Koppers Co., Inc. v. Krupp-Koppers GmbH

• Decision Date: 19 March 1981
• Docket Number: Civ. A. No. 80-78.
• Citation: 517 F. Supp. 836
• Parties: KOPPERS COMPANY, INC., Plaintiff, v. KRUPP-KOPPERS GmbH, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

517 F. Supp. 836

KOPPERS COMPANY, INC., Plaintiff, v. KRUPP-KOPPERS GmbH, Defendant.

Civ. A. No. 80-78.

United States District Court, W. D. Pennsylvania.

March 19, 1981.

COPYRIGHT MATERIAL OMITTED

Alfred T. Lee, Milgrim, Thomajan, Jacobs & Lee, New York City, Herbert J. Zeh, Jr., Robert D. Yeager, Pittsburgh, Pa., for plaintiff.

James Mollica, Meyer, Darragh, Buckler, Bebenek & Eck, Pittsburgh, Pa., for defendant.

OPINION

TEITELBAUM, District Judge.

The Koppers Company, Inc. ("Koppers Co.") of Pittsburgh, Pennsylvania, brought this action against Krupp-Koppers GmbH ("Krupp-Koppers") of Essen, Germany and Krupp International, Inc. of Harrison, New York.¹ Jurisdiction was based upon 15 U.S.C. § 1121, 28 U.S.C. § 1338(a) and (b) and 28 U.S.C. § 1332. Plaintiff charged that the use by defendant of the mark and name KRUPP-KOPPERS in the United States infringed upon its rights under its federal service mark and trademark registrations of KOPPERS; that the use of such mark and name was a false representation of the origin and quality of defendant's services; that such use constituted unfair competition at common law; and that such use was a wrongful dilution of plaintiff's distinctive mark and name in violation of the anti-dilution laws of various states. Plaintiff further charged that defendant had wrongfully represented to potential customers of plaintiff that defendant owned a certain coal gasification process (the KOPPERS-TOTZEK or K-T process). Defendant denied the allegations of plaintiff, raised equitable affirmative defenses, and asserted a counterclaim. Defendant's counterclaim closely paralleled plaintiff's claim and charged that the use by plaintiff of the mark KOPPERS-TOTZEK infringed upon defendant's common law rights in this mark, that the use of such mark was a false representation of the origin and quality of plaintiff's services; that such use constituted unfair competition at common law; and that such use was a wrongful dilution of defendant's distinctive mark in violation of the anti-dilution laws of various states. Defendant further charged that plaintiff had disclosed or threatened to disclose defendant's confidential information relating to the subject coal gasification process, and had violated or threatened to violate confidentiality provisions of a licensing agreement between the parties.

Both parties filed motions for preliminary injunctions. Plaintiff seeks to enjoin defendant pendente lite from using the mark or name KOPPERS in the United States. Plaintiff also seeks to enjoin defendant pendente lite from asserting proprietary and exclusive rights to the subject coal gasification process. Defendant seeks to restrain plaintiff pendente lite from using the marks KOPPERS-TOTZEK and K-T as they relate to the subject coal gasification process.² Thus, at this juncture, three requests for preliminary injunctive relief are before this Court.

The Parties

Koppers Co. is a Delaware corporation with its principal offices in Pittsburgh, Pennsylvania. Its principal activities involved in this litigation are those of its Engineering and Construction Group which engages in the design, engineering, and construction of coal gasification plants, coke oven plants, sintering plants, and blast furnaces. The other corporate groups of Koppers Co. are the Road Materials Group, the Organic Chemicals Group, the Engineered Metal Products Group, and the Forest Products Group.

Krupp-Koppers is a totally separate entity from and has no corporate relationship to Koppers Co. It is a German corporation with its principal offices in Essen, Germany. Krupp-Koppers is a process engineering company i. e. it sells services, but does not manufacture goods or products. Its activities are similar to those of Koppers Co.'s Engineering and Construction Group.

A brief survey of the corporate history of the parties and their dealings with respect to the subject coal gasification process is helpful to an understanding of this litigation. Koppers Co. and Krupp-Koppers had a common founder — Mr. Heinrich Koppers. In 1901, Mr. Koppers formed his own business in Essen, Germany. He later came to the United States and constructed coke oven plants for the steel industry. In 1912 he incorporated his American business as H. Koppers, Inc. About 1914-1915 he refinanced this company by selling 80% of its stock while retaining 20% ownership, moved the company to Pittsburgh, and reincorporated as Heinrich Koppers Inc. Mr. Koppers later left the United States, and during World War I his 20% ownership was confiscated by the United States government and sold at public auction. In 1944 this company was reorganized as a Delaware corporation and became known by its present corporate name, Koppers Company, Inc.

The German company founded by Mr. Koppers was incorporated in 1927 and reincorporated in 1933 as Heinrich Koppers GmbH. In 1974 Heinrich Koppers GmbH was acquired by Fried, Krupp GmbH, and in 1975 the name was changed from "Heinrich Koppers GmbH" to its present corporate name "Krupp-Koppers GmbH".

The coal gasification process which is at the center of much of this litigation was developed by Friedrich Totzek, an employee of Heinrich Koppers GmbH, in Germany during the 1930's. Shortly after World War II, the Allied Military Government published a technical description of this process and the work of Heinrich Koppers GmbH relating to it. In 1946-1947 Koppers Co. sent a number of representatives to Heinrich Koppers GmbH to receive additional information concerning this process. In 1948 Koppers Co. and Heinrich Koppers GmbH entered into an agreement under which Heinrich Koppers GmbH assigned all of its United States patentable inventions concerning this process to Koppers Co. The agreement further provided that Koppers Co. was entitled to all of Heinrich Koppers GmbH's know-how relating to this process without restriction upon Koppers Co.'s use of such technology. This agreement terminated in 1968.

In 1948-1950 Koppers Co. and Heinrich Koppers GmbH participated in the design and construction of a demonstration coal gasification plant using this process in Louisiana, Missouri. Because of the availability of inexpensive large reserves of natural gas and of petroleum from the Middle East, the production of synthetic fuels was not commercially competitive in the United States and this plant was soon closed.

However, Heinrich Koppers GmbH and later Krupp-Koppers continued with the development and construction of commercial coal gasification plants in other parts of the world. Between 1949 and 1980 over twenty such plants were erected.

Perceiving a future need for synthetic fuels in the United States, Koppers Co. entered into a new licensing agreement with Heinrich Koppers GmbH in 1972. This agreement granted Koppers Co. a license under certain United States patents relating to the subject coal gasification process and provided for the assistance and know-how of Heinrich Koppers GmbH. This agreement was permissibly terminated by Krupp-Koppers effective December 31, 1979.

Legal Standard

The issuance of a preliminary injunction is a matter of equity within the sound discretion of the court. The general purpose of a preliminary injunction is to preserve the status quo pending final determination of the action after a full hearing. 7 Moore's Federal Practice ¶ 65.041 (2d ed. 1980). Oburn v. Shapp, 521 F.2d 142 (3rd Cir. 1975). The parties agree the applicable legal standard requires (1) the moving party show a reasonable probability of eventual success on the merits; (2) the moving party show it will be irreparably injured if the preliminary injunction is not granted; (3) the Court consider the possibility of harm to other interested persons from the grant or denial of the preliminary injunction; (4) the Court consider what effect the grant or denial of the preliminary injunction would have on the public interest. Oburn v. Shapp, supra. Since both parties are requesting injunctive relief this opinion will address these factors with regard to each request.

Defendant's Use of KOPPERS

It is useful to begin an analysis of plaintiff's claims with respect to KOPPERS with a definition of terms. A trademark is "any word, name, symbol or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others." Lanham Act § 45, 15 U.S.C.A. § 1127. A service mark is a mark "used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others." Id. Trade names are "individual names and surnames, firm names and trade names used by manufacturers, industrialists, merchants, agriculturists and others to identify their businesses, vocations, or occupations; ..." Id.

Plaintiff is the owner of nine trademark registrations and one service mark registration issued by the United States Patent and Trademark Office for KOPPERS. For present purposes the most significant of these is the service mark registration which broadly covers engineering surveys, design and consultation services, economic and market research surveys, and the construction and repair of industrial plants and apparatus in fields of manufacture, fabrication or treatment of metals, bituminous materials, gas, and chemicals. The plaintiff has extensively advertised and promoted its goods and services under the mark and name KOPPERS to the industrial trade and to the public at large in the United States.

Defendant placed an advertisement in the September 20, 1978 issue of Chemical Week (PX 132). Defendant advertised its services in the fields of coke plants, coal gasification, and others and stated: "The names KRUPP and KOPPERS have symbolized reliability during a century of technical advancement." In the December 19, 1979 issue of Chemical Week defendant advertised its coal gasification services (PX 38). These advertisements were, in part,...