Brittingham v. Jenkins
| Decision Date | 16 October 1990 |
| Docket Number | 89-1579,Nos. 89-1560,s. 89-1560 |
| Citation | 914 F.2d 447 |
| Parties | David A. BRITTINGHAM; Thrasher's, Incorporated; Thrasher's of Georgetown, Incorporated, Plaintiffs-Appellants, v. Charles R. JENKINS; Synepuxent Pier and Improvement Company; Time, Incorporated; Ocean Fries Corporation, Defendants-Appellees, and Resort Leisure Industries, Incorporated, Defendant. David A. BRITTINGHAM; Thrasher's, Incorporated; Thrasher's of Georgetown, Incorporated, Plaintiffs-Appellants, v. Charles R. JENKINS; Synepuxent Pier and Improvement Company; Time, Incorporated; Ocean Fries Corporation, Defendants-Appellees, and Resort Leisure Industries, Incorporated, Defendant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Larry Steven Gibson, Shapiro and Olander, Baltimore, Md. (Larry Steven Gibson on brief), for plaintiffs-appellants.
Raymond Stevens Smethurst, Jr., Adkins, Potts & Smethurst, Salisbury, Md., (Barbara R. Trader, Adkins, Potts & Smethurst on brief), Robert R. Priddy, Elliott I. Pollock, Pollock, Vande Sande & Priddy, Washington, D.C., for defendants-appellees.
Before ERVIN, Chief Judge, and PHILLIPS and MURNAGHAN, Circuit Judges.
David A. Brittingham, 1 the holder of both federal and Maryland state registrations for the service mark THRASHER'S, brought this infringement action against Charles R. Jenkins 2 under the Lanham Trademark Act, 15 U.S.C. Secs. 1051 et seq. Jenkins filed an answer and a counterclaim alleging, inter alia, that Brittingham had obtained his trademark registrations fraudulently, that Jenkins owned the common law service mark THRASHER'S, and that Brittingham had infringed upon Jenkins's mark. In the court below, Brittingham and Jenkins each argued that they were entitled to monetary damages and injunctive relief. Following a bench trial, the district court found that Brittingham had obtained his trademark registrations in a fraudulent manner, that Brittingham had infringed upon Jenkins's common law mark, and that Jenkins was entitled to recover on his counterclaim despite Brittingham's asserted defense of laches. Accordingly, the court ordered the cancellation of Brittingham's federal and Maryland state trademark registrations, permanently enjoined Brittingham from using the THRASHER'S service mark, and awarded Jenkins damages, interest and attorneys' fees. This appeal followed. For the reasons set forth below, we affirm the district court's cancellation of Brittingham's registrations, but on grounds other than fraud in the initial application for registration. In addition, we reverse that part of the district court's decision relating to laches, and remand this case for a recalculation of damages and attorneys' fees.
In 1940, Joseph T. Thrasher began selling french fried potatoes during the summer months at a food stand in Ocean City, Maryland, under the name THRASHER'S. Around 1961, Thrasher sold the business, including the common law rights to the THRASHER'S service mark, to Franklin Hastings. Hastings operated the business until his death in 1973. At that time, ownership of the business and the THRASHER'S mark passed by inheritance to Hastings' wife, Irma.
On March 13, 1974, Mrs. Hastings agreed to sell her interests in several enterprises to Jenkins. 3 The contract between Mrs. Hastings and Jenkins was silent with regard to the french fry business and the THRASHER'S mark. At trial, however, Mrs. Hastings testified that, pursuant to an oral agreement between Jenkins and herself, she had sold all of her rights to the french fry business and the THRASHER'S mark to Jenkins along with her other business interests. The trial court believed Mrs. Hastings' testimony, and explicitly found that all common law rights to the THRASHER'S mark had been transferred from Mrs. Hastings to Jenkins in 1974.
In 1968, Brittingham began working for Mr. Hastings, his uncle, as a bookkeeper. Eventually, Brittingham started to manage the french fry stand as well. After his uncle's death, Brittingham continued to work at THRASHER'S, either as an employee or a partner of Mrs. Hastings, who operated THRASHER'S until the end of the 1974 summer season.
Thereafter, Brittingham entered into a partnership with Jenkins, and the two of them operated THRASHER'S during the summer of 1975. Subsequently, Brittingham and Jenkins had a falling out, and they terminated their partnership. At this point in time, it is apparent that Brittingham and Jenkins each believed that they owned THRASHER'S to the exclusion of the other. Accordingly, each of them began operating french fry enterprises like THRASHER'S. 4
For his part, Jenkins continued to operate a french fry stand in Ocean City. In contrast, Brittingham began a french fry business in Salisbury, Maryland. 5 On December 5, 1975, Brittingham also filed an application for federal registration of the trademark THRASHER'S. A year later, on December 8, 1976, Jenkins' attorney wrote to Brittingham challenging his use of the THRASHER'S mark in his Salisbury business. 6 Upon advice of counsel, Brittingham did not respond to the letter, and Jenkins took no further action to protect his purported trademark. On December 28, 1976, the United States Patent and Trademark Office approved Brittingham's application for registration of the THRASHER'S mark. On August 31, 1978, Brittingham's lawyer wrote to Jenkins warning him that his use of the THRASHER'S mark in his Ocean City business constituted an infringement of Brittingham's federally registered trademark. The correspondence included Brittingham's registration number. Jenkins did not respond to this letter, and Brittingham declined to pursue the matter at that time.
In July of 1980, Brittingham began operating a THRASHER'S in Baltimore's Harborplace. 7 On July 18, Brittingham's lawyer wrote to Jenkins threatening immediate legal action against him if he continued to infringe upon the THRASHER'S trademark. The letter contained a copy of Brittingham's federal registration certificate. Jenkins's attorney replied on August 7, 1980, denying any trademark infringement, asserting that Jenkins was the common law owner of the THRASHER'S mark, and threatening Brittingham with legal action. As before, however, neither party sought to enforce their professed trademark rights against the other. In 1981, Brittingham attempted to open a THRASHER'S in the Georgetown neighborhood of Washington, D.C. This store never opened.
On September 24, 1982, Brittingham filed an affidavit with the Patent and Trademark Office attesting to five years of continuous and unchallenged use of the THRASHER'S service mark, thereby seeking incontestable status under the Lanham Act. A few days later, on September 28, 1982, Brittingham also registered the THRASHER'S mark under Maryland law. Approximately one month later, on November 2, 1982, Brittingham brought this infringement action against Jenkins in the United States District Court for the District of Maryland. A bench trial was conducted on September 19-20, 1983, and judgment was entered in favor of Jenkins on both the original complaint and the counterclaim. 8 The district court awarded Jenkins $794,134.89 in damages, 9 $228,714.18 in prejudgment interest, and $203,068.23 in attorneys' fees. Brittingham now appeals that decision, claiming that: (1) he did not obtain his trademark registrations fraudulently; (2) he did not infringe on Jenkins' common law trademark because of non-overlapping uses of the mark; (3) Jenkins' claim for damages and interest are barred by laches; (4) he did not violate section 43(a) of the Lanham Act which prohibits false designations of origins; (5) Jenkins is not entitled to attorneys' fees; and (6) he should not be held personally liable for damages.
Under the Lanham Act, the owner of a common law service mark used in commerce may apply to register the mark with the United States Patent and Trademark Office. 15 U.S.C. Sec. 1051(a). As this court noted in Georator Corp. v. United States, federal registration confers a number of benefits upon the owner of a mark not available at common law:
(1) constructive notice of the registrant's claim of ownership of the trademark; (2) prima facie evidence of the validity of the registration, of the registrant's ownership of the mark, and of his exclusive right to use the mark in commerce as specified in the certificate; (3) the possibility that, after five years, registration will become incontestible and constitute conclusive evidence of the registrant's right to use the mark; (4) the right to request customs officials to bar the importation of goods bearing infringing trademarks; (5) the right to institute trademark actions in federal courts without regard to diversity of citizenship or the amount in controversy; and (6) treble damage actions against infringing trademarks and other remedies.
485 F.2d 283, 285 (4th Cir.1973), cert. denied, 417 U.S. 945, 94 S.Ct. 3069, 41 L.Ed.2d 665 (1974). The most significant of these advantages are proof of ownership and incontestability.
First, a certificate of registration of a mark serves as prima facie evidence that the registrant owns the registered mark, has properly registered it under the Lanham Act, and is entitled to its exclusive use in commerce. 15 U.S.C. Sec. 1057(b). Thus, registration creates a presumption of the registrant's ownership of the mark, subject to any applicable legal or equitable defenses or defects. 15 U.S.C. Sec. 1115(a). This attribute of registration represents a change from the common law where the putative owner bears the burden of establishing ownership of the disputed mark in any trademark infringement action.
Second, a registrant's right to use a mark may become incontestable after five years of continuous and unchallenged use, if such use has been averred to in an affidavit filed with the Patent and Trademark Office within one year after...
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