T & T MFG. CO. v. AT Cross Co.

• Decision Date: 24 March 1978
• Docket Number: Civ. A. No. 5267.
• Citation: 449 F. Supp. 813
• Court: U.S. District Court — District of Rhode Island
• Parties: T & T MANUFACTURING COMPANY, Plaintiff, Jonathan Bradley Pens, Inc., Intervenor, the Quill Company, Inc., Second Intervenor, v. A. T. CROSS COMPANY, Defendant.

449 F. Supp. 813

T & T MANUFACTURING COMPANY, Plaintiff, Jonathan Bradley Pens, Inc., Intervenor, the Quill Company, Inc., Second Intervenor, v. A. T. CROSS COMPANY, Defendant.

Civ. A. No. 5267.

United States District Court, D. Rhode Island.

March 24, 1978.

James K. Edwards, Providence, R. I., for plaintiff and intervenor.

George L. Graff, New York City, for intervenor Jonathan Bradley Pens.

Robert L. Thompson, Boston, Mass., for second intervenor Quill Co.

Herbert B. Barlow, Jr., Providence, R. I., Leslie D. Taggart, New York City, for defendant.

OPINION

PETTINE, Chief Judge.

T & T Manufacturing Company (T&T) filed this action on appeal from a decision of the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (Board)¹ that upheld the application of the defendant A. T. Cross Company (Cross) to register as a trademark the silver-colored top on its writing instruments.

Defendant Cross and plaintiff-intervenors Jonathan Bradley Pens, Inc. (Bradley) and The Quill Company, Inc. (Second-Quill), engage in the manufacture and sale of mechanical pens and pencils. Plaintiff T&T sells mechanisms and findings for mechanical pens and pencils and wholly owns the intervenor Second-Quill, its subsidiary. T&T joined by the intervenors on appeal from the Board, sought a declaration that Cross' trademarks are invalid and that neither T&T, Second-Quill, nor Bradley infringe those trademarks, nor engage in unfair competition.

Jurisdiction is under Sections 21, 32(1) and 39 of the Lanham Act, 15 U.S.C. §§ 1071, 1114(1) and § 1121 and 28 U.S.C. § 1338.

The complicated background of this case needs to be set forth to appreciate the present posture of the controversy. On June 19, 1951, trademark registrations were issued to Cross for a black top (Reg. No. 543,934), and on April 11, 1967, for a gold top (Reg. No. 827,167), on its mechanical pens and pencils. There is also pleaded Registration No. 920,728 which is for essentially the same mark as Registration No. 543,934. It is agreed reference to Registration No. 543,934 may be considered reference to Registration No. 920,728.

In 1965 a Rhode Island corporation named The Quill Company (First-Quill), was engaged in the manufacture of mechanical pens and pencils. On October 25, 1965 Cross filed suit against First-Quill in this Court (C.A. 3563), alleging infringement of its trademark registration numbered 543,934. This case was settled by an agreement between First-Quill and Cross dated November 29, 1967. By the terms of said agreement First-Quill could continue manufacturing its writing instruments that had black, silver and gold conical tops (exhibits C, D and F). The precise wording of the agreement is:

1. QUILL hereby agrees not to manufacture or sell any writing instrument which has an exterior appearance closer to the exterior appearance of the CROSS pen and pencil attached hereto as Exhibits A and B than the exterior appearance of the QUILL pen and pencils attached hereto as Exhibits C, D and F, so long as the said CROSS trademark is respected by the trade and said trademark registrations remain in full force and effect.

2. CROSS agrees that it will not sue QUILL for unfair competition, infringement of said trademark or infringement of said trademark registrations unless QUILL breaches the agreement of paragraph 1.

3. CROSS hereby releases QUILL and its customers from all debts, complaints, demands and causes of action and whatsoever such as have arisen by reasons of or in any manner grown out of the facts alleged in said Civil Action prior to the date of this agreement.

4. The parties agree that forthwith after the execution of this agreement said Civil Action shall be terminated by a Consent Judgment dismissing it without prejudice and without any award of damages or costs to either party.

5. This agreement shall be deemed to constitute a contract made under the laws of the State of Rhode Island and for all purposes shall be construed in accordance with the laws of such State.

6. This agreement shall be binding upon and inure to the benefit of each party, its successors in business and assigns.

On November 21, 1969, Cross filed an application to register a silver top. The application was for "a silver frustro-conical member at the end of a writing instrument body opposite the writing point, which member is adjacent to a portion of contrasting color". T&T, at that time a manufacturer of mechanical pens and pencils with a silver end member, opposed the application, claiming prior first use and continuous manufacture of its pens and pencils with silver tops. It further claimed, "Applicant's Silver End Member is not capable of functioning as a trademark and that silver end members adjacent to a portion of contrasting color or non-contrasting color for pens and pencils is common, general and/or descriptive to the pen and pencil industry and accordingly is not the proper subject for a monopoly. . . ." T&T's opposition was dismissed on April 27, 1973, and T&T appealed.

In March of 1972, while the opposition was pending, T&T purchased from First-Quill the settlement agreement between First-Quill and Cross. It also purchased the pen and pencil equipment and supplies that First-Quill had on hand.

On September 21, 1972, T&T incorporated Second-Quill as a wholly-owned subsidiary; on September 28, 1972, T&T executed an assignment of its rights under the 1967 settlement agreement to Second-Quill and sold Second-Quill the equipment it had acquired from First-Quill. Second-Quill then started manufacturing and selling pens and pencils with tops which are the subject of this suit. T&T had discontinued manufacturing complete pens and pencils in 1970.

There is no need to discuss the position of Intervenor Bradley in this case because, by agreement of partial discontinuance, the claims of all parties in the Bradley controversy have been dismissed with prejudice. Similarly, by agreement, T&T accepted the decision of the Board dismissing T&T's opposition. All that remains in the case is the complaint of Second-Quill seeking a declaration that Cross' trademark registrations 543,934 and 827,167 are invalid; and that Second-Quill's sales of its writing instruments do not infringe Cross' trademarks or constitute unfair competition. Also remaining is Cross' counterclaim seeking dismissal of Second-Quill's complaint, injunctive relief and an accounting.

I. VALIDITY OF CROSS' TRADEMARKS

A trademark is an identifying character of goods that is designed to attract potential customers by labeling the particular item with its maker's reputation. A well-earned reputation is profitably exploited through the mechanism of trademark merchandising. Trademark law recognizes as well the concomitant right of the purchaser to be protected from the ingenuity of the exploiters making similar goods who seek to mislead him.

The United States Supreme Court described the function of trademarks in Mishawaka Mfg. Co. v. Kresge Co., 316 U.S. 203, 205, 62 S.Ct. 1022, 1024, 86 L.Ed. 1381 (1942) thus:

The protection of trade-marks is the law's recognition of the psychological function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a merchandising shortcut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means employed, the aim is the same — to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress.

In A. E. Staley Manufacturing Co. v. Staley Milling Co., 253 F.2d 269, 275 (7th Cir. 1958), the Seventh Circuit further articulated the dual purpose of trademarks:

Our alertness to the social values in and functions of trademarks flows from and parallels the dual purposes of the trademark statute . . . one . . . to protect the public so that it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows, it will get the product which it asks for and wants to get. Secondly, where the owner of a trademark has spent energy, time and money in presenting to the public the product, he is protected in his investment from its misappropriation by pirates and cheats.

Since Second-Quill has challenged the validity of Cross' trademarks, the Court must make the threshold determination that the trademarks are indeed valid. Basically, we are talking of a color combination — namely, a colored top against a barrel of contrasting color. Cross concedes, as it must, that color alone cannot be appropriated as a trademark. However, it points out that its trademark is the application of a color in an arbitrary manner to a conical shaped portion of the top of its writing instruments, with a barrel and writing portion of the same or contrasting color. This motif creates a unique and distinguishing commercial impression which is exclusively Cross'. As the First Circuit has recently held, "Color in combination with a distinctive arbitrary design can be a valid trademark." Quabaug Rubber Company v. Fabiano Shoe Co., Inc., 567 F.2d 154, 161 (1st Cir. 1977), citing Mishawaka Rubber & Woolen Manufacturing Co. v. Panther-Panco Rubber Co., 153 F.2d 662, 68 U.S.P.Q. 232 (1st Cir. 1946).

Cross correctly cites decisions by many courts that have recognized and protected trademarks consisting of a design similar to Cross' mark, e. g., Mishawaka Mfg. Co. v. Kresge Co., supra, (a "red dot" in rubber heels); Pachmayr Gun Works, Inc. v. Olin Mathieson Chemical Corp., 502 F.2d 802, 805 (9th Cir. 1974) (a "white line" on gun recoil pads); Application...