Photo & Sound Co. v. Corvallis

• Jurisdiction: Oregon
• Court: Oregon Supreme Court
• Writing for the Court: Before DENECKE; TANZER
• Citation: Photo & Sound Co. v. Corvallis, 628 P.2d 733, 291 Or. 105 (Or. 1981)
• Decision Date: 27 May 1981
• Parties: , 214 U.S.P.Q. 402 PHOTO & SOUND COMPANY, a California corporation authorized to transact business in Oregon under the name NWI Audio Visual Systems, Inc., Respondent, v. Peter G. CORVALLIS, Petitioner, and Frank J. Healy, Corporation Commissioner for the State of Oregon, Defendant. TC 112451; CA 15727; SC 27345.

Page 733

628 P.2d 733

291 Or. 105, 214 U.S.P.Q. 402

PHOTO & SOUND COMPANY, a California corporation authorized to transact business in Oregon under the name NWI Audio Visual Systems, Inc., Respondent, v. Peter G. CORVALLIS, Petitioner and Frank J. Healy, Corporation Commissioner for the State of Oregon, Defendant.

TC 112451; CA 15727; SC 27345.

Supreme Court of Oregon.

Argued and Submitted Feb. 4, 1981.

Decided May 27, 1981.

Leslie Roberts, of Kell, Alterman & Runstein, Portland, argued the cause and filed a brief for petitioner.

Patric J. Doherty, of Rankin, McMurry, Osburn, VavRosky & Doherty, Portland, argued the cause and filed briefs for respondent.

Before DENECKE, C. J., and LENT, LINDE, PETERSON, TANZER and CAMPBELL, JJ.

TANZER, Justice.

The issue is whether there is a private right to injunctive relief to protect exclusive use of a registered assumed business name. Plaintiff Photo and Sound Company filed a complaint pursuant to ORS 648.050(6) to cancel defendant Peter Corvallis' registration of the assumed business name "Photo and Sound" in Washington, Multnomah and Clackamas Counties, alleging that defendant was not making actual use of the name. Defendant Corvallis answered and countersued to enjoin plaintiff from using the name "Photo and Sound Co." in the three counties. The defendant Corporation Commissioner made a pro forma appearance favoring neither side and not praying for an injunction. On the complaint, the trial court upheld defendant Corvallis' registration based on sufficient use. On the countersuit, the court prohibited the Corporation Commissioner from registering "Photo and Sound Co." as an assumed business name for plaintiff and the court enjoined plaintiff from using that name in the three counties.

The Court of Appeals, 48 Or.App. 169, 616 P.2d 557, affirmed the trial court's denial of cancellation of defendant's name registration, but it held that the trial court erred in granting an injunction at the behest of defendant Corvallis. The Court of Appeals gave two reasons for vacating the injunction. First, it held that an injunction was improper because the assumed business name registration statute does not confer an exclusive private right of use upon the registrant of a name. Second, it held that ORS 648.130, which authorizes the Corporation Commissioner to seek injunctive relief for violations of the assumed business registration scheme, is a remedy available only to the Corporation Commissioner.

We accepted review to determine whether there is a private right to injunctive relief for violations of the assumed business name act, ORS ch. 648. The legislative history of the enactment of ORS 648.130 as part of the assumed business name act gives reason to question the conclusion of the Court of Appeals that only the Corporation Commissioner has authority to seek an injunction enforcing the act. The statute provides:

"Whenever the Corporation Commissioner determines that any person is violating subsection (1) of ORS 648.010, the commissioner may bring suit in the name of the state in any circuit court of this state to enjoin the acts of practices. Upon proper showing, the court shall grant a permanent or temporary injunction or restraining order. * * * "

The Corporation Commissioner, as proponent of the bill which became ORS 648.130, explained its purpose:

"The main thrust of the bill, however, is to permit the Corporation Commissioner to seek an injunction against the use of an unregistered name. The present penalty provisions under Chapter 648 are so severely limited ($100 fine) that they have not been enforced by District Attorneys. Civil remedies available by (sic) persons harmed through the use of their name by another party frequently are too burdensome on the small businessman, particularly where the offender is a large national business organization." ¹

It is clear that the intention of the bill was to supplement, not to supplant, existing private civil remedies. The question is whether private injunctive relief for interference with exclusive use of an assumed business name is one of those existing remedies. No reported Oregon cases provide such a remedy, but it may nevertheless exist. A review of the purpose of the assumed business name statutes and their interplay with other bodies of law regulating and protecting competitive use of names and marks leads us to conclude, as did the Court of Appeals, that there was no preexisting right to injunctive relief regarding assumed business names, that ORS 648.130 was not intended to establish a new private remedy, and that the injunction in this case was erroneously allowed.

The evident purpose of ORS chapter 648 is public protection. The method of the chapter is to require disclosure by registration of the names and locations of persons doing business under an assumed name in order that members of the public may know the identity of those with whom they do business. ² ORS 648.010 prohibits any person or persons from carrying on, conducting or transacting business under any assumed name unless such assumed name has been registered with the Corporation Commissioner. ³ ORS 648.015 requires the Corporation Commissioner to compare the applicant's proposed name to other business names and trademarks on file in various offices to ensure that the public will not be confused by the registration of two identical or deceptively similar names. ⁴ Any person who uses an assumed business name without having registered it is prohibited from maintaining any suit or action in any of the courts of this state. ORS 648.090. The Corporation Commissioner may bring suit in the name of the state to enjoin a violation of the registration provision, ORS 648.130, supra. A violation of the Act is punishable, upon conviction, by a fine not exceeding $100. ORS 648.990. Thus the statutes purport to establish a requirement of registration; they do not purport to create a right to use or registration.

Although the purpose of ORS ch. 648 is to safeguard the public, certain of its provisions have the effect of benefiting private parties. ORS 648.050 under which this proceeding is brought, provides an administrative procedure whereby the Corporation Commissioner, on his own information or upon application, must cancel registration of assumed business names for counties where they are not used. If, as in this case, he does not, an applicant may file a complaint in circuit court to compel the Commissioner to cancel. Subsection (6) provides:

"If a petition (for cancellation) is rejected * * * a petitioner may file a complaint in the circuit court * * * raising the question of actual use of the registered name in such county by the registrant. If the circuit court finds that at the time the verified statement of use was filed the registered name was not in fact being used in such county, it shall issue its order directing the Corporation Commissioner to cancel the existing registration with respect to such county and register the name requested by the petitioner in such county."

Although this section appears to be directed to the public purpose of preventing monopolization of names and trafficking in registered names for profit, it also effectively benefits private parties who wish to free a certain name for their use. Nevertheless, it is significant that the judicial relief authorized by subsection (6) is directed only to the Corporation Commissioner and no judicial remedy against the existing registrant is provided. Similarly, ORS 648.015, which protects the public from confusion by prohibiting the registration of names the same as or deceptively similar to previously registered names, also has the practical effect of protecting a prior registrant from use of the name by another party. The point illustrated by reference to these statutes, however, is that the existence of private practical benefits is incidental to the assumed business name registration scheme. Those effects do not alter the actual basis for the chapter as a scheme of public protection administered by the Corporation Commissioner.

The Court of Appeals correctly concluded that ORS chapter 648 was not intended to protect private parties' interests in the use of their business names, despite the incidental benefit afforded to the registrants of particular names. Nowhere does the chapter expressly grant private parties the remedy of an injunction to prohibit statutory violations which impinge upon their exclusive use of a registered business name and no such private injunctive remedy may be fairly inferred from the statutory purpose of public protection. ORS 648.130, giving the Corporation Commissioner authority to seek an injunction in the name of the public, is the sole method established by statute for enforcement of the assumed business name registration provisions.

This is not to say that private parties have no rights to the exclusive use of their business names or that the Commissioner's suit forecloses parties from protecting such use through injunctive remedies outside of this statute. The reference in the Corporation Commissioner's 1971 testimony to preexisting private civil remedies recognized the existence of other forms of litigation to protect private rights. They are based on concepts which are similar in nature to those in the statutes for assumed business names and which are at the heart of defendant's arguments. We mention other forms of relief to demonstrate their distinctness despite similarities in hopes of providing a better understanding regarding assumed business name enforcement. The Court of Appeals distinguished between this statutory scheme and that for protection of trademarks, ORS ch. 647, and we need say nothing further on that subject.

The most significant other class of private litigation similar to this is based on common law theories of unfair competition. This court has traditionally applied the common law principles of unfair...