Hershey Foods Corp. v. Hershey Creamery Co.

• Decision Date: 03 October 1991
• Docket Number: No. 90-5892,90-5892
• Parties: , 21 Fed.R.Serv.3d 249, 20 U.S.P.Q.2d 1530 HERSHEY FOODS CORPORATION, v. HERSHEY CREAMERY COMPANY, Appellant. HERSHEY CREAMERY COMPANY, Counter-Claimant, v. HERSHEY FOODS CORPORATION, Counter-Defendant.
• Court: U.S. Court of Appeals — Third Circuit

Page 1272

945 F.2d 1272

60 USLW 2272, 21 Fed.R.Serv.3d 249,

20 U.S.P.Q.2d 1530

HERSHEY FOODS CORPORATION, v. HERSHEY CREAMERY COMPANY, Appellant.

HERSHEY CREAMERY COMPANY, Counter-Claimant, v. HERSHEY FOODS CORPORATION, Counter-Defendant.

No. 90-5892.

United States Court of Appeals Third Circuit.

Argued March 4, 1991.

Decided Oct. 3, 1991.

Herbert F. Schwartz (argued), Susan Progoff, Mark D. Engelmann, Vicki S. Veenker, Fish & Neave, New York City, R. Stephen Shibla, Rhoads & Sinon, Harrisburg, Pa., for appellant, Hershey Creamery Co.

David E. Lehman (argued), Rod J. Pera, McNees, Wallace & Nurick, Harrisburg, Pa., Nims, Howes, Collison & Isner, New York City, for appellee, Hershey Foods Corp.

Before BECKER, NYGAARD and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

This appeal is a tale of two courts. Appellant Hershey Creamery Company ("Hershey Creamery") and appellee Hershey Foods Corporation ("Hershey Foods") are locked in a struggle for the perceived advantage of litigating rights in the HERSHEY'S trademark in their preferred federal district courts. Both parties' predecessors began producing and marketing food products in Hershey, Pennsylvania, around the turn of the century; they have been feuding intermittently over the rights to the mark HERSHEY'S for seventy years. In 1967, in the previous round in the dispute, Hershey Creamery and Hershey Foods's predecessor, the Hershey Chocolate Company ("Hershey Chocolate"), settled, and, pursuant to the parties' agreement, the District Court for the Southern District of New York issued a consent judgment.

In the current round, Hershey Foods filed suit in the District Court for the Middle District of Pennsylvania, ¹ at which point Hershey Creamery sought from the Southern District of New York an order construing and enforcing the 1967 consent judgment. At the behest of Hershey Foods, the Middle District of Pennsylvania enjoined Hershey Creamery from further proceedings in the Southern District of New York. Hershey Creamery has filed this interlocutory appeal from the Middle District of Pennsylvania's order.

On the merits, the appeal presents several intricate and interesting questions: (1) whether the Middle District of Pennsylvania improperly deprived its sister court in New York of the ability to hear a motion to enforce its own judgment; (2) whether the consent judgment in the New York action is broad enough to encompass the relief sought by Hershey Foods in the Pennsylvania actions (or whether it was, except for provisions not relevant here, merely a nonsubstantive agreement to dismiss); and (3) whether the Pennsylvania or New York action was first filed. At ultimate issue in this appeal is whether the Middle District of Pennsylvania or the Southern District of New York will decide whether the parties' 1967 settlement agreement and consent judgment preclude the substantive relief Hershey Foods seeks in this action.

The case thus presents us with a procedural nightmare. To complicate the picture further, there is also a difficult threshold question of appellate jurisdiction: whether an interlocutory order enjoining a party from prosecuting a related action is an immediately appealable "injunction" under 28 U.S.C. § 1292(a)(1) (1988). We conclude that the injunctive order before us is not appealable under the teachings of Cohen v. Board of Trustees of the University of Medicine & Dentistry of New Jersey, 867 F.2d 1455 (3d Cir.1989) (in banc), because it is not designed to accord or protect some of the substantive relief sought by the claimant. Instead, the order appealed from is akin to an order denying a change in venue, which is not appealable interlocutorily. Because the Middle District of Pennsylvania's order is not an appealable "injunction" as that term is defined in Cohen, we will not reach the merits and will dismiss the appeal for lack of appellate jurisdiction.

I. FACTS AND PROCEDURAL HISTORY

In about 1894, Hershey Chocolate began manufacturing and selling various food and milk products throughout the United States as HERSHEY'S, which it first registered with the United States Patent and Trademark Office in 1906. Over time Hershey Foods and its predecessor have marketed under the mark HERSHEY'S candy, chocolate, cocoa, chocolate milk, chocolate syrup, and refrigerated puddings. In about 1910, the Hershey brothers, ² who later founded Hershey Creamery, began manufacturing and selling ice cream products, using the same HERSHEY'S trademark.

In 1921, Hershey Chocolate filed the first lawsuit between these parties in the Middle District of Pennsylvania. Five years later, the district court issued a decree enjoining the Hershey brothers from using the trademark HERSHEY'S in connection with the manufacture, advertisement, distribution, or sale of, among other things, chocolate, cocoa, chocolate confections, and chocolate or cocoa products. In 1958, however, Hershey Creamery registered the HERSHEY'S trademark for ice cream and butter and received U.S. Trademark Registration 665,835.

In 1966, Hershey Creamery filed suit in the Southern District of New York. In that year, Hershey Creamery had learned that Hershey Chocolate was planning to make a foray into the ice cream business by licensing Consolidated Foods Corporation to use the HERSHEY'S trademark on ice cream bars coated with HERSHEY'S chocolate. Hershey Creamery's New York complaint charged Hershey Chocolate and Consolidated Foods Corporation with trademark infringement, unfair competition, false designation of origin, false descriptions, and false representations. In response, Hershey Chocolate filed a counterclaim challenging the validity of Hershey Creamery's trademark registration for ice cream and butter. Hershey Chocolate alleged that Hershey Creamery obtained U.S. Trademark Registration 665,835 through fraud and sought cancellation of the registration.

The parties amicably resolved the New York action in 1967. As part of the settlement agreement, Hershey Creamery agreed to drop its claims against Hershey Chocolate and to allow Hershey Chocolate to license its HERSHEY'S trademark for use in connection with ice cream bars coated with HERSHEY'S chocolate, subject to various restrictions on the manner in which the mark is displayed on the packaging. Hershey Creamery further agreed to amend U.S. Trademark Registration 665,835 by deleting butter from the goods covered and by correcting an error in the date of first use of the mark. In return, Hershey Chocolate agreed not to "attack the validity of, or oppose any federal or state trademark application or registration of Hershey Creamery directed to the trademark 'HERSHEY'S' for ice cream." Based on the parties' settlement agreement, the Southern District of New York entered a Final Judgment on Consent dismissing Hershey Creamery's claims and Hershey Chocolate's counterclaim with prejudice and ordering the United States Patent and Trademark Office to rectify U.S. Trademark Registration 665,835 in the manner described above.

Shortly after the resolution of the New York action, Hershey Creamery obtained an additional trademark registration of HERSHEY'S for various ice cream products, namely "ice cream, ice milk, sherbet, water ice, and frozen confections in which ice cream, ice milk, sherbet or water ice is a component." Over the next twenty-two years, the production and marketing efforts of the parties changed in response to the vagaries of market demand. In 1989, Hershey Creamery began to sell and advertise frozen yogurt in containers bearing the mark HERSHEY'S and filed an application in the United States Patent and Trademark Office to register the trademark for that product. When Hershey Foods became aware of the application to register HERSHEY'S as a trademark for frozen yogurt, it advised Hershey Creamery that Hershey Creamery's acts violated Hershey Foods's rights in the trademark and requested that Hershey Creamery discontinue use of HERSHEY'S on frozen yogurt. Although Hershey Creamery withdrew its pending application for registration of the mark for frozen yogurt, it refused to discontinue use of HERSHEY'S in connection with the advertisement and sale of frozen yogurt. ³

In May of 1990, Hershey Foods brought the present suit against Hershey Creamery in the Middle District of Pennsylvania, seeking an injunction prohibiting Hershey Creamery's use of the HERSHEY'S trademark for frozen yogurt. Hershey Foods also sought to enjoin Hershey Creamery from expanding its use of the HERSHEY'S mark on ice cream outside of what it claims is Hershey Creamery's "traditional thirteen-state trading area," and to require Hershey Creamery to use a disclaimer on all products that it sells or distributes under the HERSHEY'S trademark.

Hershey Creamery, believing that this relief, if granted, would undercut its rights under the 1967 consent judgment, filed in the Southern District of New York a "motion for order construing and enforcing consent judgment" under the 1966 docket number of that court's action. Hershey Creamery also moved in the Middle District of Pennsylvania to transfer the Pennsylvania action to the Southern District of New York pursuant to 28 U.S.C. § 1404(a) (1988) or, in the alternative, to stay the Pennsylvania action pending the resolution of its motion in the Southern District of New York. While these motions were pending, Hershey Foods moved in the Middle District of Pennsylvania for an order enjoining Hershey Creamery from prosecuting its motion in the Southern District of New York during the pendency of the Pennsylvania action.

Before the Southern District of New York was able to rule on the substance of Hershey Creamery's motion, the Middle District of Pennsylvania denied Hershey Creamery's motion to transfer and granted Hershey Foods's motion to enjoin Hershey Creamery from proceeding with its motion in the New York action pending final adjudication of the Pennsylvania action. ⁴ Upon...