                 United States Court of Appeals,

                        Eleventh Circuit.

               Nos. 94-8700, 95-8656 and 95-8767.

 LONE STAR STEAKHOUSE & SALOON, INC., Plaintiff-Counterdefendant-
Appellant,

                                  v.

           LONGHORN STEAKS, INC., Defendant-Appellee.

  LONE STAR STEAKS, INC., Plaintiff-Counterdefendant-Appellee,

                                  v.

    LONE STAR STEAKHOUSE & SALOON OF GEORGIA, INC., Lone Star
Steakhouse & Saloon, Inc., Defendants-Counterclaimants-Appellants.

                          Feb. 24, 1997.

Appeals from the United States District Court for the Northern
District of Georgia. (Nos. 1:93-CV-2936, 2938-ODE), Orinda D.
Evans, Judge.

Before COX and BLACK, Circuit Judges, and FAY, Senior Circuit
Judge.

     FAY, Senior Circuit Judge:

     In these consolidated appeals and cross-appeals, we are asked

to review various orders entered by the district court in a

trademark infringement case.1 Appellants and Cross-Appellees, Lone

Star Steakhouse & Saloon, Inc. and Lone Star Steakhouse & Saloon of

Georgia, Inc. ("Plaintiff"),2 and Appellees and Cross-Appellants,

     1
      The parties in this appeal each filed separate but related
complaints in the United States District Court for the Northern
District of Georgia: Case No. 93-CV-2963 and Case No. 93-CV-
2938. The two cases were consolidated pursuant to Rule 42(a) of
the Federal Rules of Civil Procedure.
     2
      Although Lone Star Steakhouse & Saloon of Georgia, Inc. is
listed as a separate defendant in Case No. 93-CV-2938, it is a
wholly-owned subsidiary of Lone Star Steakhouse & Saloon, Inc.
To simplify our discussion, we treat the two corporations as a
single entity, and we consequently refer to only one "Plaintiff."
Lone Star Steaks, Inc. and Longhorn Steaks, Inc. ("Defendant"),3

are involved in the restaurant business. The parties' main dispute

surrounds         which   party's   trade     name   for    restaurant    services,

Plaintiff's LONE STAR STEAKHOUSE & SALOON and LONE STAR CAFE or

Defendant's LONE STAR STEAKS, has prior and superior rights.                       The

United States District Court for the Northern District of Georgia,

concluded that Defendant's rights were superior in Georgia, and

thus granted Defendant's motion for a preliminary injunction.

Subsequently, the district court (1) entered a clarification order

discussing the scope of the preliminary injunction, (2) entered a

permanent injunction against Plaintiff, enjoining it from using the

LONE       STAR   STEAKHOUSE   &    SALOON    mark     in   Georgia,   (3)   awarded

Defendant damages, attorneys' fees, costs, and final judgment on

its pendent state law claims, and (4) entered two separate orders

further       explaining     the    relief.      The    issues   raised      in   this

consolidated appeal arise from these various orders.                         For the

reasons discussed below, we affirm the district court in all of its

rulings, except that part of the district court's order which

grants Defendant attorneys' fees under Georgia law.                    However, in

vacating the award of attorneys' fees under Georgia law, we remand

the matter to the district court to determine if Defendant is

entitled to attorneys' fees under the Lanham Act.

       Plaintiff operates over one hundred and seventy "Lone Star

Steakhouse & Saloon" restaurants throughout the United States. The

first such restaurant was opened in October 1989 in Winston Salem,


       3
      Again, for simplicity's sake, we treat these separate
entities as if they were one.
North    Carolina,   and    since     then   the   business   has   expanded

considerably.      In connection with these restaurants, Plaintiff

holds a federal trademark registration for the mark LONE STAR

STEAKHOUSE & SALOON.        This registration covers various clothing

items, but does not cover restaurant services.4               Additionally,

Plaintiff holds a federal trademark registration for the mark LONE

STAR CAFE.    The LONE STAR CAFE mark covers both clothing items and

restaurant services.        The mark covering restaurant services was

registered    in   1981    by   a   New   York   City   nightclub   operator.

Plaintiff's predecessor corporation purchased the LONE STAR CAFE

mark from the nightclub in 1992;          the mark was later transferred to

Plaintiff.5

     4
      Plaintiff has an application for the mark LONE STAR
STEAKHOUSE & SALOON, which does cover restaurant services, now
pending before the United States Patent and Trademark Office.
     5
      More specifically, Plaintiff describes its trademarks as
follows:

                  A. United States Service Mark Registration No.
             1,555,907, issued on May 26, 1981 for the mark LONE
             STAR CAFE, which registration is now incontestable
             under 15 U.S.C. § 1065. This registration covers
             restaurant services and nightclub services featuring
             musical entertainment.

                  B. United States Trademark Registration No.
             1,318,227, issued on February 5, 1985 for the mark LONE
             STAR CAFE, which registration is now incontestable
             under 15 U.S.C. § 1065. This registration covers adult
             clothing for everyday wear—namely, men's and women's
             jackets, sweatshirts, T-shirts, hats, ball caps, vests,
             boots, shoes, socks, shirts, jeans, and trousers, and
             tie tacks, and belt buckles.

                  C. United States Trademark Registration No.
             1,731,247, issued on November 10, 1992 for the mark
             LONE STAR STEAKHOUSE & SALOON. This registration
             covers clothing: namely, men's and women's sport
             shirts, sweatshirts, polo shirts, and caps.
       Defendant operates two "Lone Star Steaks" restaurants in

Atlanta, Georgia.6     The first Lone Star Steaks was opened in 1984,

and in that same year, the LONE STAR STEAKS mark was registered as

a trade name in several of Georgia's metropolitan counties.       In

March of 1992, the mark was registered as a service mark with the

Georgia Secretary of State.

       In August 1992, Plaintiff's general counsel sent a letter to

Defendant stating that Plaintiff was planning to expand into

Georgia;      Plaintiff demanded that Defendant stop its use of the

mark LONE STAR STEAKS.       Defendant's counsel responded with the

assertion that Defendant had prior and superior rights in its mark.

In August 1993, Plaintiff opened a Lone Star Steakhouse & Saloon

restaurant in Augusta, Georgia.     By letter dated October 22, 1993,

Defendant demanded that Plaintiff cease and desist its use of the

LONE STAR STEAKHOUSE & SALOON mark.       After Plaintiff refused to

comply, Defendant filed suit.      Plaintiff filed suit on the same

day.       Both complaints alleged violations of the Lanham Act, 15

U.S.C. §§ 1051-1127 (1994), as well as other pendent state law

claims.       More specifically, both sides alleged violations of

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), which creates

a federal cause of action for unfair competition by prohibiting the


                   D. United States Service Mark Application No. 74-
              248,299, for the mark LONE STAR STEAKHOUSE & SALOON,
              which application is presently pending in the United
              States Patent and Trademark Office. This application
              covers restaurant services.

       R1-1-3.
       6
      As a result of Longhorn Steaks' acquisition of Lone Star
Steaks, a Lone Star Steaks' restaurant has been converted to a
Longhorn Steaks' restaurant.
use in interstate commerce of any "false designation of origin, or

any false description or representation, including words or other

symbols tending falsely to describe or represent the same...."              15

U.S.C. § 1125(a).    In order to prevail on this claim, each party

had the burden of showing (1) that it had trademark rights in the

mark or name at issue and (2) that the other party had adopted a

mark or name that was the same, or confusingly similar to its mark,

such that consumers were likely to confuse the two.           Conagra, Inc.

v. Singleton, 743 F.2d 1508, 1512 (11th Cir.1984);                see also

Investacorp, Inc. v. Arabian Inv. Banking Corp., 931 F.2d 1519,

1521-22 (11th Cir.), cert. denied, 502 U.S. 1005, 112 S.Ct. 639,

116 L.Ed.2d 657 (1991).

     Plaintiff and Defendant agreed that the use of Plaintiff's

LONE STAR STEAKHOUSE & SALOON mark together with the use of

Defendant's LONE STAR STEAKS mark created and would continue to

create consumer confusion.      The district court was thus faced with

the sole task of determining which party had prior and superior

rights to its mark.        Not surprisingly, each party believed its

rights   were   superior   to   the   other's,   and   each   moved   for   a

preliminary injunction to enjoin the other's use.

     Defendant's first used the LONE STAR STEAKS mark in January of

1984, while Plaintiff's first used the LONE STAR STEAKHOUSE &

SALOON mark in October of 1989.        Based on these dates, Defendant

argued that its mark had prior and superior rights over Plaintiff's

mark.    Plaintiff, in turn, argued that its LONE STAR STEAKHOUSE &

SALOON mark had priority because of the 1981 federal registration

of the LONE STAR CAFE mark.     In support of this argument, Plaintiff
pointed to the fact that it used both marks in the sale and

advertising of its restaurant services.   Plaintiff also pointed to

the fact that the words "Lone Star" were the dominant, identifying

features of both parties' marks.   Accordingly, Plaintiff contended

that in determining infringement and priority, the court should

consider which party first developed rights in the words "Lone

Star," without regard to the accompanying generic words.       The

district court rejected Plaintiff's arguments, denied Plaintiff's

motion for a preliminary injunction,7 and by granting Defendant's
motion for a preliminary injunction, prohibited Plaintiff from

using the LONE STAR STEAKHOUSE & SALOON mark in the state of

Georgia.8

     7
      Plaintiff filed an appeal challenging the district court's
denial of its motion for a preliminary injunction. That appeal
has been carried with the other appeals pertaining to this case
and is presently before this Court.
     8
      More specifically, the order granting Defendant's
preliminary injunction stated:

                 Plaintiff is hereby enjoined, together with its
            agents, subsidiaries, affiliates, franchisees and
            assigns (including Lone Star Steakhouse & Saloon of
            Georgia, Inc.), from (a) using the LONE STAR STEAKHOUSE
            & SALOON [mark], the trade name Lone Star Steakhouse &
            Saloon, or any other colorable or similar imitation of
            either the LONE STAR STEAKS mark or the LONE STAR
            STEAKHOUSE & SALOON [mark], in connection with the
            operation of any restaurant in Georgia or in connection
            with the sale, offering for sale, promotion, marketing,
            or advertising of their restaurants, goods or services
            in Georgia and (b) otherwise infringing upon Lone Star
            Steaks' service marks and registrations therefore in
            the State of Georgia. Plaintiff is further ORDERED to
            take prompt, affirmative action to change the name of
            their restaurant in Augusta, Georgia and to withdraw
            from the public any advertisements or promotional
            materials which contain or use the LONE STAR STEAKHOUSE
            & SALOON mark in relation to its restaurant in Augusta,
            Georgia.
     Plaintiff subsequently filed a motion seeking clarification

and modification of the preliminary injunction order.    Plaintiff

sought an order from the court that would allow it to use the

federally registered LONE STAR CAFE mark in Georgia.     The court

granted the motion partly because it was not convinced the LONE

STAR STEAKS mark and the LONE STAR CAFE mark were similar enough to

cause confusion.9

     Defendant thereafter moved for summary judgment, and requested

the court (1) to enter a permanent injunction against Plaintiff,

(2) to cancel Plaintiff's LONE STAR STEAKHOUSE & SALOON clothing

registration, and (3) to enter final judgment on Defendant's claims

for monetary damages, attorneys' fees, and costs.     The district

court granted in part Defendant's motion for summary judgment and

made the following rulings:   (i) granted Defendant's motion for a

permanent injunction;   (ii) denied Defendant's motion to cancel

Plaintiff's nationwide registration of its mark for clothing;

(iii) granted final judgment on Defendant's claims under (a) the

Georgia Uniform Deceptive Practices Act, O.C.G.A. §§ 10-1-371 to -

375, (b) the Georgia Fair Business Practices Act of 1975, O.C.G.A.

§§ 10-1-390 to -407, (c) as well as on its claim for infringement

of a registered mark under O.C.G.A. § 10-1-450, (iv) denied without

prejudice Defendant's request for the profits Plaintiff made from

its Augusta restaurant during the period of infringement;        (v)

granted Defendant's motion for summary judgment under O.C.G.A. 10-


     R3-43-27-28.
     9
      Defendant appealed the clarification order in appeal no.
94-8734. On January 17, 1996, this Court granted the parties'
joint motion to dismiss that appeal as moot.
1-450 for liquidated damages in the amount of $10,000.00;       (vi)

denied Defendant's request for attorney fees under the Lanham Act;

(vii) granted Defendant's attorneys' fees pursuant to Georgia's

Fair Business Practices Act, O.C.G.A. § 10-1-399(d);    and finally,

(viii) granted Defendant's request for costs under both the Lanham

Act and Georgia statutes.

     At the conclusion of the order granting in part Defendant's

motion for summary judgment, the district court directed the

parties to file briefs concerning whether Defendant was entitled to

profits from the operation of Plaintiff's Augusta restaurant during

the time of infringement, the amount of attorneys' fees and costs

Defendant could collect, and a proposed order containing language

for the permanent injunction.    The district court conducted an

evidentiary hearing on these and other issues.         Following the

evidentiary hearing, the district court entered an order that (i)

permanently enjoined Plaintiff from using either the LONE STAR

STEAKHOUSE & SALOON mark or LONE STAR STEAKS mark in connection

with the operation of any restaurant(s) in Georgia, (ii) canceled

Plaintiff's clothing registration within the state of Georgia and

directed the United States Patent and Trademark office to issue

Defendant a clothing registration within Georgia for its LONE STAR

STEAKS mark, (iii) awarded Defendant $50,000.00 of the profits from

Plaintiff's Augusta restaurant pursuant to 15 U.S.C. § 1117(a),

(iv) awarded Defendant attorneys' fees in the amount of $99,868.50,

and (v) awarded Defendant costs in the amount of $13,754.17.

Thereafter, Plaintiff again sought a clarification of the permanent

injunction's language;   again the court ruled that the permanent
injunction did not enjoin Plaintiff's use of the LONE STAR CAFE

mark within the state of Georgia. In this clarification order, the

court also awarded Defendant additional attorneys' fees and costs

in the respective amounts of $12,073.99 and $743.70.

      On appeal, the parties contest the various orders entered by

the district court.      Plaintiff argues that the district court

erred:   (1) in denying its motion for preliminary injunction, (2)

in granting in part Defendant's motion for summary judgment with

regard to its request for a permanent injunction, and (3) in

awarding   Defendant's   profits,   attorneys'   fees   and   liquidated

damages.

      In its appeal, Defendant argues:    (4) that Plaintiff's appeal

of the district court's denial of its motion for preliminary

injunction is moot or in the alternative that the motion was

properly denied;    (5) that the district court erred in its order

clarifying the scope of the permanent injunction to allow Lone Star

Steakhouse & Saloon to use the LONE STAR CAFE mark to identify its

restaurant in Georgia;      and (6) the district court erred in

refusing to completely cancel Plaintiff's clothing registration

mark, "or at least in failing to hold further proceedings on the

issue of whether Lone Star Steakhouse & Saloon [was] entitled to

concurrent registration of this mark."

      Because we believe our ruling on Plaintiff's appeal of the

permanent injunction (issue # 2), will effectively resolve both

Plaintiff's appeal of the preliminary injunction order (issue # 1)

and   Defendant's   suggestion   that    Plaintiff's    appeal   of   the

preliminary injunction is moot (issue # 4), we will first address
Plaintiff's appeal of the permanent injunction.10

        As stated earlier, to prevail under 15 U.S.C. § 1125(a), a

party must show (1) that it had prior rights to its mark or name

and (2) that the other party had adopted a mark or name that was

the same, or confusingly similar to its mark, such that consumers

were likely to confuse the two.        See Conagra Inc. v. Singleton, 743

F.2d 1508, 1512 (11th Cir.1984).                It is undisputed that the

parties' respective marks created confusion among the restaurants'

consumers.     Thus, the dispute centered around which party had the

prior and superior rights to its mark.             In granting Defendant's

motion for preliminary injunction, the district court concluded

that Defendant's mark was the superior mark. Thereafter, Defendant

filed a motion for summary judgment seeking in part a permanent

injunction on its claims of trademark infringement.             The district

court again found that Defendant's mark was the superior mark and

granted Defendant's request for a permanent injunction.

       On appeal, Plaintiff argues that the district court erred in

concluding that Defendant's mark is superior and consequently in

granting Defendant's request for a permanent injunction.             Instead,

Plaintiff believes its acquired LONE STAR CAFE mark is the superior

mark    and   that   it   is    entitled   to   prevail   on   the   trademark

infringement claims.           In support of this contention, Plaintiff

advances the following arguments: First, Plaintiff argues that its


       10
      Our discussion of the district court's order granting
Defendant a permanent injunction applies equally to Plaintiff's
appeal of the preliminary injunction. For the same reasons we
believe the district court was correct in granting a permanent
injunction, we believe the district court was correct in denying
Plaintiff's motion for a preliminary injunction.
prior federally registered LONE STAR CAFE mark is superior to

Defendant's state registered LONE STAR STEAKS mark.            Second,

Plaintiff asserts that the words "Lone Star" were the dominant,

identifying   features   of   both    parties'   marks.   Accordingly,

Plaintiff contends that in determining infringement and priority,

the court should consider which party first developed rights in the

words "Lone Star," without regard to the accompanying generic

words.   Since Plaintiff's purchased rights in the LONE STAR CAFE

mark date back to 1981, it argues that it was first in developing

rights in the words "Lone Star." Next, Plaintiff attempts to argue

that it was adequately using the LONE STAR CAFE mark to identify

its restaurant services. Finally, Plaintiff contends that since it

complied with the district court's preliminary injunction order by

using the LONE STAR CAFE mark to identify its restaurant, the

district court erred in granting Defendant a permanent injunction.

     All of Plaintiff's arguments listed above were considered and

rejected by the district court.      Moreover, Plaintiff concedes that

there are no genuine issues of material fact.        Plaintiff further

agrees that the questions presented on appeal are purely legal.

Thus, to the extent that Plaintiff argues the district court erred

in granting Defendant's motion for a permanent injunction, the

error must be that the district court failed to apply the correct

law or misapplied the law.           Accordingly, we will review the

district court's legal conclusions de novo.        Great Lakes Dredge &

Dock v. Tanker Robert Watt Miller, 92 F.3d 1102, 1106 (11th

Cir.1996).    In sum, our review of the relevant law and the cases

cited by the parties lead us to conclude that the district court
properly applied the law and was correct in granting Defendant's

motion for summary judgment as it pertains to Defendant's request

for a permanent injunction.

     For     instance,   Plaintiff   cites   John   R.   Thompson   Co.    v.

Holloway, 366 F.2d 108 (5th Cir.1966) and Dawn Donut Co. v. Hart's

Food Stores, Inc., 267 F.2d 358 (2d Cir.1959) for the proposition

that the senior owner of a federal registration has nationwide

priority over all junior users.       In support of this proposition,

Plaintiff attempts to argue that Defendant's first use of its mark
in 1984 is inferior to Plaintiff's 1992 acquisition of the LONE

STAR CAFE mark which was federally registered in 1981.                    The

district court concluded otherwise.

      The parties agree that factually the LONE STAR CAFE mark was

used on a sign displayed on an interior wall of Plaintiff's Augusta

Restaurant.     The district court found as a matter of law that this

did not constitute a valid service mark use because it was not

being used to identify or distinguish the services being offered.

We agree.11

     11
          15 U.S.C. § 1127 states:

          The term "service mark" means any word, name, symbol,
     or device, or any combination thereof—

             (1) used by a person, or

          (2) which a person has a bona fide intention to use in
     commerce and applies to register on the principal register
     established by this chapter, to identify and distinguish the
     services of one person, including a unique service, from the
     services of others and to indicate the source of the
     services, even if that source is unknown. Titles, character
     names, and other distinctive features of radio or television
     programs may be registered as service marks notwithstanding
     that they, or the programs, may advertise the goods of the
     sponsor.
         The Plaintiff then argues that it has prior rights in the

words "Lone Star" through its acquisition of the LONE STAR CAFE

mark.    Plaintiff relies upon its prevailing in
                                               Lone Star Steakhouse

& Saloon, Inc. v. Alpha of Virginia, Inc., 43 F.3d 922 (4th

Cir.1995).     In Alpha of Virginia, plaintiff Lone Star Steakhouse &

Saloon, Inc., filed suit against defendant Alpha of Virginia, Inc.,

alleging defendant violated the Lanham Act and other state laws by

operating a restaurant under the name "Lone Star Grill."                    The

defendant there began operating the "Lone Star Grill" in 1991,

after plaintiff's 1981 federal registration of the LONE STAR CAFE

mark.     The district court agreed with plaintiff that defendant

violated    the   Lanham    Act   and   entered    a   permanent    injunction

enjoining defendant from using any mark containing the words "Lone

Star." Defendant appealed. On appeal, the Fourth Circuit rejected

defendant's argument that the federal registration of LONE STAR

CAFE did not extend to the words "Lone Star," stating:

     The original federal registration of "Lone Star Cafe"
     effectively gave Max Shayne the exclusive right to use the
     term "Lone Star" because the registration explicitly
     disclaimed the word "Cafe" apart from the complete mark "Lone
     Star Cafe," see Registration number 1,155,907; and this right
     to use the mark "Lone Star" was subsequently assigned to Lone
     Star Steakhouse.   Furthermore, the mark "Lone Star," apart
     from "Cafe," is important to this case because this Court has
     held that courts should concentrate on the words not
     disclaimed in assessing the likelihood of confusion necessary
     for trademark infringement. See Pizzeria Uno Corp. v. Temple,
     747 F.2d 1522, 1529-30 (4th Cir.1984).

Alpha of Virginia, 43 F.3d at 926 n. 1.           In the case before us, the

district court reached a contrary conclusion on somewhat similar

facts.     The district court found that Plaintiff's "1981 federal

registration applies to the LONE STAR CAFE mark as a composite

whole    and   does   not   establish    priority      to   the   general   ...
descriptive term "Lone Star' by itself."     R3-43-24.     The district

court added that:

     Plaintiff has no federal registration for the words "Lone
     Star" by themselves. In determining whether a composite mark
     such as LONE STAR CAFE is entitled to protection, courts do
     not assess the individual parts of the name. McCarthy at §
     14.06; California Cooler, Inc. v. Loretto Winery, Ltd., 774
     F.2d 1451, 1455 (9th Cir.1985). Instead, the validity of a
     composite mark is determined by looking at the mark as a
     whole. McCarthy at § 14.06; California Cooler, 774 F.2d at
     1455.

R3-43-23-24.     In   addition,   the   district   court   specifically

considered and rejected Plaintiff's argument that it has exclusive

right to the words "Lone Star" because it disclaimed the word

"Cafe" from its LONE STAR CAFE registration covering restaurant

services.   The district court, quoting from a leading commentator

on trademark and unfair competition law stated:

     The disclaimer does not have the effect of removing from the
     registered mark the matter disclaimed. It disclaims only a
     claim that the federal registration gives an exclusive right
     in those disclaimed words or symbols per se. That is, the
     applicant is merely stating that he is claiming only the whole
     composite mark as his property, and makes no claim to those
     particular portions disclaimed.

R3-43-24 (quoting McCarthy on Trademarks and Unfair Competition,

(3d ed. 1992) at § 19.20[1] (emphasis added)).      With great respect

for the Fourth Circuit, we believe the district court correctly

applied the controlling principles of law.

      The district court properly concluded that the validity of

Plaintiff's LONE STAR CAFE mark is to be determined by viewing the

trademark as a whole and not just the words "Lone Star."      Estate of

P.D. Beckwith, Inc. v. Commissioner of Patents, 252 U.S. 538, 545-

46, 40 S.Ct. 414, 416-17, 64 L.Ed. 705 (1920) ("The commercial

impression of a trade-mark is derived from it as a whole, not from
its elements separated and considered in detail.");                 see also

California Cooler v. Loretto Winery, Ltd., 774 F.2d 1451, 1455 (9th

Cir.1985) ("[T]he validity of a trademark is to be determined by

viewing the trademark as a whole.")       (citing Union Carbide Corp. v.

Ever-Ready Inc., 531 F.2d 366, 379 (7th Cir.), cert. denied, 429

U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976)).              In addition, the

district court appropriately found that Plaintiff's disclaimer of

the word "Cafe" from its registration of the LONE STAR CAFE mark

does not establish priority to the words "Lone Star."           See Country

Floors, Inc. v. Partnership Composed of Gepner and Ford, 930 F.2d

1056, 1065 (3d Cir.1991) ("The descriptive portions of a mark can

be disclaimed, although the entire composite mark, including the

descriptive terms, is considered for purposes of infringement.");

Giant Food, Inc. v. Nation's Foodservice, Inc., 710 F.2d 1565, 1570

(Fed.Cir.1983) ("[I]t is well settled that the disclaimed material

still forms a part of the mark and cannot be ignored in determining

likelihood of confusion.");        Schwarzkopf v. John H. Breck, Inc.,

340 F.2d 978, 980 (C.C.P.A.1965) (court agreeing with statement "It

is of course well established that disclaimed material forming part

of a trademark cannot be ignored in determining whether the marks

are   confusingly    similar.").     Accordingly,     we   agree    with   the

district court's that Plaintiff is not entitled to priority over

the descriptive words "Lone Star."

      As   to   Plaintiff's   remaining   arguments   that    its   mark    is

superior, for the reasons discussed in the district court's orders,

we summarily agree with the district court's application of the law

and affirm the district court's ruling granting Defendant's motion
for summary judgment as it pertains to the permanent injunction.

      Plaintiff also appeals from the portions of the district

court's orders that awarded Defendant:            (1) profits pursuant to 15

U.S.C. § 1117(a), (2) attorneys' fees under the Georgia Fair

Business Practices Act, O.C.G.A. §§ 10-1-390 to -407, and (3)

liquidated damages under O.C.G.A. § 10-1-450.

I. Profits

        Under the Lanham Act, a successful party "subject to the

principles of equity" may recover:            "defendant's [the infringer's]

profits;     (2) any damages sustained by the plaintiff, and (3) the

costs   of     the    action."   15 U.S.C. § 1117(a);                See   Babbit

Electronics, Inc. v. Dynascan Corp.,              38 F.3d 1161, 1182 (11th

Cir.1994). After hearing uncontradicted evidence on the issue, the

district court determined that the principles of equity weighed in

Defendant's favor and awarded Defendant $50,000.00 of the profits

from Plaintiff's Augusta, Georgia restaurant. The district court's

findings of profits are questions of fact subject to the clearly

erroneous standard of review.          St. Charles Mfg. Co. v. Mercer, 737

F.2d 891, 893 (11th Cir.1983) (citing Boston Professional Hockey

Ass'n Inc. v. Dallas Cap & Emblem Mfg., Inc., 597 F.2d 71, 76 (5th

Cir.1979)).      We do not believe the district court was clearly

erroneous in awarding Defendant these profits.                 Accordingly, we

affirm the award.

II. Attorneys' Fees

        Defendant sought recovery of its attorneys' fees under both

the   Lanham    Act    and   Georgia   law.     The   Lanham   Act    authorizes

reasonable attorneys' fees "in exceptional cases."                   15 U.S.C. §
1117(a). "[E]xceptional cases are those where the infringing party

acts in a "malicious,' "fraudulent,' "deliberate,' or "willful'

manner."     Burger King Corp. v. Pilgrim's Pride Corp., 15 F.3d 166,

168 (11th Cir.1994).         The district court, unsure if the present

case constituted an "exceptional case," circumvented the question

of attorneys' fees under the Lanham Act.               However, the district

court granted Defendant's attorneys' fees under the Georgia Fair

Business Practices Act ("FBPA").              O.C.G.A. § 10-1-399(d).      In

awarding     these   fees,   the   district    court   rejected   Plaintiff's

arguments that only consumers may bring actions under the FBPA and

that the Lanham Act preempts the FBPA's attorney's fees statute.

       On appeal, Plaintiff again argues that the FBPA only provides

relief for consumers and not competitors.          Thus, the argument goes

that Defendant a non-consumer is not entitled to FBPA coverage and

an   award   of   attorneys'   fees.     In    support   of   this   argument,

Plaintiff cites a case not available to the district court at the

time of its decision.        In Friedlander v. PDK Labs, Inc., 266 Ga.

180, 465 S.E.2d 670 (1996), the Georgia Supreme Court in response

to a question certified by this Court in Friedlander v. PDK Labs,

Inc., 59 F.3d 1131 (11th Cir.1995), recently held that:

      A person who suffers injury or damages, or whose business or
      property has been injured or damaged, as a result of consumer
      acts   or  practices   may   bring   an  action   under   FBPA
      "individually, but not in a representative capacity...." OCGA
      § 10-1-399(a). A suit predicated upon an alleged violation of
      the FBPA must be brought in the plaintiff's "capacity as an
      individual member of the consuming public...."       Zeeman v.
      Black, 156 Ga.App. 82, 84, 273 S.E.2d 910 (1980). See also
      Gross v. Ideal Pool Corp., 181 Ga.App. 483, 484(1), 352 S.E.2d
      806 (1987).    A suit is not brought in the capacity of an
      individual member of the consuming public when the plaintiff's
      only allegation of an injurious consumer act or practice
      relates to representations made by his competitor in the
      marketing of competing products to the general consuming
      public. Of course, if a business, as a consumer, sustains
      damage, it may bring suit under OCGA § 10-1-399(a). OCGA §§
      10-1-391(a); 10-1-392(a)(7). However, we are not empowered
      to expand the coverage of the FBPA to provide a cause of
      action to non-consumers against their competitors. See State
      of Ga. v. Meredith Chevrolet Inc., supra [145 Ga.App. 8,] 13-
      14(2), 244 S.E.2d 15 [ (1978) ].

Friedlander, 465 S.E.2d at 671. Defendant relying on the following

language "if a business, as a consumer, sustains damage, it may

bring suit under [the FBPA]," argues it is entitled to bring suit

under the FBPA and recover attorneys' fees.               Yet, Defendant fails

to   explain   how   it   is   a     consumer   who     has   sustained   damage.

Moreover, it seems Defendant is a non-consumer attempting "to

expand the coverage of the FBPA to provide a cause of action ...

against their competitors [Plaintiff]," which the Georgia Supreme

Court refused to do.           Id.     Accordingly, based on this recent

development in FBPA law, we vacate the award of attorneys' fees

under the FBPA.      However, we remand the case to allow the district

court to determine if the case is an exceptional one entitling

Defendant to an award of attorneys' fees under the Lanham Act.

III. Liquidated Damages

      Finally, Plaintiff appeals from the district court's award of

liquidated damages under O.C.G.A. § 10-1-450.                   As the district

court stated, "Under § 10-1-450, a prevailing party is entitled to

$10,000.00 in liquidated damages for an act of infringement "if

such act has been committed with knowledge that the trademark or

service mark has been registered under this part and such act has

been committed without previously obtaining the consent of the

owner thereof.' "         There is no dispute that Plaintiff knew of

Defendant's    Georgia      registration        prior    to    the   opening   of
Plaintiff's Georgia's restaurant.                 Thus, liquidated damages are

proper under Georgia law.

      We now turn our attention to Defendant's two appeals:                     First,

Defendant appeals from the clarification order allowing Plaintiff

to use the LONE STAR CAFE mark to identify its restaurant.                    Second,

Defendant     appeals    from       the   district   court's       order    that   only

partially canceled Plaintiff's clothing registration within the

state of Georgia.

       For the same reasons discussed in the district court's

clarification of the preliminary injunction, the district court in

its   modification      of    the    permanent     injunction       order   permitted

Plaintiff to use the LONE STAR CAFE mark in Georgia.                        Defendant

argues that since Plaintiff has been found guilty of trademark

infringement,        well-established           trademark     law     requires     the

injunction to be broad enough to keep Plaintiff "a safe distance

away from the dividing line between violation of, and compliance

with, the injunction."          Howard Johnson Co. v. Khimani, 892 F.2d

1512, 1517 (11th Cir.1990) (quoting Eskay Drugs v. Smith, Kline &

French Laboratories, 188 F.2d 430, 432 (5th Cir.1951)).                            The

district     court   considered        and     dismissed    this    argument.      The

district court found that Defendant is unlikely to prevail on the

merits that its LONE STAR STEAKS mark has priority over Plaintiff's

LONE STAR CAFE mark.

        We   review     for   abuse       of   discretion    a     district   court's

modification of a permanent injunction.               See Beefy King Int'l Inc.

v. Veigle, 464 F.2d 1102, 1104 (5th Cir.1972).                   The district court

provided several reasons why it thought Plaintiff was entitled to
use the LONE STAR CAFE mark and why it modified the scope of the

permanent injunction.     Any of the reasons provided by the district

court could justify the modification of the permanent injunction.

We find no abuse of discretion.

      As to Defendant's second issue on appeal, Defendant contends

that the district court erred as a matter of law in failing to

completely cancel the clothing registration for Plaintiff's LONE

STAR STEAKHOUSE & SALOON mark.            In the alternative, Defendant

argues that in canceling Plaintiff's registration in Georgia, the

district   court   has   effectively      given    Plaintiff   a   concurrent

registration without determining whether Plaintiff is entitled to

a concurrent registration.          Because Defendant argues that the

district court misapplied the law in only partially canceling

Plaintiff's mark or erred in not holding a hearing to determine if

Plaintiff is entitled to concurrent registration, we will review

the district court's application of the law de novo.                 E. Remy

Martin & Co. v. Shaw Ross Intern. Imports, 756 F.2d 1525, 1529

(11th Cir.1985).

     The district court entered an order directing the United

States Patent and Trademark Office to issue Defendant a clothing

registration mark for its LONE STAR STEAKS mark within Georgia, and

to cancel Plaintiff's LONE STAR STEAKHOUSE & SALOON clothing mark

within the state of Georgia. Interpreted differently, the district

court's order could be construed as a concurrent registration

allowing Defendant to use its mark in Georgia while simultaneously

allowing   Plaintiff     to   use   its   mark    everywhere   but   Georgia.

Although Defendant sought nationwide cancellation of Plaintiff's
clothing registration, the district court found "that cancellation

of this scope was not warranted, since during a previous hearing

Lone Star Steaks' counsel had conceded that the potential area of

trademark confusion was confined to Georgia."           R5-81-3.

     Initially,       we     find   that   in   territorially    restricting

Plaintiff's and Defendant's marks, the district court must have

issued     a    concurrent    registration.      See   Snuffer   &   Watkins

Management, Inc. v. Snuffy's, Inc., 17 U.S.P.Q.2d 1815, 1816 (TTAB

1990) ("geographic limitations will be considered and determined
only in the context of a concurrent use proceeding."); Hollowform,

Inc. v. Aeh,      515 F.2d 1174, 1176 (C.C.P.A.1975) (court agreeing

with statement "no authority is found for issuing a restricted

registration to an applicant which has established its superior

[prior] rights in a mark.").           Because we find that the district

court issued a concurrent registration, our analysis will center on

concurrent use and not cancellation.

     In a concurrent registration proceeding we turn to Section

2(d) of the Lanham Act, 15 U.S.C. § 1052(d).12         The statute permits

     12
          The statute states in pertinent part:

               No trademark by which the goods of the applicant may be
               distinguished from the goods of others shall be refused
               registration on the principal register on account of
               the nature unless it—

               (d) Consists of or comprises a mark which so resembles
               a mark registered in the Patent and Trademark Office,
               or a mark or trade name previously used in the United
               States by another and not abandoned, as to be likely,
               when used on or in connection with the goods of the
               applicant, to cause confusion, or to cause mistake, or
               to deceive: Provided, That if the Commissioner
               determines that confusion, mistake, or deception is not
               likely to result from the continued use by more than
               one person of the same or similar marks under
registration of a mark for concurrent use to an applicant (1) who

has become entitled to use the mark as a result of his concurrent

lawful use of the mark in commerce and (2) where there is no

likelihood of confusion for the same or similar marks of two or

more parties as a result of the territorial distinctions of the

place of use of the goods or services.                  BellSouth Corp. v.

DataNational Corp., 60 F.3d 1565, 1569 (Fed.Cir.1995).

      Here,    the   district     court   granted   concurrent    use    of    the

parties' marks based upon the territorial boundaries of actual use

and   the     conclusion   that    such   would     eliminate    the    risk   of

confusion.13    We agree with the district court's application of the

law and affirm its order granting concurrent use to the parties

with the restrictions imposed.



            conditions and limitations as to the mode or place of
            use of the marks or the goods on or in connection with
            which such marks are used, concurrent registrations may
            be issued to such persons when they have become
            entitled to use such marks as a result of their
            concurrent lawful use in commerce prior.... In issuing
            concurrent registrations, the Commissioner shall
            prescribe conditions and limitations as to the mode or
            place of use of the mark or the goods on or in
            connection with which such mark is registered to the
            respective persons.

      15 U.S.C. § 1052(d).
      13
      We note that there is a circuit split regarding who has
the authority to define the territories for concurrent
registration, the courts or the Patent and Trademark Office.
Compare Safeway Stores, Inc. v. Safeway Quality Foods, Inc., 433
F.2d 99, 103 (7th Cir.1970) ("Commissioner should be the one to
determine the place or places of use of the mark by defendants.")
with Old Dutch Foods, Inc. v. Dan Dee Pretzel & Potato Chip Co.,
477 F.2d 150, 156 (6th Cir.1973) (court may place restrictions).
This circuit has not addressed the issue. However, because the
parties did not raise the issue before the district court or on
appeal, we need not resolve this question. Narey v. Dean, 32
F.3d 1521, 1526-27 (11th Cir.1994).
     In   conclusion,   all    of   the   district   court's   rulings    are

affirmed, except the portion which granted Defendant attorneys'

fees under Georgia law.      We vacate this ruling and remand the issue

to the district court for consideration de novo.

     AFFIRMED   IN   PART;      REVERSED     IN   PART;    REMANDED      WITH

INSTRUCTIONS.
