Dwinell-Wright Co. v. National Fruit Product Co.

• Decision Date: 16 July 1942
• Docket Number: No. 3773.,3773.
• Citation: 129 F.2d 848
• Parties: DWINELL-WRIGHT CO. v. NATIONAL FRUIT PRODUCT CO., INC.
• Court: U.S. Court of Appeals — First Circuit

129 F.2d 848 (1942)

DWINELL-WRIGHT CO. v. NATIONAL FRUIT PRODUCT CO., INC.

No. 3773.

Circuit Court of Appeals, First Circuit.

July 16, 1942.

Edward G. Fenwick, of Washington, D. C., Simon P. Townsend, and Choate, Hall & Stewart, all of Boston, Mass., and Charles R. Fenwick and Mason, Fenwick & Lawrence, all of Washington, D. C., for appellant.

Clarence B. DesJardins, of Cincinnati, Ohio, and Gilman P. Welsh, of Boston, Mass., for appellee.

Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.

WOODBURY, Circuit Judge.

This appeal is from an interlocutory order enjoining the appellant, the defendant below, "from prosecuting or taking any further step", in a proceeding brought by it in the United States Patent Office for the cancellation of five certificates of trademark registration¹ previously issued to the plaintiff-appellee.

For convenience the parties will be referred to hereafter simply as the plaintiff and defendant.

On July 29, 1941, the plaintiff, a Virginia corporation, filed a complaint in the district court alleging that it was the owner of five registrations under the Trade-Mark Act of 1905, 33 Stat. 724, 15 U.S.C.A. § 81 et seq., of the trade-mark "White House", sometimes but not always accompanied by a representation of the Executive Mansion covering the use of that mark in connection with the sale of apples, cider, cider vinegar, canned apples, apple sauce, apple juice and kindred apple products, as well as other vegetable and fruit products and juices; that for a long period of time it had marketed in interstate commerce "a line of fruit and vegetable products under the trade-mark White House, usually accompanied by a representation of the Executive Mansion"; and that the conduct of the defendant, a Massachusetts corporation, in using the same trade-mark, also in interstate commerce, for its line of fruit juices, particularly orange and grapefruit juice, "constitutes an infringement of plaintiff's said trade-mark, unfair competition, and unfair trading". The prayer of the complaint is for injunctive relief; for delivery up to the court for destruction of all "labels, signs, prints, packages, wrappers, or receptacles in the possession of defendant, bearing the said trade-mark of plaintiff"; for damages, in addition to the defendant's profits, and for a threefold increase of these damages, in the discretion of the court, "as allowed by the statute, in such case made and provided"; for, in addition to the plaintiff's damages, the profits made by the defendant by reason of its "unfair competition and unfair trading"; for costs; and for "such other and further relief as the nature of the case may seem to require and to your Honors shall be deemed meet and equitable."

On August 18, 1941, the defendant answered denying the plaintiff's ownership of the trade-mark and denying the validity of the registrations of that mark as alleged in the plaintiff's complaint. At the same time it also filed a counterclaim alleging ownership of the mark itself and infringement thereof by the plaintiff, and on September 5, 1941, the plaintiff answered the defendant's counterclaim. Neither party asked the district court for affirmative relief by way of cancellation of the other's trade-mark registrations under 15 U.S.C.A. § 102.

This was the state of the pleadings when, on September 6, 1941, the defendant filed a petition in the United States Patent Office under 15 U.S.C.A. § 93 for the cancellation of the plaintiff's five trade-mark registrations noted above. On October 20, 1941, the plaintiff filed in the Patent Office a motion to stay this cancellation proceeding, and four days later it moved in the district court for an injunction to restrain the defendant from prosecuting its cancellation proceedings in the Patent Office. On November 22, 1941, the examiner in charge of interferences granted the plaintiff's motion to stay reciting:

"It seems likely to the examiner that said civil action will involve a determination of the question of ownership, as between the parties hereto, of the marks concerned, and that such determination would make it unnecessary to further contest this cancellation proceeding. Other things being equal, it is the usual practice under such circumstances to suspend the proceeding last instituted pending the final determination of the other.

"The examiner is persuaded that such practice should be followed in this case.

"Accordingly, proceedings herein are suspended pending the final determination of the civil action identified in the motion. Not later than twenty days subsequent to such final determination this case should be called up by the party interested; otherwise it will then proceed as by default."

Thereupon the defendant petitioned that the Commissioner of Patents exercise his supervisory authority over the examiner of interferences and vacate the stay of proceedings granted by the latter. This petition was granted and the Assistant Commissioner of Patents, on January 12, 1942, overruled and vacated the order staying the cancellation proceedings. In his opinion the Assistant Commissioner said:

"If in fact the registrations were improvidently granted and instead should have been refused because the marks were not registrable to respondent at the time the applications for registration were filed, it seems to me the sooner the mistake of the Patent Office is rectified the better, not only in the interest of justice to those whom the registrations may be affecting adversely but also to correct the register without undue delay.

"In my opinion, since the registrations issued as a result of decisions of a Patent Office tribunal these decisions should be reviewed by the Patent Office tribunals when challenged through a proper proceeding, for instance, this cancellation proceeding which is authorized by the statutes. Sec. 13, Act of February 20, 1905. Furthermore, cancellation of the registrations would not deprive respondent of such common law rights in the marks as respondent may possess and registrations are not necessarily essential to supporting a suit for unfair competition. In the equity suit cancellation of the registrations is not prayed for.

"In view of the above it is my opinion this cancellation proceeding should not be stayed pending the termination of the equity suit."

After this order was made the district court brought forward the motion to enjoin the defendant from prosecuting its cancellation proceeding before the Patent Office, and, after a hearing, granted it. The defendant then took this appeal.

Federal jurisdiction is based upon diversity of citizenship and an amount in controversy, exclusive of interest and costs, in excess of the statutory amount, and also upon 15 U.S.C.A. § 97. Jurisdiction over appeals of this nature is conferred upon this court by 28 U.S.C.A. § 227.

Registration of a trade-mark under the Trade-Mark Act of 1905 neither enlarges nor abridges the registrant's substantive common-law rights in the mark. "The Registration Act of 1905 (33 Stat. 724), amended in 1906 (34 Stat. 168) and in 1909 (35 Stat. 627) and in 1913 (37 Stat. 649 * * *), without changing the substantive law of trade-marks, provided, in the manner prescribed, for the registration of marks (subject to special exceptions) which, without the statute, would be entitled to legal and equitable protection." Beckwith's Estate, Inc., v. Commissioner of Patents, 252 U.S. 538, 543, 40 S.Ct. 414, 416, 64 L.Ed. 705. See, also, Charles Broadway Rouss, Inc., v. Winchester Co., 2 Cir., 300 F. 706, 713, 714; Nims on Unfair Competition and Trade-Marks, (3d Ed.) §§ 223, 223(a).

What registration under the act does is to affect the registrant's remedies for the enforcement of the rights given him by the common law. It does not abridge the remedies available to him without registration,² but it enlarges them, and among the remedial rights conferred is the right to invoke the jurisdiction of the federal courts, regardless of diversity of citizenship and amount in controversy, 15 U.S.C.A. § 97, and the right, in case a registrant shall recover a verdict against one who has infringed, to obtain a judgment "for any sum above the amount found by the verdict as the actual damages, according to the circumstances of the case, not exceeding three times the amount of such verdict, together with the costs." 15 U.S.C.A. § 96.

Registration, however, does not conclusively establish either a registrant's ownership of the mark, 15 U.S.C.A. § 96, or its validity. "While it is true that a registered trade-mark cannot be canceled except by direct attack in the way prescribed in the statute, trade-marks registered under the law * * * are not thereby rendered valid. Their validity may still be questioned in any suit in which they are relied upon." Kellogg Co. v. National Biscuit Co., 2 Cir., 71 F.2d 662, 666. See, also, Armstrong Paint & Varnish Co. v. Nu-Enamel Corp., 305 U.S. 315, 322, 323, 59 S.Ct. 191, 83 L.Ed. 195.³ In fact, under the rule as it used to be the validity of the registration of a trade-mark was always necessarily in issue in suits of the sort here under consideration, if there was not diversity of citizenship and a sufficient amount in controversy, because it was originally held that the jurisdiction of federal courts to consider the question of unfair competition in such cases depended upon the validity of the registration of the plaintiff's trade-mark. Elgin National Watch Co. v. Illinois Watch Case Co., 179 U.S. 665, 21 S.Ct. 270, 45 L.Ed. 365; Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co., 201 U.S. 166, 26 S.Ct. 425, 50 L.Ed. 710. But these cases have been overruled, the rule now in effect being that "Unless plainly unsubstantial the allegation of registration under the act is sufficient to give jurisdiction of the merits." And "Once properly obtained, jurisdiction of the one cause of action, the alleged infringement of the trade-mark, persists to deal with all grounds...