Small-Town Restaurant Wins Battle Against Firehouse Subs

In a classic David and Goliath match-up that played out in a South Carolina court recently, a firefighter and owner of Scurfield’s Calli Baker’s Firehouse Bar & Grill in Myrtle Beach won a significant trademark case that could have wide reaching, national impact for sandwich chain Firehouse Subs. The three-year legal battle between the restaurant giant and the standalone neighborhood restaurant ended in U.S. District Court in Florence, S.C. with a jury unanimously ruling that Firehouse Subs fraudulently obtained the trademark for “Firehouse,” which it had applied for 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.

“This case could have significant ramifications for Firehouse Subs,” explains Sarah Day Hurley, an attorney at Turner Padget Graham & Laney, P.A. (Greenville, S.C. office), who tried the case for Mr. Scurfield against a team of lawyers representing Firehouse Subs. “Though it played out in court in a fairly small town in South Carolina, the national significance for Firehouse Subs and its franchisees is potentially wide reaching. Firehouse Subs can no longer claim exclusive right to use the word ‘firehouse’ in connection with restaurant services.”

Firehouse Subs has a reputation of being very aggressive when pursuing smaller restaurants like Scurfield’s with regards to alleged trademark infringement. Over the last several years, it has issued more than 15 cease-and-desist letters to restaurants around the country that incorporate the term “firehouse” in their name, and filed at least five lawsuits against restaurants attempting to use the word.

“Heath is the first business owner who has been willing and able to go to the mat in terms of standing up to the chain,” added Ms. Hurley, who understands the difficulty of competing with large national chains firsthand as a small restaurant owner herself. “Fraud cases require a higher burden of proof, showing that the party committed fraud by clear and convincing evidence. Heath’s willingness to fight Firehouse Subs and their wrongful trademark claim will go a long way toward helping others who want to fight, but can’t financially battle against a large corporation.”

While it is unusual for a trademark infringement case to actually be tried to a jury verdict, it is more unusual still to obtain a verdict finding fraud on the U.S. Patent and Trademark Office.

“I couldn’t be more pleased that the jury listened to the evidence presented and made what we thought was the obvious finding on that issue,” said Ms. Hurley.

Federal court filings indicate that Firehouse Subs has already settled at least one other case since this August 19 decision was handed down by the jury in front of U.S. District Judge Bryan Harwell. Harwell issued an order canceling the defrauded trademark shortly after the jury verdict.

Both Ms. Hurley and her client, Mr. Scurfield, are available for interviews. [08/30/2011]