Schwinn Bicycle Co. v. Murray Ohio Manufacturing Co.
| Decision Date | 29 October 1971 |
| Docket Number | Civ. A. No. 5964. |
| Citation | 339 F. Supp. 973 |
| Parties | SCHWINN BICYCLE COMPANY, a corporation v. MURRAY OHIO MANUFACTURING COMPANY, a corporation. |
| Court | U.S. District Court — Middle District of Tennessee |
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Maclin P. Davis, Jr., Robert C. Hendon, Jr., Waller, Lansden, Dortch & Davis, Nashville, Tenn., Malcolm McCaleb, William E. Lucas, Horton, Davis, McCaleb & Lucas, Chicago, Ill., for plaintiff.
W. W. Berry, Bass, Berry & Sims, Nashville, Tenn., Kevin E. Joyce, Edward M. Prince, Cushman, Darby & Cushman, Washington, D. C., for defendant.
The plaintiff, Schwinn Bicycle Company, an Illinois corporation with its principal place of business in Chicago, Illinois, sues the defendant, Murray Ohio Manufacturing Company, an Ohio corporation with its principal place of business in Nashville, Tennessee, alleging the infringement of a United States trademark, No. 570,518, in violation of 15 U.S.C. § 1051 et seq. Jurisdiction is asserted under 28 U.S.C. § 1332 by virtue of there being a diversity of citizenship, and the alleged amount in controversy exceeding $10,000, exclusive of interest and costs.
The defendant filed a counter-claim, asserting jurisdiction under 28 U.S.C. § 1338(a) and 15 U.S.C. §§ 1119-1121, seeking cancellation of the plaintiff's registration of the trademark in question on the ground that the alleged trademark is not a bona fide trademark. Defendant maintains that the trademark is functional and does not serve the purpose of indicating the origin of the goods. Defendant additionally seeks cancellation of the registration on the grounds that the plaintiff obtained said registration by reason of fraud and concealment in that plaintiff withheld information as to the functional nature of the mark from the officials of the Patent Office.
The plaintiff, formerly known as Arnold, Schwinn & Co., has for 75 years been engaged in the manufacture and sale of bicycles, parts and accessories. One of the necessary items in the manufacture of a bicycle is a bicycle rim. In the case of a lightweight rim, the rim is formed, after certain machine processing, by bringing together two pieces of circular steel and joining them by a weld, sometimes referred to as a seam weld. The condition which was formed by the welded seam was, in trade circles, deemed unsightly, and for appearance purposes a treatment of this weld was and is considered necessary. For many years the accepted method of treatment was to grind the weld so as to bring it in alignment with the attached pieces of steel, polish the same, and then apply chrome to the entire rim. In this cosmetic treatment of the seam weld, considerable cost was incurred in polishing out the metal.
Prior to July 9, 1949, the plaintiff decided to knurl the inner surface of the rim. Upon inspecting the first of the knurled rims, it became apparent to the plaintiff that they had stumbled onto the very type of identifying mark that they had been seeking. Thereafter, on July 9, 1949, plaintiff, in the name of its predecessor Arnold, Schwinn & Co. filed an application for a trademark in the following language:
"The trade-mark consists of two endless parallel lines, each consisting of a multiplicity of cross parallel lines, knurled into the inner face of a bicycle rim of metal on opposite sides of the spoke apertures formed in such rim."
The trademark, according to the application, was first used on January 15, 1949, and was likewise first used in commerce among the several states on the same day. Thereafter, according to the United States Patent Office, considerable difficulty was experienced by the plaintiff in obtaining approval of the design as a trademark because the examiner expressed reservations as to whether this trademark was of such a distinguishable nature as to be subject to registration. The plaintiff persisted in pursuing its application, and was successful in convincing the examiner that the alleged trademark was not merely decorative ornamentation. In a communication to the Commissioner of Patents dated September 28, 1950, the plaintiff requested, "If after considering this communication the examiner believes that embellishment is the purpose and effect of applicant's mark, we request the privilege of filing, as an exhibit to this application, one of the applicant's rims carrying the knurled-in subject mark." In an affidavit filed with the Patent Office, Frank W. Schwinn, the former president of the plaintiff company, stated:
"Applicant has chosen a trademark for its rims and wheels which not only indicates the origin of the product, but which also does not detract from the appearance of the rim when it is used for its intended purpose."
After filing numerous additional affidavits and appearing at subsequent hearings, the files of the Patent Office indicate that the application was examined and passed for publication on October 15, 1952, and notice of allowance was issued on January 19, 1953. Despite the fact that the plaintiff through its president knew of the economic value of knurling, acknowledged in writing on November 6, 1951, the Patent Office was never advised of such fact. An examination of the file of the Patent Office fails to reveal that the question of functionality was ever presented to the Commissioner or raised by the Commissioner.
Initially, at the time of the application for the trademark, the plaintiff was manufacturing and marketing wheels which had two welds on the inner surface of the rim which were hidden by knurls. Thereafter, a lightweight rim was made of tubular steel which required only one welding seam, and thus one knurling process was used.
Knurling in and of itself was not a new discovery. Knurling wheels were attached to lathes and were used for the purpose of making indentations on metal products to impart friction for resistance. However, apparently, at least in the United States, knurling had not been used to cover the welding seam on the inner surface of a bicycle wheel.
Beginning in 1949, and to this date, the plaintiff has manufactured and distributed bicycle rims, both through the distribution of bicycles and as accessory parts, which had this knurling design thereon. A Schwinn wheel could be identified by a casual glance by the knurling on the inner surface of the wheel. In addition to the knurling, of course, the name of the Schwinn Company was stamped on the rim. However, at no time since 1949 has there been any designation on the rim which indicated that a trademark had been registered.
In 1964, the defendant began to manufacture for marketing a tubular bicycle rim. In order to eliminate cost for competition purposes, the defendant sought a method to camouflage the unsightly seam weld appearing on its rim. Defendant sought to eliminate the grinding and polishing process because of the attendant economic expense. One of defendant's employees examined a Schwinn bicycle rim and noticed the results produced by the knurling technique. He thereupon obtained the knurling wheel from a lathe owned by the defendant and imprinted a knurling design on one of defendant's experimental rims. This knurling imparted sixteen parallel marks to the inch as distinguished from thirty-two parallel marks used by Schwinn. However, these sixteen marks sufficiently concealed the weld mark to the satisfaction of the defendant. The defendant asserts, and there is no proof to the contrary, that it had no knowledge that Schwinn was claiming that its mark was a registered trademark. The defendant asserts, and it is uncontroverted, that by use of the knurling process, two beneficial items of an economic nature are attained. One is the loosening of the scales made by the welding process prior to the acid bath, and the other is the elimination of the grinding and polishing process. Subsequently, defendant adopted the knurling technique for its tubular rim. Beginning in 1965, the defendant marketed its bicycle wheel and stamped thereon the legend "M. O. Mfg. Co.," indicating the origin of the wheel.
By letter dated May 18, 1970, from Schwinn's attorney to Murray Ohio Manufacturing Company, plaintiff claimed that the defendant was infringing its United States Trademark Registration No. 570,518, dated February 17, 1953. By letter dated July 27, 1970, the defendant refused to discontinue the use of the parallel lines knurled into the inner face of its bicycle rim. The present suit ensued.
The plaintiff's proof consisted of testimony by two of its employees and three operators of bicycle sales and repair shops. The substance of the proof was that, by a quick glance, any person who is a member of the trade operating a bicycle shop or selling bicycles could identify a Schwinn wheel by seeing the knurling on the inner surface of the bicycle rim. Emphasis was placed on the fact that rims normally are stored at some height above the floor and a visual examination of the rims when stored at such heights would not necessarily determine their origin, in the absence of the knurling. In addition, proof was introduced to the effect that in one bicycle shop, two of the mechanics could not read and thus they selected bicycle rims based on the knurling. Evidence was also introduced that, in one instance, confusion has existed at one of the local Nashville Firestone retail outlets concerning the identity of a bicycle rim which had knurling thereon. The confused individual apparently looked only at the knurling and not at the name imprinted on the respective rim. Stamped into the defendant's rims as well as stamped into the plaintiff's rims is the name of the respective manufacturer, evidencing the source and origin of the rim. No proof was introduced to show confusion in the minds of the purchasing public. The only evidence introduced was directed at confusion, or possible confusion, in the minds of individuals who were operating sales rooms and/or bicycle...
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