Shakespeare Co. v. Silstar Corp. of America, Inc.

• Citation: 906 F. Supp. 997
• Decision Date: 02 January 1996
• Docket Number: Civ. A. No. 3:90-1695-19.
• Parties: SHAKESPEARE COMPANY, Plaintiff, v. SILSTAR CORPORATION OF AMERICA, INC., Defendant.
• Court: U.S. District Court — District of South Carolina

906 F. Supp. 997

SHAKESPEARE COMPANY, Plaintiff, v. SILSTAR CORPORATION OF AMERICA, INC., Defendant.

Civ. A. No. 3:90-1695-19.

United States District Court, D. South Carolina, Columbia Division.

November 17, 1995.

As Corrected January 2, 1996.

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Frank Rogers Ellerbe, III and James Moncrief Brailsford, III, of Robinson, McFadden & Moore, Columbia, South Carolina, for Plaintiff.

William C. Cleveland, Charleston, South Carolina, for Defendant.

ORDER

SHEDD, District Judge.

This trademark infringement and unfair competition case, which involves Silstar Corporation of America, Inc.'s attempt to market a fishing rod with a color configuration (i.e., a clear tip on an opaque fishing rod base) similar to Shakespeare Company's federally registered trademark for that color configuration, is before the Court on remand from the United States Court of Appeals for the Fourth Circuit. Previously, the Court issued findings of fact and conclusions of law, entered judgment in favor of Silstar on Shakespeare's claims, and ordered the cancellation of Shakespeare's trademark. See 802 F.Supp. 1386 (D.S.C.1992) ("Shakespeare I"). On appeal, a divided panel of the Fourth Circuit reversed the cancellation Order and remanded this case with instructions for further proceedings. See 9 F.3d 1091 (4th Cir.1993) ("Shakespeare II"). Thereafter, the Fourth Circuit denied Silstar's petition for rehearing, and the Supreme Court denied Silstar's petition for certiorari. See ___ U.S. ___, 114 S.Ct. 2134, 128 L.Ed.2d 864 (1994).

The Court has now given further consideration to the parties' claims and defenses based on the record presented at trial, and is entering this Order to supplement the findings of fact and conclusions of law set forth in Shakespeare I.¹ For the reasons set forth below, the Court concludes that Silstar is entitled to prevail on Shakespeare's claims because Shakespeare has failed to establish that Silstar's use of the clear tip on its fishing rods will create a likelihood of confusion and, alternatively, because Silstar has established its fair-use defense. The Court further concludes that Silstar has failed to establish its unclean hands defense or its counterclaims.

I. THE SCOPE OF THE SHAKESPEARE II MANDATE

A preliminary matter which the Court must resolve is a determination of what issues remain viable after Shakespeare II. Following the remand of this case the Court ordered the parties to brief all of the issues not previously resolved by this Court and indicated that it would consider the parties' "claims and defenses" on remand.² Shakespeare has taken exception to the Court's Order, arguing that the law of the case doctrine limits the issues which the Court may now consider. In this regard, Shakespeare asserts that "the scope of the Fourth Circuit's mandate is very narrow in that it directs the review of the very specific issue of likelihood of confusion," and the Court, by seeking briefs on the parties' "claims and defenses," has taken "an overly-broad sic interpretation of the Fourth Circuit's mandate. ..." Shakespeare Nov. 22, 1994, Brief ("Shakespeare Brief"), at 1. Shakespeare further asserts:

Assuming that Shakespeare prevails on its likelihood of confusion claim ... it would be contrary to the law of this case for this court to consider Silstar's other "defenses." Indeed, for this court to entertain Silstar's defenses for the purpose of invalidating Shakespeare's mark would be in direct conflict with the Fourth Circuit's holding that Shakespeare's mark is "valid as a matter of law." ... Therefore, the only issue before this court is the likelihood of confusion between Shakespeare's "clear tip" configuration and Silstar's infringing "clear tip," and this court lacks jurisdiction to review Silstar's additional defenses.

Id. at 2. Resolution of this important threshold issue requires an analysis of both the law of the case doctrine and the prior proceedings in this case.

A. The Law Of The Case Doctrine (The Mandate Rule)

"The rule of the law of the case is a rule of practice, based upon sound policy that when an issue is once litigated and decided, that should be the end of the matter." United States v. United States Smelting Refin. & M. Co., 339 U.S. 186, 198, 70 S.Ct. 537, 544, 94 L.Ed. 750 (1950). "Law of the case is an amorphous concept," Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983); which, being "a rule of discretion and not a jurisdictional requirement," Smith v. Bounds, 813 F.2d 1299, 1304 (4th Cir.1987), cert. denied, 488 U.S. 869, 109 S.Ct. 176, 102 L.Ed.2d 146 (1988); "is not absolute nor inflexible." Capital Invs. Co. v. Executors of Estate of Morrison, 584 F.2d 652, 654 (4th Cir.1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979). While "at least four distinctive sets of problems are caught up in law of the case terminology," 18 C.A. Wright, A.R. Miller, & E.H. Cooper, Federal Practice & Procedure, § 4478 at 788 (1981); the specific form of law of the case relied upon here by Shakespeare is the "mandate rule."

In federal court, the mandate ordinarily consists of a certified copy of the appellate judgment, a copy of the appellate opinion (if any), and any direction as to costs. Fed.R.App. P. 41(a). As the "`official mode of communicating the judgment of an appellate court to a lower court, thereby directing action to be taken or disposition to be made of the cause by the trial court,'" Amico v. New Castle County, 654 F.Supp. 982, 991 n. 6 (D.Del.1987) (citation omitted); "the mandate is a tool used to ensure that institutional values are maintained and that the allocation of authority and responsibility remains consistent with the design established under the law of our form of government." Litman v. Massachusetts Mut. Life Ins. Co., 825 F.2d 1506, 1511 (11th Cir.1987), cert. denied, 484 U.S. 1006, 108 S.Ct. 700, 98 L.Ed.2d 652 (1988). Under the mandate rule, "a lower court generally is `bound to carry the mandate of the upper court into execution and may not consider the questions which the mandate laid at rest.'" United States v. Bell, 5 F.3d 64, 66 (4th Cir.1993) (citations omitted). However, "while a mandate is controlling as to matters within its compass, on the remand a lower court is free as to other issues," Sprague v. Ticonic Nat'l Bk., 307 U.S. 161, 168, 59 S.Ct. 777, 781, 83 L.Ed. 1184 (1939); so long as consideration of those issues is consistent with the mandate. Stamper v. Baskerville, 724 F.2d 1106, 1108 (4th Cir. 1984).

In applying the mandate rule, "it is critical to determine what issues were actually decided by the appellate court in order to define what is the `law' of the case." Gertz v. Robert Welch, Inc., 680 F.2d 527, 533 (7th Cir.1982), cert. denied, 459 U.S. 1226, 103 S.Ct. 1233, 75 L.Ed.2d 467 (1983). Because the lower court is generally duty bound to "implement both the letter and spirit of the ... mandate, taking into account the opinion and the circumstances it embraces," Bell, 5 F.3d at 66 (internal quotation marks deleted); "determining the scope of the mandate can present problems with interpretation." Litman, 825 F.2d at 1511. Where, as here, the appellate judgment is silent with respect to the manner in which the lower court should proceed on remand,³ determination of the scope of the mandate "requires a careful reading of the appellate Court's opinion," Gertz, 680 F.2d at 533; which serves as "a statement of the reasons on which the judgment rests." Rogers v. Hill, 289 U.S. 582, 587, 53 S.Ct. 731, 734, 77 L.Ed. 1385 (1933). The opinion must be read as a whole, Harris v. Sentry Title Co., 806 F.2d 1278, 1280 (5th Cir.), cert. denied, 484 U.S. 818, 108 S.Ct. 74, 98 L.Ed.2d 37 (1987); including any concurring and dissenting opinions, Jones v. Lewis, 957 F.2d 260, 262 (6th Cir.), cert. denied, 506 U.S. 841, 113 S.Ct. 125, 121 L.Ed.2d 80 (1992); and "in light of the facts of the case under discussion." Armour & Co. v. Wantock, 323 U.S. 126, 133, 65 S.Ct. 165, 168, 89 L.Ed. 118 (1944). "Different sections of an opinion should be read as consistent with each other," Mashpee Tribe v. New Seabury Corp., 592 F.2d 575, 585 (1st Cir.), cert. denied, 444 U.S. 866, 100 S.Ct. 138, 62 L.Ed.2d 90 (1979); and "parts thereof should not be read out of context." Sterling Drug, Inc. v. Yarrow, 408 F.2d 978, 991 (8th Cir.1969). Any "observations, commentary, or mere dicta touching upon issues not formally before the Court do not constitute binding determinations." Gertz, 680 F.2d at 533.

B. Summary Of Shakespeare I And Shakespeare II

With these principles in mind, the Court now turns to a brief summary of this litigation. This action arises as a result of Silstar's attempt to market a fishing rod known as the "Silstar Power Tip Crystal," which has a color configuration (i.e., a clear tip on an opaque rod base) similar to that protected by a federally registered trademark owned by Shakespeare and used on Shakespeare's "Ugly Stik" line of rods. Shakespeare, which seeks injunctive relief, asserts three causes of action: (1) trademark infringement under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); (2) unfair competition under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and (3) common law trademark infringement and unfair competition under South Carolina law.

Silstar has filed an Amended Answer and Counterclaim ("Answer"), in which it asserts in defense that its use of the clear tip is a "fair use," Answer, at 2-3; and that Shakespeare is precluded from enforcing any rights under the trademark based on the defense of unclean hands. Id. at 3-4. Apart from these defenses Silstar also asserts claims for damages and cancellation of Shakespeare's trademark based on its contention that Shakespeare's trademark is invalid because the clear tip is both a functional feature and generic of the type of fishing rods at issue, id. at 5-6; and...