Electronic Com'ns, Inc. v. Electronic Components For Ind. Co.

• Citation: 443 F.2d 487
• Decision Date: 28 May 1971
• Docket Number: No. 20079.,20079.
• Parties: ELECTRONIC COMMUNICATIONS, INC., Appellee, v. ELECTRONIC COMPONENTS FOR INDUSTRY CO., et al., Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

443 F.2d 487 (1971)

ELECTRONIC COMMUNICATIONS, INC., Appellee, v. ELECTRONIC COMPONENTS FOR INDUSTRY CO., et al., Appellants.

No. 20079.

United States Court of Appeals, Eighth Circuit.

May 6, 1971.

Rehearing Denied May 28, 1971.

Ralph W. Kalish, St. Louis, Mo., for appellants.

Roy C. Hopgood, Sandoe, Hopgood & Calimafde, New York City, William H. Webster, St. Louis, Mo., for appellee; Paul H. Blaustein, New York City, Armstrong, Teasdale, Kramer & Vaughan, St. Louis, Mo., of counsel.

Before MEHAFFY, GIBSON and BRIGHT, Circuit Judges.

MEHAFFY, Circuit Judge.

This appeal is from an action for infringement of plaintiff's trademark, "ECI," registered in the United States Patent Office, and for unfair competition for use of such trademark and plaintiff's trade name. Plaintiff sought an injunction to prohibit defendants' use of the trademark, "ECI."

Plaintiff is Electronic Communications, Inc., a New Jersey corporation with its principal place of business in St. Petersburg, Florida. Defendants are Electronic Components for Industry Co., ECI Semiconductors, Inc. and ECI Chicago, Inc., Missouri corporations with their principal place of business in St. Louis, Missouri. All defendants are under the same ownership and management and for convenience will be referred to hereafter as defendants. Jurisdiction is based on 28 U.S.C. § 1338 and 15 U.S.C. § 1121.

The district court found that plaintiff was the prior user, having first used the mark "ECI" in early 1957, at which time Electronic Communications, Inc. was a wholly owned subsidiary of Air Associates, Inc. In April, 1957 the name of this subsidiary was adopted as plaintiff's name, and the name, Air Associates, was retained as the name of a subsidiary or division of the company. The district court specifically found that plaintiff had made sales of products marked with "ECI" to McDonnell Aircraft in St. Louis, Missouri in 1957 prior to the inception of any of the defendants. It also found that plaintiff used "ECI" in its sale of facsimile equipment to the Signal Corps in St. Louis in 1958, before the conduct of any business by any of the defendants.

The court held that the mark "ECI" was completely arbitrary and fanciful and was neither descriptive nor suggestive of any of the goods, generally termed electronic equipment, of either of the parties nor descriptive or suggestive of any of plaintiff's business or services. The court also held that plaintiff had diligently enforced its right to the trademark against third parties and brought the present suit after successful conclusion of prior litigation.

The district court found that the first use of "ECI" by any of the defendants on electronic goods or containers for electronic goods occurred after formation of defendant Semiconductors in 1961 when that defendant commenced using a shipping label featuring "ECI," and that this occurred after the first registration of "ECI" by plaintiff in 1960. The court found that defendants now advertise electronic goods under the mark "ECI" which are covered by plaintiff's registrations and which are manufactured and sold by plaintiff, and that both companies have listed "ECI" parts numbers and in some instances parts meeting precisely the same military specifications are listed by both plaintiff and defendants under their "ECI" parts numbers.

It was found that the trademark "ECI," being all capital letters and in that order, is identical in plaintiff's trademark registration No. 706,588 and in defendants' shipping labels, stickers, packing slips, forms for billheads and other items. All of plaintiff's other trademark registrations also feature "ECI" written in dominating capital letters and in that order, but with different associated figurative designs. The court held that there was a likelihood of confusion among purchasers and prospective purchasers of goods when marketed under the trademark "ECI," that "ECI" had acquired a secondary meaning as referring to the goods and services of plaintiff, and that defendants were negligent in not conducting an investigation for registrations or applications to register. The court noted that plaintiff was seeking only an injunction and did not object to defendants' using a stylized presentation of Electronic Components for Industry Co. that accents the E, C, and I. The court rejected the defense of laches as a bar to injunctive relief for plaintiff. The court held that plaintiff's registrations were valid, unrevoked and uncancelled, and enjoined defendants from continued infringement and from continued unfair competition with plaintiff.

The memorandum opinion of The Honorable James H. Meredith, now Chief District Judge, is reported at 308 F.Supp. 267 (D.C.). We affirm the judgment of the district court.

Broadly stated, the issues before us are whether plaintiff should be barred injunctive relief because of conduct amounting to laches, whether the district court's finding as to the likelihood of confusion was clearly erroneous, and whether the district court's determination as to priority of trademark use was clearly erroneous.

We find solid evidentiary support for all of the court's findings. We have frequently called attention to our function and limitations in cases tried before the court sitting without a jury. Parke-Davis & Co. v. Stromsodt, 411 F.2d 1390, 1394 (8th Cir. 1969). In a decision involving protection of a trademark, Humble Oil & Refining Co. v. American Oil Co., 405 F.2d 803, 814 (8th Cir. 1969), cert. denied, 395 U.S. 905, 89 S. Ct. 1745, 23 L.Ed.2d 218 (1969), Judge Blackmun in discussing the clearly erroneous rule described it as a hornbook rule.

Defendants characterize as the primary issue here laches or equitable estoppel based on plaintiff's delay of five years before instituting this action. We note at the outset of this discussion that plaintiff began using the mark "ECI" early in 1957. In April of 1957 after plaintiff adopted the name of its subsidiary, it used the mark "ECI" extensively throughout the United States and abroad. At this juncture, defendants' first company was not even in business. Its first company was incorporated in August, 1958 and its first use of the mark on electronic goods or their containers was in 1961, a year after plaintiff's first registration of the mark "ECI."

It is true that some five years intervened before plaintiff brought the instant suit, but when it was ascertained that defendants were using this mark and, we might add, in a territory penetrated by plaintiff, plaintiff corresponded with defendants and notified them of registration of its trademark. Nonetheless, defendants not only persisted in using the mark but even audaciously after institution of this suit incorporated the defendant ECI Chicago, Inc.

Plaintiff had a valid reason for delaying institution of this action. It was engaged in litigation on the same subject against another company for the purpose of protecting its trademark and the present action was commenced shortly after termination of the New York litigation. Additionally, plaintiff was in correspondence with other infringers, and we also note that plaintiff sought no damages in the instant case, but solely an injunction against further infringement. This court held in San Francisco Ass'n for the Blind v. Industrial Aid for the Blind, Inc., 152 F.2d 532, 537 (8th Cir. 1946), that a delay of eight years in bringing an action for infringement of a trademark, after having notified the defendant that the use of the trademark was an infringement, would not prevent the issuance of an injunction but in some cases might deprive the plaintiff of any right to damages.

It is interesting to note the discussion on this subject in an old opinion of this court by the first Judge Sanborn, Stearns-Roger Mfg. Co. v. Brown, 114 F. 939, 945 (8th Cir. 1902), where Judge Sanborn observed: "Moreover, delay in prosecuting other infringers during the time while the validity of a patent is in litigation does not constitute laches. (Citing cases.)"

The cases relied upon by defendants for reversal are readily distinguishable. In Seven-Up Co. v. O-So Grape Co., 177 F.Supp. 91 (S.D.Ill.1959), aff'd, 283 F. 2d 103 (7th Cir. 1960), cert. denied, 365 U.S. 869, 81 S.Ct. 903, 5 L.Ed.2d 859 (1961), the Court of Appeals found that there was something more than delay present and stated that mere delay in bringing suit ordinarily does not affect the right to an injunction against further use of an infringed trademark. The court there said, 283 F.2d at 106:

"Mere delay in bringing suit ordinarily does not affect the right to an injunction against further use of an infringed trademark. (Citing cases.)

* * * * * *

"In the case at bar, much more than mere delay is present."

Defendants advance the argument that Theodore Rectanus Co. v. United Drug Co., 226 F. 545 (8th Cir. 1915), aff'd, 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), distinguished the cases of McLean v. Flemming, 96 U.S. 245, 24 L. Ed. 828 (1878), and Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526 (1888), as being restricted to situations where the plaintiff was diligent in giving notice to desist and the defendant's actions had not been innocent, but those factors are present in the instant case. Here, defendants had notice of plaintiff's rights as early as 1962 but contended that there was no infringement and persisted in using the mark despite the notice. The district court found defendants negligent in so doing which is another way of saying defendants were not innocent; hence the distinctions of Rectanus do not apply here. Actually, the holding in Rectanus is based on negligence and is a case where injunctive relief was barred by "estoppel by negligence." Here, the district court held that plaintiff was not negligent and that defendants were negligent in not causing a search to be made of the registrations and in continuing to use the mark after notice. It is obvious that Rectanus is no authority for...