Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc.

• Decision Date: 22 May 1989
• Docket Number: No. 88-5025,BURKE-PARSONS-BOWLBY,88-5025
• Citation: 871 F.2d 590,10 USPQ2d 1443
• Parties: CORPORATION, Plaintiff-Appellant, v. APPALACHIAN LOG HOMES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 590

871 F.2d 590

10 U.S.P.Q.2d 1443

BURKE-PARSONS-BOWLBY CORPORATION, Plaintiff-Appellant, v. APPALACHIAN LOG HOMES, INC., Defendant-Appellee.

No. 88-5025.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 13, 1988.

Decided April 5, 1989.

Rehearing and Rehearing En Banc Denied May 22, 1989.

Cecilia S. Lambert (argued), David E. Rodgers, Kramer, Rayson, McVeigh, Leake & Rodgers, Knoxville, Tenn., for Burke-Parsons-Bowlby Corp.

W.P. Boone Dougherty (argued), Harwell & Nichols, Knoxville, Tenn., for Appalachian Log Homes, Inc.

Before KRUPANSKY and GUY, Circuit Judges and MEREDITH, District Judge. ^*

MEREDITH, District Judge.

On November 30, 1987, the Honorable Judge Thomas G. Hull entered his Order denying injunctive relief to appellant Burke-Parsons-Bowlby Corporation (BPB), a Virginia corporation, which owned a validly registered trademark in the phrase APPALACHIAN LOG STRUCTURES. Appellants argued that appellee, Appalachian Log Homes, Inc., a Tennessee corporation, should be enjoined from their use of APPALACHIAN LOG HOMES as it constituted an infringement of BPB's registered mark. The District Court ruled for the defendant-appellee and we now affirm the decision of the District Court.

BPB applied for a registered trademark for the term APPALACHIAN LOG STRUCTURES in December of 1981 and as evidence of the establishment of secondary meaning, BPB informed the Patent and Trademark Office that it had spent $100,000 in advertising the name APPALACHIAN LOG STRUCTURES and had received approximately $2,000,000 in gross sales of log residences under that name. On August 30, 1983, the Patent and Trademark Office, pursuant to Title 15 U.S.C. Sec. 1052(f), issued a certificate of registration for the mark APPALACHIAN LOG STRUCTURES.

From January of 1980, BPB advertised the name APPALACHIAN LOG STRUCTURES on a regular basis in various periodicals including Log Home Guide, Country Homes, The Log Home Annual, Mother Earth News, Alternative House Builder, and Better Building Ideas. BPB specifically advertised in Tennessee during the Knoxville Home Show in April of 1981, including radio and newspaper advertising. A dealership for Appalachian Log Structures was established in Seymour, Tennessee in January of 1981. In addition, in June of 1981 an Appalachian Log Structure dealership was established in New Smyrna Beach, Florida, which notably was the home of Ken Winter, the financier of Appalachian Log Homes, Inc., though no evidence indicated that Winter had prior knowledge of Appalachian Log Structures.

Appellee, Appalachian Log Homes, Inc., began using its name in the east Tennessee area in August of 1981. The name was chosen to represent the location in which the business was located and the kind of product that was sold. The record does not reflect any prior knowledge on the part of appellee of the existence of Appalachian Log Structures.

Appalachian Log Homes builds only handcrafted log homes using Western Hemlock logs with a flat hand-hewn surface and connecting dovetail notches on the logs. The Western Hemlock logs are taken from the core of the tree, measure six inches in depth, twelve inches in height and are up to forty feet in length. Their massive size requires a fifteen (15) ton crane to set the logs and thus the residences cannot be sold as a do-it-yourself kit.

On the other hand, BPB through Appalachian Log Structures, manufactures a variety of log structures including commercial buildings and log residences. BPB utilizes primarily round, pressure treated logs of much shorter length made from pine. The logs are notched so that they ultimately form a solid wood wall and can be erected by the home buyer. BPB also manufactures hand-hewn square logs with dove-tailed ends.

The testimony of Dr. Leonard W. Brinkman, Associate Professor of Geography at the University of Tennessee was offered by appellee as evidence of the geographically descriptive nature of the term APPALACHIAN. Dr. Brinkman testified that he teaches a course at the University of Tennessee entitled "Geography of Appalachia" and that the term APPALACHIAN refers to an area "extending from the southern part of the State of New York to the central part of the state of Alabama, and in an east-west direction from the Blue Ridge and Smokey Mountains to the plateau regions of Ohio and states to the southwest." (Joint Appendix Pg. 68A). Furthermore, the term APPALACHIAN is used in governmental activity to name a Regional Commission in the Appalachian area, to identify a region for study within the Department of Agriculture and in a report to the news media regarding the rivers, forests, and mountains of the southern Appalachian region. In 1910, the Appalachian Exposition was held in Knoxville, Tennessee. Dr. Brinkman testified that the term APPALACHIAN has been used in the public domain since 1902. A map prepared by the United States Geological Survey was introduced and the title of the map was the "Appalachian Region." The map indicated that the "Appalachian Region" extends into the east Tennessee area as well as West Virginia, the western counties of Virginia and the western counties of North Carolina.

The appellee offered the testimony of Larry Hagood, a licensed attorney in the State of Tennessee who found by virtue of his research that the term APPALACHIAN was used in 132 business titles in North Carolina, Virginia and West Virginia.

The Lanham Act provides in pertinent part that:

No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it--

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(e) Consists of a mark which, (1) when applied to the goods of the applicant is merely descriptive ... or (2) when applied to the goods of the applicant is primarily geographically descriptive....

(f) Except as expressly excluded in paragraphs (a)--(d) of this section, nothing in this chapter shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant's goods and commerce. The Commissioner may accept as prima facie evidence that the mark has become distinctive, as applied to the applicant's goods and commerce, proof of substantially exclusive and continuous use thereof as a mark by the applicant in commerce for the five years next preceding the date of the filing of the application.

Title 15 U.S.C. Sec. 1052. Receipt of a registered trademark automatically invokes a statutory presumption that the trademark is valid. Title 15 U.S.C. Sec. 1115(a). The statutory presumption shifts the burden of proof to the party challenging the validity of the mark. WSM, Inc. v. Hilton, 724 F.2d 1320, 1326 (8th Cir.1984); Scientific Applications, Inc. v. Energy Conservation Corp., 436 F.Supp. 354 (D.C.Ga.1977). Furthermore, the District Court may not overrule the decision of registerability of the Patent and Trademark Office (PTO) unless the party challenging the mark argues persuasively that the mark was ineligible for protection. Scientific Applications, 436 F.Supp. at 360. Validity of a registered trademark is contingent on determining first whether the mark is (1) arbitrary and fanciful; (2) suggestive; (3) descriptive; or (4) generic. WLWC Centers, Inc. v. Winners Corp., 563 F.Supp. 717, 719 (D.Tenn.1983). Neither generic nor descriptive terms are protectable without establishing secondary meaning. 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 747 F.2d 81, 87 (2nd Cir.1984). A mark is descriptive:

"... if it describes: the intended purpose, function or use of the goods; the class of users of the goods; a desirable characteristic of the goods; or the end effect upon the user."

Wynn Oil Co. & Classic Car Wash Inc. v. Thomas, 839 F.2d 1183, 1190 (6th Cir.1988). If the mark "imparts information directly, it is descriptive." Anheuser-Busch, Inc. v. Stroh Brewery Co., 587 F.Supp. 330, 335 (E.D.Mo.1984); affirmed 750 F.2d 631 (8th Cir.1984). APPALACHIAN LOG STRUCTURES refers to either the origin of the log structures or to a particular style of log structures. The term LOG is a generic term commonly used to denote a rough cut portion of a tree and the term STRUCTURE is a commonly used descriptive term. The parties do not dispute the classification of the terms LOG and STRUCTURE as made by the District Court. Instead the controversy centers on whether APPALACHIAN LOG STRUCTURES is a primarily geographically descriptive term.

The appellee introduced substantial evidence supporting the District Court's determination that APPALACHIAN LOG STRUCTURES is primarily geographically descriptive. The Appalachian region has been publicly acknowledged as a distinct, identifiable region since 1902. Furthermore, the regionally descriptive term APPALACHIAN is used in 132 businesses located in the Appalachian region. The Lanham Act does not protect primarily geographically descriptive marks.

"It is plain that the congressionally established prohibition against registration of geographical names or terms basically stems from the realization that most terms in the vocabulary of this science are generic or descriptive. Thus, Congress has expressly left accessible to all potential users those names of subdivisions of the earth--regions, nations, counties, town, rivers, lakes, and other natural and artificial geographical units--which could be employed to draw public attention to the origin of a product or the situs of a business. It would obviously promote unfair competition to proscribe for all save a single producer the name of a region and thereby preclude other producers of the same product in the same region from indicating their product's origin."

World Carpets, Inc. v. Dick Littrell's New World Carpets, 438 F.2d 482, 485 (5th Cir.1971). Where it is determined that the mark as perceived by potential purchasers describes the geographic origin of the goods the mark is primarily geographically descriptive. In re Nantucket, 677 F.2d...