## Facts

- Stork Restaurant, Inc. operated “The Stork Club,” a well-known New York City nightclub, using the name since 1929 through predecessors and directly since 1934.
- The New York club generated substantial revenue, employed hundreds, and developed extensive nationwide publicity through radio, print, motion pictures, and other promotional efforts.
- The name “Stork Club” became widely associated in the public mind with plaintiff’s New York establishment and its reputation.
- Defendants operated a bar in San Francisco under the name “Stork Club” (including “Stork Club, Bar & Cocktail Lounge”).
- Defendants used a stork-themed insignia (a stork standing on one leg wearing a top hat and monocle) similar in concept to plaintiff’s stork imagery, though not identical in artistic execution.
- Plaintiff did not operate a physical venue on the West Coast, and the record did not show direct, local market competition between the parties.
- Plaintiff sued for injunctive relief against defendants’ use of the name and insignia; damages were later waived.
- The district court denied an injunction and entered judgment for defendants; plaintiff appealed.

## Issues

1. Whether a nationally known, single-location establishment may enforce common-law trade name rights against a remote user where there is no direct local competition.
2. Whether defendants’ use of “Stork Club” and a similar stork insignia created a likelihood of public confusion or mistaken association sufficient for injunctive relief without proof of actual confusion or intent to deceive.
3. Whether likely dilution or tarnishment of a famous trade name’s goodwill supports injunctive relief absent trademark registration or a pre-suit demand.

## Decision

- The Ninth Circuit reversed the district court and remanded with directions to issue an injunction.
- The court held that “Stork Club” had acquired secondary meaning identifying plaintiff’s New York establishment and carried nationwide goodwill.
- The court found defendants’ use of the same name and a similar stork insignia was likely to cause the public to assume affiliation, sponsorship, or expansion by plaintiff.
- The court ruled that relief did not depend on direct competition, proof of actual confusion, fraudulent intent, trademark registration, or a prior demand to cease use.

## Legal Principles

- A trade name that has acquired secondary meaning is protectable under common law to prevent likely public confusion or mistaken association.
- Unfair competition relief may be granted even where the parties do not directly compete in the same local market; protection extends to the owner’s goodwill.
- Likelihood of confusion, not actual confusion, is the central inquiry for injunctive relief in trade name cases.
- Courts may enjoin use that threatens dilution of a distinctive trade name or tarnishment of its reputation, including through association with a lower-quality business.
- Selection of a famous, distinctive name when many alternatives exist may support an inference that the junior user sought to benefit from the senior user’s reputation, reinforcing the equities for an injunction.
- A pre-suit demand and federal trademark registration are not prerequisites to injunctive relief based on common-law trade name rights.

## Conclusion

The Ninth Circuit held that plaintiff’s famous “Stork Club” name and related stork imagery had secondary meaning and nationwide goodwill, and that defendants’ use of the same name and similar insignia in San Francisco created a likely mistaken association and risked dilution or tarnishment; the court therefore ordered injunctive relief despite the absence of direct competition, proof of actual confusion, or trademark registration.


Stork Rest., Inc. v. Sahati, 166 F.2d 348 (9th Cir. 1948)