Maier Brewing Company v. Fleischmann Distilling Corp.

Decision Date16 March 1966
Docket NumberNo. 20748.,20748.
Citation359 F.2d 156
PartiesMAIER BREWING COMPANY, a Corp., et al., Appellants, v. The FLEISCHMANN DISTILLING CORP., Appellee. MAIER BREWING COMPANY, a Corp., et al., Appellants, v. JAMES BUCHANAN & CO., Ltd., Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

J. Albert Hutchinson, San Francisco, Cal., for appellants.

Gregory A. Harrison, Richard Haas, Brobeck, Phleger & Harrison, San Francisco, Cal., for appellee.

Before CHAMBERS, BARNES, HAMLEY, JERTBERG, MERRILL, KOELSCH, BROWNING, DUNIWAY and ELY, Circuit Judges.

DUNIWAY, Circuit Judge.

Following this court's decision in Fleischmann Distilling Corporation v. Maier Brewing Company, 1963, 314 F.2d 149, the district court entered judgment pursuant to our mandate enjoining Maier Brewing Company from distributing, selling or offering for sale any alcoholic beverage labeled or named with the words "Black & White" not blended and bottled by James Buchanan & Company Limited. The judgment further recited that the plaintiffs (Fleischmann Distilling Corporation and James Buchanan & Company Limited) were entitled to recover from defendants (Maier Brewing Company and Ralphs Grocery Company) a reasonable amount for attorneys' fees and litigation expenses incurred in this suit in the district court, in the United States Court of Appeals, and in the United States Supreme Court, and fixed the time for hearing to determine the amount of such fees and expenses. Thereafter a hearing was held at which evidence on behalf of all parties was received, and the district court, on April 30, 1964, entered an order awarding plaintiffs, as attorneys' fees, the sum of $60,000 and further sums by way of costs. Appellants have now appealed from that order.

Their first appeal, our No. 19,486, was held by us to be premature, the order not being a final judgment. The trial court then made its certificate, pursuant to 28 U.S.C. § 1292(b), that the order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation. We granted leave to appeal and the matter is now before us for decision on the merits.1

It is contended that it was error for the district court to award any amount by way of attorneys' fees and litigation expenses and that, in any event, the amount awarded was excessive and not warranted by the record.

Two decisions of this court appear to support such an award: National Van Lines v. Dean, 9 Cir., 1956, 237 F.2d 688 and Wolfe v. National Lead Co., 9 Cir., 1959, 272 F.2d 867. Wolfe is in point here and relies on National Van Lines, but we are of the opinion that, insofar as these cases can be said to relate to an award of attorneys' fees in an action for trademark infringement under the Lanham Act (15 U.S.C. §§ 1051 ff.) they, or at least Wolfe, should be overruled.

National Van Lines was a case in which the plaintiff asserted three grounds for relief; infringement of a registered service mark, unfair competition, and breach of contract. The first rested upon federal law, the other two upon the law of California and diversity jurisdiction. The trial court entered judgment for the defendant. This court reversed, holding that the findings as to unfair competition were clearly erroneous, confining its decision to that ground, and further holding that monetary damages had not been proved, but that an injunction should issue. The opinion concludes as follows (237 F.2d p. 694):

"We make one exception from the ruling just announced. Since we have found appellee\'s acts to have been willful and calculated to trade upon appellant\'s good will, the latter is entitled to recover its actual and reasonable attorney\'s fees incurred in this litigation.8
"8. Aladdin Mfg. Co. v. Mantle Lamp Co., 7 Cir., 116 F.2d 708; Admiral Corp. v. Penco, 2 Cir., 203 F.2d 517; Keller Products, Inc. v. Rubber Linings Corp., 7 Cir., 213 F.2d 382, 47 A.L.R.2d 1108."

It will be noted that no consideration was given to whether the award of attorney's fees rested upon state law or upon federal law.

Wolfe cites and follows National. In that case, as here, there were two appeals. The action began as one for a declaratory judgment that Wolfe's use of a trademark did not infringe National Lead Company's registered mark. National Lead counterclaimed for infringement, a federal claim, and for unfair competition, a state claim. Wolfe prevailed in the trial court. We reversed, 9 Cir. 1955, 223 F.2d 195, holding that the mark "was one entitled to full protection both under the rules of the common law and under the federal acts" (p. 200). We relied specifically upon the Lanham Act (15 U.S.C. §§ 1051 ff.) As in National Van Lines, we held that the trial court's findings were clearly erroneous. (p. 201) We further held that Wolfe's "continued use of these names and the passing off of their products thereunder was intentionally false and misleading and done with a purpose on their part of deceiving prospective purchasers." (p. 202) We concluded that there was both trademark infringement and unfair competition under California law. (p. 205) We remanded with directions to dismiss Wolfe's complaint, to grant National Lead an injunction, to take an account of Wolfe's profits, and to determine National Lead's damages.

Thereafter, the trial court took an accounting and entered a judgment for damages and attorney's fees. It made findings as to intentional infringement consistent with the views stated by us in our first opinion. On Wolfe's appeal, we affirmed (272 F.2d 867). As to the award of attorney's fees, we said (p. 873):

"Finally Wolfe assigns as error the inclusion in the judgment of an allowance to appellee for counsel fees. In the light of the judicial determination that the infringement was deliberate and fraudulent, this allowance was proper. National Van Lines Co. v. Dean, 9 Cir., 1956, 237 F.2d 688, 694."

The course of the present litigation is similar to that in Wolfe. The complaint was based upon both trademark infringement and unfair competition. Judgment was for the defendant Maier. We reversed. Our decision was based solely on the Lanham Act. (See 314 F.2d at 151-152) We said:

"We cannot conclude but that Maier deliberately adopted the name knowing that Black & White was the name and trademark of Buchanan and they must have done so with some purpose in mind. The only possible purpose could have been to capitalize upon the popularity of the name chosen. This popularity, they must have known, would extend to their product because the public would associate the name Black & White with something old and reliable and meritorious in the way of an alcoholic beverage." (314 F.2d at 157) * * *
"But when the evidence does show or require the inference that another\'s name was adopted deliberately with a view to obtain some advantage from the good will, good name, and good trade which another has built up, then the inference of likelihood of confusion is readily drawn, for the very act of the adopter has indicated that he expects confusion and resultant profit." (314 F.2d at 158)

The judgment of the district court, entered pursuant to our mandate, found and concluded as follows: "Without seeking legal advice, and for the purpose of capitalizing upon the popularity of the name thus chosen, defendant Maier deliberately adopted the name `Black & White' knowing that `Black & White' was the name and trademark of plaintiff Buchanan, and knowing that this popularity would extend to its product because the public would associate the name `Black & White' with the long established reliability and meritoriousness of Buchanan's product. Defendants intended to adopt plaintiff Buchanan's `Black & White' name or mark for the purpose of taking advantage of the aura of good will which surrounded the name, and they deliberately adopted the name with a view to obtaining advantage from the good will, good name and good trade which Buchanan had built up and expecting that there would be confusion and resultant profit. Defendants refused to discontinue their use on beer of the name `Black & White' upon request made before suit filed, and they have knowingly, wilfully and deliberately infringed the said mark `Black & White' and plaintiffs' rights therein."

We might distinguish National Van Lines on the ground that it rests upon California law of unfair competition. Wolfe, however, is expressly grounded on the Lanham Act and on National Van Lines, which does not differentiate, so far as attorney's fees are concerned, between the two grounds. Thus Wolfe is authority for the award here made, and it makes National Van Lines an authority on the same question. We must either follow them, limit or overrule them.

We start with the long established principle that a successful party cannot, in an ordinary action at law or in equity, recover his attorney's fees incurred in the action, unless such recovery is provided for by statute or contract. It makes no difference whether such a recovery be denominated costs or damages or something else. This has long been the rule in the federal courts,2 and in the courts of California.3 This court has recognized and applied the rule.4 And we note particularly that the rule has been applied by the Supreme Court in patent cases. (Teese v. Huntingdon, supra, fn. 2, Philp v. Nock, supra, fn. 2)

The rule is stated in Oelrichs v. Spain, 1872, 82 U.S. (15 Wall.) 211, 231, 21 L.Ed. 43;

"In debt, covenant and assumpsit damages are recovered, but counsel fees are never included. So in equity cases, where there is no injunction bond, only the taxable costs are allowed to the complainants. The same rule is applied to the defendant, however unjust the litigation on the other side, and however large the expensa litis to which he may have been subjected. The parties in this respect are upon a footing of equality. There is no fixed standard
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