Kimberly-Clark Corp. v. Fort Howard Paper Co.

• Decision Date: 06 September 1985
• Docket Number: No. 85-902,KIMBERLY-CLARK,85-902
• Citation: 772 F.2d 860,227 USPQ 36
• Parties: CORPORATION, Appellant, v. FORT HOWARD PAPER COMPANY, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 860

772 F.2d 860

227 U.S.P.Q. 36

KIMBERLY-CLARK CORPORATION, Appellant, v. FORT HOWARD PAPER COMPANY, Appellee.

Appeal No. 85-902.

United States Court of Appeals, Federal Circuit.

Sept. 6, 1985.

Dean A. Olds, Willian, Brinks, Olds, Hofer, Gilson & Lione, Ltd., Chicago, Ill., argued for appellant. With him on brief was Thomas M. O'Malley, Chicago, Ill.

Boyd A. Tracy, Kimberly-Clark Corp., Neenah, Wis., of counsel.

George P. McAndrews, Allegretti, Newitt, Witcoff & McAndrews, Ltd., Chicago, Ill., argued for appellee. With him on brief were L. Michael Jarvis, Allegretti, Newitt, Witcoff & McAndrews, Ltd., Chicago, Ill., of counsel, and Joseph D. Kaufman, Fort Howard Paper Co., Green Bay, Wis., of counsel.

Before FRIEDMAN, DAVIS and NIES, Circuit Judges.

NIES, Circuit Judge.

This appeal is from the decision of the Trademark Trial and Appeal Board (TTAB) of the Patent and Trademark Office (PTO) sustaining an opposition by Fort Howard Paper Company to registration by Kimberly-Clark Corporation of the mark KIMTEX for "non-woven fabric articles, namely, wiping cloths." ¹ The board held, inter alia, that a settlement agreement entered into in 1924 between the applicant's predecessor and the opposer "precluded" registration of the subject mark. Since we conclude that a registration for non-woven fabric wiping cloths is not barred by the agreement, we reverse.

I.

Kimberly-Clark seeks to register the mark KIMTEX for "non-woven fabric articles, namely, wiping cloths" in International Class 24 (U.S. Class 42). The facts relating to the prosecution of that application and the course of the inter partes proceedings leading to this appeal are detailed in the board's opinion. Familiarity with these facts will be assumed. ² It suffices here to note that Fort Howard asserted three grounds for opposing the application:

(1) a 1924 settlement agreement which, opposer asserted, barred Kimberly-Clark from securing the registration sought;

(2) likelihood of confusion between KIMTEX for wiping cloths and the Fort Howard mark KRAFTEX for paper towels; and

(3) likelihood of confusion between KIMTEX for wiping cloths and a "family" of ... TEX marks, e.g., KRAFTEX, VEL-TEX, SPRUTEX, MILTEX and others of Fort Howard for a line of paper products.

The board held that Fort Howard failed to establish a family of ... TEX marks; that numerous uses of TEX marks for paper products and/or non-woven wipers by third parties had been proved; and that Fort Howard had failed to establish likelihood of confusion between the KIMTEX mark and any of its marks, either individually or as a group. Fort Howard did not appeal and does not now challenge the board's decision on the issue of likelihood of confusion.

The 1924 agreement between Fort Howard and Cellucotton Products Company, a predecessor of Kimberly-Clark, resolved an opposition by Cellucotton to Fort Howard's application to register KRAFTEX for toilet paper, paper napkins, paper towels, and paper tablecloths based on Cellucotton's prior use and registration of the mark KOTEX for sanitary napkins. Cellucotton agreed to dismiss the opposition in consideration of Fort Howard's promise that, should it ever engage "in the business of making and (or) selling sanitary napkins, it will not use in any way, in connection with the sale of said sanitary napkins, the name or mark 'Kraftex', or any other name or mark terminating in the suffix 'tex' or the equivalent thereof."

Cellucotton reciprocally agreed that, should it ever engage "in the business of making and/or selling of toilet paper, paper napkins, paper towels, or paper tablecloths, it will not use in any way, in connection with the sale of said toilet paper, paper napkins, paper towels, or paper tablecloths, any word terminating in the suffix 'tex' or the equivalent thereof."

The decision by the board sustaining the subject opposition rests solely on its determination that the rights and obligations flowing from the above agreement preclude Kimberly-Clark from registering KIMTEX for non-woven fabric wiping cloths. It is this part of the board's decision that is the subject of this appeal by Kimberly-Clark.

II.

The issues raised by Kimberly-Clark are the following:

A. Whether the Trademark Trial and Appeal Board erred in permitting a 1924 agreement between Fort Howard and Kimberly-Clark's predecessor to solely dictate its decision to deny registration of Kimberly-Clark's KIMTEX mark, despite its express finding that there is no likelihood of confusion between the KIMTEX mark and any of Fort Howard's marks, either individually or as a group; and

B. Whether the TTAB erred in its interpretation and enforcement of the 1924 agreement.

III.

Kimberly-Clark asserts that the board erred in treating the 1924 settlement agreement as dispositive of the case, despite the board's conclusion that there was no likelihood of confusion between Kimberly-Clark's use of KIMTEX for wiping cloths and Fort Howard's use of KRAFTEX and other ... TEX marks for paper towels and other paper products.

Kimberly-Clark argues that the board has statutory jurisdiction only over the question of likelihood of confusion and that an agreement between the parties is but one factor to be considered in resolving that question. It argues that the law is clear that a private agreement, consent, or other arrangement between the parties cannot "dictate the decision which the Patent and Trademark Office must make on registration," citing Chromalloy American Corp. v. Kenneth Gordon (New Orleans) Ltd., 736 F.2d 694, 699, 222 USPQ 187, 191 n. 4 (Fed.Cir.1984); In re E.I. DuPont de Nemours & Co., 476 F.2d 1357, 1362, 177 USPQ 563, 568 (CCPA 1973); and In re Continental Baking Co., 390 F.2d 747, 749, 156 USPQ 514, 516 (CCPA 1968). Thus, per Kimberly-Clark, the board may decide other issues, which it characterizes as "collateral," only as necessary in the course of its exercise of its statutory jurisdiction. In other words, according to Kimberly-Clark, an agreement between the parties cannot provide an independent basis for denying registration.

Kimberly-Clark's position is clearly untenable and its reliance on the Chromalloy decision for support is misplaced. Indeed, Chromalloy supports the board's position that an agreement between parties may bar registration, wholly apart from the issue of likelihood of confusion.

In Chromalloy the board had dismissed an opposition on two grounds:

(1) under principles of claim preclusion (res judicata ) arising from a consent judgment in prior litigation between the parties; and

(2) by reason of a consent by the opposer to registration by the applicant purportedly given by the terms of the decree entered in that litigation.

Kimberly-Clark points to a statement by this court, in reversing the board's decision in Chromalloy, that it was "legal error" for the board to have "treated the consent judgment as dispositive of the case." That statement, per Kimberly-Clark, constitutes a holding that no consent decree or other agreement between the parties can be dispositive of contested proceedings before the board and that the board's jurisdiction is limited to the issue of likelihood of confusion.

Kimberly-Clark's interpretation of Chromalloy is unwarranted. The statement extracted by Kimberly-Clark from that opinion, in context, related to the res judicata effect of a consent decree as a judgment, not to its effect on registrability as an agreement between the parties. Moreover, Kimberly-Clark's suggested interpretation of the Chromalloy case would represent a major departure from the precedent of this court, as will be discussed. Counsel is apparently unaware that a panel of this court is bound by prior precedential decisions unless and until overturned in banc. Thus, statements in opinions of this court must be read harmoniously with prior precedent, not in isolation. Had counsel done so in this case, the first issue would have been discarded, and substantial portions of both briefs, as well as the time devoted to the issue at oral argument, would have been unnecessary.

With respect to the argument that the board has no jurisdiction over issues other than likelihood of confusion in an opposition, the precedent of this court is unequivocally that the issues in an opposition are not so restricted. As stated in California Packing Corp. v. Sun-Maid Raisin Growers of California, 64 F.2d 370, 372-73, 17 USPQ 257-58 (CCPA 1933), cert. denied, 298 U.S. 668, 56 S.Ct. 833, 80 L.Ed. 1391 (1935):

We will first consider the matter relating to said contract of March 10, 1917, for if the Commissioner was in error in his holding that said contract was not material to the question of registration of appellee's marks, and if we should also find that said contract bars appellee from asserting ownership of said marks used upon goods named in its applications, then the decision of the Commissioner must be reversed and the oppositions sustained, rendering it unnecessary for us to consider the question of confusing similarity of the marks of the respective parties. [Emphasis added.]

That the board replaced the Commissioner as the adjudicator of oppositions did not restrict the scope of the issues in such proceedings.

Kimberly-Clark also confuses the effect of an agreement consenting to another's use and/or registration with the effect of an agreement barring another's use and/or registration. This difference is also clearly articulated in the California Packing decision:

The Commissioner erred in holding that the legal effect of said contract of March 10, 1917, could not be considered by him, and the case of Skookum Packers' Association v. Pacific Northwest Canning Co., 45 F. (2d) 912, 18 C.C.P.A. 792, does not support his ruling. In that case we held that "parties can not, by their conduct or by any agreement, confer upon the Commissioner of Patents the power to do that which the law forbids." No such question is involved in the case at bar. Here the...