Haeger Potteries v. Gilner Potteries

• Decision Date: 28 June 1954
• Docket Number: Civ. No. 16391.
• Citation: 123 F. Supp. 261
• Parties: HAEGER POTTERIES, Inc. v. GILNER POTTERIES.
• Court: U.S. District Court — Southern District of California

123 F. Supp. 261

HAEGER POTTERIES, Inc. v. GILNER POTTERIES.

Civ. No. 16391.

United States District Court, S. D. California, C. D.

June 28, 1954.

COPYRIGHT MATERIAL OMITTED

Fulwider, Mattingly & Babcock, Robert W. Fulwider, Los Angeles, Cal. (Curtis F. Prangley and Moore, Prangley & Clayton, Chicago, Ill., of counsel), for plaintiff.

Victor E. Kaplan, Los Angeles, Cal., for defendant.

MATHES, District Judge.

Plaintiff invokes the equity jurisdiction of this court, Briggs v. United Shoe etc. Co., 1915, 239 U.S. 48, 50, 36 S.Ct. 6, 60 L.Ed. 138; Rees v. City of Watertown, 1873, 19 Wall. 107, 86 U.S. 107, 122, 22 L.Ed. 72, under certain provisions of the Lanham Trade-Mark Act, 15 U.S.C.A. §§ 1121, 1125, 1126(b) (1-2), (g-i), and upon the ground of diversity of citizenship, 28 U.S.C. § 1332; Suttle v. Reich Bros. Const. Co., 1948, 333 U.S. 163, 166, 68 S.Ct. 587, 92 L.Ed. 614; cf. Blake v. McClung, 1898, 172 U.S. 239, 259, 19 S.Ct. 165, 43 L.Ed. 432, seeking an injunction and damages for alleged unfair competition in and affecting interstate commerce. Cf. U. S. Printing etc. Co. v. Griggs etc. Co., 1929, 279 U.S. 156, 158, 49 S.Ct. 267, 73 L.Ed. 650; Dad's Root Beer Co. v. Doc's Beverages, 2 Cir., 1951, 193 F.2d 77, 81-82.

The complaint alleges inter alia that defendant has exactly copied except for quality of craftsmanship, and is foisting upon the trade and the public in unfair competition with plaintiff, certain distinctive art pottery ash trays previously and currently designed, manufactured and sold by plaintiff.

The cause is now before the court upon plaintiff's application for a preliminary injunction pursuant to Rule 65, Fed.Rules Civ.Proc. rule 65, 28 U.S.C.A., and defendant's motion to dismiss for failure to state a claim upon which relief can be granted or, in the alternative, for a more definite statement. Fed. Rules Civ.Proc. rule 12(b)(6), (e), 28 U.S.C.A.

The case does not involve any claimed right to a trade name, registered or unregistered, see: Cal.Business and Professions Code, § 14400 et seq.; Stork Restaurant v. Sahati, 9 Cir., 1948, 166 F.2d 348, or to a trade mark, registered or unregistered, see: 15 U.S.C.A. § 1051, Cal.Bus. & Prof.Code, § 14200 et seq.; Sunbeam Furniture Corp. v. Sunbeam Corp., 9 Cir., 191 F.2d 141, upon petition for rehearing, id., 1951, 191 F.2d 731; Sunbeam Corp. v. Sunbeam Lighting Co., D.C., 83 F.Supp. 429, affirmed in part and reversed in part, 9 Cir., 1950, 183 F.2d 969, certiorari denied, 1951, 340 U.S. 920, 71 S.Ct. 357, 95 L.Ed. 665, or to a copyright, 17 U.S.C. § 1, or a design patent, 35 U.S.C. § 171. See: Mazer v. Stein, 1954, 347 U.S. 201, 74 S.Ct. 460; Stein v. Rosenthal, D.C.S.D.Cal.1952, 103 F. Supp. 227, affirmed, 9 Cir., 1953, 205 F.2d 633.

The only claim asserted by plaintiff is for unfair competition in the sale of art pottery ash trays, cf. Briddell v. Alglobe Trading Co., 2 Cir., 1952, 194 F.2d 416, unrelated to any claim under the copyright, patent or trade-mark laws. Cf. 28 U.S.C. § 1338(b); Looz v. Ormont, D.C.S.D.Cal.1953, 114 F.Supp. 211, 216-218; Block v. Plaut, D.C.N.D. Ill.1949, 87 F.Supp. 49, 50.

Upon disapproving the doctrine of Swift v. Tyson, 1842, 16 Pet. 1, 41 U.S. 1, 10 L.Ed. 865, in the far-reaching decision of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 78-80, 58 S.Ct. 817, 82 L.Ed. 1188, the Court reaffirmed that: "There is no federal general common law." 304 U.S. at page 78, 58 S.Ct. at page 822; cf. Western Union Tel. Co. v. Call Pub. Co., 1901, 181 U.S. 92, 100-103, 21 S.Ct. 561, 45 L.Ed. 765; Smith v. State of Alabama, 1888, 124 U.S. 465, 478-479, 8 S.Ct. 564, 31 L.Ed. 508; Wheaton v. Peters, 1834, 8 Pet. 591, 33 U.S. 591, 657-658, 8 L.Ed. 1055.

As explained in Erie R. Co. v. Tompkins: "Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. * * * There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or `general,' be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts." 304 U.S. at page 78, 58 S.Ct. at page 822; and see: Cities Service Oil Co. v. Dunlap, 1939, 308 U.S. 208, 60 S.Ct. 201, 84 L.Ed. 196; Ruhlin v. New York Life Ins. Co., 1938, 304 U.S. 202, 205, 58 S.Ct. 860, 82 L.Ed. 1290.

So thereafter and until passage of the Lanham Trade-Mark Act of July 5, 1946, 60 Stat. 427, 15 U.S.C.A. §§ 1051-1127, effective July 5, 1947, § 46(a), it had been regarded as settled that causes of action for unfair competition not arising under a federal statute are governed by state law. See: Pecheur Lozenge Co. v. National Candy Co., 1942, 315 U.S. 666, 667, 62 S.Ct. 853, 86 L.Ed. 1103; Fashion Originators Guild v. Federal Trade Commission, 1941, 312 U.S. 457, 468, 61 S.Ct. 703, 85 L.Ed. 949; Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 1938, 305 U.S. 315, 325, 336, 59 S.Ct. 191, 83 L.Ed. 195; Campbell Soup Co. v. Armour & Co., 3 Cir., 175 F.2d 795, 797, certiorari denied, 1949, 338 U.S. 847, 70 S.Ct. 83, 94 L.Ed. 518; Time, Inc. v. Viobin Corp., 7 Cir., 128 F.2d 860, certiorari denied, 1942, 317 U.S. 673, 63 S.Ct. 78, 87 L.Ed. 540; National Fruit Product Co. v. Dwinell-Wright Co., D.C.Mass. 1942, 47 F.Supp. 499, affirmed, 1 Cir., 1944, 140 F.2d 618; Chafee, Unfair Competition, 53 Harv.L.Rev. 1289, 1299 (1940).

Concededly plaintiff has no actionable claim of substantive right under any federal statute unless the Lanham Act gives a federal cause of action to "any plaintiff with whose interstate commerce the defendant has unfairly competed." Cf. American Auto Ass'n v. Spiegel, 2 Cir., 205 F.2d 771, 775, certiorari denied, 1953, 346 U.S. 887, 74 S.Ct. 138; Briddell v. Alglobe Trading Co., supra, 194 F.2d at page 421.

If plaintiff's claim does arise under the Lanham Act, jurisdiction is expressly conferred upon this court "without regard to the amount in controversy or to diversity or lack of diversity of the citizenship of the parties." 15 U.S.C.A. § 1121.

It is urged that Stauffer v. Exley, 9 Cir., 1950, 184 F.2d 962, and more recently Pagliero v. Wallace China Co., 9 Cir., 1952, 198 F.2d 339, serve as authority for the contention that plaintiff at bar asserts a federal cause of action arising under the Lanham Act.

Stauffer v. Exley involved a claim of unfair competition consisting in the use of "the unregistered trade name `Stauffer System' in interstate commerce * * *." 184 F.2d at page 963. And the Court held that by according "the same benefits as are granted" to beneficiaries of conventions or treaties to which the United States is a party, 15 U. S.C.A § 1126(i), (b), the Lanham Act gives "Citizens or residents of the United States", id. § 1126(i), having unregistered "Trade names or commercial names", id. § 1126(g), "used in commerce", id. § 1051, a federal cause of action for unfair competition in respect to such unregistered names, with "the remedies provided * * * for infringement of registered marks * * * so far as they may be appropriate in repressing acts of unfair competition. * * *" Id. § 1126(h); See Chamberlain v. Columbia Pictures Corp., 9 Cir., 1951, 186 F.2d 923, 924; In re Lyndale Farm, 1951, 186 F.2d 723, 726-727, 38 C.C.P.A., Patents, 825; Old Reading Brewery v. Lebanon Valley Brewing Co., D.C.M.D.Pa.1952, 102 F.Supp. 434, 437-438.

Comprehensive statutory remedies are provided in the Act "for infringement of marks". See: S. C. Johnson & Son v. Johnson, 2 Cir., 1949, 175 F.2d 176; 15 U.S.C.A. § 1126(h). These remedies include broad injunctive relief as well as damages, for infringement and for unfair competition in the use of any registered mark. Id. §§ 1114-1120. It is to be noted that these federal statutory remedies apply only to a registered mark; and the term "mark" is defined, unless the contrary is plainly apparent from the context, as including "any trade-mark, service mark, collective mark, or certification mark entitled to registration * * * whether registered or not." Id. § 1127.

In the language of the Act, unfair competition in the use of a mark consists in any use intended or likely "to cause confusion or mistake or to deceive purchasers as to the source of sic origin of * * * goods or services * * *." Id. § 1114(1) (a). This is in essence the common-law concept of unfair competition as applied to the use of trade-marks and trade names as well as other business conduct. See: Steele v. Bulova Watch Co., 1952, 344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 252; cf. American Steel Foundries v. Robertson, 1926, 269 U.S. 372, 380-384, 46 S.Ct. 160, 70 L.Ed. 317; Hanover Star Milling Co. v. Metcalf, 1916, 240 U.S. 403, 412-413, 36 S. Ct. 357, 60 L.Ed. 713; Elgin National Watch Co. v. Illinois Watch Case Co., 1901, 179 U.S. 665, 673-674, 21 S.Ct. 270, 45 L.Ed. 365; Restatement, Torts, §§ 708-756 (1938).

It thus appears to be the holding in Stauffer v. Exley that "Citizens or residents of the United States", 15 U.S.C.A. § 1126(i), owning "trade names" or "commercial names", id. § 1127, "whether or not they form parts of marks", id. § 1126(g), and whether such names be anywhere registered or unregistered, id. 1126(a) (g), are given a federal cause of action under the Lanham Act for unfair competition in the use of such names, with the same remedies as provided in the Act for infringement of registered marks, cf. Hodgson v. Fifth Ave. Plastics, D.C.S.D.N.Y.1950, 94 F.Supp. 160 "available so far as they may be appropriate in repressing acts of unfair competition" in the use of such names. Id. § 1126(h).

In Pagliero v. Wallace China Co., supra, 198 F.2d 339, the preliminary injunction issued by the District Court restrained defendants (1) "from `* * * disposing of china bearing patterns deceptively similar to those originated by plaintiff'", and (2) "`from using plaintiff's trade names or trade-marks * * * in the...