Anti-Monopoly, Inc. v. General Mills Fun Group
| Decision Date | 20 December 1979 |
| Docket Number | ANTI-MONOPOL,INC,No. 77-2302,77-2302 |
| Citation | 611 F.2d 296,204 USPQ 978 |
| Parties | , 204 U.S.P.Q. 978 , Plaintiff-Appellant, v. GENERAL MILLS FUN GROUP et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Robert B. Chickering (argued) of Warren Chickering & Grunewald, and John H. Denton, Oakland, Cal., for appellant Anti-Monopoly, Inc. Robert S. Daggett (argued) of Brobeck, Phleger & Harrison, San Francisco, Cal., and Oliver P. Howes of Nims, Howes, Collison & Isner, New York City, for defendants-appellees.
Appeal from the United States District Court for the Northern District of California.
Before WALLACE and SNEED, Circuit Judges, and BLUMENFELD, * District Judge.
Anti-Monopoly, Inc. (Anti-Monopoly) appeals from a district court judgment declaring that the MONOPOLY trademark of Parker Brothers, an unincorporated division of General Mills Fun Group, Inc., is valid and enforceable, and that Anti-Monopoly's use of the name "Anti-Monopoly" as the title of its own game constitutes an infringement thereof. Anti-Monopoly also appeals from the district court's issuance of a permanent injunction which, among other things, forbids Anti-Monopoly from using the words ANTI-MONOPOLY as a trademark, or trade or corporate name, and which requires Anti-Monopoly to submit all offending materials for destruction. We reverse and remand the case to the district court for further findings concerning the validity and enforceability of the MONOPOLY trademark.
The game of "Monopoly" was first played from 1920 to 1932 on various college campuses by a small group of individuals, many of whom were related by blood or marriage. In late 1932 or early 1933 one of these players introduced Charles Darrow to the game, and gave him a handmade game board, rules, and associated equipment. Immediately thereafter Darrow commenced commercially producing and selling "Monopoly" game equipment.
In October 1933, Darrow obtained a copyright on some part of the "Monopoly" game equipment, probably the rules. In March 1935, Parker Brothers acquired all of Darrow's rights to the "Monopoly" game and game equipment. In August 1935, Darrow applied for a patent. The application stated:
This invention relates to board game apparatus and is intended primarily to provide a game of barter, thus invoking trading and bargaining.
The board as a whole is indicated . . . in Fig. 1. Inasmuch as the game is known upon the market as Monopoly, that game is indicated .
The patent issued on December 31, 1935 and was promptly assigned to Parker Brothers. It expired 17 years later, in 1952.
Parker Brothers registered the word MONOPOLY as a trademark in 1935 and 1936. It remains the owner of trademark registration numbers 326, 723, issued July 30, 1935, and 38,834, issued September 15, 1936, for the MONOPOLY trademark.
During the years 1935 to 1952, Parker Brothers relied primarily on its patents to protect its monopoly of "Monopoly." When the patent expired, however, Parker Brothers began to concentrate on preserving the value of its MONOPOLY trademark. Parker Brothers eliminated references in the game rules to becoming the "monopolist." It also created the "generic" expression "real estate trading game equipment," which it used in conjunction with the MONOPOLY trademark on the game carton and in advertisements. Parker Brothers apparently hoped by these steps to keep the word MONOPOLY from falling into the public domain as a "generic" term. The major question which we reach on appeal is whether Parker Brothers succeeded.
In December 1973, Anti-Monopoly, headed by its president, Ralph Anspach, first marketed "Anti-Monopoly," a game which Anspach created. Anspach asserts that the game is designed to emphasize the values of the competitive private enterprise system. At first he intended to market his game under the title, "Bust the Trust, The Anti-Monopoly game," but he later decided that "Anti-Monopoly" would be a better title. The United States Patent and Trademark Office rejected Anti-Monopoly's 1973 trademark application because of the possibility of confusion, mistake, or deception. For reasons of its own, Anti-Monopoly chose not to pursue this application any further.
Anti-Monopoly, which has sold over 400,000 of its games, sought a declaratory judgment that the MONOPOLY trademark is invalid and that its use of the name "Anti-Monopoly" does not infringe the MONOPOLY mark. In addition, Anti-Monopoly sought to have the MONOPOLY trademark cancelled. Parker Brothers counterclaimed for the declaratory and injunctive relief which the district court granted, and from which Anti-Monopoly now appeals.
Anti-Monopoly raises four principal contentions in its appeal: (1) That for a variety of reasons, the district court erred when it concluded that the MONOPOLY trademark had not been invalid originally or since become invalid; (2) That the district court erred when it found that Anti-Monopoly had infringed the MONOPOLY trademark; (3) That the district court erred because it did not find that the equitable defense of "unclean hands" barred injunctive relief in favor of Parker Brothers; and (4) That the district court erred when it rejected Anti-Monopoly's demand for a jury trial. We consider each of these contentions in turn.
The invalidity issue is not one of easy resolution. Both parties agree that Parker Brothers' MONOPOLY trademark has become incontestable unless: (1) MONOPOLY was, when Parker Brothers first registered the mark, or has since become, the common descriptive name ("generic" name) of the registered article, 15 U.S.C. §§ 1064(c), 1065(4); or (2) Parker Brothers obtained its registration fraudulently, 15 U.S.C. § 1064(c). During final argument in the district court, however, counsel for Anti-Monopoly conceded that he had failed to prove fraud. Thus, Anti-Monopoly's sole remaining contention regarding the invalidity of the MONOPOLY trademark is that the term Monopoly was originally or has become the generic name for an article.
The United States encourages invention and development of new products, ideas, and systems by granting, pursuant to the patent laws, limited monopolies over the manufacture and sale of such products. See U.S.Const. art. I, § 8, cl. 8; 35 U.S.C. § 1 Et seq. But patent protection is a sharply confined exception to a general "principle of free competition in business ideas and intellectual creations." 1 J. McCarthy Trademarks and Unfair Competition, § 1:1 at 2 (1973). 1 Thus, when a patent expires, the idea, system, or product passes into the public domain and may be freely copied, so long as the copyist uses reasonable care to prevent the public from misidentifying his product as that of the original producer. See Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 117-19, 59 S.Ct. 109, 83 L.Ed. 73 (1938); Saxlehner v. Wagner, 216 U.S. 375, 381, 30 S.Ct. 298, 54 L.Ed. 525 (1910); Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 185-86, 16 S.Ct. 1002, 41 L.Ed. 118 (1896).
Trademarks, See 15 U.S.C. § 1051 Et seq., are not properly used as patent substitutes to further or perpetuate product monopolies. Smith v. Chanel, Inc., 402 F.2d 562, 566-69 (9th Cir. 1968). Rather, trademark policies are designed (1) to protect consumers from being misled as to the enterprise, or enterprises, from which the goods or services emanate or with which they are associated; (2) to prevent an impairment of the value of the enterprise which owns the trademark; and (3) to achieve these ends in a manner consistent with the objectives of free competition.
HMH Publishing Co. v. Brincat, 504 F.2d 713, 716 (9th Cir. 1974). Buyers may especially trust the constancy of quality emanating from a particular producer. Trademarks enable producers to capitalize on such goodwill, by providing a sure method of identifying a particular producer's goods to the public. Used as a means of identifying the trademark owner's products, a trademark "makes effective competition possible in a complex, impersonal marketplace by providing a means through which the consumer can identify products which please him and reward the producer with continued patronage." Smith v. Chanel, Inc., supra, 402 F.2d at 566.
Moreover, once this goodwill is established, trademarks become an extremely important medium of advertisement. Provided that the public continues to understand the trademark term primarily as a source identifier, the particular producer is exclusively entitled to benefits flowing from the mark's sales appeal. 2
Thus, "(t)he trademark can be a potent weapon in the competitive contest, for it guarantees, identifies, and sells the article to which it refers." 3 R. Callman, Unfair Competition, Trademarks, and Monopolies § 65 at 3 (1969). But all of these legitimate trademark purposes derive ultimately from the mark's representation of a single fact: the product's source. It is the source-denoting function which trademark laws protect, and nothing more. See Smith v. Chanel, Inc., supra, 402 F.2d at 566-69. The trademark is misused if it serves to limit competition in the manufacture and sales of a product. Id. That is the special province of the limited monopolies provided pursuant to the patent laws.
The genericness doctrine in trademark law is designed to prevent such anti-competitive misuse of trademarks. At its simplest, the doctrine states that when a trademark primarily denotes a product, not the product's producer, the trademark is lost. As we have stated, "one competitor will not be permitted to impoverish the language of commerce by preventing his fellows from fairly describing their own goods." Bada Co. v. Montgomery Ward & Co., 426 F.2d 8, 11 (9th Cir.), Cert. denied, 400 U.S. 916, 91 S.Ct. 174, 27 L.Ed.2d 155 (1970). Thus, the Lanham Act, enacted in 1947, provides for the cancellation of a trademark if "at any time (it) becomes the...
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