Firehouse Subs loses trademark case, CEO plans appeal

Sept. 7, 2011

Firehouse Subs recently lost a trademark case involving a Myrtle Beach, S.C., restaurant called Calli Baker's Firehouse Bar & Grill.

The three-year legal battle between the restaurant chain and the standalone restaurant ended Aug. 19 in U.S. District Court in Florence, S.C., with a jury unanimously ruling that Firehouse Subs fraudulently obtained the trademark for "Firehouse," which the U.S. Patent & Trademark Office granted in 2003.

Additionally, the jury ruled against each of the 34 allegations of trademark infringement filed by Firehouse Subs against Calli Baker's and its owner Heath Scurfield, an active duty fire captain in Horry County.

Don Fox, CEO of Firehouse Subs, said the chain has had a substantial number of reports of confusion over the years regarding the word "firehouse" in Cali Baker's name.

"Our actions in this situation were in response to those reports," he said. "We worked for some time to address the infringement issue without the use of any litigation, and it was Calli Baker's that filed the initial lawsuit."

Fox, who "passionately disagrees" with the jury's decision, plans to appeal the decision, citing the company's 110 nationally and internationally held trademarks.

"We are a company of more than 200 small business owners who have invested their livelihoods in Firehouse Subs," he said. "To protect their interests and our brand, we will exhaust all options to retain the mark that was granted to us by the U.S. Patent & Trademark Office. "

Scurfield's attorney, Sarah Day Hurley, of Turner Padget Graham & Laney, P.A., doesn't expect the decision to be reversed.

"Our main defense was that there was no likelihood of confusion between Calli Baker's Firehouse Bar & Grill and Firehouse Subs," she said "The overall impression and appearance of Calli Baker's is markedly distinct from a Firehouse Subs. There are many ways to distinguish the two restaurants, including for instance, Calli Baker's has a separate bar, hosts karaoke and trivia events, and has a full menu with appetizers, seafood, steaks, and alcoholic beverages. The interior of Calli Baker's looks nothing like a Firehouse Subs. We also argued that the mark 'firehouse' in connection with restaurant services was a weak mark, due to its widespread use in the restaurant industry."

Although Fox said the loss won't inhibit Firehouse Subs' profitability or the manner in which it markets the brand, he believes it's imperative to protect the brand.

"This case was about protecting our marks on behalf of our franchisees and their investments, and our brand. We will continue to vigorously protect and defend all of our trademarks," he said.

Scurfield's legal fees amounted to nearly $500,000, which he's asking be paid by Firehouse Subs. A judge must first approve the sum before Firehouse would be required to pay, and the chain could dispute the amount. No other damages were awarded in the case.

Topics: Legal Issues , Loss Prevention , Marketing / Branding / Promotion

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