Mystic Lake Casino Hotel in Minnesota
Mystic Lodge Casino in Henderson, Nevada
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).
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.