523 F.2d 1331 (2nd Cir. 1975), 170, Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway and Sons

Docket Nº:170, Docket 74-1397.
Citation:523 F.2d 1331
Party Name:186 U.S.P.Q. 436 GROTRIAN, HELFFERICH, SCHULZ, TH. STEINWEG NACHF., Plaintiff-Appellant, v. STEINWAY & SONS, Defendant-Appellee.
Case Date:July 09, 1975
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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523 F.2d 1331 (2nd Cir. 1975)

186 U.S.P.Q. 436



STEINWAY & SONS, Defendant-Appellee.

No. 170, Docket 74-1397.

United States Court of Appeals, Second Circuit

July 9, 1975

Argued Jan. 10, 1975.

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[Copyrighted Material Omitted]

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Dean A. Olds, Chicago, Ill. (Richard H. Compere, Jerold A. Jacover, and Hume, Clement, Brinks, Willian, Olds & Cook, Ltd., Chicago, Ill., and V. T. Giordano, and von Maltitz, Derenberg, Kunin & Janssen, New York City, on the brief), for plaintiff-appellant.

Granville M. Pine, New York City (Harry C. Marcus, Kurt E. Richter, Arnold I. Rady, and Morgan, Finnegan, Durham & Pine, New York City, on the brief), for defendant-appellee.

Before SMITH, OAKES and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

On this appeal from a judgment entered November 28, 1973 after a bench trial in the Southern District of New York, Lloyd F. MacMahon, District Judge, 365 F.Supp. 707, the essential issues are:

(1) Whether the district court correctly held that plaintiff consciously and intentionally had infringed defendant's trademarks and had competed unfairly with defendant.

(2) Whether the scope of relief granted to defendant by the district court was overly broad.

For the reasons below, we affirm the judgment in favor of defendant with respect to plaintiff's infringement and unfair competition; we affirm the dismissal of the complaint; but we modify the judgment to vacate the award to defendant of damages resulting from plaintiff's infringement of defendant's trademark rights in the United States and the award to defendant of plaintiff's profits from sales of pianos in the United States. We affirm the judgment as modified.


This is not a case for music lovers. It involves not the dulcet sounds one expects from concert grand pianos, but the discordant notes from a cacophony for pianos extending back more than a century.

To understand the essential issues on this appeal and our rulings thereon, we believe that it may be helpful to summarize the relationship between the parties to this action, substantially as found by the district court. 365 F.Supp. at 709-12. 1

In 1835 Heinrich E. Steinweg began making pianos in Germany. He emigrated to New York in 1850 with three sons, changed his name to Steinway and founded appellee Steinway & Sons

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(hereinafter Steinway). Heinrich's oldest son, C. F. Theodor Steinweg, remained in Germany. He began to make pianos under his own name. Later he sold his business to his three employees, Wilhelm Grotrian, Adolph Helfferich and H. G. W. Schulz. Theodor then moved to New York and joined Steinway & Sons as a partner in 1866.

The sale of the business to Messrs. Grotrian, Helfferich and Schulz included the right to use the name "C. F. Th. Steinweg Nachf. (Successors to C. F. Theodor Steinweg)" for ten years. 2 The name later was changed to "Grotrian, Helfferich, Schulz, Th. Steinweg Nachf.", the present corporate name of appellant (hereinafter Grotrian).

Grotrian thereafter registered the trademarks "Grotrian-Steinweg" and "Steinweg" in Germany. The latter mark was cancelled as a result of a suit by Steinway against Grotrian. In December 1918, shortly after the Armistice, the Grotrian family, owners of the firm, petitioned German officials to change its name to "Steinweg, or at least Grotrian Steinweg". One of the principal reasons was to aid in the export of its product. The petition was granted to the extent of changing the name to "Grotrian-Steinweg".

Grotrian first entered the American market in 1925. From 1926 through 1928 it sold a total of 25 pianos in the United States. When Steinway learned of this in 1928, it protested, claiming that the use of the mark "Grotrian-Steinweg" on pianos infringed its trade names "Steinway" and "Steinway & Sons". It demanded that use of the "Grotrian-Steinweg" mark be discontinued on pianos in the United States. Undeterred, Grotrian increased its shipments to 47 in 1929.

William Steinway, an officer of appellee, decided to confront Grotrian face to face. He went to Germany in 1929. A settlement was reached, symbolized by William Steinway's smoking of a cigar with Grotrian's principal owner (the "peace cigar settlement"). Thereafter Grotrian's American activities dwindled. Between 1932 and 1952 no Grotrian-Steinweg pianos were exported to the United States.

In 1952 Grotrian reentered the American market on a mail order basis. For the next 20 years it regularly exported a small number of pianos (a total of 458) to the United States and distributed them through small local dealers. Grotrian never made any pianos in the United States. It did not employ an advertising agency or require advertising by its United States dealers, although the latter were supplied with promotional material. No representative of Grotrian ever came to the United States from 1929 to 1966.

Although Steinway learned of Grotrian exports to the United States as early as 1957, it did nothing until 1967. In January of that year Grotrian entered into a distributing agreement with the Wurlitzer Company (hereinafter Wurlitzer), under which the latter agreed to use its best efforts to sell "Grotrian- Steinweg" pianos in the United States for five years. Wurlitzer issued a press release in July announcing that the world famous "Grotrian-Steinweg" piano would soon be sold in Wurlitzer stores. Steinway promptly threatened Wurlitzer with legal action to prevent the sale in the United States of pianos with the "Grotrian-Steinweg" name. Wurlitzer decided that it could not sell the pianos profitably without using the Grotrian-Steinweg name. On advice of counsel, it cancelled the distribution contract on November 21, 1967.

No legal action was taken by Steinway or Grotrian regarding the latter's export of pianos to the United States until July 29, 1969. On that date Grotrian commenced the instant action against Steinway, apparently in response to Steinway's opposition to Grotrian's application for registration in the United States of

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the trademark "Grotrian-Steinweg". 3 Grotrian's complaint 4 sought a declaratory judgment: (1) that its trademark "Grotrian-Steinweg" and corporate name did not conflict with appellee's trademarks "Steinway & Sons" and "Steinway"; (2) that Grotrian's use of its trademark and corporate name in the United States did not infringe Steinway's trademark rights and did not constitute unfair competition; (3) that Steinway was estopped by laches from asserting any claim of conflict between the respective marks or between the names of appellant and appellee; and (4) that Grotrian had the right to use its trademark and corporate name free from interference by Steinway in the United States or in any foreign country where the activities of Grotrian or Steinway have a substantial effect on interstate or foreign commerce. Grotrian also sought an injunction to enjoin Steinway from interfering or threatening to interfere with Grotrian's use of its trademark and corporate name and from instituting suit anywhere in the world challenging Grotrian's right to use its trademark or corporate name. Grotrian also sought $93,000 damages for tortious interference with its contractual relationship with Wurlitzer, plus attorneys fees.

Steinway's answer in substance denied the factual allegations of the complaint. It also counterclaimed under the Federal Trade-Mark Act (Lanham Act), 15 U.S.C. §§ 1051-1127 (1970), and under common law, for trademark infringement and unfair competition. An injunction was sought to enjoin Grotrian: (1) from using the word "Steinweg" alone or in conjunction with any other words or symbols; (2) from using the name "Grotrian-Steinweg" in connection with the sale of pianos in the United States; (3) from infringing Steinway's trademarks; 5 (4) from competing unfairly with Steinway; and (5) from prosecuting any application for registration of trademarks in the United States Patent Office. Steinway also sought an accounting for all profits Grotrian had received by reason of its illegal activities, compensatory and punitive damages for injuries sustained by Steinway as a result of those activities, plus attorneys fees.

Grotrian's reply in substance denied the allegations of Steinway's counterclaim and pleaded the defenses of laches and unclean hands.

After a bench trial, the district court in an opinion filed October 1, 1973 concluded that "(Grotrian) is infringing (Steinway's) trademarks Steinway and Steinway & Sons because the name Grotrian-Steinweg is likely to cause confusion, mistake or deception" in violation of the Lanham Act, 15 U.S.C. § 1114(1) (1970), 6 365 F.Supp. at 720; that the use of Grotrian's names in the United States constituted unfair competition against Steinway, Id. at 721; and that Steinway's counterclaim was not barred by laches because Grotrian had not been

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prejudiced. Id. at 721. Accordingly, the court permanently enjoined Grotrian from infringing Steinway's trademark rights. It ordered that Steinway recover from Grotrian damages for infringement and unfair competition and that Steinway recover Grotrian's profits from sales of pianos in the United States, together with the costs of the action. See 15 U.S.C. § 1117 (1970). 7 An accounting was ordered and a special master was appointed to determine the amount of damages and profits to which Steinway was entitled. The court denied all relief sought by Grotrian and dismissed its complaint.


We turn first to the district court's conclusion that Grotrian had infringed Steinway's trademarks and had engaged in unfair competition.

Trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) (1970), see note 6, Supra, occurs where the nonconsensual use of a colorable imitation of a valid mark is "likely to cause confusion, or to cause mistake, or to deceive."


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