Century Distilling Co. v. Continental Distilling Co.

• Decision Date: 05 October 1939
• Docket Number: No. 6833.,6833.
• Citation: Century Distilling Co. v. Continental Distilling Co., 106 F.2d 486 (3rd Cir. 1939)
• Parties: CENTURY DISTILLING CO. v. CONTINENTAL DISTILLING CO.
• Court: U.S. Court of Appeals — Third Circuit

106 F.2d 486 (1939)

CENTURY DISTILLING CO. v. CONTINENTAL DISTILLING CO.

No. 6833.

Circuit Court of Appeals, Third Circuit.

June 30, 1939.

Rehearing Denied October 5, 1939.

COPYRIGHT MATERIAL OMITTED

Edward S. Rogers, of Chicago, Ill., and Joseph S. Clark, Jr., of Philadelphia, Pa. (Valentine C. Guenther, of Peoria, Ill., of counsel), for appellant.

Thomas G. Haight, of Jersey City, N. J., and Leonard L. Kalish and J. Maurice Gray, both of Philadelphia, Pa., for appellee.

Before DAVIS and BIGGS, Circuit Judges, and KALODNER, District Judge.

KALODNER, District Judge.

The appellant filed a bill in equity under Section 4915 of the Revised Statutes, 35 U.S.C.A. § 63, to determine the right of the plaintiff to the registration of two trade marks, the registration of which had been refused by the Commissioner of Patents. The defendant filed an answer and a counterclaim, averring that the trade marks sought to be registered by the plaintiff ("Dixiana" and "Dixie Dew") infringed certain prior registered trade marks of the defendant ("Dixie Belle" and "Dixie Beau"). The counterclaim asked for an injunction and an accounting. The court below dismissed the bill on the ground that the Commissioner of Patents was a necessary party to the suit, and that he had not been joined, and that therefore the court was without jurisdiction of the bill. Having done so, the court below then proceeded to consider the counterclaim. In disposing of the issues raised by the counterclaim, it found that there was an infringement; that there was a deceptive similarity between the plaintiff's trade marks and those of the defendant; that there was a colorable imitation of the trade marks of the defendant making for a confusing similarity. It also found that the defendant was entitled to an injunction and an accounting of profits and damages as prayed for in the counterclaim. In an interlocutory decree, the court below granted an injunction; ordered destruction of all of the labels, etc., of the plaintiff; referred the matter to a special master to make an accounting and to assess damages; ordered that the plaintiff pay to the defendant the amount of plaintiff's profits found on the accounting, together with treble the amount of the defendant's damages found on the accounting; and, lastly, that the defendant also recover from the plaintiff the penalties provided by the Act of June 20, 1901, of the Commonwealth of Pennsylvania, P.L. 582, 73 P.S.Pa. § 1 et seq.

We are of the opinion that the court below erred in ruling that the Commissioner of Patents was a necessary party, and in dismissing the bill of the plaintiff on that score. Section 4915 of the Revised Statutes, 35 U.S.C.A. § 63, which controlled the proceedings, provides: "In all cases, where there is no opposing party, a copy of the bill shall be served on the commissioner." In this case there was an opposing party. The defendant had filed an opposition to the registration of the contested trade marks before the Examiner of Interferences in the Patent Office. It had continued its opposition when an appeal was taken and prosecuted by the plaintiff to the Commissioner of Patents, who affirmed the decision of the Examiner of Interferences; and it also filed an answer to the proceedings in equity under Section 4915 before the court below. See In re Hammer, D.C., 300 F. 246, affirmed, 2 Cir., 6 F.2d 460; Graham v. Teter, C.C., 25 F. 555; Butler v. Shaw, C.C., 21 F. 321; The Mergenthaler Linotype Co. v. Seymour, 66 O.G.1311, 1894 C.D. 186; Cleveland Trust Company v. Nelson et al., D.C., 51 F.2d 276.

Despite our conclusion that the court below erred in dismissing the appellant's bill on the failure to join the Commissioner of Patents as a necessary party, we think, however, that the action of the lower court should be affirmed on the dismissal of the bill. The law is clear that: "A correct decision will not be disturbed because the court gave a wrong or insufficient reason therefor." See Federal Digest, Volume 1, Appeal and Error, § 854 (2), Page 739. See also Gideon v. Hinds et al., 2 Cir., 238 F. 140, in which it was held: "An appeal brings up the ultimate question whether the decision was right or wrong; and, if the result is right, it will not be disturbed because a wrong reason was assigned." See also Linde Air Products Co. v. Morse Dry Dock & Repair Co., 2 Cir., 246 F. 834. See also Vale Pennsylvania Digest, Volume 3, Appeal and Error, § 854(2), Page 499, citing cases in Pennsylvania in agreement with the Federal decisions.

"In the review of judicial proceedings the rule is settled that, if the decision below is correct, it must be affirmed, although the lower court relied upon a wrong ground or gave a wrong reason. Frey & Son v. Cudahy Packing Co., 256 U.S. 208, 41 S. Ct. 451, 65 L.Ed. 892; United States v. American Ry. Express Co., 265 U.S. 425, 44 S.Ct. 560, 68 L.Ed. 1087; United States v. Holt State Bank, 270 U.S. 49, 56, 46 S.Ct. 197, 199, 70 L.Ed. 465; Langnes v. Green, 282 U.S. 531, 51 S.Ct. 243, 75 L. Ed. 520; Stelos Co. v. Hosiery Motor-Mend Corp., 295 U.S. 237, 239, 55 S.Ct. 746, 79 L.Ed. 1414; cf. United States v. Williams, 278 U.S. 255, 49 S.Ct. 97, 73 L.Ed. 314." Helvering v. Gowran, 302 U. S. 238, 245, 58 S.Ct. 154, 158, 82 L.Ed. 224.

An analysis of the record in the proceedings before the Commissioner of Patents and of the proceedings before the court below satisfies us that the latter did not err in its conclusion on the merits — that is, that there was a deceptive similarity between the plaintiff's trade marks and those of the defendant; that the trade marks which the plaintiff used and sought to register are colorable imitations of the defendant's trade marks. The Examiner of Trade Mark Interferences, and the Commissioner of Patents, on appeal, sustained the appellee's oppositions, and adjudged that the appellant's trade marks were confusingly similar to the appellee's admittedly prior registered trade marks. The court below came to the same conclusion. Under Morgan v. Daniels, 153 U.S. 120, 14 S.Ct. 772, 38 L.Ed. 657, and General Talking Pictures Corp. v. American Tri-Ergon Corp., 3 Cir., 96 F.2d 800, the burden is on the appellant to show by clear and convincing evidence that the decision of the Commissioner of Patents is erroneous and that appellant is entitled to register the disputed trade marks.

"Upon principle and authority, therefore, it must be laid down as a rule that, where the question decided in the patent office is one between contesting parties as to priority of invention, the decision there made must be accepted as controlling upon that question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction.

"Tested by that rule, the solution of this controversy is not difficult. * * * if doubtful, the decision of the patent office must control. * * *

"There is other testimony on both sides of this controversy. It is unnecessary to notice it in detail. It is enough to say that the testimony as a whole is not of a character or sufficient to produce a clear conviction that the patent office made a mistake in awarding priority of invention to the defendant; and because of that fact, and because of the rule that controls suits of this kind in the courts, we reverse the judgment, and remand the case, with instructions to dismiss the bill." Morgan v. Daniels, supra 153 U.S. 120, 14 S.Ct. 773, 38 L.Ed. 657.

Morgan v. Daniels, supra, involved a contest as to priority of invention in a patent matter but the principle is applicable to trade marks. United States ex rel. Baldwin Co. v. Robertson, 265 U.S. 168, 44 S. Ct. 508, 68 L.Ed. 962.

The appellant failed to show manifest error in either of the two decisions of the Patent Office tribunals, nor was there evidence in the proceedings before the lower court sufficient to overcome their findings. In the current appeal error was not shown in the findings of the court below.

"As to priority, every tribunal of the Patent Office and the District Court has held against Jardine. The question is one of fact which has been settled by the special tribunal with power to decide that question. The decision of the Patent Office, therefore, must be accepted as controlling unless the contrary is established by testimony which in character and amount carries thorough conviction. Morgan v. Daniels, 153 U.S. 120, 125, 14 S.Ct. 772, 38 L.Ed. 657. It suffices to say that there is no testimony in this record establishing that Jardine is prior to Berry." Cleveland Trust Co. v. Berry, 6 Cir., 99 F.2d 517, 522.

In the light of the above discussion, we therefore affirm the lower court's dismissal of the appellant's bill. See Bryson v. Clarke, Cust. and Pat. App., 92 F.2d 720; In re Percy Adamson, Cust. and Pat. App., 92 F.2d 717; Emerson Electric Mfg. Co. v. Emerson Radio and Phonograph Corp. et al., D.C., 24 F.Supp. 481, 485.

It is necessary, however, to modify that part of the interlocutory decree (paragraph 13) which grants appellee (defendant-counterclaimant below) the right to recover the penalties provided by Section 4, Act of June 20, 1901, of the Commonwealth of Pennsylvania, P.L. 582, Title 73, § 6 of Purdon's Pennsylvania Statutes.¹

The court below was without jurisdiction to impose the penalties provided by Section 4. First, the record is barren of any evidence of infringement in the Commonwealth of Pennsylvania. The statute provides for registration of trade marks in Pennsylvania and for the imposition of penalties upon infringement of trade marks thus registered. It not appearing that the appellant committed any act of infringement within the Commonwealth of Pennsylvania, it is clear that the penalties imposed by the Act cannot be recovered. Second, even though there were infringements of the appellee's trade marks in Pennsylvania, the court below, sitting as an equity court, could not impose the penalties...