Seven-Up Company v. Bubble Up Corporation, Patent Appeal No. 6881.

• Decision Date: 20 March 1963
• Docket Number: Patent Appeal No. 6881.
• Citation: 50 CCPA 1012,312 F.2d 472
• Parties: The SEVEN-UP COMPANY, Appellant, v. BUBBLE UP CORPORATION, by Change of Name from O-So Grape Co., Assignee of Leroy O. Schneeberger and the Sweet Valley Products Co., Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

50 CCPA 1012, 312 F.2d 472 (1963)

The SEVEN-UP COMPANY, Appellant, v. BUBBLE UP CORPORATION, by Change of Name from O-So Grape Co., Assignee of Leroy O. Schneeberger and the Sweet Valley Products Co., Appellee.

Patent Appeal No. 6881.

United States Court of Customs and Patent Appeals.

January 16, 1963.

Rehearing Denied March 20, 1963.

Lewis S. Garner, Helen W. Nies, Washington, D. C., Woodson, Pattishall & Garner, Chicago, Ill., for appellant.

Charles F. Meroni, Carlton Hill, Hill, Sherman, Meroni, Gross & Simpson, Chicago, Ill. (Miller, Westervelt & Johnson, Peoria, Ill., of counsel), for appellee.

Before WORLEY, Chief Judge, and RICH, MARTIN, SMITH and ALMOND, Judges.

SMITH, Judge.

The Trademark Trial and Appeal Board, applying res judicata, granted respondent's (appellee's) renewed motion to dismiss the petition brought by appellant under Section 14 of the Trademark Act of 1946 (15 U.S.C. § 1064) to cancel respondent's principal register registrations Nos. 141,244 and 354,840 for the trademark BUBBLE UP, owned by it as successor to the O-So-Grape Company. Petitioner-appellant, The Seven-Up Company, is the owner of a number of registered trademarks for SEVEN-UP and also 7 UP. The marks of the respective parties are used on soft drink beverages.

The Petition for Cancellation avers certain facts and concludes with a prayer for relief which reads as follows:

"WHEREFORE, petitioner prays that the said Registrations Nos. 141,244 and 354,840 be cancelled under Sec. 18 of the Trademark Act of 1946 on the grounds set forth above, for the reason that the date of first continuous use alleged in the registrations is false and misleading, and is used by the registrant to deceive and mislead, in violation of 15 U.S.C. 1120 (Sec. 38 of the Trademark Act of 1946) and the said material error in the said registrations has been, is, and will be damaging to petitioner."

The Petition for Cancellation was filed March 17, 1959, three days prior to the filing of a Bill of Complaint by petitioner-appellant as plaintiff against respondent-appellee as defendant in the District Court, S. D. Illinois, N. Div. Since the appealed decision of the Trademark Trial and Appeal Board is based on a holding of res judicata predicated upon the decision in this later filed suit, it is necessary to here review this action in some detail.

The complaint in the Illinois action seeks a recovery for Trademark Infringement, Unfair Competition and Trademark Dilution, and prays for specific relief on each of these causes of action. In addition, the complaint prays:

"That plaintiff have such other and further relief as the court deems just and equitable."

The complaint, insofar as it is pertinent to the issues raised in the present cancellation proceedings, contains the following averments:

"25. On information and belief the trademark BUBBLE UP was registered in the United States Patent Office in 1921, and was used locally and to a slight extent for a short period of time for a grape soft drink, beginning in or about the year 1920, by The Sweet Valley Products Co., of Sandusky, Ohio.

All use of the said trademark for said soft drink or for any soft drink or product was abandoned and discontinued by said company in or about the year 1922. In 1937 Leroy O. Schneeberger of St. Louis, Missouri, defendants\' predecessor, bought the naked United States registration of BUBBLE UP, No. 141,244, from the aforesaid company and in 1938 reregistered the mark in his own name, No. 354,840. There had been no use of the trademark BUBBLE UP by the assignor or anyone else from 1922 to 1937. By that date (1937) plaintiff\'s 7 UP (also SEVEN-UP) soft drink had become nationally famous. The said Leroy O. Schneeberger did not use BUBBLE UP for a grape soft drink as it had been originally used by the assignor, but instead used said trademark solely for a soft drink of the same type and flavor, except for quality, as the 7 UP (also SEVEN-UP) soft drink put out by plaintiff. The said trademark BUBBLE UP and said registrations were assigned from Leroy O. Schneeberger to Bubble Up Corporation, a Missouri corporation, in 1946, and were assigned from Bubble Up Corporation to defendant, O-So Grape Co., in 1953.

"26. Notwithstanding the aforesaid facts, the said Reg. No. 354,840, which was registered on February 22, 1938 by Leroy O. Schneeberger, recites that the trademark BUBBLE UP had been used and applied to beverages in the business of the said Leroy O. Schneeberger, and in the business of his predecessors continuously from October 17, 1917 to 1937. The said allegation was made and sworn to by Leroy O. Schneeberger in the application for said registration. The said statement was and is false and the presumption of use and priority as of the said date, namely October 17, 1917 arising from the registration, is likewise false, whereupon the said Reg. No. 354,840 is erroneous and deceptive in a material respect.

"27. The present record owner of the aforesaid registrations Nos. 141,244 and 354,840, defendant O-So Grape Co., and its agents, bottlers, and wholly controlled subsidiaries, have falsely stated, and are stating, representing and implying in numerous legal actions in foreign countries between the parties hereto, and also to the trade and public, that BUBBLE UP is `the first "UP" drink,\' that it has been in continuous use since prior to plaintiff\'s first use of 7 UP (also SEVEN-UP) and in 1938 rergistered the mark in in 1928; and that it has been continuously used side-by-side with 7 UP (also SEVEN-UP) in the United States since 1917. The Reg. Nos. 141,244 and 354,840, and each of them, have been constantly and specifically referred to in connection with, and as basis for and in support of the said misrepresentations. All of the said representations are wholly false and contrary to fact.

"28. The said false and misleading representations as aforesaid and the registrations used in support thereof have been relied upon and widely and forcefully cited and used by third persons against whom plaintiff has brought legal action for infringement of its said trademark 7 UP (also SEVEN-UP), in defense of their said infringements and unfair competition and in support of attempts to invalidate plaintiff\'s trademark 7 UP (also SEVEN-UP) on the grounds that it is generic and descriptive of soft drinks of a type similar to plaintiff\'s, based upon the falsely alleged use of BUBBLE UP since 1917 for said type of drink, all to plaintiff\'s great and irreparable prejudice and damage.

The answer filed by appellee denied the foregoing allegations of the complaint and as an affirmative defense, averred that plaintiff was not entitled to any relief by reason of laches. One averment which is of interest in the present proceeding is as follows:

"(C) Although United States Trademark Registration No. 141,244 for the trademark `Bubble Up\' was duly renewed by Leroy O. Schneeberger under date of April 2, 1941, and was duly Published under the Act of 1946 by O-So Grape Co. on July 20, 1954, Plaintiff, until the bringing of this action, has neither threatened an action for cancellation of said trademark registration nor filed any such action.

"(D) Although United States Trademark Registration No. 354,840 for the trademark `Bubble Up\' with design of fanciful bubbles was Published under the Act of 1946 by O-So Grape Co. on July 20, 1954; duly renewed by Defendant, O-So Grape Co., under date of February 22, 1958, and corrected in accordance with modern usage of the term `Bubble Up\' and encircling fanciful bubbles by a certificate of correction dated June 11, 1957, and published in the Official Gazette of the United States Patent Office of that date, Plaintiff has not, prior to the filing of this suit, taken any action seeking to cancel such registration nor has Plaintiff, prior to the filing of this suit notified Defendants or any thereof of any such intended action." Emphasis added.

A motion was made by appellee (defendant) for a separate trial under Rule 42(b), F.R.Civ.P., 28 U.S.C., on its pleaded affirmative relief based on laches. The court heard oral argument and granted the motion. (D.C., 177 F.Supp. 91). Appellant (Plaintiff), Seven-Up, under Rule 68, F.R.Civ.P., 28 U.S.C., offered judgment on the separate issue of laches, which offer was accepted by Appellee, Bubble Up. The district court then granted Bubble Up's motion to dismiss the complaint but denied Bubble Up's request for an injunction against further prosecution based upon the two marks involved.

Seven-Up appealed from the order dismissing its complaint and Bubble Up appealed from the denial of its request for injunctive relief. The Court of Appeals, Seventh Circuit, affirmed the lower court's dismissal of the complaint and also its denial of Bubble Up's request for injunctive relief (283 F.2d 103).

The essential facts which emerge from this somewhat involved situation are that while two additional parties defendant were named in the Illinois action, the two parties who are here involved were involved in the prior action and are bound by it. The prior action involved several issues which are not here before us. The question here is whether the issue of cancellation of Bubble Up's trademark registrations was in issue in the prior action.

It is...