. v. Taco Chon Mexican Grill LLC

Background

Taco John’s International, Inc. and Spicy Seasonings, LLC sued Taco Chon Mexican Grill LLC, Taco Chon Mexican Grill II, LLC, and Juan Ramos. The plaintiffs asserted trademark infringement, trademark dilution, unfair competition, and related state-law claims under the Lanham Act and Minnesota law. Taco Chon counterclaimed for abuse of process, alleging that Taco John’s pursued the lawsuit to intimidate, embarrass, and harm Taco Chon’s reputation.

Taco John’s operates quick-service Mexican restaurants and owns or uses the TACO JOHN’S marks. The court described the mark as having been used for more than fifty years, with approximately 370 establishments across 23 states. Taco Chon operates two Mexican restaurant-bars in Minnesota under the name “Taco Chon Mexican Grill.” The restaurants offer overlapping menu items, including tacos, burritos, quesadillas, nachos, and enchiladas. The parties disputed whether the names and restaurant offerings were sufficiently similar to create a likelihood of consumer confusion, and whether Taco Chon’s use of its name diluted or tarnished the Taco John’s mark.

Expert testimony

Taco John’s moved to exclude the opinions and testimony of Milissa Silva, whom Taco Chon offered as an expert on Mexican culture and cuisine. The court applied Federal Rule of Evidence 702, which requires expert testimony to be relevant, reliable, and supported by appropriate expertise and methods.

The court granted in part and denied in part the motion to exclude. Silva may testify about the characteristics of traditional Mexican cuisine as typically found in Mexico and about differences between traditional Mexican cuisine and Tex-Mex food. She may not testify about which restaurant consumers would choose, whether consumers prefer one type of food over another, or whether the average consumer would confuse the food served by the two restaurants. The court found that Taco Chon had not shown that Silva was qualified in consumer science or marketing and that she had not conducted or cited studies supporting opinions about consumer choice or confusion.

Abuse-of-process counterclaim

Taco John’s moved for partial summary judgment on Taco Chon’s abuse-of-process counterclaim. Summary judgment is appropriate when the evidence shows no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law.

The court granted the motion. Under Minnesota law, abuse of process requires an ulterior purpose and use of legal process to obtain a result outside the proceeding’s proper scope. The court found that Taco Chon offered no evidence from which a reasonable jury could find that Taco John’s had an ulterior motive. The court stated that even an effort to make Taco Chon change its name would not make an otherwise legitimate trademark lawsuit an abuse of process. The counterclaim was therefore dismissed.

Taco Chon’s summary-judgment motion

Taco Chon sought summary judgment on all of Taco John’s claims. The court denied the motion because genuine disputes of material fact remained.

For the trademark infringement and unfair-competition claims, the court focused on whether the marks were likely to confuse consumers. It concluded that disputes remained concerning the similarity of the marks, the similarity of the restaurants’ products, Ramos’s intent in selecting the name, evidence of actual confusion, and the degree of care used by customers when choosing Mexican food. The court found that the TACO JOHN’S mark was conceptually strong because “JOHN’S” does not describe the restaurant’s offerings and commercially strong because of the mark’s history, business size, sales, and advertising. The court ruled that the mark’s strength was established as a matter of law but left the overall likelihood-of-confusion question for the jury.

For trademark dilution, the court found that the TACO JOHN’S mark was famous as a matter of law. It relied on the mark’s registration, longstanding use, sales volume, geographic reach, advertising, and evidence of recognition. The court nevertheless found factual disputes about whether Taco Chon’s use caused dilution by blurring or tarnishment. The court therefore left those issues for the jury.

The court also found factual disputes concerning whether Taco Chon acted willfully, which could affect Taco John’s request for Taco Chon’s profits. The court explained that willfulness is required for a profits award based on trademark dilution, although it is not a prerequisite for recovering profits based on trademark infringement.

Motion to strike

Taco John’s moved to strike Taco Chon’s reply memorandum because Taco Chon exceeded the applicable word limit. The court found that Taco Chon violated the local rule but denied the motion to strike because the additional briefing did not affect the outcome. The court did not impose sanctions at that time and warned that future violations would not be tolerated.

Order

The court ordered that:

- Plaintiffs’ motion to exclude Milissa Silva’s opinions and testimony was granted in part and denied in part. - Plaintiffs’ partial motion for summary judgment on defendants’ counterclaim was granted. - Defendants’ motion for summary judgment was denied. - Plaintiffs’ motion to strike defendants’ reply memorandum was denied.

The trademark infringement, unfair competition, dilution, and related claims remained for consideration by a jury.