Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co.

• Decision Date: 13 February 1976
• Docket Number: Civ. A. No. 74-M-1106.
• Citation: 408 F. Supp. 1219
• Parties: BIG O TIRE DEALERS, INC., a Colorado Corporation, Plaintiff, v. The GOODYEAR TIRE & RUBBER COMPANY, an Ohio Corporation, Defendant.
• Court: U.S. District Court — District of Colorado

408 F. Supp. 1219

BIG O TIRE DEALERS, INC., a Colorado Corporation, Plaintiff, v. The GOODYEAR TIRE & RUBBER COMPANY, an Ohio Corporation, Defendant.

Civ. A. No. 74-M-1106.

United States District Court, D. Colorado.

February 13, 1976.

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Michael C. Schaefer and Duane Burton of Burton, Crandell & Polumbus, Denver, Colo., for plaintiff.

William E. Schuyler of Schuyler, Birch, Swindler, McKie & Beckett, Washington, D. C., Arthur K. Underwood Jr., and W. David Pantle of Dawson, Nagel, Sherman & Howard, Denver, Colo., for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW, MEMORANDUM OPINION AND ORDERS

MATSCH, District Judge.

Plaintiff, Big O Tire Dealers, Inc. (hereinafter "Big O"), a Colorado corporation with its principal place of business in Englewood, Colorado, filed the complaint initiating this action on November 27, 1974. The defendant, The Goodyear Tire & Rubber Company (hereinafter "Goodyear"), is an Ohio corporation with its principal place of business in Akron, Ohio. The original complaint alleged Big O's ownership of a trademark BIG FOOT¹ for automobile tires and it claimed relief from Goodyear for false designation of origin under 15 U.S.C. § 1125(a), because of Goodyear's use of the same trademark in connection with tires. A claim for common law trademark infringement was also alleged with jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332. There is no question about jurisdiction over the subject matter and the parties.

The plaintiff made a timely jury demand. A motion for preliminary injunction was heard and denied in January, 1975. The evidence presented at that hearing was conflicting on a number of issues and, because the court could not anticipate the jury's findings, there could not be a determination that the plaintiff would ultimately prevail. Additionally, the plaintiff was considered to have an adequate remedy in the claim for damages.

The plaintiff was formed in 1962 and it engaged in the business of providing merchandising techniques, advertising concepts, operating systems and other aids to approximately 200 independent retail tire dealers in 14 states, who identified themselves to the public as Big O dealers. These stores sold replacement tires in the retail market using the Big O label on "private brand" tires made by one or more of the major tire manufacturers. These dealers also sold other companies' brands such as B. F. Goodrich and Michelin tires.

In the fall of 1973, Big O had Admiral Company manufacture tire molds for two tire models. One of those was designed to produce a tire with raised white lettering on the sidewall saying "Big O BIG FOOT 60". The other was designed to produce such a tire saying "Big O BIG FOOT 70". Uniroyal manufactured tires with these molds and the first shipment of such tires occurred in interstate commerce in February, 1974. Such tires were prominently displayed at a convention of Big O tire dealers in Reno, Nevada in March, 1974. Big O dealers began the sale of such tires to the public in April, 1974.

The defendant is the world's largest tire manufacturer, selling its tires to automobile makers as original equipment and selling to dealers in the replacement tire market. With respect to the replacement market, sales are made through a nationwide network of company owned stores, franchise dealers and independent retailers. In early 1974, Goodyear began making a new radial tire for the original equipment market. Because that new radial tire was thought to have better wet traction characteristics than Goodyear's other tires, an advertising agency was employed to develop a promotional program with that emphasis for the replacement tire market in June, 1974. This tire model was named "Custom Polysteel Radial" and that name was molded into the tire's sidewall.

Beginning in September, 1974, Goodyear launched a massive advertising program using television commercials, magazine and newspaper advertising and point of sale material, all using the word BIGFOOT in connection with this Custom Polysteel Radial tire. Goodyear had invested approximately $5,000,000. in BIGFOOT advertising up to the time of the preliminary injunction hearing.

In refusing injunctive relief, this court observed that the crucial questions of fact to be resolved by the jury included these: Was BIG FOOT merely descriptive as applied to automobile tires? If so, had Big O established a secondary meaning? Was there a likelihood of confusion as to the source of origin of the tires made by Goodyear and the tires sold by Big O dealers? Did the defendant have a prior right to the use of BIGFOOT for tires as a result of its use of BIGFOOT on snowmobile replacement track?

Following a series of motion hearings and pre-trial conferences, the case was tried to a jury for ten days. After three days of deliberation, a verdict was returned on September 4, 1975. During the course of the trial, counsel for both parties submitted many proposed instructions and a number of conferences were held on the subject of instructions. All counsel were given a full opportunity to consider, comment upon and make record objections to the instructions prepared by the court. By agreement of counsel, copies of the instructions as read were given to each juror for use in deliberation.

A set of those instructions which the court specifically designed for this case, bearing numbers 1 through 22, and a copy of the verdict are attached as Appendix I. The jury was asked to consider and separately determine three theories of liability, identified in the form of verdict as trademark infringement, false designation of origin and trademark disparagement.

The elements of the claim for a common law trademark infringement and the defenses to that claim were given in Instructions 3 through 13.

The elements of a claim for recovery on the theory of a false designation of origin under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), were given in Instruction 14.

What this court chose to call "trademark disparagement" was a theory given in Instructions 16 through 20. This theory of recovery did not appear in the plaintiff's original complaint and it was not contained in the amended complaint filed in December, 1974. In fact, the plaintiff never articulated such a theory prior to the trial of this case. Plaintiff's counsel did make an oral motion to amend the complaint to conform to the evidence. Such a motion was not necessary under F.R.C.P. 15(b) because defense counsel were well aware of the factual and legal questions involved in the case. This procedure could not have prejudiced the defendant. As a result of the extensive pre-trial conferences and other hearings preliminary to the jury trial, the defendant was made fully aware of the evidence which the plaintiff intended to introduce and the operative facts which it intended to establish by that evidence. There is nothing to indicate that the conduct of this trial would have been different in any respect if this theory of relief had been fully described in the plaintiff's complaint.

The jury found for the plaintiff on the claim of liability for trademark infringement, for the defendant on the claim of liability for false designation of origin and for the plaintiff on the claim for trademark disparagement. Compensatory damages of $2,800,000. and punitive damages of $16,800,000. were awarded. Those damages were available under either of the two theories of liability on which the plaintiff prevailed.

It remains for the court to consider the equitable claims in the case and a number of post verdict motions. In deciding these questions, the court is bound by the facts determined by the jury to the extent that such facts may be inferred from the form of the verdict. It would be an invasion of the province of the jury and a denial of the right to trial by jury for the court to make any findings in conflict with the verdict when it is supported by the evidence. That is true in this case.

It is difficult to infer a set of ultimate facts from the verdict of liability on the claim for common law trademark infringement. Obviously, there must have been a finding that both Big O and Goodyear made a trademark use of BIG-FOOT (BIG FOOT) in connection with automobile tires. It is equally obvious that the jury must have found that Big O had established BIG FOOT as a trademark for its tires before September 16, 1974 and that Goodyear, in its advertising and sales program beginning with a nationwide telecast on September 16, 1974, used BIGFOOT in a manner likely to cause confusion among persons using ordinary care and prudence in the purchase of tires.

Because of the conflicting evidence on the issue, it is impossible to determine whether the jury found that BIG FOOT was merely a descriptive word for which Big O developed a secondary meaning before September 16, 1974 or whether the finding was that BIG FOOT was sufficiently distinctive to be a trademark.

To reach the result of liability for infringement, the jury necessarily had to reject the affirmative defense of extension or expansion to related products which Goodyear claimed for its earlier use of BIGFOOT on replacement snowmobile track belts. They could have done so on one of several findings: that Goodyear did not have a valid trademark for snowmobile track belts; that track belts and automobile tires are not related products; that Goodyear's use of BIGFOOT for snowmobile track belts was only a token use and that the trademark use of BIGFOOT for snowmobile track belts was abandoned by Goodyear.

A review of the elements of the claim for false designation of origin under § 43(a) of the Lanham Act contained in Instruction 14 and a comparison of those elements with the instructions for common law trademark infringement give rise to the deduction that in finding for the defendant under the Lanham Act claim, the jury concluded that the plaintiff failed to show that...