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Hooters loses its battle in court

A judge throws out its copycat case against WingHouse, and a jury awards its rival damages.

By KRIS HUNDLEY
Published December 3, 2004

Hooters of America chalked up a loss in its war with WingHouse on Thursday when a federal judge in Orlando ruled that Hooters has no legal lock on scantily dressed servers and tacky store interiors.

A jury then ruled that Hooters owed WingHouse $1.2-million to settle a counterclaim brought by the smaller chain.

Hooters, founded in Clearwater but now based in Atlanta, had sued WingHouse's five locations in the Orlando/Daytona Beach area for trade dress infringement, saying its copycat look damaged Hooters' reputation and confused the public.

But after hearing Hooters' case, U.S. District Judge Anne C. Conway entered a directed verdict, rejecting Hooters' claims.

Such a move is highly unusual, though not unprecedented, and indicates the judge believes the plaintiff did not present enough evidence to prove its case.

Conway then allowed WingHouse to finish presenting testimony to support a counterclaim that Hooters was reneging on a 1997 agreement that settled all trade infringement claims. That case went to the jury, which decided in WingHouse's favor after about an hour and awarded damages to recover legal costs.

"The jury basically said you shouldn't have to go through and defend yourself when you've already settled your differences," said Don Conwell, WingHouse's lawyer. "I'm ecstatic."

Crawford Ker, the Dunedin native and former Dallas Cowboys football player who founded WingHouse in 1994, called Hooters' claims frivolous from the start.

"It was a lot of work to defend ourselves before a huge conglomerate like Hooters of America," Ker said. "But when you back somebody into a corner, they either fight or lie down. I was always taught to fight. And I prevailed."

Hooters issued a news release saying that it is considering appealing the judge's directed verdict.

"To take this matter away from the jury at this point in the trial after two weeks of testimony is baffling," said Mike McNeil, Hooters' vice president of marketing. "Unfortunately for all parties involved, we may well find ourselves right back here in about a year or so trying this case all over again. Ultimately this is worse for WingHouse because they will remain in limbo."

Hooters, founded in 1983, has 386 restaurants around the world and revenues last year of more than $750-million. WingHouse has 14 locations and sales last year of more than $26-million. But WingHouse's newer locations in the Orlando area have been particularly lucrative, racking up more than $5-million in profits since mid 2001.

Hooters' attorney, Steven Hill, argued that his client's success was based on a unique combination of elements that the chain's founders "bled and sweat for." Among those elements: parchment paper menus, rustic interiors and Hooters' Girls in tight-cut tank tops and shorts.

"Hooters blazed a trail that was a different trail from other sports bars and it paved that road with a substantial investment in marketing and promotion," Hill said in opening arguments.

"Now that it's been a success, Crawford Ker wants to walk on that road, but he doesn't realize it's a toll road."

But WingHouse's lawyer said Hooters failed to convince the judge that Hooters Girls or the chain's decor were protectable under trademark law. He said WingHouse's argument was even bolstered by a longtime Hooters' manager who took the stand during the trial.

"We showed her pictures of WingHouse, without identifying it, and she was able to tell it wasn't a Hooters because of a number of differences," Conwell said. "So we got across our point that notwithstanding the similarities between the chains, you still know where you are."

Conwell also argued that Hooters could not consider its servers protected under trademark law because they serve a well-recognized function: attracting male customers.

"That's like saying you can't use a grill or a bar," Conwell said. "If the girls are purely functional, you can't protect them because you deprive the competition of its ability to compete."

Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

[Last modified December 2, 2004, 23:56:20]