617 F.2d 1178 (5th Cir. 1980), 78-2590, Soweco, Inc. v. Shell Oil Co.

Docket Nº:78-2590.
Citation:617 F.2d 1178
Party Name:207 U.S.P.Q. 278 SOWECO, INC., Plaintiff-Appellant, v. SHELL OIL COMPANY, etc. and Shell Chemical Company, etc., Defendants-Appellees.
Case Date:May 30, 1980
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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617 F.2d 1178 (5th Cir. 1980)

207 U.S.P.Q. 278

SOWECO, INC., Plaintiff-Appellant,

v.

SHELL OIL COMPANY, etc. and Shell Chemical Company, etc.,

Defendants-Appellees.

No. 78-2590.

United States Court of Appeals, Fifth Circuit

May 30, 1980

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[Copyrighted Material Omitted]

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LARVACIDE.

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Samuel L. Boyd, Dallas, Tex., for plaintiff-appellant.

Arnold, White, & Durkee, Louis T. Pirkey, Houston, Tex., Gibson, Ochsner, & Adkins, S. Tom Morris, Amarillo, Tex., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Texas.

Before GEE, FAY and VANCE, Circuit Judges.

GEE, Circuit Judge:

Slugs, larvae, nematodes, and rodents form the supporting cast in this trademark drama; the protagonists are the terms "Larvacide" and "larvicide." Our etymological investigation of these entomological terms leads us to affirm in main the judgment of the careful trial court in this complex and demanding cause.

The trademark "Larvacide" was originally registered in 1927 by Innis, Speiden & Company ("ISC") to designate fumigants for exterminating bugs, insects, slugs, and rodents. It is used today on similar products. After the initial term of registration expired, ISC reregistered the mark in 1951. At that time the trademark examiner found that the mark had become "distinctive of applicant's goods"; in other words, the trademark had become "incontestable" within the meaning of the Lanham Act. See 15 U.S.C. § 1065 (1976).

After an intervening assignment, 1 Nor-Am Agricultural Products, Inc. ("Nor-Am") acquired all rights in the mark "Larvacide" in 1957. Like its predecessors, Nor-Am sold tear gas composed primarily of chloropicrin under the "Larvacide" label as a grain fumigant for the control of bugs, insects, and rodents in grain elevators and bins. However, on August 13, 1970, Nor-Am notified its distributors that its "Larvacide" line of products had been discontinued and that orders could no longer be accepted. 2 "Larvacide" products nevertheless remained for a time on distributors' shelves and continued to be sold. In its application for renewal of its "Larvacide" registration in April 1971, Nor-Am represented to the Patent and Trademark Office that "Larvacide" was "still in use in interstate commerce or in connection with fumigants intended for use as an exterminator of bugs, insects, slugs and rodents" and that the label submitted at that time "shows the mark as actually used on goods at the present time (April 5, 1971)."

In November 1973, Nor-Am assigned all of its rights in its "Larvacide" trademark to Southwestern Grain Supply Company ("Southwestern"), the predecessor in interest of plaintiff Soweco, Inc. ("Soweco"). 3 Since that time Soweco has marketed grain fumigants, like those sold by Nor-Am, under the label "Larvacide."

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Shell Chemical Company, a division of Shell Oil Company ("Shell"), manufactures two products alleged to infringe on Soweco's trademark: (1) SHELL Poultry Spray & Larvicide and (2) RABON Oral Larvicide. Originally developed and marketed as two separate products, 4 SHELL Poultry Spray & Larvicide was first marketed in 1974. A liquid ordinarily used in spray form, this product can either be sprayed directly on birds to control mites and lice or sprayed on poultry droppings to inhibit the growth of larvae and maggots. Shell sells SHELL Poultry Spray & Larvicide to a small number of distributors (ten to twelve) who resell it to poultry farmers. RABON Oral Larvicide is added to cattle feed to control fly larvae in manure. Developed in the late 1960's and first sold in 1972, RABON Oral Larvicide is chiefly sold to feed companies for incorporation into their own brands of cattle feed. 5

In February 1976, Soweco brought suit against Shell, charging both trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1051 et seq. (1976), and unfair competition under state law. The district court granted plaintiff's motion to bifurcate the issues of liability and damages. 6

Trial on the issue of liability was held in February 1978. After several days of testimony the district court submitted 25 special issues to the jury. 7 After a day of deliberations, the jury was unable to answer all of the questions unanimously. After receiving an Allen 8 charge, the jury returned a unanimous verdict on all issues the following afternoon. At plaintiff's request, the judge polled the jury. Although several jurors initially indicated that the answers to one or more of the special issues did not reflect their individual judgments, they subsequently explained their actions and affirmed the unanimity of the jury's answers. 9

Because the judge thought there was an "irreconcilable conflict between the jurors' answers" to some of the special issues, he granted plaintiff's motion for a mistrial and ordered a new trial. Subsequently, however, the court issued a memorandum opinion granting judgment for Shell on plaintiff's Lanham Act claims and ordered cancellation of plaintiff's trademark "Larvacide" on the ground that the jury had found the mark to be a common descriptive name. 10 15 U.S.C. § 1064(c). With respect to the state law unfair competition claim, the judge granted a judgment n. o. v. for the defendant. Soweco appeals from the court's determinations.

Trademark Infringement

Trademark cases often involve line drawing in areas that are inherently "fuzzy." This problem is exacerbated in the instant case by the jury's contradictory answers to some inartfully worded special issues and the judge's subsequent attempts to reconcile those answers. For these reasons, it may be helpful to set out the basic principles of applicable trademark law 11 before turning to the jury's findings and the judge's conclusions.

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Terms for which trademark protection is sought are customarily grouped into four categories: 12 (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. Although meant as pigeon-holes, these useful labels are instead central tones in a spectrum; they tend to merge at their edges and are frequently difficult to apply. Vision Center v. Optics, Inc., 596 F.2d 111, 115 (5th Cir. 1979), cert. denied, --- U.S. ----, 100 S.Ct. 668, 62 L.Ed.2d 646 (1980).

A "generic" 13 term refers to "a particular genus or class of which an individual article or service is but a member," id.; Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976); it suggests the "basic nature of articles or services." American Heritage Life Insurance Co. v. Heritage Life Insurance Co., 494 F.2d 3, 11 (5th Cir. 1974). A word may be generic of some things and not of others: "ivory" is generic of elephant tusks but arbitrary as applied to soap. Abercrombie & Fitch, 537 F.2d at 9 n.6. A generic term can never become a trademark. Miller Brewing Co. v. G. Heileman Brewing Co., 561 F.2d 75, 79 (7th Cir. 1977) (citing William R. Warner & Co. v. Ely Lilly & Co., 265 U.S. 526, 528, 44 S.Ct. 615, 616, 68 L.Ed. 1161 (1924)), cert. denied, 434 U.S. 1025, 98 S.Ct. 751, 54 L.Ed.2d 772 (1978); Abercrombie & Fitch, 537 F.2d at 9. Moreover, if a registered mark at any time becomes generic with respect to a particular article, the Lanham Act, 15 U.S.C. § 1064(c), 14 provides for the cancellation of that mark's registration. See, e. g., Haughton Elevator Co. v. Seeberger, 85 U.S.P.Q. 80 (1950) (the mark "Escalator" had become generic).

A "descriptive" term "identifies a characteristic or quality of an article or service," Vision Center, 596 F.2d at 115, as, for example, its color, odor, function, dimensions, or ingredients. American Heritage, 494 F.2d at 11. Although descriptive marks are not automatically protectable, 15 U.S.C. § 1052(e)(1), 15 they may be registered if they have acquired secondary meaning for the consuming public. 16 See id. § 1052(f). 17 Examples of descriptive marks

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would be "Vision Center" in reference to a place where one purchases eyeglasses, Vision Center, supra, or "EVERREADY" with reference to batteries or light bulbs. Union Carbide Corp. v. Every-Ready, Inc., 531 F.2d 366 (7th Cir.), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976). As we noted in Vision Center, 596 F.2d at 115 n.11, "the distinction between descriptive and generic terms is necessarily one of degree."

A "suggestive" term "suggests, rather than describes," some characteristic of the goods to which it is applied and requires the consumer to exercise his imagination to reach a conclusion as to the nature of those goods. Vision Center, 596 F.2d at 115-16. If used as a trademark for refrigerators, the term "Penguin" would be suggestive. Suggestive terms require no proof of secondary meaning in order to be protected. Id. at 116.

"Arbitrary" or "fanciful" terms, such as "Kodak," bear no relationship to the product or service with which they are associated. Like suggestive terms, they may be registered without proof of secondary meaning.

Once a mark has been registered, proof of registration is prima facie evidence of the registrant's right to use the mark, but it does not preclude one who is sued for trademark infringement from proving "any legal or equitable defense or defect which might have been asserted if such mark had not been registered." 15 U.S.C. § 1115(a). If, however, a registrant has used his mark in connection with the goods or services specified on his registration for five continuous years after the registration date, his mark is deemed "incontestable," id. § 1065; 18 his registration constitutes "conclusive evidence" of his right to use the mark, subject only to the seven defenses enumerated in 15 U.S.C. § 1115(b). 19 An "incontestable"

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mark cannot be challenged as...

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