Minnesota Indian Casino Sues Local Henderson Casino Over MYSTIC name

Mystic Lake Casino Hotel in Minnesota

Las Vegas Sun reporter Steve Green reports on the trademark infringement lawsuit filed in Nevada District Court by the Shakopee Mdewakanton Sioux Community (“Shakopee”) against Templeton Gaming Corporation (“Templeton”) and its owner Hugh Templeton (link to story here) [I am quoted in the article]. See Shakopee Mdewakanton Sioux Community v. Templeton Gaming Corporation et al., Case No. 10-cv-00010 (D. Nev). A copy of the complaint can be viewed here.

Shakopee owns the Mystic Lake Casino Hotel in Scott County, Minnesota (near Minneapolis). Templeton owns a local video poker bar in Henderson, Nevada going by the name Mystic Lodge Casino.

Mystic Lodge Casino in Henderson, Nevada

While Shakopee appears to promote its services primarily using the mark MYSTIC LAKE, it also happens to own a trademark registration for the word mark MYSTIC in connection with “entertainment services, namely providing casino facilities” registered January 6, 1998. While Shakopee also owns numerous other registrations containing the word MYSTIC in connection with goods and services related to its casino/hotel operations (a “family of marks” as Shakopee would likely describe it), this single registration alone gives Shakopee some strong ammunition against companies that wish to use the word MYSTIC in connection with a casino related business.

While Shakopee appears to have the upper hand in making a legal argument against Templeton for likelihood of confusion based on the Sleekcraft factors, all I could think about with this case was that it looked like a “Dawn Donut” situation. See Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959). As described recently by the Nevada district court in Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116622 (D. Nev. December 14, 2009) (blog post here):

Under the Dawn Donut rule, even if a federal registrant has rights in a mark, it is not necessarily entitled to an injunction against an unauthorized user: “if the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into the defendant’s market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user’s use of the mark.” Dawn Donut, 267 F.2d at 364 (footnote omitted); see also Fairway Foods, Inc. v. Fairway Markets, Inc., 227 F.2d 193, 198 (9th Cir. 1955) (vacating injunction issued to prevailing plaintiff on essentially the same basis as later became known as the Dawn Donut rule). Only once the federal registrant has expanded its use of the mark, so that the market areas of the two users are no longer separate and distinct, will the registrant be entitled to an injunction. Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir. 1969) (citing Dawn Donut).

Given that the tribe’s operation of its casino is certainly bound by its Indian territory boundaries and not likely to expand its use of the Mystic mark into the into the Henderson, Nevada area where this small locals casino operates, should Shakopee be allowed to stop them from using the name until such time as Shakopee expands into the Las Vegas market?

Of course, any discussion of “Dawn Donut” would not be complete without raising the issue of whether in this day and age of nationwide commerce through the Internet, whether “Dawn Donut” is relevant any more. The following are two excellent articles focusing on this particular issue:

• Stephen Quigley, “Is 'Dawn Donut' Dead in Internet Age?”. New York Law Journal, May 19, 2008
• Jessica Amber Drew, “Death of Dawn Donut: The Demise of Concurrent Trademarks,” 2007 U. Ill. J.L. Tech. & Pol'y 145 (Spring 2007).

Indeed, Shakopee's argument would certainly be that while its casino business is limited to its tribal area in Minnesota, its reputation (thanks to its traditional and Internet marketing) is nationwide and thus, consumers visiting the Henderson, Nevada area who come across this locals place may believe that there is an affiliation between this "Mystic Lodge Casino" and that other "Mystic" casino in Minnesota with which they are familiar or about which they have heard.