Drop Dead Co. v. SC Johnson & Son, Inc.

• Decision Date: 03 December 1963
• Docket Number: No. 18414.,18414.
• Citation: 326 F.2d 87
• Parties: DROP DEAD CO., Inc., a corporation doing business as Paramount Chemical Co., and Paramount Sales Co., Western Filling Corp., a corporation, Frank G. Marshall, Hugh G. Marshall and James G. Christenson, Appellants, v. S. C. JOHNSON & SON, INC., a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

326 F.2d 87 (1963)

DROP DEAD CO., Inc., a corporation doing business as Paramount Chemical Co., and Paramount Sales Co., Western Filling Corp., a corporation, Frank G. Marshall, Hugh G. Marshall and James G. Christenson, Appellants, v. S. C. JOHNSON & SON, INC., a corporation, Appellee.

No. 18414.

United States Court of Appeals Ninth Circuit.

December 3, 1963.

COPYRIGHT MATERIAL OMITTED

William C. Babcock and G. Merle Bergman, Long Beach, Cal., for appellants.

Woodson, Pattishall & Garner, Beverly W. Pattishall, and Robert M. Newbury, Chicago, Ill., Fulwider, Patton, Rieber, Lee & Utecht, and Warren L. Patton, Los Angeles, Cal., for appellee.

Before BARNES and JERTBERG, Circuit Judges, and JAMESON, District Judge.

BARNES, Circuit Judge.

Plaintiff-appellee brought suit against defendants-appellants for unfair competition and for infringement of a copyright and a trademark. The district court granted a permanent injunction on all three grounds and retained the issue of damages to be determined by a master after the interlocutory judgment became final. (210 F.Supp. 816) Appellants appeal from that interlocutory judgment. This court has jurisdiction of the appeal pursuant to 28 U.S.C. § 1292(a) (1). The jurisdiction of the district court is an issue in this appeal and will be discussed later.

Plaintiff-appellee is a Wisconsin corporation producing primarily what is commonly known as "Johnson's Wax," and manufacturing a variety of household products, one of which is an aerosol furniture wax named PLEDGE. Plaintiff registered its PLEDGE trademark (Reg. No. 668,526) and secured a copyright certificate for its PLEDGE label. Plaintiff began using the PLEDGE trademark on January 31, 1958, and the PLEDGE label on March 15, 1958.

Appellant Drop Dead Co., Inc., is a California corporation. One of the household products which it manufactures is an aerosol furniture wax called PROMISE. The three individual defendants-appellants are the officers and sole owners of appellant Drop Dead Co. Appellant Western Filling Corp. is a California corporation which fills and labels the PROMISE aerosol containers. Appellants first used the trademark PROMISE and a label similar to appellee's PLEDGE label on aerosol cans on about July 20, 1959. The similarity of the labels is readily seen in the Exhibits G and T-10, and the picture opposite page 3 of appellee's brief. After commencement of the action in the district court appellants modified their label to that shown as Exhibit H, but continued to use the PROMISE trademark.

Since first adopting its trademark PLEDGE, appellee has sold over $50,000,000 of its product, and has spent over $12,000,000 advertising it. Such sales and advertising have been nationwide. Since adopting its PROMISE trademark, appellants have sold about $7,000 of the product, all sales being in southern California. One can of PROMISE with label attached was sent to New York in order to register the trademark PROMISE.

Certain findings of the trial court are significant, and unattacked on this appeal. They are:

"24. Defendants\' Promise product, as originally sold, was marketed in a label closely simulating plaintiff\'s Pledge label as to color, layout, design and wording."

"25. Defendants\' original Promise label was copied from and is a slavish copy of plaintiff\'s Pledge label. The palpable copying of the wording on the label discloses the intention of defendants to appropriate plaintiff\'s Pledge label."

"27. Subsequent to the filing of this action, defendants modified their Promise label to eliminate the slavish copying of color and design from plaintiff\'s Pledge label, but defendants\' modified label continued to use the trademark Promise."

Likewise, in its memorandum opinion the trial court stated:

"At the time this action was instituted the imitation of the label by the defendant was so slavish that even the color scheme and the contrast between the letters on the cans and labels were imitated. Later the color scheme of the defendants\' label was changed but the word `Promise\' remained and the label also continued to use descriptive material which was palpably copied from the plaintiff\'s label and descriptive matter on it."

In neither their "Statement of Points on Which Appellants Intend to Rely" nor in their briefs nor in oral arguments do defendants question the district court's findings of fact:

(1) that defendants deliberately copied plaintiff's PLEDGE label (R.62);

(2) that defendants adopted and used the trademark PROMISE for the purpose of trading upon the good will built up in plaintiff's PLEDGE trademark (R. 63);

(3) that the confusion which existed among purchasers was caused (and was likely to be caused) by defendants' use of the trademark PROMISE, and of the original label for PROMISE (R.63-64).

Remedies for the copying of a copyrighted work are created by the Copyright Act, 17 U.S.C.A. § 101 (Mazer v. Stein (1954) 347 U.S. 201, 218, 74 S. Ct. 460, 98 L.Ed. 630), and the use of a trademark or label likely to cause confusion of source is prohibited by the law of trademark infringement (15 U.S.C. § 1114(1)) and the law of unfair competition (Audio Fidelity, Inc. v. High Fidelity Recordings, Inc., 9 Cir. 1960, 283 F.2d 551, 555). Since the findings of deliberate copying and likelihood of confusion are unchallenged on this appeal, unless defendants show that plaintiff's copyright is invalid or that the district court was without jurisdiction, or unless the defendants convince this court on their allegations raised in issues (4), (5) or (6) below, the judgment of the district court issuing the injunction should be affirmed.

The issues are framed thus by appellee: (Br.5)

(1) Is the plaintiff's copyright of its PLEDGE label valid?

(2) Did the district court have jurisdiction of plaintiff's claim of trademark infringement?

(3) Did the district court have jurisdiction of plaintiff's claim of unfair competition?

(4) Did the district court err in receiving and considering evidence of defendants' use of the trademark PROMISE on the modified label?

(5) Is the plaintiff barred from relief in this action by alleged violations of the anti-trust laws?

(6) Does this court have jurisdiction on this appeal to modify the discretionary monetary awards of the district court (and if so, did the district court abuse its discretion)?

We discuss each in turn:

I

Is plaintiff's copyright of its PLEDGE label valid?

Defendants obviously copied the laudatory and instructional words of the PLEDGE label as well as the design.

The first issue concerning the validity of the copyright is whether appellants can raise that issue at this time.

Appellants admitted during the trial that the copyright and the trademark were valid.¹ Appellee points out that if an issue is conceded below it cannot be raised on appeal. Wilson v. Byron Jackson Co., 9 Cir. 1937, 93 F.2d 572, 573n2; Aetna Life Ins. Co. v. Carrillo, 5 Cir. 1947, 164 F.2d 883, 884; Andrews v. St. Louis Joint Stock Land Bank, 8 Cir. 1942, 127 F.2d 799, 804; and Edward B. Marks Music Corp. v. Continental Records Co., 2 Cir. 1955, 222 F. 2d 488, 492, cert. den. 350 U.S. 861, 76 S.Ct. 101, 100 L.Ed. 764. There the Second Circuit said:

"But a plaintiff in his opposition to a motion for summary judgment cannot abandon an issue and then, after an unpalatable decision by the trial judge, on appeal, by drawing on the pleadings, resurrect the abandoned issue."

Appellants reply that:

"The admission * * * can have no effect on appellants\' right to raise a question of constitutional validity here. Constitutional jurisdictional facts cannot be waived by the parties. Matter which, for constitutional definition is not copyrightable, is outside the authority of Congress and the courts, and is always a matter in issue." (Reply Br. 1)

We will assume for the purpose of this discussion that whether waived below or not, appellants' objection upon jurisdictional grounds can be raised here; and if sound, appellants can, at the least, demand a new trial.

The copyright material was not copyrightable, say appellants, because the language used on the label was textual and "used solely to laud the product and instruct in its use." Appellants maintain: (a) that the copyright office is a mere depository, (b) that there is no discretion in the copyright office, as there is in the patent office, as to what is copyrightable and what is not, (c) that the Copyright Act itself gives little guidance, (d) that the case law gives little aid because of "loose language,"² (e) that the courts should strictly follow what admittedly is dicta in Higgins v. Keuffel, 140 U.S. 428, 11 S.Ct. 731, 35 L.Ed. 470 (1891); (f) that the courts have uniformly been wrong in referring to Mr. Justice Holmes' opinion in Bleistein v. Donaldson Lith. Co., 188 U.S. 239, 23 S.Ct. 298, 47 L.Ed. 460 (1903) as establishing a "new and liberal standard."³ All this, say appellants, is not enough.

Yet, in Rosenthal v. Stein, 9 Cir. 1953, 205 F.2d 633, this court stated:

"An opinion on copyright would be unusual indeed that did not mention the case entitled Bleistein v. Donaldson Lithographing Company, 1903, 188 U.S. 239, 23 S.Ct. 298, 300, 47 L.Ed. 460. This is the celebrated circus poster case in which Justice Holmes discoursed upon art and copyrights. Plaintiff sued defendant to recover the penalties prescribed for infringement. The objects copyrighted were chromolithographs which, as circus posters, were especially adapted to advertise `Wallace\' shows. After Wallace had `given them up\' they were `used by less pretentious exhibitions * *.\' The trial court found for the defendant. It has been suggested that the posters could not be the subjects of legal copyright because they were not art and because they were used commercially. The court said, 188 U.S. at page 251, 23 S.Ct. at page 300, `Again, the act, however construed, does not mean that ordinary posters are not good enough to be considered within its

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