Vanity Fair Mills v. T. Eaton Co.
| Decision Date | 01 June 1956 |
| Docket Number | No. 251,Docket 23831.,251 |
| Citation | 234 F.2d 633 |
| Parties | VANITY FAIR MILLS, Inc., Plaintiff-Appellant, v. The T. EATON CO. Limited and John David Eaton, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
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Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Toulmin & Toulmin, Dayton, Ohio (Harry A. Toulmin, Jr., Wm. H. Pavitt, Jr., Dayton, Ohio, of counsel), for plaintiff-appellant.
Cadwalader, Wickersham & Taft, New York City (Jacquelin A. Swords, New York City, of counsel), for defendants-appellees.
Before FRANK, MEDINA and WATERMAN, Circuit Judges.
This case presents interesting and novel questions concerning the extraterritorial application of the Lanham Act, 15 U.S.C.A. § 1051 et seq., and the International Convention for the Protection of Industrial Property (Paris Union), 53 Stat. 1748 (1883, as revised 1934), T.S.No.941. Plaintiff's complaint, filed November 18, 1954, and amended January 18, 1955, alleged trade-mark infringement and unfair competition both in the United States and Canada. Defendants moved to dismiss under Rule 12(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., on the grounds that the district court lacked jurisdiction over the person of the individual defendant, John D. Eaton, and the corporate defendant, The T. Eaton Co.; that the district court lacked jurisdiction over the subject matter of the complaint insofar as it related to defendants' alleged trade-mark infringement and unfair competition in the Dominion of Canada; and that the district court was an inconvenient forum for the trial of those issues. The district court found that it had personal jurisdiction over the corporate defendant, and no issue concerning personal jurisdiction is raised by this appeal.1 However, the district court held that it lacked subject-matter jurisdiction over that portion of the complaint raising Canadian trade-mark issues, and, alternatively, that it was an inconvenient forum for the trial of such issues. That portion of the complaint asserting claims based upon violation of United States trade-marks and unfair competition in this country was recognized by the district court as within its jurisdiction, but because the complaint was thought to inextricably combine the Canadian and American issues, the court dismissed the complaint in its entirety, with leave to file an amended complaint stating separately the American issues. Plaintiff chose to stand on its original complaint, and appealed from the judgment dismissing the complaint.2
Although the parties presented many affidavits, depositions, and exhibits for the consideration of the district court, there has been no trial of facts, and the complaint is unanswered. On an appeal from a judgment granting a motion to dismiss a complaint for lack of federal jurisdiction, we must assume the truth of the facts stated in the complaint.3 On the basis of the plaintiff's complaint, the following facts may be assumed to be true for the purpose of this appeal:
Plaintiff, Vanity Fair Mills, Inc., is a Pennsylvania corporation, having its principal place of business at Reading, Pennsylvania. It has been engaged in the manufacture and sale of women's underwear under the trade-mark "Vanity Fair" since about the year 1914 in the United States, and has been continuously offering its branded merchandise for sale in Canada since at least 1917. Plaintiff has publicized its trade-mark "Vanity Fair" on feminine underwear in the United States since 1914, and since 1917 has regularly expended large sums of money in advertising and promoting its trade-mark both in the United States and Canada. As a result of the high quality of plaintiff's merchandise, and its extensive sales promotion and advertising, the name "Vanity Fair" has become associated throughout the United States and Canada with plaintiff's products.
Beginning in 1914 plaintiff has protected its trade-mark rights by registrations with the United States Patent Office of the trade-mark "Vanity Fair" as applying to various types of underwear. It has been continuously manufacturing and selling feminine underwear under these trade-mark registrations since about the year 1914.
Defendant, The T. Eaton Company, Limited, is a Canadian corporation engaged in the retail merchandising business throughout Canada, with its principal office in Toronto, Ontario. It has a regular and established place of business within the Southern District of New York. On November 3, 1915, defendant filed with the proper Canadian official an application for the registration in Canada of the trade-mark "Vanity Fair," claiming use in connection with the sale of "Women's, Misses' and Children's Coats, Suits, Cloaks, Waists, Dresses, Skirts, Corsets, Knitted Goods, Gloves, Hosiery, Boots & Shoes, Outer Garments, and other Wearing Apparel." On November 10, 1915, the proper Canadian official granted defendant's application for the registration of that mark. Plaintiff asserts that this registration applies only to feminine outerwear, and that in any event it is merely a "paper registration" because of non-use. In 1919 plaintiff sought to register the trade-mark "Vanity Fair" in Canada for "ready made underwear," but its application was rejected as a matter of course because of the prior registration of defendant. In 1933 defendant, in reply to a request of the Canadian Registrar of Trade-Marks, listed "women's underwear, corsets, girdles and other foundation garments" as the goods in connection with which it had actually been using the mark "Vanity Fair," and its registration was modified accordingly. Plaintiff alleges that defendant, by this informal procedure, amended its trade-mark registration in Canada to include, for the first time, feminine underwear.
During the years 1945-1953 the defendant ceased to use its own "Vanity-Fair" trade-mark, purchased branded merchandise from the plaintiff, and sold this merchandise under advertisements indicating that it was of United States origin and of plaintiff's manufacture. These purchases by defendant from plaintiff were made through defendant's New York office. In 1953 defendant resumed the use of its own trade-mark "Vanity Fair" and, simultaneously, under the same trade-mark, sold plaintiff's branded merchandise and cheaper merchandise of Canadian manufacture. Defendant at this time objected to plaintiff's sales of its branded merchandise to one of defendant's principal competitors in Canada, the Robert Simpson Company. The Simpson Company discontinued purchases of plaintiff's branded merchandise after being threatened with infringement suits by defendant.
Plaintiff alleges that these acts constitute a conspiracy on the part of the corporate defendant and its officers and agents to appropriate for their own benefit plaintiff's registered and common-law trade-mark. It asserts that defendant, by purchasing plaintiff's branded merchandise for a period of years and advertising and selling such merchandise as plaintiff's goods, attempted to associate plaintiff's trade-mark with itself, and, that purpose having been accomplished, defendant then began using the trademark "Vanity Fair" in connection with its own inferior feminine underwear, discontinued purchases from plaintiff, and threatened its competitors in Canada with infringement suits if they continued to sell plaintiff's branded merchandise in Canada.
Finally, plaintiff asserts that defendant has advertised feminine underwear in the United States under the trade-mark "Vanity Fair," and that it has sold such underwear by mail to customers residing in the United States.
The complaint seeks injunctive relief against the use by defendant of the trademark "Vanity Fair" in connection with women's underwear both in Canada and the United States, a declaration of the superior rights of the plaintiff in such trade-mark, and an accounting for damages and profits.
The initial question is whether the district court had jurisdiction over all, or only part, of the action. Plaintiff's complaint asserted federal jurisdiction both because it raised substantial federal questions under the Lanham Act, 15 U.S. C.A. § 1051 et seq., and the International Convention for the Protection of Industrial Property, 53 Stat. 1748, and because of the presence of diversity of citizenship and the requisite jurisdictional amount, 28 U.S.C. § 1332. Regardless of the existence of the other asserted grounds for federal jurisdiction, the allegations of diversity of citizenship and of the requisite jurisdictional amount were sufficient to vest the district court with jurisdiction over the entire action.
Plaintiff, however, does not rely other than incidentally on diversity as the basis for federal jurisdiction, but asserts that its claims arise under the laws of the United States and should be governed by those laws. The result sought — extraterritorial application of American law — is contrary to usual conflict-of-laws principles. First, the legal status of foreign nationals in the United States is determined solely by our domestic law — foreign law confers no privilege in this country that our courts are bound to recognize. Ingenohl v. Walter E. Olsen & Co., 1927, 273 U.S. 541, 47 S. Ct. 451, 71 L.Ed. 762; United Drug Co. v. Theodore Rectanus Co., 1915, 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141; Baglin v. Cusenier Co., 1911, 221 U.S. 580, 31 S.Ct. 669, 55 L.Ed. 863. And when trade-mark rights within the United States are being litigated in an American court, the decisions of foreign courts concerning the respective trade-mark rights of the parties are irrelevant and inadmissible. George W. Luft Co. v. Zande Cosmetic Co., 2 Cir., 1944, 142 F.2d 536, 539. Similarly, the rights and liabilities of United States citizens who compete with foreign nationals in their home countries are ordinarily to be determined by the appropriate foreign...
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