Bulova Watch Co. v. Steele, No. 13396.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtHOLMES, RUSSELL, and RIVES, Circuit
Citation194 F.2d 567
Docket NumberNo. 13396.
Decision Date13 March 1952
PartiesBULOVA WATCH CO., Inc. v. STEELE et al.

194 F.2d 567 (1952)

BULOVA WATCH CO., Inc.
v.
STEELE et al.

No. 13396.

United States Court of Appeals Fifth Circuit.

February 21, 1952.

Rehearing Denied March 13, 1952.


Maury Maverick, Harold D. Putman, San Antonio, Tex., George Cohen, New York City, Isidor Ostroff, Philadelphia, Pa., for appellant.

Grady Barrett, W. L. Matthews, and Herbert Davis, all of San Antonio, Tex., for appellees.

Before HOLMES, RUSSELL, and RIVES, Circuit Judges.

RIVES, Circuit Judge.

Bulova Watch Company, a New York corporation, sued Sidney Steele, a citizen of the United States actually domiciled and residing in San Antonio, Texas,1 seeking to enjoin Steele from using the name "Bulova" on watches in Mexico and to recover damages resulting from such use.

194 F.2d 568

Steele conducts a watch business in Mexico as a part of which he assembles watches, stamps them with the name Bulova and sells them as Bulova watches. The works and some of the watch cases and dials he purchases from companies in Switzerland, and some of the cases and dials he procures from companies in the United States.

The district court heard such evidence as was introduced relating to its territorial jurisdiction or jurisdiction of the subject matter, and then made findings of fact and conclusions of law fairly summarized in its judgment as quoted in the margin2 and dismissed the case with prejudice.

In his answer, Steele pleaded lack of jurisdiction and several other defenses, including res adjudicata, laches and justification. The taking of testimony on the other issues thus presented was not completed because the district court held that it had no jurisdiction.

Bulova Watch Co., Inc., its predecessors and the Bulova family have been using the family surname "Bulova" to identify their watches since 1875. Since 1927, the name "Bulova", as applied to watches, has been registered under the various Trade Mark statutes of the United States. It has been registered under the Lanham Act of 1946.3

The Bulova Watch Co. has built up a watch business to the point that it is now, according to the testimony, the world's largest manufacturer of watches and its yearly sales exceed fifty million dollars. It spends vast sums of money each year in the United States and abroad to advertise its products and to make its name and reputation known to the public. Much of this advertising, through printed publications and radio broadcast, is distributed through Mexico, and a considerable amount is in the Spanish language.

Steele started in the jewelry and watch business in Texas in 1922. He learned of the name "Bulova" as applied to watches while employed in the watch business in 1926. Neither he nor any member of his family was ever named Bulova. In 1933, upon a search of the records, he found that the name "Bulova" was not registered in Mexico, and on December 5, 1933, there was granted to S. Steele, Y Cia., S. A., the predecessor in title of Sidney Steele, Mexican National Trade Mark No. 33602, purporting to grant the right to use the name "Bulova" in the Republic of Mexico as a trade name for watches. That trade-mark has been the subject of litigation between the Bulova Watch Company and the Department of National Economy and the Director of Industrial Property of the Republic of Mexico in cases before the Mexican Courts in which Sidney Steele was a party, and the Bulova Watch Company has not up to this time been successful in such litigation. At the present time there is a suit or proceeding pending in Mexico with reference to the right as between Bulova Watch Company and Sidney Steele to use the Bulova name on watches assembled and sold by Steele in Mexico.

If the district court has jurisdiction it is conferred because of diversity of citizenship4 or because the case involves the Trade Mark laws of the United States.5

194 F.2d 569
There is no dispute about the requisite diversity of citizenship and amount in controversy. Personal service of process in this case was had upon the Steels in San Antonio, Texas. Bulova Watch Company claims that the action arises under the Trade Mark laws of the United States. This claim the Steeles deny and they deny also that Steele's conduct in Mexico was contrary to the laws of Texas. They claim that those laws, National and State, have no extraterritorial effect

The issue to be decided is whether the cause of action, as disclosed by the pleadings and the evidence, is within the territorial reach of the court and of the laws of the United States. Unquestionably, the Steeles themselves are within the jurisdiction of the court and subject to its process. Courts have often exercised the power of restraining persons within their jurisdiction from prosecuting suits in other states or foreign countries, or from taking such action there as would be contrary to the law of the forum.6 The more serious question is whether the conduct charged to Steele was lawful where done or whether it may be considered as in violation of the Trade Mark Laws or laws relating to unfair competition of the State of Texas or of the United States.

It will be helpful first clearly to understand the general nature of those laws and of the rights thereby protected. A trade mark symbolizes business good will.7

"There is no property in a trade-mark apart from the business or trade in connection with which it is employed. United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97, 39 S.Ct. 48, 63 L.Ed. 141; Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413-414, 36 S.Ct. 357, 360 (60 L.Ed. 713). `The law of trade-marks is but a part of the broader law of unfair competition' (Id.), the general purpose of which is to prevent one person from passing off his goods or his business as the goods or business of another." American Steel Foundries v. Robertson, Commissioner, 269 U.S. 372, 380, 46 S.Ct. 160, 162, 70 L.Ed. 317.

"The interest in a trade-mark or trade name is protected, * * * with reference only to territory from which he receives or, with the probable expansion of his business, may reasonably expect to receive custom in the business in which he uses his trademark or trade name, and in territory in which a similar designation is used for the purpose of forestalling the expansion of his business." Am.Law Inst.Restatement of Torts, Vol. 3, Sec. 732.8

In the comment to that section of the Restatement of Torts, it is said: "In each case the issue is whether, in the territory in which the similar designation is used, there are or are likely to be a considerable number of prospective purchasers of the goods or services in connection with which the trade-mark or trade name is used, who are likely to be misled by the similarity. On this issue, the good or bad faith of the alleged infringer is an important factor. If he imitates the other's trade-mark or trade name knowingly and acts in other ways to convey the impression that his business is associated with the other, the inference may reasonably be drawn that

194 F.2d 570
there are prospective purchasers to be misled. The actor's purpose to forestall expansion of the other's business is also an indication of the extent, in fact, of the other's interest in his trade-mark or trade name and of the limits within which the interest requires protection."9

In United Drug Company v. Theodore Rectanus Co., 248 U.S. 90, 98, 39 S.Ct. 48, 51, 63 L.Ed. 141, the Court speaking through Mr. Justice Pitney, said:

"Property in trade-marks and the right to their exclusive use rest upon the laws of the several states, and depend upon them for security and protection; the power of Congress to legislate on the subject being only such as arises from the authority to regulate commerce with foreign nations and among the several states and with the Indian tribes. In re Trade-Mark Cases, 100 U.S. 82, 93, 25 L.Ed. 550."10

Parenthetically, it is interesting to note that when the definition of foreign commerce in the In re Trade Mark Cases, 100 U.S. 82, 96, 25 L.Ed. 550, is read literally, the conduct charged to Steele may be included: "* * * commerce with foreign nations means commerce between citizens of the United States and citizens and subjects of foreign nations * * *".

The Supreme Court has said that the power of Congress "when exercised in respect to foreign commerce may be broader than when exercised as to interstate commerce." Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 434, 52 S.Ct. 607, 609, 76 L.Ed. 1204.

The extent to which Congress intended to exercise its powers over interstate commerce and over foreign commerce in the Lanham Trade Mark Act of 1946 is indicated by Daphne Robert's Commentary on that Act appearing just before 15 U.S.C.A. § 1051 at pages 268 and 269, in part, saying:

"The new Act clarifies and extends the phrase `use in commerce' far beyond the previous laws and the decisions thereunder.

"`Commerce' is defined as meaning all commerce which may lawfully be regulated by Congress. This includes commerce between States, between Territories, between States and Territories, within the District of Columbia, within the Territories, between States and the District of Columbia, between Territories and the District of Columbia, and between States, Territories or the District of Columbia and foreign nations. Since there is no limitation, it also appears to extend to any other commerce which burdens, restricts or interferes with the free flow of interstate, territorial or foreign commerce. The Supreme Court has held that an activity which is local in its nature may be regulated by Congress if it exercises substantial economic effect on interstate commerce. It is therefore apparent that purely intrastate uses may come under the provisions of the Act if they have a substantial economic effect on interstate, territorial or foreign commerce. * * *11

"The foregoing extensions are important for purposes...

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28 practice notes
  • Mariniello v. Shell Oil Co., No. 74--1385
    • United States
    • U.S. Court of Appeals — Third Circuit
    • February 14, 1975
    ...Cong.Serv. 1274. 24 Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974). 25 Bulova Watch Co. v. Steele, 194 F.2d 567 (5th Cir.) aff'd 344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 319 26 15 U.S.C. §§ 1114(1), 1115(a). 27 See, e.g., Mister Donut of America, Inc. v. Mr.......
  • Ramirez & Feraud Chili Co. v. Las Palmas Food Company, No. 19355.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 8, 1956
    ...Rives' well reasoned opinion could well serve as a complete answer to the questions raised here. Bulova Watch Co. v. Steele, 5 Cir., 1952, 194 F.2d 567. Although plaintiff at bar has filed proceedings in Mexico to cancel or nullify the registration by defendants of plaintiff's mark there, i......
  • Vanity Fair Mills v. T. Eaton Co., No. 251
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • June 1, 1956
    ...did not intimate that the Act should be given the extreme interpretation urged upon us here. In the Bulova case, supra, the Fifth Circuit, 194 F.2d 567, assuming that the defendant had a valid registration under Mexican law, found that the district court had jurisdiction to prevent the defe......
  • Steele v. Bulova Watch Co, No. 38
    • United States
    • United States Supreme Court
    • December 22, 1952
    ...District Court's unreported findings of fact and conclusions of law, as amended, appear at R. 246—248. Cf. R. 232, 237. 4. 5 Cir., 1952, 194 F.2d 567. 5. Id., 194 F.2d at page 573. 6. For able Court of Appeals discussions of the impact of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct.......
  • Request a trial to view additional results
28 cases
  • Mariniello v. Shell Oil Co., No. 74--1385
    • United States
    • U.S. Court of Appeals — Third Circuit
    • February 14, 1975
    ...Cong.Serv. 1274. 24 Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974). 25 Bulova Watch Co. v. Steele, 194 F.2d 567 (5th Cir.) aff'd 344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 319 26 15 U.S.C. §§ 1114(1), 1115(a). 27 See, e.g., Mister Donut of America, Inc. v. Mr.......
  • Ramirez & Feraud Chili Co. v. Las Palmas Food Company, No. 19355.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 8, 1956
    ...Rives' well reasoned opinion could well serve as a complete answer to the questions raised here. Bulova Watch Co. v. Steele, 5 Cir., 1952, 194 F.2d 567. Although plaintiff at bar has filed proceedings in Mexico to cancel or nullify the registration by defendants of plaintiff's mark there, i......
  • Vanity Fair Mills v. T. Eaton Co., No. 251
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • June 1, 1956
    ...did not intimate that the Act should be given the extreme interpretation urged upon us here. In the Bulova case, supra, the Fifth Circuit, 194 F.2d 567, assuming that the defendant had a valid registration under Mexican law, found that the district court had jurisdiction to prevent the defe......
  • Steele v. Bulova Watch Co, No. 38
    • United States
    • United States Supreme Court
    • December 22, 1952
    ...District Court's unreported findings of fact and conclusions of law, as amended, appear at R. 246—248. Cf. R. 232, 237. 4. 5 Cir., 1952, 194 F.2d 567. 5. Id., 194 F.2d at page 573. 6. For able Court of Appeals discussions of the impact of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct.......
  • Request a trial to view additional results

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