Nestle Co., Inc. v. Chester's Market, Inc., Docket No. 83-7753

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtBefore VAN GRAAFEILAND, MESKILL and WINTER; WINTER; The parties thereupon moved this court to vacate the district court's judgment and enter a judgment on consent. Believing it best to permit the district court to consider the motion in the first ins
Citation756 F.2d 280
Docket NumberDocket No. 83-7753
Decision Date05 March 1985
Parties, 225 U.S.P.Q. 537 The NESTLE COMPANY, INC., Plaintiff-Appellant, v. CHESTER'S MARKET, INC. and Saccone's Toll House, Inc., Defendants-Appellees.

Page 280

756 F.2d 280
40 Fed.R.Serv.2d 1192, 225 U.S.P.Q. 537
The NESTLE COMPANY, INC., Plaintiff-Appellant,
v.
CHESTER'S MARKET, INC. and Saccone's Toll House, Inc.,
Defendants-Appellees.
Docket No. 83-7753.
United States Court of Appeals,
Second Circuit.
Argued Jan. 22, 1985.
Decided March 5, 1985.

Allen F. Maulsby, New York City, for plaintiff-appellant; Cravath, Swaine & Moore, New York City, of counsel.

Barry H. Garfinkel, New York City, for defendants-appellees; Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel.

Before VAN GRAAFEILAND, MESKILL and WINTER, Circuit Judges.

WINTER, Circuit Judge:

Plaintiff-appellant The Nestle Company, Inc. ("Nestle") and defendants-appellees Chester's Market, Inc. and Saccone's Toll House, Inc. (collectively "Saccone") jointly seek vacatur of a partial judgment of the district court invalidating the Nestle trademark "Toll House" as used in connection with cookies. The parties seek this relief as part of a settlement they have reached.

Page 281

For the reasons discussed infra, we remand to the district court with instructions to vacate the partial judgment and dismiss the action and counterclaims.
BACKGROUND

Nestle owns five trademarks for Toll House covering various products. Saccone uses Toll House in its corporate name, in the name of an inn it operates, and in connection with cookies. Nestle brought suit against Saccone in May, 1982 for trademark infringement and unfair competition with regard to cookie use. Saccone asserted counterclaims and affirmative defenses. On August 23, 1983, the district court granted partial summary judgment to Saccone, 571 F.Supp. 763 (D.Conn.1983), holding that the term "Toll House" was generic and therefore could not be a trademark under 15 U.S.C. Sec. 1064(c) (1982).

While Nestle's appeal from the partial judgment was pending, the parties negotiated, with the aid of this court's staff counsel, a settlement resolving both the trademark infringement claim and all pending claims and counterclaims. Nestle desired, however, to continue to defend the Toll House trademark and understandably feared that the existence of the Connecticut judgment would operate as collateral estoppel in future litigation. Thus, the parties jointly suggested to Judge Blumenfeld that he vacate his judgment and enter a consent judgment effectuating the settlement. Judge Blumenfeld advised the parties that he lacked jurisdiction to take such action while Nestle's appeal was pending.

The parties thereupon moved this court to vacate the district court's judgment and enter a judgment on consent. Believing it best to permit the district court to consider the motion in the first instance, Judge Newman, with the consent of both parties, remanded the case to the district court without prejudice to the parties' right to reinstate the appeal on the merits or to bring an identical motion in this court should the district court decline to enter the consent judgment.

On November 5, 1984, the district court denied the joint motion. 596 F.Supp. 1445 (D.Conn.1984). Finding that the case was not moot and construing the motion as one for relief from the judgment pursuant to Fed.R.Civ.P. 60(b), the court concluded that such relief is discretionary, and that the interest in finality of judgments and the public interest in adjudicating trademark validity outweighed the parties' interest in their settlement. On November 6, 1984, pursuant to 15 U.S.C. Sec. 1119 (1982), Judge Blumenfeld directed the clerk of the district court to notify the U.S. Commissioner for Patents and Trademarks that Nestle's trademark was invalid. The parties have now moved this court, in accord with the terms of the remand, to vacate the district court's judgment and dismiss the pending appeal as moot.

DISCUSSION

The parties contend that their settlement effectively moots this appeal and that the judgment of the district court must therefore be vacated under United States v. Munsingwear, Inc., 340 U.S. 36, 41, 71 S.Ct. 104, 107, 95 L.Ed. 36 (1950). Both this court 1 and other courts of appeals 2 have generally followed the rule that district court judgments that become moot pending appeal must be vacated. However, this rule is inapplicable in the present case because it is not moot.

Nestle insists on vacatur of the district court's judgment as a condition of settlement so that the judgment will not automatically prevent it through the operation of collateral estoppel from enforcing the trademark in the future. Should we vacate the judgment, the settlement agreement by its terms will take automatic effect.

Page 282

Should we decline to vacate it, Nestle will pursue its appeal. This very recital, however, makes it clear that the case is not moot in the conventional sense. The presence of a live controversy is amply demonstrated by Nestle's insistence on a vacatur prior to settlement so as to preserve its right to pursue an appeal should the judgment remain in effect. In Munsingwear, vacatur of the district court's judgment was the consequence of the case's mootness. In the instant case, mootness would be the consequence of the vacatur. We conclude, therefore, the action is not moot.

After reaching a similar conclusion, the district court treated the parties' joint motion as a request for relief from a judgment under Fed.R.Civ.P. 60(b). Because a party may bring a timely...

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54 practice notes
  • In re Tamoxifen Citrate Antitrust Litigation, Docket No. 03-7641.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • November 2, 2005
    ...of contract doctrine, 466 F.3d 203 settlement of litigation is more strongly favored by the law."); Nestle Co. v. Chester's Mkt., Inc., 756 F.2d 280, 284 (2d Cir.1985) ("[T]he district court imposed the heavy burden on trademark defendants of having to continue to litigate when they would p......
  • Harris Trust & Sav. v. John Hancock Mut. Life Ins., No. 83 Civ. 5401(RPP).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • September 26, 1989
    ...estoppel or other preclusive purposes," 662 F.Supp. at 1113, and Judge Dorsey, bound by the rule of Nestle Co. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985), entered an order that embodied the parties' agreement. Harris Trust argues that Judge Dorsey's order, though withdrawn, shoul......
  • In re Finley, Kumble, Wagner, Heine, et al., Bankruptcy No. 88 B 10377.
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • October 29, 1993
    ...judicial resources. See, e.g., Long Island Lighting Co. v. Cuomo, 888 F.2d 230, 234 (2d Cir.1989); Nestle Co. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985). According to the Third, Seventh, and District of Columbia Circuits, requests for vacatur based on post-judgment settlement sho......
  • Jewish Sephardic Yellow Pages, Ltd. v. Dag Media, No. 04-CV-747 (RJD).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • March 19, 2007
    ...proceeding); accord Nestle Co., Inc. v. Chester's Mkt., Inc., 571 F.Supp. 763, 768 (D.Conn.1983), rev'd and remanded on other grounds, 756 F.2d 280 (2d Cir.1985). Consequently, here, as in various other cases, defendants should be permitted to assert a defense of genericness to an infringem......
  • Request a trial to view additional results
54 cases
  • In re Tamoxifen Citrate Antitrust Litigation, Docket No. 03-7641.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • November 2, 2005
    ...of contract doctrine, 466 F.3d 203 settlement of litigation is more strongly favored by the law."); Nestle Co. v. Chester's Mkt., Inc., 756 F.2d 280, 284 (2d Cir.1985) ("[T]he district court imposed the heavy burden on trademark defendants of having to continue to litigate when they would p......
  • Harris Trust & Sav. v. John Hancock Mut. Life Ins., No. 83 Civ. 5401(RPP).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • September 26, 1989
    ...estoppel or other preclusive purposes," 662 F.Supp. at 1113, and Judge Dorsey, bound by the rule of Nestle Co. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985), entered an order that embodied the parties' agreement. Harris Trust argues that Judge Dorsey's order, though withdrawn, shoul......
  • In re Finley, Kumble, Wagner, Heine, et al., Bankruptcy No. 88 B 10377.
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • October 29, 1993
    ...judicial resources. See, e.g., Long Island Lighting Co. v. Cuomo, 888 F.2d 230, 234 (2d Cir.1989); Nestle Co. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985). According to the Third, Seventh, and District of Columbia Circuits, requests for vacatur based on post-judgment settlement sho......
  • Jewish Sephardic Yellow Pages, Ltd. v. Dag Media, No. 04-CV-747 (RJD).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • March 19, 2007
    ...proceeding); accord Nestle Co., Inc. v. Chester's Mkt., Inc., 571 F.Supp. 763, 768 (D.Conn.1983), rev'd and remanded on other grounds, 756 F.2d 280 (2d Cir.1985). Consequently, here, as in various other cases, defendants should be permitted to assert a defense of genericness to an infringem......
  • Request a trial to view additional results

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