Powder River Oil Co. v. Powder River Petroleum Corp.

• Decision Date: 16 April 1992
• Docket Number: No. 91-119,91-119
• Citation: 830 P.2d 403
• Parties: POWDER RIVER OIL COMPANY, a Wyoming corporation, and W.R. "Bob" Gibson, d/b/a Powder River Oil Company, Appellants (Plaintiffs), v. POWDER RIVER PETROLEUM CORPORATION, a Delaware corporation, and Walter Van Norman, Jr., Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 403

830 P.2d 403

23 U.S.P.Q.2d 1037

POWDER RIVER OIL COMPANY, a Wyoming corporation, and W.R. "Bob" Gibson, d/b/a Powder River Oil Company, Appellants (Plaintiffs), v. POWDER RIVER PETROLEUM CORPORATION, a Delaware corporation, and Walter Van Norman, Jr., Appellees (Defendants).

No. 91-119.

Supreme Court of Wyoming.

April 16, 1992.

Morris R. Massey of Brown & Drew, Casper, for appellants.

Richard R. Wilking of Schwartz, Bon, McCrary, & Walker, Casper, for appellees.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

URBIGKIT, Chief Justice.

This case involves application of the Wyoming common law of trade name infringement and unfair competition. Appellants, W.R. Gibson (Gibson) and Powder River Oil Company, Inc., filed suit against appellees, Walter Van Norman, Jr. (Van Norman) and Powder River Petroleum Corporation, Inc., seeking injunctive relief preventing the use of a confusing and similar trade name. The trial court granted summary judgment in favor of Powder River Petroleum Corporation finding that actual confusion among the customers of Powder River Oil Company was not established. Powder River Oil Company appeals the order granting summary judgment. We reverse and remand.

I. ISSUES

Powder River Oil Company asks whether the trial court erred

(1) in determining [appellants] have no right to relief absent a showing of confusion among the parties' customers as to the source of goods or services and (2) in concluding [appellants] have no redress from the Secretary of State's grant to [appellees] of the authority to do business under a name demonstrated to be deceptively similar to the trade name and corporate name under which [appellants] conduct the same business.

Powder River Petroleum Corporation claims only one issue is before this court:

[W]hether [the trial court judge] erred when he determined that there were no genuine issues of material fact and that Appellees were entitled to judgment as a matter of law.

We consider these issues during the course of a unified discussion.

II. FACTS

Gibson conducts an oil and gas exploration and production business under the name Powder River Oil Company. Gibson began using the trade name in 1961. In 1963, Gibson filed a Wyoming trade name registration for Powder River Oil Company. The business entity itself was actually incorporated in 1968 under Wyoming law as Powder River Oil Company.

Powder River Oil Company acquires oil and gas leases. After additional geology work, Powder River Oil Company determines which leases have sufficient potential for an exploratory well. Powder River Oil Company then contributes the geology expenses and lease acquisitions to a drilling partnership formed with outside investors. Powder River Oil Company also purchases producing wells from which oil or gas production is sold to processors. Powder River Oil Company's operations are presently concentrated within the geographic area of Wyoming known as the Powder River Basin, particularly Campbell and Crook Counties.

Van Norman is the president of Powder River Petroleum Corporation a closely held family corporation. Powder River Petroleum Corporation had been incorporated in 1988 under the Delaware state corporate code. Despite Powder River Oil Company's protests over the similarity of the names, Powder River Petroleum Corporation, following Delaware incorporation, secured authority to register its trade name with the Secretary of State as a foreign corporation doing business in Wyoming. Prior to 1988, the Van Norman family oil business in Wyoming had not used the name Powder River Petroleum Corporation.

Powder River Petroleum Corporation acquires oil and gas leases and, after drilling sites are selected, finances the drilling program in-house without the utilization of an outside investor program. The oil or gas produced is also sold to processors. Powder River Petroleum Corporation's operation area is presently contained within Albany and Niobrara Counties in the southeastern portion of the Powder River Basin.

Seventeen months after Powder River Petroleum Corporation registered to do business in Wyoming, Powder River Oil Company filed this lawsuit seeking a permanent injunction prohibiting use of the name Powder River Petroleum Corporation. Powder River Oil Company complained that the use of a deceptively similar trade name caused unfair competition, confusion and threatened the business reputation of Powder River Oil Company. After one year of discovery proceedings, Powder River Petroleum Corporation moved for summary judgment contending that trade name infringement could not exist as a matter of law unless "customers" were confused. Following a hearing, the trial court granted summary judgment in favor of Powder River Petroleum Corporation with a decisional finding that the similarity of names had created confusion among suppliers of the two companies, but not as required by law among "customers."

III. DISCUSSION

Disputes between parties involving the validity of trademarks or trade names and infringement can rarely be determined satisfactorily on a motion for summary judgment because full development of the facts at trial is particularly important for a proper resolution. Defined fact-finding for dispositive decision is required. Frederick Warne & Co., Inc. v. Book Sales Inc., 481 F.Supp. 1191 (S.D.N.Y.1979). However, when appellate review of summary judgment is required, this court proceeds on a frequently stated ordered course. "Summary judgment is proper only when there are no genuine issues of material fact and the prevailing party is entitled to judgment as a matter of law." McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866, 869 (Wyo.1990), reh'g 820 P.2d 986 (Wyo.1991). See W.R.C.P. 56(c). The court considers the record from the viewpoint most favorable to the party opposing the motion, giving all favorable inferences to be drawn from the facts contained in affidavits, depositions The theoretical origin of this case lies in the body of common law known as trade name infringement. Trade name infringement is directly related to trademark infringement with the historical root of each lying in the desire of tradesmen to identify the origin of goods. See George J. Alexander, Commercial Torts § 1.3 (2d ed. 1988). Ultimately, trade names and trademarks are accorded similar protection by law being subsets of the broad topic of unfair competition and all resting on the same general principle. Bernstein v. Friedman, 62 Wyo. 16, 160 P.2d 227 (1945); Standard Oil Company v. Standard Oil Company, 252 F.2d 65 (10th Cir.1958). These classifications should be considered as a continuum of rights recognized by common law and often by statute protecting competition within the business marketplace. See 1 J. Thomas McCarthy, Trademarks and Unfair Competition § 1:2 (2d ed. 1984). Unfair competition originated as a commercial tort, but now represents an independent body of law. Restatement (Second) of Torts §§ 708-816 introductory note at 1 (1979). ¹

and other proper material appearing in the record to the opposing party. Roth v. First Sec. Bank of Rock Springs, Wyo., 684 P.2d 93 (Wyo.1984) (quoting Reno Livestock Corp. v. Sun Oil Co. (Delaware), 638 P.2d 147 (Wyo.1981)). Summary judgment eliminates the expense and burden of a formal trial when only questions of law are involved; however, this court must be persuaded that no material facts are in dispute and the trial court's judgment was correct as a matter of law. Fiscus v. Atlantic Richfield, 773 P.2d 158 (Wyo.1989). We accord no deference to and are not bound by the trial court's decisions on issues of law. True Oil Co. v. Sinclair Oil Corp., 771 P.2d 781 (Wyo.1989). " 'Summary judgment is notoriously inappropriate for the determination of claims in which issues of intent, good faith and other subjective feelings play dominant roles.' " Cordova v. Gosar, 719 P.2d 625, 635 (Wyo.1986) (quoting Croxen v. United States Chemical Corporation of Wisconsin, 558 F.Supp. 6, 7 (N.D.Iowa 1982)).

These name contestants have spent extensive litigative time and effort debating the effect of the various registrations of trade or corporate names with the Wyoming Secretary of State. Powder River Oil Company argues its prior registration, first as a trade name then as a corporate name, entitles it to special protection. Powder River Petroleum Corporation responds by saying that the Secretary of State's decision to allow registration of its corporate name cannot be contested at this point. Both arguments are without merit. Wyoming accepts the majority rule that administrative acceptance of a corporate name by a state agency will be given no judicial weight in litigation over rights to the name. Plains Tire and Battery Co. v. Plains A to Z Tire Co., Inc., 622 P.2d 917 (Wyo.1981); First Nat. Bank of Lander v. First Wyoming Sav. and Loan Ass'n, 592 P.2d 697 (Wyo.1979); 1 J. Thomas McCarthy, supra, at § 9:3. This rule is rooted in sound policy.

It can no longer be argued that in allowing incorporation under its laws, a state thereby intends to license the commission of what would otherwise be a tortious act. In other words, a state does not pass upon the legality of a corporate name by merely permitting incorporation under that name.

Hulburt Oil & Grease Co. v. Hulburt Oil & Grease Co., 371 F.2d 251, 254 (7th Cir.1966), cert. denied 386 U.S. 1032, 87 S.Ct. 1482, 18 L.Ed.2d 594 (1967). The legal rights protected by common law infringement and unfair competition actions flow from prior use of the trade name in commerce The boundaries for Wyoming infringement and unfair competition laws were developed by Chief Justice Blume in Bernstein. The party seeking protection proved a secondary meaning had been established in the trade name "Western Ranchman Outfitters" and injunctive relief was affirmed preventing the use of Western Outfitters by a competitor. Bernstein, 160 P.2d at 228, 234. The analytical framework conjunctively...