Sam S. Goldstein Industries, Inc. v. General Electric Co.

• Citation: 153 USPQ 334,264 F. Supp. 403
• Decision Date: 09 February 1967
• Docket Number: No. 66 Civ. 3867.,66 Civ. 3867.
• Parties: SAM S. GOLDSTEIN INDUSTRIES, INC., Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

264 F. Supp. 403

153 USPQ 334

SAM S. GOLDSTEIN INDUSTRIES, INC., Plaintiff, v. GENERAL ELECTRIC COMPANY, Defendant.

No. 66 Civ. 3867.

United States District Court S. D. New York.

February 9, 1967.

Bader & Bader, New York City, for plaintiff.

Rogers, Hoge & Hills, New York City, George M. Chapman, William H. Ball, Jr., New York City, of counsel, for defendant.

MANSFIELD, District Judge.

Defendant here seeks dismissal of a complaint which asks (1) a determination of plaintiff's right to use a trademark, and (2) damages for alleged antitrust violations. The first cause of action seeks a declaratory judgment that plaintiff's use of the mark "Americana Star" in connection with its sale of items such as deep fat cookers, electric knives, vacuum cleaners, coffee makers, toaster broilers, electric hot trays, hair dryers and other goods of the same descriptive properties (hereinafter "electrical products") is proper and that the defendant's use of a similar mark ("Americana", sometimes with a star-shaped dot over the letter "i") on major appliances (refrigerators, stoves) is improper.

The second cause of action, purporting to be based on § 2 of the Sherman Act (Title 15 U.S.C. § 2) and § 2 of the Robinson-Patman Act (15 U.S.C. § 13), alleges that defendant is wrongfully attempting to create a monopoly in the appliance business by asserting claims based on a non-existent trademark in an attempt to promote a monopoly in the word "Americana"; and that the defendant has "been selling goods under the trademark `Americana' at differing prices to differing customers".

The motion to dismiss is granted insofar as it relates to the antitrust claims, and is denied as to the declaratory judgment count, which defendant challenges on the ground that the Court lacks jurisdiction.

Turning to the first cause of action, it appears that the mark "Americana Star" was registered by the plaintiffs with the United States Patent Office on November 19, 1963 (Reg. No. 760194) for use on plastic dinnerware. In addition to using the mark on plastic dinnerware, plaintiff used it in connection with its electrical products. Defendant claims common law trademark rights in a similar mark used by it on its electric ranges and refrigerators. Whether plaintiff's use of the mark preceded defendant's use of its similar mark on ranges and refrigerators is in dispute.

On January 30, 1963, plaintiff filed with the Patent Office an application to register the mark "Americana (eagle and shield device) Star" for use on many of the electrical products previously listed. Defendant opposed on the ground that it produced similar products which, although not identified by such a mark, could be confused with plaintiff's electrical products on account of defendant's use of such a mark on refrigerators and ranges. On April 29, 1966, defendant's opposition was sustained by the Trademark Trial and Appeal Board. Plaintiff nevertheless continued thereafter to use the mark on its electrical products and, in response to a protest from the defendant, instituted this suit for a judgment declaring the rights of the respective parties to use the mark.

Defendant's motion to dismiss the declaratory judgment action is premised on plaintiff's concession that there is no diversity of citizenship and on the ground that the action does not involve a registered mark — a prerequisite for jurisdiction under 15 U.S.C. § 1119.¹ That statute provides:

"In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. * * *"

An examination of the complaint reveals that plaintiff indeed seems to assert common law rights in the mark in that it alleges it used the mark on its electrical products prior to defendant's use of the mark on ranges and refrigerators. Although the complaint alleges generally (Par. EIGHTH) that plaintiff has trademark registrations with the Patent Office, it does not identify them, and its brief reveals that its only registration pertains to plastic dinnerware, not electrical products. Without referring to the limited scope of plaintiff's registration, the complaint alleges that plaintiff has expanded its use of the trademark to include electrical products. It thus appears to invoke the established doctrine that a registered mark protects not only the registrant's use of the mark on goods for which the mark was registered, but also its use on goods within the natural area of expansion of the registrant's business. See Vanderburgh, Trademark Law and Procedure § 2.50 (1959). When the owner of a registered mark claims that a defendant is interfering with the owner's natural expansion of the use of the mark, the court will assume jurisdiction over the claim as one stemming from the registered mark under Title 15 U.S.C. § 1119, provided the claim is not completely insubstantial on its face. See L. E. Waterman Co. v. Gordon, 72 F.2d 272 (2d Cir. 1934). Once the court assumes jurisdiction, it carries along with it, under the doctrine of pendent jurisdiction, separate common law trademark claims based on the same alleged conduct. Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148 (1933).²

Applying these principles here it must be conceded that in the light of the affidavits and briefs the expansion claim appears to be tenuous at best, for several reasons. First of all the gap between plastic dinnerware and electrical products appears to be a very large one indeed, and it seems unlikely that purchasers would assume that a manufacturer or distributor of one is also engaged in the other line. Plaintiff's expansion theory is further weakened by the Patent Office's refusal to allow it to register the mark for use on the electrical products sold by it, a fact which, at least, would weigh heavily against the plaintiff on the issue of expansion of the mark from plastic dinnerware to electrical products, since it seems unlikely that the plaintiff could thereafter succeed in its claim of a right, based on its expansion theory, to use the mark on electrical products.

Since the foregoing observations go principally to the merits of plaintiff's contention, however, it cannot be said as a matter of law that on its face the complaint states a claim that is too insubstantial to permit plaintiff to invoke the Court's jurisdiction. Construing the complaint most favorably to the plaintiff (as we must do on this motion), the Court must conclude that the allegation of expansion of plaintiff's registered trademark is sufficient to confer jurisdiction...