Anti-Monopoly, Inc. v. General Mills Fun Group, C-74-0529 SW.

• Decision Date: 11 May 1981
• Docket Number: No. C-74-0529 SW.,C-74-0529 SW.
• Citation: 515 F. Supp. 448
• Parties: ANTI-MONOPOLY, INC., a California Corporation, Plaintiff, v. GENERAL MILLS FUN GROUP, INC., a Nevada Corporation, Defendant-Counterclaimant.
• Court: U.S. District Court — Northern District of California

515 F. Supp. 448

ANTI-MONOPOLY, INC., a California Corporation, Plaintiff, v. GENERAL MILLS FUN GROUP, INC., a Nevada Corporation, Defendant-Counterclaimant.

No. C-74-0529 SW.

United States District Court, N. D. California.

May 11, 1981.

Robert S. Daggett, Brobeck, Phleger & Harrison, San Francisco, Cal., Oliver P. Howes, Jr., Nims, Howes, Collison & Isner, New York City, for defendant and counterclaimant General Mills Fun Group, Inc. Carl E. Person, New York City, John H. Denton, Oakland, Cal., for plaintiff.

OPINION AND ORDER ON REMAND

SPENCER WILLIAMS, District Judge.

Plaintiff Anti-Monopoly, Inc., a California corporation which has engaged in the business of selling a board game it calls ANTI-MONOPOLY, brought this action challenging the validity and enforceability of defendant's MONOPOLY game trademark. After a trial before this court, a judgment was granted declaring the MONOPOLY trademark valid and enforceable, and that Anti-Monopoly's use of the name ANTI-MONOPOLY constituted an infringement thereof. On appeal to the Ninth Circuit Court of Appeals, the appellate court reversed and remanded to this court for a redetermination of the trademark validity issue. Anti-Monopoly, Inc. v. General Mills Fun Group, 611 F.2d 296 (9th Cir. 1979). In so doing, the Court of Appeals invited this court to entertain new evidence bearing on the validity issue, specifically the consuming public's perception and usage of the term "MONOPOLY."

Accordingly, the court received and considered proposals on both sides regarding the scope and content of further post-remand proceedings. On July 11 and July 18, 1980, the court conducted further evidentiary hearings. At the hearing the court received documentary evidence and the testimony of four witnesses. The court received and considered written arguments of counsel on the law and facts and, after the hearing closed and on July 22, 1980, the court heard and considered further oral argument of counsel. Having carefully considered the oral and documentary evidence received both at the trial and at the hearings after remand, and the oral and written arguments of counsel, and having observed the demeanor of the witnesses, the court now finds the following:

I

FACTUAL BACKGROUND

According to its creator, Ralph Anspach, a professor of economics, the primary focus of ANTI-MONOPOLY is to emphasize and support the values of the competitive private enterprise system. The game was first created in 1971, Anspach attempting unsuccessfully to market it under the name "BUST THE TRUST." Professor Anspach decided the problem lay in the name, which he changed to ANTI-MONOPOLY, thus achieving a notable market success. The game, as packaged, bears remarkable similarities to MONOPOLY in terms of box size, lettering, board configuration and design. Since the game was first sold in December 1973, plaintiff has sold approximately 419,000 games, taking in close to one million dollars.

Defendant and counterclaimant General Mills Fun Group, Inc. is a Nevada corporation engaged in business in California and elsewhere throughout the world with its principal place of business in Minnesota. Parker Brothers is an unincorporated division of defendant engaged in the business, among others, of manufacturing and selling games. Parker Brothers is the owner of the registered trademark MONOPOLY, No. 326,723 which was registered with the United States Patent and Trademark Office on July 30, 1935 and No. 338,834 registered on September 15, 1936. Parker Brothers' patent for MONOPOLY, issued December 31, 1935, expired in 1952.

For over forty-five years, Parker Brothers has been the sole producer of the real estate trading game known to the public as MONOPOLY. Since 1935, Parker Brothers and its predecessor have sold 80 million sets of the MONOPOLY game in the United States for $125 million. In the past ten years it has sold 24 million sets, and since 1973 its sales have approximated 80,000 sets annually. Parker Brothers has diligently and consistently promoted and policed its MONOPOLY mark, expending $4 million in publicizing the trademark since its first use, $2.1 million in publicizing the mark in the last ten years, and $234,000 in publicizing expense in 1976. Defendant has enjoyed exclusive use of its MONOPOLY trademark for all of this period, and the mark has not been used by anyone else except plaintiff for board games or otherwise except under licenses and other permission granted by Parker Brothers.

II

Three principal issues are raised on remand. First, and foremost, the question as to the validity of the MONOPOLY trademark has been remanded for redetermination in light of the Ninth Circuit's test explicitly set forth in Anti-Monopoly, supra, 611 F.2d at 306, to wit: "whether the primary significance of ... the term, MONOPOLY is to denote product or source." Second, if the MONOPOLY mark is held valid, does Anti-Monopoly's use thereof constitute an infringement? And third, irrespective of the trademark validity issue, whether Anti-Monopoly's exploitation of similar "competition factors" with the MONOPOLY game produced by Parker Brothers constitutes unfair competition under state law.

III

A. VALIDITY OF MONOPOLY TRADEMARK.

The thrust of plaintiff's argument is that the MONOPOLY trademark is invalid and should be cancelled either because (1) MONOPOLY was at the time of its registration, or has since become, the generic or common descriptive name of an article, or in this case, a game, or (2) the trademark was acquired through fraudulent means. Under 15 U.S.C. § 1064(c) a trademark may be cancelled if it becomes the common descriptive name of an article or substance or was obtained fraudulently. Unless one of these or certain other specified grounds exist, the right to use a trademark which has been in continuous use for five consecutive years after registration becomes incontestable and is conclusive evidence of the registrant's sole right to use the mark in commerce. 15 U.S.C. §§ 1065 and 1115(b).

After the initial trial, this court found against plaintiff on the fraud allegation, and plaintiff has not raised that issue on appeal. The remaining issue involves the question of "genericness" of the MONOPOLY mark.

1. Genericness At Time Of Registration.

Plaintiff attempted to show at trial that at the time of Parker Brothers' trademark registration, MONOPOLY was already a widely played game known by that name. The evidence introduced to support this contention consists chiefly of isolated and sporadic examples of individuals playing old oilcloth games referred to in some instances as "Monopoly," the "Landlord's Game," or some other variation thereof. The Ninth Circuit found it "significant ... that the original patent application in August, 1935 divulged that `the game is known on the market as Monopoly.' This usage, of course, predated any association of Parker Brothers with the game." 611 F.2d at 306, n.7.

This court finds the evidence to the contrary. Parker Brothers' MONOPOLY had been registered by trademark in July of 1935, one month before the patent application was filed. At the date of the patent application reference, thus, Parker Brothers had a clear association with MONOPOLY. Moreover, it must be recalled that MONOPOLY's inventor, Mr. Clarence Darrow, assigned his rights in the game to Parker Brothers in March, 1935.

In order to be "generic," the name MONOPOLY, in the minds of the consuming public, must primarily denote product rather than source. It remains unclear how widely played the precursors to modern MONOPOLY were in the 1920s and early '30s. Plaintiff has simply made no showing as to what the public's conception of the term was at that juncture or indeed how widely played it actually was. As Clarence Darrow, and later his successor, Parker Brothers, popularized a specific game they called MONOPOLY, this court cannot find that the trademark when registered denoted "a game" rather than the "game's producer." Because Anti-Monopoly has the burden of showing genericness by convincing evidence, Feathercombs, Inc. v. Solo Products Corporation, 306 F.2d 251 (2d Cir. 1962), this finding must be for defendant.

2. Genericness Since Registration.

The primary issue before this court on remand relates to plaintiff's assertion that the MONOPOLY mark became generic in contemporary usage over time, so that current usage of the term "MONOPOLY" by consumers refers to the game and not the producer. In Anti-Monopoly, the Ninth Circuit determined that this court had employed the wrong test in determining genericness (by first defining the "genus" as "all board games involving real estate trading"). 611 F.2d at 305. As a result, this court "thus obscured the basic issue: whether MONOPOLY primarily describes a product, or a producer." Id.

This error transpired, the Ninth Circuit observed, because this court had "lumped together in the species category" the two alternatives between which the proper test was designed to discern: attribution to either product or producer. Id. Only if a trademark's "primary significance" is to denote the source or producer, as opposed to denoting the product itself, can the trademark be sustained. Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118, 59 S.Ct. 109, 113, 83 L.Ed. 73 (1938); Anti-Monopoly, supra, 611 F.2d at 306. As Judge Learned Hand made clear in Bayer Co., Inc. v. United Drug Co., 272 F. 505, 509 (S.D.N.Y.1921), the test relates to the average consumer's comprehension of the mark: "What do the buyers understand by the word for whose use the parties are contending?"

In a normal context this test is implemented by ascertaining whether a mark denotes a "particular producer's goods or services ... or whether the word is identified with all such goods or services, regardless of their suppliers." Surgicenters of America v. Medical Dental Surgeries, 601 F.2d 1011, 1016 (9th Cir. 1979). This is a straightforward task in markets where several producers...