Morse-Starrett Products Co. v. Steccone, 27081-E.

• Decision Date: 25 October 1949
• Docket Number: No. 27081-E.,27081-E.
• Citation: 86 F. Supp. 796
• Court: U.S. District Court — Northern District of California
• Parties: MORSE-STARRETT PRODUCTS CO. v. STECCONE.

86 F. Supp. 796

MORSE-STARRETT PRODUCTS CO. v. STECCONE.

No. 27081-E.

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

October 25, 1949.

COPYRIGHT MATERIAL OMITTED

Mellin and Hanscom, Oscar A. Mellin, Jack E. Hursh, San Francisco, Cal., attorneys for plaintiff.

I. M. Peckham, James M. Naylor, San Francisco, Cal., attorneys for defendant.

ERSKINE, District Judge.

Most, if not all of the facts in this case, are virtually admitted. The difficulty in deciding this action stems more from the confusion in the decisions which are or are claimed to be applicable. The plaintiff's action is based upon a claimed infringement of a trademark registered under the Acts of 1905, 33 Stat. 724, and 1946, 15 U.S.C.A. § 1051 et seq., and alleged unfair competition arising by virtue of the use of that trademark by defendant. The defendant filed an answer and cross-complaint denying many of the averments of the complaint, claiming that the right to use the trademark in dispute is solely that of defendant, and asking for an injunction against its use by plaintiff, and for damages claimed to have been suffered by defendant because of plaintiff's alleged unauthorized use of said trademark.

The salient facts are as follows:

The defendant states that in 1934 he invented the window squeegee, a device for window cleaning, and started making and selling it in January, 1935. (On Page 17 of his deposition defendant says he commenced to make and sell them 16 months before November, 1938. But this discrepancy between his statements at the trial and in his deposition is immaterial and is explained by his further statement that after the deposition was taken he found an order for a squeegee sold by him dated January, 1935). Defendant before January, 1935 had been a window cleaner both in the San Francisco bay area and in the East. He was an organizer, charter member and perpetual vice-president of the East Bay local of that trade union, and a delegate to their state and national conventions. After inventing the "squeegee" he applied for and was granted a United States patent on the device. He began his manufacturing operations under the name of "New Deal Manufacturing Co., E. Steccone," and impressed on the metal handles the words "New Deal Patent Pending". He did not mark the rubber part of the squeegee. He continued making and selling those squeegees with the handles marked "New Deal" until December, 1938. During this period he circularized the trade throughout the United States soliciting the sale of his product under the name of "New Deal."

In November, 1938 he licensed the manufacture and sale of this patented device to plaintiff subject to the cancellation or disposal of his previous contract with one Dormeyer. When it became apparent the Dormeyer contract could not be disposed of, the defendant on December 3, 1938 entered into a supplemental license agreement with plaintiff wherein he indemnified plaintiff against all loss which plaintiff might suffer by reason of the Dormeyer contract. Upon the making of these two contracts and pursuant to the terms therein, defendant turned over to plaintiff, at cost less depreciation, his dies, tools, material and equipment used in the making of the squeegees. He also gave plaintiff his customers list and retired from the business.

Defendant admits he had never used the disputed trade mark "Steccone", or his own name in any form, on his squeegees prior to his license agreements with plaintiff. His business had been identified as "New Deal Manufacturing, E. Steccone", and the metal handles of the squeegees had been marked "New Deal," and had been advertised and sold under that name. Several witnesses for plaintiff from San Francisco, Oakland and San Jose testified they had followed the occupation of window cleaner and had known defendant for many years; that he had invented the squeegee in question; and that although it was marked "New Deal", whenever they purchased a squeegee from a dealer they asked for and called it the Steccone squeegee. These statements related to the years from 1935 to 1938.

After the agreement of December 3, 1938, and on or about January 1, 1939, plaintiff commenced to make and sell the device invented by defendant pursuant to the license agreements of November and December, 1938. At or about this time the officials of the plaintiff discussed the name under which they would sell the squeegee. They decided to dispense with the term "New Deal" and to adopt the name "Steccone". They told the defendant that this was their purpose. He made no objection. According to Paul, one of plaintiff's officials, they did not ask Steccone if it were agreeable to him, but told him this was their intention, and he made no objection. Morse, the president of plaintiff company, stated he talked to defendant shortly after the license agreement of December, 1938 was obtained, told defendant that he did not like the name "New Deal", and suggested it be called "Steccone"; the defendant was pleased and agreed. Morse further stated that nothing was said about how long that mark could be used, but he understood it was to be as long as his company made and sold the squeegee. Paul says that one of the reasons which actuated them in calling the article "Steccone" was the fact that there was another squeegee on the market called "Ideal", and it was desired to prevent any confusion about the articles. Morse stated he thought it would please defendant. Defendant contends in his briefs that the reason plaintiff adopted this name was that the article was already known to the public as the "Steccone" squeegee, although it was marked "New Deal" squeegee. At any rate it is conceded by both parties that when plaintiff adopted the mark "Steccone" and impressed it upon the rubber squeegee itself, as well as on the handle, and thus sold the article, defendant raised no objection.

At the time defendant was told plaintiff intended to use this mark nothing was said about the length of time it could be used. There was no written agreement respecting its use. Nothing appears in the license agreements or in the letter of December 12, 1938 transferring the inventory, dies, and equipment from defendant to plaintiff respecting its use or the use of any trademark. Apparently no consideration passed from plaintiff to defendant for its use, if such consideration were necessary. Nothing was said about registering the mark. Nothing was said about the transfer of the business or good will, if any, by defendant to plaintiff.

Early in 1939 plaintiff procured a rubber stamp and red ink and proceeded to cut and stamp the rubbers used in the squeegee with the mark, which consisted of the name "Steccone" enclosed in a red oval. About the middle of July, 1939 plaintiff commenced to impress the same mark on the metal handles of the squeegee. Plaintiff has continued to so mark the rubbers and handles of the squeegees up to the present time. On June 13, 1939 plaintiff applied under the Trade Mark Act of 1905 for registration of the mark Steccone with an oval around the name. On October 3, 1939 this mark was registered in the Patent Office. According to defendant this registration was obtained without his knowledge or consent.

On October 31, 1940 the Circuit Court declared the defendant's patent invalid for lack of novelty and for anticipation. Morse-Starrett Products Co. v. Standard American Window Safety Device Co., 7 Cir., 115 F.2d 574.

It will be noted that plaintiff herein was also plaintiff in that action, attempting to uphold the validity of the patent and thus the validity of its license from defendant under which it had manufactured and sold the squeegees for nearly two years. After this decision, and on or about November 13, 1940, plaintiff by letter cancelled the license agreement because of the annulment of the patent. So far as the record shows, defendant made no objection to this cancellation or to the plaintiff's continuation in the business of making and selling the squeegee under the name "Steccone" until approximately two years later. On October 16, 1942 defendant caused a letter to be written to plaintiff demanding that it discontinue using the name "Steccone" on the squeegee. In the meantime, approximately a two-year period, plaintiff continued to manufacture, advertise and sell the device nationally under the trademark "Steccone". Defendant explains his delay from November, 1940 to October, 1942 in demanding that plaintiff discontinue the use of the trademark by saying he realized plaintiff had on hand a stock of goods marked "Steccone", and he thought it was no more than right to allow plaintiff to get rid of them. He did not, however, convey this idea to plaintiff. Upon receipt of this letter of October 16, 1942 plaintiff caused defendant to be notified that plaintiff had registered the mark and would not discontinue its use.

Sometime in 1945 defendant claims he decided to embark again in the manufacture and sale of this squeegee. This was three years after the exchange of letters between plaintiff and defendant above referred to, during which time plaintiff had continued making, advertising, and selling its product throughout the United States under the name "Steccone". Defendant contends he then applied to Goodrich Tire Co., his former supplier, to make the rubbers with his name "Steccone" on them, but that Goodrich refused to do so on the ground that plaintiff claimed the mark. Plaintiff had notice of this action by defendant because in July, 1945 Goodrich who was making the rubbers for plaintiff advised plaintiff that defendant had requested Goodrich to make rubbers for him and mark them "Steccone". Plaintiff advised Goodrich that it owned the mark and guaranteed Goodrich against any liability for continuing to make and mark the rubbers for it.

Between 1945 and 1947 there were no further developments except for defendant's efforts to get rubber for his squeegee. Various manufacturers thereof...