493 F.2d 275 (8th Cir. 1974), 73-1338, Flavor Corp. of America v. Kemin Industries, Inc.

CourtUnited States Court of Appeals (8th Circuit)
Citation181 U.S.P.Q. 289,493 F.2d 275
Date11 March 1974
PartiesFLAVOR CORPORATION OF AMERICA, Plaintiff-Appellee and Cross-Appellant, v. KEMIN INDUSTRIES, INC., and Rolland W. Nelson, Defendants-Appellants and Cross-Appellees.
Docket Number73-1338,73-1339,73-1519.

Page 275

493 F.2d 275 (8th Cir. 1974)

181 U.S.P.Q. 289

FLAVOR CORPORATION OF AMERICA, Plaintiff-Appellee and Cross-Appellant,

v.

KEMIN INDUSTRIES, INC., and Rolland W. Nelson, Defendants-Appellants and Cross-Appellees.

Nos. 73-1338, 73-1339, 73-1519.

United States Court of Appeals, Eighth Circuit.

March 11, 1974

Submitted Oct. 19, 1973.

Page 276

William E. Lucas, Chicago, Ill., for Flavor Corp. of America.

Page 277

Donald H. Zarley, Des Moines, Iowa, for Kemin Industries, Inc.

Before LAY, BRIGHT and WEBSTER, Circuit Judges.

WEBSTER, Circuit Judge.

This is an appeal and cross-appeal from the order of the District Court granting limited injunctive relief in favor of appellee Flavor Corporation of America (FCA), holder of the registered trademark 'PESTLUR', and against appellant Kemin Industries, Inc. (Kemin), holder of the common law trademark 'LURE'. 1

The trial court found that Kemin had adopted its 'LURE' mark in good faith without prior knowledge of FCA's 'PESTLUR' and had acquired superior common law trademark rights in ten states prior to the registration of 'PESTLUR'. 'PESTLUR' was held to be a descriptive mark which had acquired a secondary meaning both before and after registration in Georgia and Florida. The court accepted a prior determination by the Court of Customs and Patent Appeals (CCPA) that the marks were so confusingly similar as to cause a likelihood of confusion, but found that Kemin's 'LURE' mark as used in commerce infringed FCA's 'PESTLUR' only in Georgia and Florida. The court enjoined Kemin from using its 'LURE' mark for animal and rodenticide feed flavorings in competition with 'PESTLUR' in those two states and later construed the order to prohibit Kemin from advertising in national periodicals which might reach potential customers there.

Both parties have raised numerous arguments on this appeal, but the principal issues are: (1) whether a finding of the Court of Customs and Patent Appeals in a trademark cancellation proceeding operates as collateral estoppel in a subsequent trademark infringement action; and (2) whether FCA's 'PESTLUR' mark is descriptive of a flavoring additive for rodenticides designed to attract pests rather than a fanciful mark entitled to incontestable status under the Lanham Act, 15 U.S.C. § 1065. We conclude that the trial court's determination of these issues was correct and affirm. Judge William C. Stuart's well reasoned opinion is reported at 358 F.Supp. 1114 (S.D.Iowa 1973).

FCA and Kemin both manufacture flavor additives for animal feeds and rodenticides. The portion of their businesses devoted to rodenticide flavorings is very minor compared to their animal feed flavoring business. FCA was organized in 1946 and began producing flavorings for animal feeds for which it used the trademark 'NECTAR'. In 1956, it added 'PESTLUR', a flavor additive for rodenticides and pesticides. 2 FCA's total sales of 'PESTLUR' between 1956 and 1971, when this action was filed, amounted to $17,013.

Rolland Nelson worked as a regional sales manager for FCA from 1958 until the end of 1961, serving as acting sales manager for the entire operation during the last few weeks of his employment. Nelson left FCA to form Chemical Industries, Inc. in early 1962; the name was later changed to Kemin Industries. Kemin sold the same type products as FCA and was in competition for the same class of customers. At the outset of its operation, Kemin adopted the trademark 'LURE' for its animal flavoring additives, which it used with specific animal products, i.e., 'PIGLURE', 'CATTLE LURE', 'CAT LURE', etc. Kemin also produced 'RAT LURE', a flavoring additive for

Page 278

rodenticides, in direct competition with FCA's 'PESTLUR'. Sales of 'RAT LURE' have been nominal and are insignificant even when compared to sales of 'PESTLUR'.

'PESTLUR' was registered on the Principal Register of the Patent Office September 22, 1964. In October FCA sent a formal notice of infringement to Kemin. Kemin had registered its 'LURE' mark with the State of Iowa in 1962, but had made no effort to register with the United States Patent Office until late 1964. Its application to register 'LURE' on the Principal Register was denied because the mark was deemed merely descriptive of Kemin's goods. In February, 1966 Kemin registered 'LURE' on the Supplemental Register, whereupon FCA petitioned to cancel that registration. The Trademark Trial and Appeal Board (TTAB) granted the petition and cancelled the 'LURE' registration, and on May 6, 1971 the CCPA found 'no error' in the TTAB decision, affirming the cancellation order. Kemin Industries, Inc. v. Flavor Corp. of America, 440 F.2d 1375, 58 CCPA 1180 (1971). FCA promptly filed this action in the Northern District of Illinois; venue was subsequently transferred to the Southern District of Iowa.

I

The first question presented on this appeal is whether, in an infringement action, Kemin is collaterally estopped from challenging factual determinations of the CCPA in the earlier cancellation proceeding. In cancelling the 'LURE' registration, the TTAB held that flavoring additives for animal feed were in the same channel of trade as flavoring additives for rodenticides because they were promoted through a common trade publication and at least one company manufactured both products and would be a prospective purchaser of both products. The TTAB also held:

Insofar as the marks are concerned the phonetic equivalent of the word 'LURE', comprising (Kemin's) mark, is the characterizing feature of (FCA's) marks 'PESTLUR' and 'RODENTLUR', and it is our opinion that this feature of similarity between the marks is such as would be reasonably likely to cause confusion or mistake or to deceive.

Kemin appealed to the CCPA pursuant to 15 U.S.C. § 1071(a), thereby waiving its right to a de novo hearing in federal district court under 15 U.S.C. § 1071(b). The CCPA affirmed.

Judge Stuart held the doctrine of collateral estoppel was applicable to those factual questions actually decided by the CCPA, and hence Kemin was estopped from challenging the CCPA's holding that the marks were so confusingly similar as to cause a reasonable likelihood of confusion. 358 F.Supp. at 1121.

The doctrine of collateral estoppel is a corollary of the broader doctrine of res judicata. Restatement of Judgments, §§ 47, 48. The doctrines are premised on the well recognized principle that 'public policy and the interest of litigants require that there be an end to litigation.' Kithcart v. Metropolitan Life Ins. Co., 119 F.2d 497, 500 (8th Cir. 1941), cert. denied, 315 U.S. 808, 62 S.Ct. 793, 86 L.Ed. 1207 (1942). The Supreme Court has on numerous occasions defined and distinguished these doctrines. 3 In Southern Pacific R.R. Co. v. United States, 168 U.S. 1, 18 S.Ct. 18, 42 L.Ed. 355 (1897), the Court said:

The general principle announced in numerous cases is that a right, question or fact distinctly put in issue,

Page 279

and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action, the right, question or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified.

168 U.S. at 48-49, 18 S.Ct. at 27.

In Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 68 S.Ct. 715, 92 L.Ed. 898 (1948), after discussing the effect of res judicata, the Court further explained collateral estoppel:

But where the second action between the same parties is upon a different cause or demand, the principle of res judicata is applied much more narrowly. In this situation, the judgment in the prior action operates as an estoppel, not as to matters which might have been litigated and determined, but 'only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.' . . . Since the cause of action involved in the second proceeding is not swallowed by the judgment in the prior suit, the parties are free to litigate points which were not at issue in the first proceeding, even though such points might have been tendered and decided at that time. But matters which were actually litigated and determined in the first proceeding cannot later be relitigated. Once a party has fought out a matter in litigation with the other party, he cannot later renew that duel. In this sense, res judicata is usually and more accurately referred to as estoppel by judgment, or collateral estoppel. 333 U.S. at 597-598, 68 S.Ct. at 719.

The parties in the instant appeal agree that res judicata is inapplicable because an infringement...

To continue reading

Request your trial
35 practice notes
  • 531 F.2d 366 (7th Cir. 1976), 75--1371, Union Carbide Corp. v. Ever-Ready Inc.
    • United States
    • United States Court of Appeals (7th Circuit)
    • January 30, 1976
    ...Circuit opinion lends support to plaintiff's position. Finally, we must consider Flavor Corporation of America v. Kemin Industries, Inc., 493 F.2d 275 (8th Cir. In Flavor Corporation the Eighth Circuit interpreted the incontestability provisions in relation to descriptiveness in an apparent......
  • Functional signs and decanters of wine: how trade dress protection unconstitutionally extends expired design patents.
    • United States
    • Marquette Intellectual Property Law Review Vol. 18 Nbr. 2, June - June 2014
    • June 22, 2014
    ...Biscuit Co., 305 U.S. 111, 112 (1938). (73.) Brenner v. Manson, 383 U.S. 519, 527 (1966); Flavor Corp. of Am. v. Kemin Indust., Inc., 493 F.2d 275, 280 (8th Cir. 1974) (citing 28 U.S.C. [section] 1256 (1948)). (74.) See Vornado Air Circulation Sys., Inc. v. Duracraft Corp., 58 F.3d 1498 (10......
  • 701 F.Supp. 1431 (W.D.Ark. 1988), Civ. 87-3060, Gaston's White River Resort v. Rush
    • United States
    • United States District Courts. 8th Circuit. Western District of Arkansas
    • June 20, 1988
    ...has acquired a secondary meaning. Flavor Corporation of America v. Kemin Industries, Inc., 358 F.Supp. 1114 (S.D. Iowa 1973), affirmed 493 F.2d 275 (8th Cir. 1974). Both the evidence and the fact of registration establishes the fact that Gaston's is a strong, distinctive b) Proximity of Goo......
  • 633 F.Supp. 108 (N.D.Ill. 1985), 85 C 6214, Floralife, Inc. v. Floraline Intern., Inc.
    • United States
    • United States District Court (Northern District of Illinois)
    • October 9, 1985
    ...before the Board; both presented evidence and submitted briefs. Id. at 377-78 (citations omitted); see also Flavor Corp. v. Kemin Indus., 493 F.2d 275 (8th The reasoning of EZ Loader, developed in the context of issue preclusion, is equally applicable to a determination of the plaintiff's l......
  • Request a trial to view additional results
33 cases
  • 531 F.2d 366 (7th Cir. 1976), 75--1371, Union Carbide Corp. v. Ever-Ready Inc.
    • United States
    • United States Court of Appeals (7th Circuit)
    • January 30, 1976
    ...Circuit opinion lends support to plaintiff's position. Finally, we must consider Flavor Corporation of America v. Kemin Industries, Inc., 493 F.2d 275 (8th Cir. In Flavor Corporation the Eighth Circuit interpreted the incontestability provisions in relation to descriptiveness in an apparent......
  • 701 F.Supp. 1431 (W.D.Ark. 1988), Civ. 87-3060, Gaston's White River Resort v. Rush
    • United States
    • United States District Courts. 8th Circuit. Western District of Arkansas
    • June 20, 1988
    ...has acquired a secondary meaning. Flavor Corporation of America v. Kemin Industries, Inc., 358 F.Supp. 1114 (S.D. Iowa 1973), affirmed 493 F.2d 275 (8th Cir. 1974). Both the evidence and the fact of registration establishes the fact that Gaston's is a strong, distinctive b) Proximity of Goo......
  • 633 F.Supp. 108 (N.D.Ill. 1985), 85 C 6214, Floralife, Inc. v. Floraline Intern., Inc.
    • United States
    • United States District Court (Northern District of Illinois)
    • October 9, 1985
    ...before the Board; both presented evidence and submitted briefs. Id. at 377-78 (citations omitted); see also Flavor Corp. v. Kemin Indus., 493 F.2d 275 (8th The reasoning of EZ Loader, developed in the context of issue preclusion, is equally applicable to a determination of the plaintiff's l......
  • 17 F.Supp.2d 919 (D.Minn. 1998), Civ. 98-603, Graham Webb Intern. v. Helene Curtis Inc.
    • United States
    • United States District Court of Minnesota
    • June 9, 1998
    ...are acquired only by actual use of a mark in commerce in connection with the goods. See Flavor Corp. of America v. Kemin Industries, Inc., 493 F.2d 275, 284 (8th Cir. 1974). Plaintiffs contend that defendants' pre-launch activities fall far short of being "open and notorious," as ......
  • Request a trial to view additional results
1 firm's commentaries
  • Understanding B & B Hardware And Strategic Responses To The Opinion
    • United States
    • Mondaq United States
    • April 10, 2015
    ...1984) (holding Board determinations entitled to preclusive effect when affirmed by Federal Circuit); Flavor Corp. of Am. v. Kemin Indus., 493 F.2d 275, 281 (8th Cir. 1974) (holding Board determinations entitled to preclusive effect when affirmed by Court of Customs and Patent Appeals). In l......
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT