ACME VALVE & FITTINGS COMPANY v. Wayne

• Decision Date: 09 July 1974
• Docket Number: Civ. A. No. 72-H-1194.
• Citation: 386 F. Supp. 1162
• Parties: ACME VALVE & FITTINGS COMPANY, Plaintiff, v. Edward WAYNE, d/b/a Gibraltar, Ltd., Defendant.
• Court: U.S. District Court — Southern District of Texas

386 F. Supp. 1162

ACME VALVE & FITTINGS COMPANY, Plaintiff, v. Edward WAYNE, d/b/a Gibraltar, Ltd., Defendant.

Civ. A. No. 72-H-1194.

United States District Court, S. D. Texas, Houston Division.

July 9, 1974.

Wilson & Guest, William F. Guest, Houston, Tex., Mason, Kolehmainen, Rathburn & Wyss, Clemens Hufmann, Chicago, Ill., for plaintiff.

Pravel, Wilson & Matthews, B. R. Pravel and John H. Dodge, II, Houston, Tex., for defendant.

MEMORANDUM OPINION & ORDER

SEALS, District Judge.

Plaintiff has brought this suit seeking to establish himself as the lawful owner of the trademark "OIC" and the trademark "OIC and Design," and Defendant has counterclaimed maintaining that he is in fact the owner of the trademarks. This suit involves questions of the exclusive right, title and interest in and to the trademarks "OIC" and "OIC and Design," infringement and unfair competition. Each party maintains that it has the exclusive right to use the designated trademarks on industrial valves which it sells in interstate commerce, and each party therefore claims that the other party is infringing its right to these "OIC" marks. Jurisdiction is based on the Trademark Laws, 15 U.S.C. §§ 1119, 1120 and 1121 and 28 U.S.C. §§ 1331, 1332 and 2201. Trial was held to the Court, after which both parties filed proposed findings of fact and conclusions of law and briefs in support thereof. This Memorandum Opinion will constitute the findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

A short discussion of the history of the trademarks involved is helpful in understanding the posture of the case as it appears before the Court at this time. Major valve manufacturers in the United States have long made it a general practice to use their names or abbreviations of their names as trademarks for their valves. These marks are usually a part of the metal casting of the valves, and customers often order valves specifying the manufacturer's name. The "OIC" trademarks involved in this suit were for many years used on valves manufactured by the Ohio Injector Company of Wadsworth, Ohio. This company was one of the major United States manufacturers of industrial valves and used the "OIC" trademarks on valves made of bronze, steel and iron. The trademark letters appeared in elevation on the housings of valves made by this corporation, and they also appeared on washers located in the center of the valve handles. These valves were sold all over the United States and were used by refineries in processing and transporting petroleum and other fluids. "OIC" valves enjoyed a good reputation and were advertised in catalogs and trade periodicals.

On January 17, 1931 Ohio Injector Company filed two applications for registration of the mark "OIC" in the Patent Office. These applications matured into Registrations No. 283,154 for "OIC and Design" and No. 283,155 for "OIC" on May 19, 1931. The registrations remained in effect until August 19, 1971 when they expired according to 15 U.S. C. § 1059 because no renewal applications were filed.

In November, 1966 all shares of stock of the Ohio Injector Company were acquired by Kearney of Ohio, a subsidiary of Kearney-National, Inc. In June, 1967 the Ohio Injector Company changed its name to the OIC Corporation. Then in the fall of 1969, Kearney-National sold the majority of the assets of OIC Corporation to Conval Corporation. At that time the OIC Corporation discontinued the manufacture of valves in commercial quantities. The sale included substantially the entire inventory of the steel valves which OIC Corporation had on hand at that time, but did not transfer any trademark rights. Conval Corporation manufactures valves but at no time have they sold them under the "OIC" trademark. On December 31, 1971 OIC Corporation filed a certificate of dissolution with the Secretary of State at Columbus, Ohio.

Both Plaintiff and Defendant are engaged in the business of buying and selling new and used valves and both are separate entities from the OIC Corporation, Kearney-National and Conval Corporations. Plaintiff has engaged in this business for forty years; the Defendant for twenty-five. Both have during this time bought and sold new and used OIC valves as have their competitors. In addition Defendant, in January of 1970, obtained valve patterns from Kerotest Corporation, a United States manufacturer of valves, which he turned over to Mr. L. Iturate of Spain to use in manufacturing valves for the Defendant to market in the United States and overseas.

With the above background information we now turn to the real question at hand, that is, who is the present owner of the trademarks "OIC" and "OIC and Design." Determination of all other issues follows the decision as to ownership. The Plaintiff traces his claim to ownership of the marks to a purchase made by him on January 20, 1970 from Kearney-National, Inc. of the entire inventory of finished bronze valves as evidenced by Purchase Order No. 687 which reads:

"For the following consideration $350,000 Acme Valve and Fittings Corp. is purchasing from Kearney-National all the Finished Bronze Valves on the inventory Stock Status Sheets dated 1-15-70, as amended to date, subject to a physical inventory verifying these amounts. Acme Valve is also purchasing all patterns, core boxes and drawings owned by Kearney-National Inc. and/or OIC and utilized in the manufacture of the above Bronze Valves.

Acme Valve & Fittings is also acquiring the use of OIC name and all trademarks in connection with that name and in connection with the manufacture and sale of these bonze valves."

Plaintiff further claims that he owns the "OIC" marks regardless of the interpretation of Purchase Order No. 687 through his independent usage of the mark.

The Defendant takes the position that the "OIC" marks were abandoned as evidenced by the sale of the entire valve inventories and by permitting the trademark registrations to expire, and that this abandonment left the marks open for adoption by others. This the Defendant did by filing a lawful registration, and manufacturing using that trademark. The Defendant maintains that Purchase Order 687 was not an assignment of the trademarks but was at most a license and as such was ineffective in that it lacked provisions for quality control and the placement of the mark. In addition, the Defendant argues that Plaintiff has no independent rights to the mark through usage because he has failed to identify his name with the marks or use them in any way as his own.

Trademark rights can be acquired in two ways: by getting ownership or title to another's trademark rights, or by the proper usage of a trademark associating or identifying the user as the owner of the work or the source of the product. Coca-Cola Bottling Co. v. Coca-Cola Co., 269 F. 796 (D.C.Del.1920); Wallace Torres Corp. v. Sutton Cosmetics (P.R.) Inc., 175 U.S. P.Q. 488 (1972).

In order for a transfer of rights in a trademark to constitute a sale or assignment, thereby vesting title to the trademark in a party, the transfer must be absolute and must relate to the entire rights in the trademark. In contrast to an assignment, a license to use a mark does not pass title to the trademark because it is a transfer of limited rights, less than the whole interest which might have been transferred. Jones v. Pepsi-Cola Company, 223 F. Supp. 650, 653 (D.C.Neb.1963); Armour et al. v. Commissioner of Internal Revenue, 101 U.S.P.Q. 257 (U.S.T.C.1954).

Having considered the testimony at trial carefully, along with all the documents entered into evidence and the briefs, the Court is convinced that Purchase Order 687, on which Plaintiff bases one of its claims to the "OIC" trademarks, means exactly what it says on its face and nothing more. Purchase Order 687 gave the Plaintiff the use of the "OIC" trademark and then only in relation to bronze valves even though the OIC Corporation had manufactured and held patents to steel valves and cast iron valves as well. The Purchase Order did not transfer any exclusive right, title or interest to the marks. Clearly, Kearney-National, who still held the "OIC" marks although many of the assets of the OIC Corporation had been sold to Conval, could have transferred as of January 20, 1970 the exclusive right, title and interest in the "OIC" marks for all valves to the Plaintiff or anyone else, but they did not. They only transferred the right to use the "OIC" trademarks with relation to bronze valves, and this transfer was substantially less than what they held. The only evidence to the contrary, that is that Purchase Order 687 was intended to transfer all interest in the "OIC" marks, is the uncorroborated testimony of Plaintiff's Vice-President. However, the Court cannot give this evidence much weight in light of the witness' interest in establishing his rights to the marks.

There is no evidence that subsequent to the January 20, 1970 Purchase Order Kearney transferred the rights to the trademarks to anyone, prior to their expiration on August 19, 1971. Furthermore, there is no evidence to indicate that Plaintiff made any attempt to obtain a transfer of the United States Trademark registrations 283,155 and 283,154 from Kearney-National to themselves although the registrations were in full force on January 20, 1970 when the Purchase Order 687 was executed. Nor did Plaintiff file an application in the United States Patent Office to register the "OIC" marks as its trademarks after the registrations expired on August 19, 1971 or at any other time.

In addition, the Vice-President of Plaintiff admitted that Plaintiff received under Purchase Order 687 patterns and molds for bronze valves only, and such patterns and molds were not suitable for manufacturing steel or iron valves. Plaintiff at no time was transferred the entire assets of the old OIC Corporation for manufacturing all types of valves but instead was expressly limited to the...