Block v. Plaut
| Decision Date | 28 September 1949 |
| Docket Number | No. 49 C 603.,49 C 603. |
| Citation | 87 F. Supp. 49 |
| Parties | BLOCK v. PLAUT et al. |
| Court | U.S. District Court — Northern District of Illinois |
Bernard Weissbourd, Chicago, Ill., for plaintiff.
Taylor, Miller, Busch & Magner, Chicago, Ill., for defendant Mandel Bros.
Samuel W. Kipnis, Chicago, Ill., for defendants Ivan S. Plaut, Geo. Lederman, Harvey S. Lederman and Aba Plaut Lederman.
LA BUY, District Judge.
The complaint herein consists of three counts: Count I is predicated on the Copyright Act of July 30, 1947, 17 U.S.C.A. § 1 et seq.; Count II is based on the trademark laws; and Count III is directed against the individual defendants for breach and violation of the terms of an agency with plaintiff for making plans and arrangements to manufacture and sell "close copies" of the plaintiff's product Closet Caddy.
As to Count I, the complaint alleges plaintiff complied in all respects with the Copyright Act and all other laws governing copyright and secured exclusive rights and privileges to the copyright of a Closet Caddy label and received from the Register of Copyrights a certificate of registration dated May 24, 1948, identified as Class K No. 23454, and a copyright of a De Luxe Closet Caddy Label receiving from the Register of Copyrights a Certificate of registration dated October 18, 1948, identified as Class K No. 27854; that defendants Plaut and Lederman are infringing 23454 in manufacturing and marketing of a Closet Space Saving Rack and a Super Closet Space Saving Rack, by printing and causing to be printed a label to be fastened to the racks which is largely copies from plaintiff's copyrighted label and in printing and causing to be printed circulars and promotional literature containing material copied largely from plaintiff's copyrighted label; and as to 27854 by doing the same and in addition illustrating the plaintiff's De Luxe Closet Caddy Label as and for defendants' Super Closet Space Saving Rack; that the defendant Mandel Bros. infringed by printing newspaper advertisements for the Plaut and Lederman product which contained material copies in large measure from plaintiff's copyrighted label and selling Plaut and Lederman products without informing purchasers that the items sold were not Closet Caddies thus palming off those products as plaintiff's; that Plaut and Lederman represented plaintiff was no longer in the business and engaged in unfair trade practices and unfair competition against plaintiff to its damage.
As to Count II, the complaint alleges the plaintiff applied for registration at the United States Patent Office of the trade mark Closet Caddy, application number being S.N. 550,483, and that the defendants have infringed such trademark and are engaging in unfair trade practices to the confusion of the public.
Count III alleges Plaut and Lederman undertook to serve as exclusive sales representatives of plaintiff in the promotion and sale of a household product known as the Closet Caddy and were to receive commissions thereon; that defendants did not actively and energetically promote the sale of the Closet Caddy; that such promotion as was made was designed to make it appear the product was that of the defendants; that in direct violation and total disregard of their duty to plaintiff, defendants made plans and entered into arrangements to manufacture and sell on their own account items known as the Closet Space Saving Rack and Super Closet Space Saving Rack which are close copies of the Closet Caddy and De Luxe Closet Caddy; that as a consequence plaintiff has suffered great loss of sales and profits.
Defendants have filed a motion to dismiss for lack of jurisdiction under the copyright law since no valid copyright is alleged in plaintiff's complaint, lack of jurisdiction under the trademark laws since no registered trademark is alleged, and that as to the unfair competition allegations of Counts I, II and III no diversity of citizenship exists between plaintiff and the three individual defendants.
In its brief plaintiff admits Count II "does not state a claim for infringement of a registered trademark, (but) does state a claim for infringement of plaintiff's common-law trademark, a common law right obtained by prior and continued usage". Plaintiff's Count II is premised on the theory that infringement of such a mark constitutes unfair competition and is related closely to the copyright infringement allegations of Count I and therefore jurisdiction pursuant to Section 1338, 28 U.S. C.A., attaches. The same theory is presented as to the unfair competition aspect of Count III against the individual defendants.
Section 1338(b) provides:
"The district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the copyright, patent or trademark laws."
It appears, therefore, that not all claims for unfair competition come within the original jurisdiction of the district court — only those joined with a substantial claim under copyright, patent or trademark law.
There is no jurisdiction originally in the district court for common law trademark infringement, and consequently in the absence of diversity of citizenship, there is no jurisdiction over a related claim of unfair competition arising out of violation of a common law trademark. Count II does not arise under the federal trademark law since it is admitted there is no registered trademark under the federal statute and no diversity of citizenship is alleged. The motion to dismiss Count II is therefore sustained.
Count III alleges a breach of duty arising out of a contract arrangement. There is no original jurisdiction in the district court over contract actions not arising under the federal law unless diversity of citizenship between the parties is established and consequently the motion to dismiss Count III is sustained.
The motion to dismiss Count I is primarily based upon the invalidity of the copyright because of lack of proper statutory copyright notice thereby causing said copyrightable material to be in...
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