Brennan's, Inc. v. Brennan's Restaurants, Inc.

590 F.2d 168 (1979)

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Nature of the Case

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Facts

Brennan's, Inc., (P) owns and operates Brennan's restaurant in New Orleans. D's own and operate other restaurants in Louisiana, Texas, and Georgia. Prior to 1974, all the members of the Brennan family were stockholders and directors of P, and some of them were stockholders and directors of D. The corporations were independent legal entities but they were all owned by members of the Brennan family and had interlocking boards of directors. Wegmann became general counsel for the family businesses, and his retainer was paid pro rata by all the corporations. He continued this joint representation until November 1973. Wegmann prosecuted applications for the federal registration of three service marks: 'Brennan's,' 'Breakfast at Brennan's,' and a distinctive rooster design. A registration for the rooster design was issued in February 1972, but the applications for the other two marks were initially denied on the ground that they were primarily a surname. These registered service marks are the subject of this lawsuit. A dispute developed within the Brennan family. It was resolved by dividing the corporations' stock between the two opposing family groups. P became 100% owned by one group, and D became 100% owned by the second group. Mr. Wegmann elected to continue to represent Ds and severed his connections with P and its shareholders. The right to use the registered service marks were not discussed in the 'separation.' P filed this suit for trademark infringement and unfair competition. D alleged that the marks were registered in P's name for convenience only. D also alleged that the marks and registrations are invalid. Wegmann retained the services of Arnold Sprung, and P moved for the disqualification of both attorneys. The district court granted the motion; the subject matter of the suit is substantially related to matters in which Wegmann formerly represented P. It also found that 'the close working relationship between Wegmann and Sprung creates a significant likelihood that Sprung would have had access to or been informed of confidential disclosures made to Wegmann by his former client. D appealed.