Omega Importing Corp. v. Petri-Kine Camera Company

Citation451 F.2d 1190
Decision Date08 November 1971
Docket NumberNo. 303,Docket 71-1919.,303
PartiesOMEGA IMPORTING CORP., Plaintiff-Appellant, v. PETRI-KINE CAMERA COMPANY, Inc., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Harry I. Rand, New York City (Botein, Hays, Sklar & Herzberg, and Donald E. E. Nawi, New York City, of counsel), for plaintiff-appellant.

Jacob Freed Adelman, New York City (Salomon & Mainzer, New York City, of counsel), for defendant-appellee.

Before FRIENDLY, Chief Judge, CLARK, Associate Justice Retired,* and KAUFMAN, Circuit Judge.

FRIENDLY, Chief Judge:

Omega Importing Co., a licensed distributor of cameras bearing the trademark Exakta, manufactured in Dresden in the German Democratic Republic (hereafter "East Germany"), appeals from the denial by the District Court for the Southern District of New York of an injunction that would restrain the defendant, Petri-Kine, pendente lite from distributing under the same trade-mark cameras manufactured by the Niko Company, Ltd., in Japan with lenses made in the German Federal Republic (hereafter West Germany). Final decision of the action will turn on whether Ihagee Kamerawerk A.G.I.V.,1 an East German corporation, or Ihagee Kamerawerk, A.G., a West German corporation, is entitled to the trade-mark Exakta in the United States. That issue will have to be determined in light of the facts that the United States recognizes the West German Government as the de jure government over the territory it controls but does not recognize the East German Government. See Mann, Germany's Present Legal Status Revisited, 16 Int'l & Comp. L.Q. 760, 779, 789 (1967); Contemporary Practice of the United States Relating to International Law, 57 Am.J. Int'l L. 403, 410 (1963).

The Ihagee camera business in Dresden was founded in 1912 by Johann Steenbergen, a Dutch national. At first a corporation, the business later became a partnership, Ihagee Kamerawerk Steenbergen & Co. After the German attack on Holland in 1940, Steenbergen was taken into custody and the Nazi War Ministry used the plant to make war equipment. Later Steenbergen was given some freedom, although he did not regain control of the plant. It was at this time that the partners formed a corporation, Ihagee Kamerawerk, A. G., to which the partnership transferred all its assets — including three United States registered trade-marks2 — except buildings, machinery, and equipment, which were leased to the corporation by the partnership. Because the new corporation was largely owned by an enemy alien, the Nazi Government appointed a trustee for it in 1943. The Ihagee plant was almost completely destroyed during the heavy Allied air raid on Dresden on February 13, 1945.

Prior to the war the Ihagee partnership had made extensive sales of cameras in the United States under the names Exakta and Kine-Exakta. Such sales were, of course, interrupted by the war. After the surrender of Germany, the Soviet military administration, which controlled what is now East Germany, appointed a trustee for the property of the Ihagee corporation and of the partnership, and confiscated the share certificates of the corporation, which had been deposited in a Dresden bank. Some-one, presumably the military administration, created new facilities for the business at Dresden. With the utilization of plans and patents and perhaps some machinery of the former Ihagee corporation, the East German enterprise began to make cameras which were sold under the trade-mark Exakta. In 1947 exportation to the United States was resumed; allegedly such exports have exceeded $10,000,000, retail value.

After the creation in 1949 of the East German Government, the Soviet military administration turned over its functions of administration to that Government. The latter made certain decrees providing for the appointment of a trustee for property owned by aliens. The property of the Ihagee corporation has been managed by a trustee bearing the name "Optic Association of State-Owned Enterprises for Precision and Optical Instruments." All profits have been turned over to the East German Government, with their final disposition to await the conclusion of a peace treaty. This, of course, has not yet occurred.

In 1952 Steenbergen, on behalf of the partnership, assigned the United States camera trade-marks to the Exakta Camera Company of America, Incorporated, which brought an action in the District Court for the Southern District of New York against defendants who were selling cameras manufactured in Dresden in this country, under the name Exakta. The court granted summary judgment for the defendants, Exakta Camera Co. of America v. Camera Specialty Co., 154 F.Supp. 158 (1957), on the narrow ground that the conveyance from the partnership to the American company was a meaningless act since the partnership had assigned the trade-marks to the Ihagee corporation in 1941.

In 1959 a meeting of the stockholders of Ihagee, as constituted in 1941, was held in Frankfurt, West Germany. The meeting was attended by Steenbergen and a trustee appointed by a West German court for the heirs of the other stockholders. The stockholders voted to transfer the domicile of the corporation from Dresden to Frankfurt.3

Extensive litigation ensued. The East German enterprise brought suits both in West and in East Germany; the latter proceeding does not appear to have been truly adversary. While the West German suit was first begun, the East German proceeding was earlier concluded. A judgment of the district court of Leipzig in favor of the East German enterprise, dated October 26, 1962, was confirmed on December 20, 1963, by the Second Civil Chamber of the Supreme Court of East Germany; these judgments are not in the record before us. After various ups and downs in the lower courts, decision by the Supreme Court of West Germany was rendered on January 30, 1969. In a reasoned opinion it upheld the right of the Ihagee enterprise now domiciled in West Germany to employ in West Germany the trade-marks that had been used before 1945; it refused to recognize the East German judgment because this had been rendered in an action begun after the East German enterprise had submitted itself to the jurisdiction of the West German courts. Although the precise issue was the rights of the respective enterprises to use the trade-marks in West Germany, the court based its judgment on a conclusion that the corporation had continued to subsist and that the transfer of domicile to West Germany was valid.

Legal proceedings also began in the United States. In 1961 the West German enterprise applied to the Patent Office to register Ihagee as a trade-mark for cameras; nothing occurred. Six years later the East German enterprise made a similar application. The Patent Office declared an interference. See 15 U.S.C. § 1066. The matter was heard by a three-member Trademark Trial and Appeal Board, but the West German enterprise made only a written presentation. The Board ruled in favor of the East German enterprise primarily on the ground of lack of use by the West German enterprise in the United States; it disregarded the West German judgment on the basis of our decisions in Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 641-643 (2 Cir.), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed. 2d 76 (1956), and George W. Luft Co. v. Zande Cosmetic Co., 142 F.2d 536 (2 Cir.), cert. denied, 323 U.S. 756, 65 S.Ct. 90, 89 L.Ed. 606 (1944), and the Seventh Circuit's decision in Sperry Rand Corp. v. Sunbeam Corp., 285 F.2d 542 (7 Cir. 1960), none of which dealt with the effect of a foreign judgment in regard to the right of a manufacturer to use a particular trade-mark in the United States. In 1967 the East German enterprise also applied to register Exakta as a trademark for cameras. The West German enterprise opposed, and this matter also went to a Trial and Appeal Board. Again the West German enterprise presented no evidence, and the Board held the East German enterprise entitled to register the mark, for reasons similar to those in the Ihagee case. On April 24, 1970, the West German enterprise began a suit in the District Court for the District of Columbia, pursuant to 15 U.S.C. § 1071(b), to review this determination; we are advised that the action is definitely set for trial in January, 1972.4

During all this period the West German enterprise made no sales in the United States; indeed, the claim is that it manufactured only 800 cameras in West Germany, and that of these a large number proved inoperable. The present litigation arises from defendant's prospective importation from Japan of cameras bearing the trade-mark Exakta and the name Ihagee. The cameras are manufactured by an established Japanese firm, Niko, from designs made by an employee of the West German firm and presumably with its acquiescence. The lenses are to be made in Germany; whether by the West German "Ihagee" does not appear. As against plaintiff's claims that these cameras will be "junk" which will injure the reputation of the East German Exaktas, defendant responds that they are a quality product and are to sell at prices higher than the Dresden cameras.

The district judge denied a temporary injunction on the ground that, under Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 293 F.Supp. 892 (S.D.N.Y. 1968), aff'd as modified, 433 F.2d 686 (2 Cir. 1970), cert. denied, 403 U.S. 905, 90 S.Ct. 2205, 29 L.Ed.2d 680 (1971), which he regarded as controlling, plaintiff had "not shown sufficient likelihood of success to entitle it to a preliminary injunction." He also concluded that "no irreparable injury to plaintiff has been shown," especially since "the purchaser of an expensive camera who buys on reputation must have considerable knowledge of the camera world and of the Exakta controversy." However, the judge continued a temporary restraining order, which had been granted in April 1971, until an application for a...

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