Tillamook County Cream. Ass'n v. Tillamook Cheese & D. Ass'n, 19565.

• Decision Date: 20 May 1965
• Docket Number: No. 19565.,19565.
• Citation: 345 F.2d 158
• Parties: TILLAMOOK COUNTY CREAMERY ASSOCIATION, Appellant, v. TILLAMOOK CHEESE AND DAIRY ASSOCIATION, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

345 F.2d 158 (1965)

TILLAMOOK COUNTY CREAMERY ASSOCIATION, Appellant, v. TILLAMOOK CHEESE AND DAIRY ASSOCIATION, Appellee.

No. 19565.

United States Court of Appeals Ninth Circuit.

April 7, 1965.

As Amended May 20, 1965.

J. Pierre Kolisch, Kolisch & Hartwell, Portland, Or., Warren A. McMinimee, Tillamook, Lester Epstein, Portland, Or., Jon M. Dickinson, Portland, Or., for appellant.

Joseph B. Sparkman, Kenneth S. Klarquist, Buckhorn, Blore Klarquist & Sparkman, Portland, Or., Jack, Goodwin & Anicker, James O. Goodwin, Oregon City, Or., for appellee.

Before POPE, HAMLEY and ELY, Circuit Judges.

POPE, Circuit Judge.

The appellant, as plaintiff below, brought this action alleging that it had adopted as a trade-mark in April, 1918, the name "Tillamook" for cheese and other dairy products which it sold and marketed and thereby became the owner of said trade-mark. On November 7, 1950, plaintiff registered under United States Trade-Mark Registration No. 533,033, the name "Tillamook" for cheese and butter. The complaint alleged that this trade-mark came to be associated in the trade and in the mind of the purchasing public with dairy products, particularly cheese, originating with plaintiff; that thereafter the appellee, defendant below, sold and marketed cheese under its name "Tillamook Cheese and Dairy Association" and the name "Premium Brand"; that the label and name used by defendant was capable of misleading and it has deceived and confused the buying public causing it to believe it is buying plaintiff's product; that defendant was using the words "Tillamook Cheese" on its letterheads and has been marketing cheese under that name. This, it is alleged, constituted trade-mark infringement and unfair competition and has caused great harm to plaintiff and to its trade-mark. The complaint asked for an injunction restraining the defendant from using the name "Tillamook" in connection with the marketing and sale of cheese.

After trial, before the court, the court made findings and conclusions and entered a decree holding that the defendant owns and has the full right to use the mark "Tillamook" on cheese; that the defendant had not infringed any trademark rights of the plaintiff, and it had not been guilty of any unfair competition. The court enjoined the plaintiff from threatening others, including customers of the defendants, with any action for unfair competition or trade-mark infringement on account of the name "Tillamook" in connection with the marketing of cheese and from asserting that the defendant may not market its cheese with the trade-mark "Tillamook" or sell such cheese, and from instituting any action based on the trade-mark infringement or unfair competition in connection with the trade-mark "Tillamook". This appeal followed.¹

The facts in the case are not in dispute and substantially all of them were set forth as agreed facts in the pretrial order. As there disclosed, in 1895 a corporation organized under the laws of the State of Oregon with the name "Tillamook Creamery" began the manufacture and sale of cheese under that name in Tillamook County, Oregon, a county in which production of dairy products for the manufacture of cheese was a principal industry. From the time of its organization in 1895 until 1949, that Tillamook Creamery manufactured and sold cheese under that name. In 1949, an Oregon cooperative corporation was formed under the name "Tillamook Cheese Association" which became the successor to Tillamook Creamery and three other cheese or creamery associations which were Oregon cooperative corporations. In 1962, this Tillamook Cheese Association, and a certain fluid milk shippers association, were consolidated as an Oregon cooperative corporation under the defendant's present name Tillamook Cheese and Dairy Association. It thus appears that Tillamook Cheese Association became the successor of the original Tillamook Creamery and the defendant Tillamook Cheese and Dairy Association in turn became the successor of Tillamook Cheese Association.

In 1909, the plaintiff Tillamook County Creamery Association, a cooperative corporation organized under the laws of Oregon, was formed by a group of cheese producers in Tillamook County for the purpose of inspecting and grading the cheese made by such producers. In 1917, plaintiff's articles were amended and the organization undertook thereafter to market the cheese produced by its member producers as well as to grade the same, and by 1924 all the cheese produced in Tillamook County, including that of defendant and its predecessor, was being sold through the plaintiff Tillamook County Creamery Association. This continued until 1963 when the defendant Tillamook Cheese and Dairy Association separated from the plaintiff Tillamook County Creamery Association and since that date has been marketing its own cheese as above indicated. It operates a large and substantial cheese plant in Tillamook County, located near the City of Tillamook, Oregon, and for a long period of time, including the time when plaintiff was marketing the defendant's cheese product, defendant's factory was advertised by plaintiff as "The Home" of the Tillamook cheese and a picture of that factory appeared on plaintiff's letterhead. Whether for this or other reasons, the defendant's factory was visited by many thousands of visitors from all over the country.

Since the defendant terminated its membership in the plaintiff organization the plaintiff has continued to represent six other members who operated cheese plants in Tillamook County. Plaintiff has never itself manufactured any cheese and it owns no plant for that purpose.

We start here with the self-evident proposition that before plaintiff may procure an injunction against the defendant's use of the name or mark here in issue, plaintiff must establish its exclusive right to the trade mark "Tillamook" on the strength of its own title. In undertaking to establish such a case, the plaintiff is confronted with a number of difficulties. The fact that plaintiff procured registration of its so-called trade-mark does not carry plaintiff over its difficulty because it is elementary that a trade-mark right is not acquired by registration. A right to a trade-mark stems from prior appropriation and use.² This is recognized in the Lanham Act itself, 60 Stat. 446, § 49, reading as follows: "Sec. 49. Preservation of Existing Rights. Nothing herein shall adversely affect the rights or the enforcement of rights in marks acquired in good faith prior to the effective date of this Act."³

Therefore, assuming that the name "Tillamook" can possibly meet the standards and requirements of a valid trade-mark, it is plain that if the defendant first adopted, used and acquired "Tillamook" as a trade-mark, and if it did not by subsequent acts or conduct lose that trade-mark, then the plaintiff's use of that name and mark from 1918 on, as well as its registration of the mark in 1950, could not operate to deprive the defendant of its prior rights to the use thereof.

This is what the trial court decided and found. The court found that "For some years prior to 1913 and continuously thereafter until approximately 1918, defendant's predecessor actually designated, appropriated and used the word `Tillamook' as a brand name and trade-mark in connection with the marketing of its cheese and branded such cheese on the rind with the mark `Tillamook.'" The court also held that during the time that plaintiff was marketing defendant's cheese it was "merely an agent or servant for the various factories, without which plaintiff would have no purpose or mission in life." During this period plaintiff "sold the cheese of its factory-members under the brand `Tillamook' for the benefit of its members." It held that the registration of the trade-mark by plaintiff was with the consent and acquiescence of its predecessor "solely for the purpose of giving plaintiff's members * * * the increased benefit and protection offered by registration * * * in connection with the marketing of the members' cheese."⁴

Essentially the trial court has found that assuming the propriety and validity of the trade-mark "Tillamook", that trade-mark was first acquired and used by the predecessors of the defendant prior to 1913, and prior to the time when the plaintiff came into existence. It found, correctly we think, that the defendant never lost its common law rights to that trade-mark and that nothing which has occurred would operate to estop defendant from continuing to claim and use its trade-mark. Accordingly, we are of the opinion that the court correctly held that the defendant owns the mark "Tillamook" for cheese; that it has a further right to use the same, and that it has not infringed any trade-mark right which the plaintiff may have.

Appellant asserts that since it had been selling all of the Tillamook County cheese, including that of the defendant during the period 1918 to 1963, and since during this time the defendant made no objections to what plaintiff was doing and never made any claim of ownership in the trademark, defendant is now estopped from claiming any ownership through its predecessors prior to 1918.

Appellant asserts that its position is commanded by the decision in Holly Hill Citrus Growers Assn. v. Holly Hill Fruit Prod., 5 Cir., 75 F.2d 13, and by Pacific Supply Co-op. v. Farmers Union Central Exch., Inc., 9 Cir., 318 F.2d 894. We agree with the trial judge that these cases are distinguishable on their facts. In the Holly Hill case, the earlier company which used certain trade-marks later organized Fruit Products, and the latter for a cash consideration purchased from the former the first company's "business, trade-mark business and good will, all the labels, the die and other physical properties." The trial court found that no such transaction occurred here.

In Pacific Supply Co-op., supra, plaintiff asserted an exclusive license to use certain registered...