Page:Quality Inns v. McDonald's.pdf/4

 Laurence R. Hefter, Robert D. Litowitz, Griffith Price, and Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., and Harry M. Rifkin, Semmes, Bowen & Semmes, Baltimore, Md., for plaintiff.

Stephen H. Sachs, Thomas P. Olson, Stephen S. Zimmerman, and Wilmer, Cutler & Pickering, Washington, D.C., and Karen B. Ksander, Isham, Lincoln & Beale, Chicago, Ill., for defendant.

NIEMEYER, District Judge.

On September 21, 1987, Quality Inns International, Inc. announced a new chain of economy hotels to be marketed under the name “McSleep Inn.” The response of McDonald’s Corporation was immediate. It demanded by letter sent three days later that Quality International not use the name “McSleep” because it infringed on McDonald’s family of marks that are characterized by the use of the prefix “Mc” combined with a generic word. Five days later, on September 29, 1987, Quality International filed this action seeking a declaratory judgment that the mark “McSleep Inn” (1) does not infringe McDonald’s federally registered trademarks in violation of 15 U.S.C. § 1114; (2) does not constitute a false designation of origin or a false description or representation of services as being associated with or originating with McDonald’s in violation of 15 U.S.C. § 1125(a); and (3) does not infringe or violate any common law rights that McDonald’s may have to its marks.

McDonald’s filed a counterclaim alleging trademark infringement and unfair competition under the same laws that Quality International invoked in its complaint for a declaratory judgment. In addition, McDonald’s alleges dilution of its marks in violation of the Illinois Anti-Dilution Act, Ill.Rev.Stat. Ch. 140, § 22.

The case came to trial before the Court without a jury on July 18, 1988 and concluded on July 26, 1988. The Court has reviewed all of the evidence received at trial, including the deposition testimony offered. It has studied the memoranda and cases submitted by counsel for the parties. This opinion will serve as the Court’s findings of fact and conclusions of law as prescribed by Fed.R.Civ.P. 52(a).

The issues are framed by the positions taken by the parties.

McDonald’s alleges a straightforward trademark infringement and unfair competition action. It contends that it is the owner of a family of marks each of which is formulated by combining the prefix “Mc” with a generic word to form a fanciful trademark or service mark. It contends that the name “McSleep Inn” that has been adopted by Quality international is likely to cause confusion and that Quality International selected the word “McSleep” deliberately to trade on the goodwill and reputation of McDonald’s. It