Safeway Stores v. Dunnell

• Decision Date: 24 February 1949
• Docket Number: No. 11806.,11806.
• Citation: 172 F.2d 649
• Parties: SAFEWAY STORES, Inc. v. DUNNELL.
• Court: U.S. Court of Appeals — Ninth Circuit

172 F.2d 649 (1949)

SAFEWAY STORES, Inc. v. DUNNELL.

No. 11806.

United States Court of Appeals Ninth Circuit.

January 11, 1949.

Rehearing Denied February 24, 1949.

Mitchell T. Neff, Willard S. Johnston, Orrick, Dahlquist, Neff, Brown & Herrington, all of San Francisco, Cal., for appellant.

Joseph F. Westall, Edward F. Westall and Westall & Westall, all of Los Angeles, and Charles M. Fryer, of San Francisco, Cal., for appellee.

Before DENMAN, Chief Judge, and HEALY and BONE, Circuit Judges.

DENMAN, Chief Judge.

Appellant, Safeway Stores, Inc., hereinafter called Stores, long user of its corporate name as its trade name, appeals from a judgment of the district court (a) requiring the Commissioner of Patents to grant registration to Dunnell as his trade mark the words "Safe Way", which his application to the Patent Office states he "used * * * for toilet seat covers" and (b) denying to the Stores an injunction against Dunnell and his agents sought in a Stores' counterclaim restraining him from using the words "Safe Way" in the course of his business of selling the toilet seat covers. Stores did not seek damages for the claimed infringement.

The evidence before the district court was in part of witnesses there and that taken before the Examiner of Interferences in an application of Dunnell filed May 1st, 1942, to the Commissioner of Patents for registration of the words "Safe Way."

Stores opposed the application to the Commissioner of Patents on the ground that it had since 1926 and prior to Dunnell's use of the words "Safe Way" engaged in the business of owning and operating retail grocery stores under the name "Safeway" and that in 1944, when its opposition was heard, it owned and operated approximately 2,500 retail stores doing business as "Safeway" in the following states: Arkansas, Arizona, California, Colorado, District of Columbia, Idaho, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, South Dakota, Texas, Utah, Virginia, Washington, Wyoming.

Stores alleged "The name `Safeway' is the distinguishing and dominant part of opposer's Stores' name. Opposer's name `Safeway' has been and is now prominently displayed in signs on its stores and places of business, in newspaper advertisements, price tags, gummed tape, cash register receipts, invoices, paper bags, display cards, and other forms of advertising, in such manner and to such an extent that the opposer's name `Safeway' alone has become associated in the mind of the public with opposer, and the name `Safeway' by reason of such extensive and continuous use by the opposer over a long period of years has come to mean the opposer, and the public know and identify the opposer by the name `Safeway' alone. `Safeway' is a substantial part of the valuable good will of opposer."

And alleged that "The name `Safeway' claimed by applicant Dunnell is identical to the name `Safeway' owned and in prior use by opposer and used by opposer in connection with the sale of merchandise in various classification, including, particularly, paper products, such as toilet tissue, paper towels, paper napkins. The use by applicant of the name `Safeway' is likely to cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin of such goods, and thereby cause irreparable damage to the good-will of the opposer's business in connection with which the opposer's name `Safeway' is extensively used."

And alleged that "On or about August 16, 1939, the predecessor of opposer deposited with the Commissioner of Patents a certified copy of its corporate charter, showing its corporate name `Safeway Stores, Incorporated,' and received certificate of deposit No. 4220 therefor."

And alleged that "The unauthorized use by the applicant of opposer's name `Safeway' on goods such as toilet seat covers is likely to cause confusion or mistake in the minds of the purchasers or to deceive purchasers into believing that such goods are in some manner associated with or emanate from this opposer."

And alleged that "The name `Safeway' sought to be registered by applicant consists merely in the name of the opposer corporation, or the distinctive, dominant portion thereof, not written, printed, impressed or woven in some particular or distinctive manner, or not associated with a portrait of an individual, and is therefore within the prohibition against registration of such name under Section 5(b) of the Act of 1905."

And alleged that "The applicant, Warren W. Dunnell, is not the owner of the trade mark sought to be registered by him, and he was not entitled to the exclusive use thereof at the time of the filing of his application, nor at any other time."

Dunnell's response claimed Stores had lost its right to oppose because it had not brought an injunctive proceeding against Dunnell during the nine years he had used "Safe Way" as a trade mark for his toilet seat covers. The response placed in issue the above allegations of Stores, and particularly alleged that Stores had not sold or distributed in its groceries any toilet seat covers under the name "Safeway" or otherwise, and that no one else had sold such covers to the general public, and that Dunnell had sold them only to large concerns which distributed them to the public using them in their public toilets.

Though Dunnell lays great stress on his claim that he was selling his seat covers only to these large users of them in their public toilets, no such limitation of the use of his claimed trade mark was sought from the patent office. The granting of his petition to the Commissioner of Patents as ordered by the judgment of the district court would have given him a monopoly on the trade mark in their sale to the general public in response to a demand which the evidence, infra, shows already existing and certain to increase.

Voluminous evidence was taken and the Examiner of Interferences found that such products as toilet seat covers "are very closely related to the paper products which opposer Stores does sell and that the average consumer might reasonably suppose that a paper toilet seat cover sold under the notation "Safeway" was sponsored and sold by the opposer. Indeed, it appears that applicant Dunnell himself is of the opinion that his toilet seat covers might be readily carried and sold by opposer since he has approached opposer in an effort to have opposer sell his goods. Considering all the facts involved herein, therefore, it is the examiner's opinion that in view of the nature of the goods confusion of persons and reputations is reasonably likely," and gave his decision against Dunnell that "Safe Way" was non-registerable. On appeal the Commissioner sustained the Examiner, holding that "Safe Way" as used by Dunnell is "non-registerable" because that "mark constitutes a substantial appropriation of opposer Stores corporate name" and finding that "Opposer Stores operates a chain of more than two thousand grocery stores, which are scattered through half the States of the Union. In them it sells not only groceries, but all such more or less related items as the public demands. It has been in business for many years, and has come to be widely known merely as `Safeway'. In fact, it has almost invariably used that word alone as its name. And while it may not be as universally recognized as is Radio Corporation of America, its customers constitute a very considerable portion of the American public," and that, though as Dunnell contends, Stores "was not dealing in the particular merchandise for which registration was sought; but that fact was held to be immaterial. Moreover, as pointed out by the examiner of interferences, opposer does sell such paper products as toilet tissue and paper towels, which are clearly of the same descriptive properties as applicant's paper toilet seat covers."

The Commissioner further decided that Stores need not have sought to enjoin Dunnell as a condition precedent to opposing the registration.

This decision of the Commissioner of Patents presented to the district court, and now to this court, the issue whether the evidence in the patent office proceeding afforded inferences of fact supporting it. The rule established in such cases is that stated by the Supreme Court in Morgan Massachusetts v. Daniels, 153 U.S. 120, 124, 125, 14 S.Ct. 772, 38 L.Ed. 657. There the suit in the circuit court to compel the registration of a patent, which had been denied, was stated to be "something more than a mere appeal from the Commissioner's decision. It is an application to the court to set aside the action of one of the executive departments of the government. The one charged with the administration of the patent system had finished its investigations and made its determination with respect to the question of priority of invention. That determination gave to the defendant the exclusive rights of a patentee. A new proceeding is instituted in the courts — a proceeding to set aside the conclusions reached by the administrative department and to give to the plaintiff the rights there awarded to the defendant. It is something in the nature of a suit to set aside a judgment, and as such is not to be sustained by a mere preponderance of evidence * * * Upon principle and authority, therefore, it must be laid down as a rule that where the question decided in the Patent Office is one between contesting parties as to priority of invention, the decision there made must be accepted as controlling upon that question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction."

This rule is applicable to trade mark cases. Century Distilling Co. v. Continental Distilling Co., 3 Cir., 106 F.2d 486, 489, certiorari denied. Yale Electric Co. v. Robertson, 2 Cir., 26 F.2d 972 (Cir. 2). It precedes the more general rule regarding the finality of...