561 F.2d 1365 (10th Cir. 1977), 76-1199, Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co.

Docket Nº:76-1199.
Citation:561 F.2d 1365
Party Name:BIG O TIRE DEALERS, INC., a Colorado Corporation, Plaintiff-Appellee, v. The GOODYEAR TIRE & RUBBER COMPANY, an Ohio Corporation, Defendant-Appellant.
Case Date:September 02, 1977
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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561 F.2d 1365 (10th Cir. 1977)

BIG O TIRE DEALERS, INC., a Colorado Corporation, Plaintiff-Appellee,

v.

The GOODYEAR TIRE & RUBBER COMPANY, an Ohio Corporation,

Defendant-Appellant.

No. 76-1199.

United States Court of Appeals, Tenth Circuit

September 2, 1977

Argued and Submitted Jan. 25, 1977.

Rehearing Denied Oct. 11, 1977.

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[Copyrighted Material Omitted]

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Denis McInerney of Cahill, Gordon & Reindel, New York City (Robert Usadi, Cahill, Gordon & Reindel, New York City, Arthur K. Underwood, Jr., and W. David Pantle of Dawson, Nagel, Sherman & Howard, Denver, Colo., of counsel, and William E. Schuyler, Jr., and Alan S. Cooper of Schuyler, Birch, Swindler, McKie & Beckett, Washington, D. C., also of counsel, on the briefs), for defendant-appellant.

Michael C. Schaefer of Rutenbeck & Schaefer, Denver, Colo. (Duane C. Burton, Robert C. Dorr, of Burton & Dorr, Denver, Colo., of counsel, on the brief), for plaintiff-appellee.

Before LEWIS, Chief Judge, and PICKETT and BARRETT, Circuit Judges.

LEWIS, Chief Judge.

This civil action was brought by Big O Tire Dealers, Inc. ("Big O") asserting claims of unfair competition against The Goodyear Tire & Rubber Co. ("Goodyear") based upon false designation of origin under 15 U.S.C. § 1125(a) and common law trademark infringement. After a ten-day trial and three days of deliberation, the jury returned the following verdict:

We the jury in the above entitled cause, upon our oath do say that we find the following as our verdict herein:

Upon the claim of liability for trademark infringement we find for Big O Inc.

Upon the claim of liability for false designation of origin we find for Goodyear.

Upon the claim for trademark disparagement we find for Big O Inc.

We find that plaintiff has proven special compensatory damages in the amount of $ None.

We find that plaintiff has proven general compensatory damages in the amount of $2,800,000.

We assess punitive or exemplary damages in the amount of $16,800,000.

Dated September 4, 1975.

Filing a comprehensive post-trial opinion the United States District Court for the District of Colorado entered judgment on the jury's verdict, permanently enjoined Goodyear from infringing on Big O's trademark, and dismissed Goodyear's counterclaim for equitable relief. 408 F.Supp. 1219. Goodyear appeals that judgment.

Big O is a tire-buying organization which provides merchandising techniques, advertising concepts, operating systems, and other aids to approximately 200 independent retail tire dealers in 14 states who identify themselves to the public as Big O dealers. These dealers sell replacement tires using the Big O label on "private brand" tires. They also sell other companies' brands such as B. F. Goodrich and Michelin Tires. At the time of trial Big O's total net worth was approximately $200,000.

Goodyear is the world's largest tire manufacturer. In 1974 Goodyear's net sales totalled more than $5.25 billion and its net income after taxes surpassed $157 million. In the replacement market Goodyear sells through a nationwide network of company-owned stores, franchise dealers, and independent retailers.

In the fall of 1973 Big O decided to identify two of its lines of private brand tires as "Big O Big Foot 60" and "Big O Big

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Foot 70." These names were placed on the sidewall of the respective tires in raised white letters. The first interstate shipment of these tires occurred in February 1974. Big O dealers began selling these tires to the public in April 1974. Big O did not succeed in registering "Big Foot" as a trademark with the United States Patent and Trademark Office.

In the last three months of 1973 Goodyear began making snowmobile replacement tracks using the trademark "Bigfoot." From October 1973 to August 1975 Goodyear made only 671 "Bigfoot" snowmobile tracks and sold only 411 tracks. In December 1973 Goodyear filed an application to register "Bigfoot" as a trademark for snowmobile tracks with the United States Patent and Trademark Office; the registration was granted on October 15, 1974.

In July 1974 Goodyear decided to use the term "Bigfoot" in a nationwide advertising campaign to promote the sale of its new "Custom Polysteel Radial" tire. The name "Custom Polysteel Radial" was molded into the tire's sidewall. Goodyear employed a trademark search firm to conduct a search for "Bigfoot" in connection with tires and related products. This search did not uncover any conflicting trademarks. After this suit was filed Goodyear filed an application to register "Bigfoot" as a trademark for tires but withdrew it in 1975. Goodyear planned to launch its massive, nationwide "Bigfoot" advertising campaign on September 16, 1974.

On August 24, 1974, Goodyear first learned of Big O's "Big Foot" tires. Goodyear informed Big O's president, Norman Affleck, on August 26 of Goodyear's impending "Bigfoot" advertising campaign. Affleck was asked to give Goodyear a letter indicating Big O had no objection to this use of "Bigfoot." When Affleck replied he could not make this decision alone, it was suggested Affleck talk with John Kelley, Goodyear's vice-president for advertising.

Affleck called Kelley and requested more information on Goodyear's impending advertising campaign. A Goodyear employee visited Affleck on August 30 and showed him rough versions of the planned Goodyear "Bigfoot" commercials and other promotional materials. On September 10, Affleck and two Big O directors met in New Orleans, with Kelley and Goodyear's manager of consumer market planning to discuss the problem further. At this time the Big O representatives objected to Goodyear using "Bigfoot" in connection with tires because they believed any such use would severely damage Big O. They made it clear they were not interested in money in exchange for granting Goodyear the right to use the "Bigfoot" trademark, and asked Goodyear to wind down the campaign as soon as possible. Goodyear's response to this request was indefinite and uncertain.

During the trial several Goodyear employees conceded it was technically possible for Goodyear to have deleted the term "Bigfoot" from its television advertising as late as early September. However, on September 16, 1974, Goodyear launched its nationwide "Bigfoot" promotion on ABC's Monday Night Football telecast. By August 31, 1975, Goodyear had spent $9,690,029 on its massive, saturation campaign.

On September 17 Affleck wrote Kelley a letter setting forth his understanding of the New Orleans meeting that Goodyear would wind up its "Bigfoot" campaign as soon as possible. Kelley replied on September 20, denying any commitment to discontinue use of "Bigfoot" and declaring Goodyear intended to use "Bigfoot" as long as it continued to be a helpful advertising device.

On October 9 Kelley told Affleck he did not have the authority to make the final decision for Goodyear and suggested that Affleck call Charles Eaves, Goodyear's executive vice-president. On October 10 Affleck called Eaves and Eaves indicated the possibility of paying Big O for the use of the term "Bigfoot." When Affleck stated no interest in the possibility Eaves told him Goodyear wished to avoid litigation but that if Big O did sue, the case would be in litigation long enough that Goodyear might obtain all the benefits it desired from the term "Bigfoot."

This was the final communication between the parties until Big O filed suit on November 27, 1974. The district court denied

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Big O's request for a temporary restraining order and a preliminary injunction. After judgment was entered on the jury's verdict for Big O, Goodyear appealed to this court. Goodyear's allegations of error are discussed below.

I.

The district court instructed the jury it must decide whether "the term BIG FOOT (is) merely descriptive of a quality or characteristic of the Big O BIG FOOT 60 and Big O BIG FOOT 70 tires." The court further charged the jury that if it decided "Big Foot is merely descriptive as applied to these Big O tires, then (it must) consider whether the evidence shows that before September 16, 1974, the plaintiff had so used Big Foot as to develop a secondary meaning such as to associate that term with Big O Tire Dealers, Inc. in the minds of a significant number of the consuming public."

Goodyear argues that Big Foot is descriptive in nature as a matter of law or fact and that the evidence is not sufficient to support the issue of secondary meaning and therefore Goodyear is entitled to judgment notwithstanding the verdict. Goodyear bases its descriptiveness argument on the premise that "Big Foot" is a combination of two common English words which together are descriptive of the big footprint characteristic of tires. At trial, Goodyear presented evidence showing it had used the term "BIG FOOT TRACTION" in brochures produced in 1964 and 1969. Goodyear...

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