Bandag, Inc. v. Al Bolser's Tire Stores, Inc.

• Citation: 223 USPQ 982,750 F.2d 903
• Decision Date: 08 November 1984
• Docket Number: Nos. 83-1123,83-1286,s. 83-1123
• Parties: BANDAG, INC., Appellee/Cross-Appellant. v. AL BOLSER'S TIRE STORES, INC., Appellant/Cross-Appellee. Appeal
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 903

750 F.2d 903

223 U.S.P.Q. 982

BANDAG, INC., Appellee/Cross-Appellant. v. AL BOLSER'S TIRE STORES, INC., Appellant/Cross-Appellee.

Appeal Nos. 83-1123, 83-1286.

United States Court of Appeals Federal Circuit.

Nov. 8, 1984.

George T. Mobille, Washington, D.C., argued for appellee/cross-appellant. With him on the brief was Robert W. Adams, Washington, D.C., Jeffrey R. Van Duzer, Seattle, Wash., of counsel.

Gary S. Kindness, Seattle, Wash., argued for appellant/cross-appellee Al Bolser. With him on the brief was James R. Uhlir, Seattle, Wash.

Before BENNETT, Circuit Judge, SKELTON, Senior Circuit Judge, and MILLER, Circuit Judge.

BENNETT, Circuit Judge.

I. BACKGROUND

The matters here for consideration ¹ encompass the separate appeals of both the plaintiff and defendant from the final judgment of the United States District Court for the Western District of Washington, ² entered July 6, 1983, ³ in Civil Docket No. C82-124(v), an action for patent and trademark infringement and for unfair competition.

I. BACKGROUND

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II. TRADEMARK APPEAL

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A. Jurisdiction

B. Choice of Law

C. Trademark Liability

1. Similarity

2. Class of Goods and Services

3. Marketing Channels

4. Actual Confusion

5. Intent of Alleged Infringer

D. Trademark Remedies

1. Injunction

2. Monetary Recovery

(a) Profits

(b) Damages

(c) Attorney's Fees

III. PATENT APPEAL

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A. Patent at Issue

B. Equipment Purchased

C. Patent Infringement Liability

The defendant, Al Bolser Tire Stores, Inc. (Bolser), is a family-owned business begun in 1951 and engaged primarily in the retail and wholesale distribution of new and recapped tires in the State of Washington. Initially, Bolser recapped tires at its own recapping shop, using a hot recapping method. ⁴ This shop was closed in the mid-1960's, and thereafter Bolser met its needs for recaps through purchases from various outside recapping sources. It was the resumption of Bolser's own recapping activities in September 1981 using a cold process that appears to have figured most decisively in precipitating this lawsuit.

Bandag, Inc. (Bandag), organized in 1957, engages primarily in manufacturing precured tire tread rubber and other materials and equipment for retreading. It maintains a network of over 800 worldwide franchisees which are entitled to purchase such rubber, materials, and equipment and to use a "Bandag" cold-process retreading method, aspects of which have been covered at various times by Bandag patents. One of these is alleged to have been infringed by the cold process recapping of Bolser, which was carried out on equipment originally manufactured by Bandag and purchased by Bolser from a terminated local Bandag franchisee.

In connection with its franchising and marketing, Bandag has obtained a number of United States trademark and service mark registrations. Bolser utilized at least one of these in the 1981-82 Seattle Yellow Pages telephone directory (telephone directory). Purportedly this was to advise the public of Bolser's capacity to provide Bandag recaps, which it then was regularly purchasing from authentic Bandag franchisees for resale. Bandag claims the telephone directory listing misrepresented Bolser as a Bandag franchisee. This is the basis for its charges of trademark infringement and unfair competition.

Bandag's complaint was filed on February 3, 1982, and tried without a jury for 4 days beginning February 28, 1983. The district judge ruled from the bench at the conclusion of trial that Bolser was guilty of trademark infringement but innocent of the charge of patent infringement. A memorandum of decision followed on March 15, 1983. The final judgment of the court awarded to Bandag damages of $36,212.38, attributable to Bolser's trademark infringement, and attorneys' fees of $13,604.25.

The decision of the district court as to trademark infringement and its issuance of an injunction related thereto are affirmed. Nevertheless, the award of damages and attorneys' fees based thereupon is vacated. The determination that no patent infringement has been shown is reversed, and this case is remanded for a determination of an appropriate monetary award to Bandag.

II. TRADEMARK APPEAL

A. Jurisdiction

Bandag has moved that Bolser's appeal of the trademark portion of this case (App. No. 83-1123), notice of which was filed after announcement of the decision below but before entry of the corresponding final judgment, ⁵ be transferred to the United States Court of Appeals for the Ninth Circuit, pursuant to 28 U.S.C. Sec. 1631 (1982), in order to cure what is argued to be a lack of jurisdiction in this court to review the matter. The Bandag motion to transfer was originally filed when only Bolser's trademark appeal was yet pending, but before the end of the period for timely appeal by "any other party" provided by FED.R.APP.P. 4(a)(3). It was accordingly denied without prejudice as being premature. Subsequently, within the period for timely appeal, either by an initial appellant under FED.R.APP.P. 4(a)(1) or by "any other party" under FED.R.APP.P. 4(a)(3), Bandag filed notice of its separate appeal of the patent issues now before this court (App. No. 83-1286). Thereafter, Bandag renewed its earlier motion to transfer. Thus, this court must initially determine whether it has jurisdiction over an appeal of the final adjudication of a nonpatent claim in a case from which issues related to a patent claim are being separately appealed.

The complaint filed below by Bandag contained, inter alia, a count for patent infringement and another for trademark infringement. Jurisdiction of the district court over the subject matter of each was predicated, at least in part, on 28 U.S.C. Sec. 1338(a) (1982). ⁶ Apparently no attempt was made, apart from the filing of various unsuccessful summary judgment motions, to effect either segregated presentation of evidence or the rendering of separate judgments on each count. Bandag argues that its post-judgment decision to seek review of the patent issues by separate appeal rather than by cross-appeal has significance to our treatment of the motion to transfer.

The jurisdiction of this court set forth in Bandag reads this exception too narrowly when it argues that the issues in the trademark appeal "relate to trademarks and no other claims that arise under 28 U.S.C. Sec. 1338(a), since the patent Appeal No. 83-1286 is totally separate therefrom." Although the patent and the trademark infringement claims presented for review involve the same parties, the acts alleged to have given rise to each do not overlap substantially. Thus, the patent and the trademark claims could have been resolved in separate trials with a minimal cost to judicial economy. In this instance, however, they were permissively joined when pled together in Bandag's original complaint without objection from Bolser. FED.R.CIV.P. 18(a).

                28 U.S.C. Sec. 1295(a)(1) (1982) 7 is exclusive as to "an appeal from a final decision of a district court of the United States ... if the jurisdiction of that court was based, in whole or in part, on section 1338 of this title."    An exception to this exclusive jurisdiction is provided for in any "case involving a claim arising under any Act of Congress relating to copyrights or trademarks and no other claims under section 1338(a)."
                

That which triggers the exception of section 1295(a)(1) is not a claim, the issues of which can be fairly characterized as "relating to copyrights or trademarks and [relating to] no other claims under section 1338(a)," but rather the "case" which, while involving a claim "relating to copyrights or trademarks," involves in addition thereto "no other claims under section 1338(a)." The focus is not the interrelation of the issues involved in individual claims. The statute makes no mention of an exception to exclusive jurisdiction based on an issue analysis. If the exception of section 1295(a)(1) is applicable, it is as a result of an analysis of the jurisdictional basis of the appealed claims as each was correctly pled, accepted, and tried. The term "case" in this context refers collectively to the proceedings that transpired at the district court level when viewed pragmatically at the time of appeal.

Thus, the raising of patent issues in a separate appeal by Bandag, rather than in a cross-appeal, where those patent issues were tried below simultaneously with the trademark issues, has no impact on our disposition of the motion to transfer. No persuasive reason has been advanced in these circumstances for distinguishing between a cross-appeal and a separate appeal. ⁸ We explicitly reserve for future resolution the proper treatment to be accorded a similar motion to transfer in a case in which no appeal is brought of the patent issues tried before the district court.

Here there is no dispute that the trademark appeal of Bolser and the separate patent appeal by Bandag are both from "a final decision of a district court of the United States," or that the jurisdiction of that court was based, in whole or in part, on 28 U.S.C. Sec. 1338. Thus, both appeals are within the exclusive jurisdiction of this court, unless the exception within section 1295(a)(1) applies.

In the proceedings below, both the trademark and patent counts, though conceivably capable of independent resolution, were pled together and tried in a single case Bandag's motion to transfer the trademark appeal under 28 U.S. Sec. 1631 is thus denied.

from which a single judgment ultimately issued. While that case did involve a claim under section 1338(a) that arose under the Acts of Congress relating to trademarks, it involved in addition another claim under section 1338(a) which has been appealed and which arose under Acts of Congress relating to patents. This precludes application of the exception to the exclusive jurisdiction of the Federal Circuit in section 1295(a)(1).

B. Choice of Law

As to nonpatent...