Siegerist v. Blaw-Knox Company

• Decision Date: 04 August 1969
• Docket Number: No. 19365,19366.,19365
• Citation: 414 F.2d 375
• Parties: Walter L. SIEGERIST, Charles C. Litsch, and The Medart Engineering and Equipment Company, Appellants, v. BLAW-KNOX COMPANY, Appellee. BLAW-KNOX COMPANY, Appellant, v. Walter L. SIEGERIST, Charles C. Litsch, and The Medart Engineering and Equipment Company, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

414 F.2d 375 (1969)

Walter L. SIEGERIST, Charles C. Litsch, and The Medart Engineering and Equipment Company, Appellants, v. BLAW-KNOX COMPANY, Appellee.

BLAW-KNOX COMPANY, Appellant, v. Walter L. SIEGERIST, Charles C. Litsch, and The Medart Engineering and Equipment Company, Appellees.

Nos. 19365, 19366.

United States Court of Appeals Eighth Circuit.

August 4, 1969.

COPYRIGHT MATERIAL OMITTED

Edmund C. Rogers, of Kingsland, Rogers, Ezell, Eilers & Robbins, St. Louis, Mo. for Walter L. Siegerist et al., Estill E. Ezell and David F. Crossen, St. Louis, Mo., were on the briefs with Edmund C. Rogers, St. Louis, Mo.

Walter J. Blenko, Jr., of Blenko, Leonard & Buell, Pittsburgh, Pa., for Blaw-Knox Co.; Norris H. Allen, of Anderson, Gilbert, Wolfort, Allen & Bierman, St. Louis, Mo., Edmund S. Ruffin, III, of Thorp, Reed & Armstrong, Pittsburgh, Pa., and James E. Anderson, Pittsburgh, Pa., were on the brief with Walter J. Blenko, Pittsburgh, Pa.

Before BLACKMUN, GIBSON and BRIGHT, Circuit Judges.

BRIGHT, Circuit Judge.

Walter L. Siegerist, Charles C. Litsch and the Medart Engineering and Equipment Company (Meeco), defendants below, appeal from the entry of an injunction in the United States District Court for the Eastern District of Missouri which found that they had infringed upon appellee Blaw-Knox Company's right to the trademark "Medart" and had unfairly competed with Blaw-Knox. Blaw-Knox cross-appeals, asserting that it was entitled to an accounting. We refer to the parties by their status on the initial appeal, No. 19,365. We affirm, except with directions to modify the injunction in part.

The contested trademark "Medart" was originally the property of the Medart Company, a St. Louis-based corporation which had successfully engaged in manufacturing various industrial components including power transmission equipment and machinery for straightening metal bars and tubes.¹ In 1954, Medart Company was liquidated and the assets of its machinery division, which had manufactured power transmission equipment and bar and tube machinery, were transferred to the Emerman Machinery Company, together with all designs, drawings, specifications and customers' orders as well as inventions, patents, trade names and trademarks and the good will associated therewith. In conjunction with this transaction, Emerman immediately resold Medart's bar and tube machinery business to the Continental Foundry and Machine Company, together with all rights to the trademark and trade name "Medart". Continental, in turn, gave back to Emerman an assignable license to use the trademark "Medart" on power transmission equipment but reserved to itself all rights to use the trademark on bar and tube machinery. Included in Continental's purchase were the

"designs, drawings and specifications relating to the bar and tube equipment business, and all customer\'s orders, inquiries and correspondence or other documents or materials pertaining thereto * * * together with any filing cabinets used for the storage of such items."

Blaw-Knox's rights are derived through Continental, whose assets it purchased in 1955.

Appellant Walter L. Siegerist was a machinery manager for the Medart Company until it was liquidated. His father, Walter Siegerist, Sr., was the president of the Medart Company. In mid-August, 1954, the Siegerists and several other key employees of Medart Company became associated with Continental.

Appellant Charles Litsch was a shop foreman for Medart. He was employed by Emerman immediately following its purchase of the Medart Company and until November of 1954 as a caretaker for the Medart assets purchased by Emerman which had not been removed from the former Medart building. Litsch left Emerman's employ after certain Medart assets, consisting of factory and office equipment, were sold at public auction. In 1955, Litsch purchased from Emerman the former Medart power transmission business, including a license to use the trademark "Medart" upon power transmission equipment. The assignment to Litsch specifically recited the prior transfer to Continental of the trademark "Medart" as applied to bar and tube machinery "together with the good will connected with the use of and symbolized by said mark in the bar and tube equipment business acquired by Emerman from the Medart Company". Emerman's sale to Litsch occurred at about the same time as Blaw-Knox made its purchase from Continental, Emerman's successor in interest in the bar and tube machinery business.

In March of 1957, Litsch, Walter L. Siegerist and two other individuals organized the appellant corporation, the Medart Engineering and Equipment Company (Meeco), and the assets of Litsch's power transmission business were transferred to the new corporation. The new firm operated until 1962 from the building formerly occupied by the Medart Company. Prior to its incorporation, the Litsch business was confined to power transmission items. When Siegerist joined forces with Litsch, they broadened the scope of their operation to include the sale and repair of bar and tube machinery, both new and used.

The trial court found that, commencing with the incorporation of Meeco, the appellants had the deliberate purpose and intent of appropriating the trade name and trademark "Medart" for their benefit in developing a profitable bar and tube machinery business, well knowing that they had no right to do so. To this end, the appellants employed various stratagems and devices, including intentional use in the bar and tube business of the name "Medart" as a part of their corporate name, while knowing that such use would create confusion with the former Medart Company. This confusion was aggravated by the fact that Meeco operated its bar and tube business from the former Medart plant in St. Louis; by the publication and distribution of various advertising bulletins which were deceptively similar in format to those of the former Medart Company and included the false statement "Medart services since 1879"; and by the use of stationery in its bar and tube endeavors which was the same size and contained the same letter-type as that used by the former Medart Company, giving an appearance identical to that of stationery used by Medart, except for the different addresses and the substitution of the words "Engineering and Equipment Co." for the word "Company". The trial court found that the name difference was of no real significance since the name "Medart" was printed in very large letters on the Meeco stationery whereas a much smaller type was used for "Engineering and Equipment Co.". The impression conveyed to one who would even be aware of the difference was that the company was the same but it simply had changed its name. In addition, the appellants used advertising photographs of Medart machinery for the purpose of attempting to secure bar and tube machinery orders while misleading prospective customers for bar and tube machinery as to the relationship of Meeco with the Medart Company. The trial court also found that inquiries and other correspondence relating to bar and tube machinery which were addressed to the Medart Company were opened and answered by Meeco as though the inquiry had been intended for Meeco. The appellants failed to disclose the fact that Meeco was an entirely new company, wholly different from the former Medart Company and in no manner a successor to its interest in bar and tube machinery. Replies tended to mislead the prospective customers into believing that Meeco was either the same company or its successor in interest as to bar and tube machinery.

Numerous drawings and tracings of bar and tube machinery manufactured and sold by the Medart Company, which the trial court found to be the property of appellee, came into the possession of Siegerist and Litsch and were used by them for their profit and benefit. These drawings enabled Meeco to make repairs and provide parts for bar and tube machinery and to make improvements in Medart bar and tube machinery. Siegerist attempted to justify his possession of the drawings on the ground that they were given to him for "safekeeping" by the Medart Company prior to its liquidation. The lower court found that this did not warrant Siegerist's making use of the drawings for personal or corporate benefit. In addition to the drawings already held by Siegerist, other drawings were obtained by Litsch, who was employed by Emerman for a short period after the 1954 liquidation as caretaker for the Medart's former assets. These drawings and other documents were given to Siegerist in 1962 after Meeco moved from the old Medart building.

The trial court found that Litsch knew that these drawings were the property of Blaw-Knox and that, until the time of trial, Blaw-Knox did not know for a fact that the appellants had these documents.

The appellants, without the knowledge of Blaw-Knox, unlawfully acquired possession and made use of a list of names of former customers of Medart Company, which list contained information concerning serial numbers, dates of sale and the type of Medart machines sold to these customers. The trial court found that list to be "invaluable", particularly for the purpose of correlating such information with the drawings already held by Siegerist.

On April 1, 1968, the trial court entered an order prohibiting the appellants from using the trademark "Medart" or any colorable imitation thereof in connection with its bar and tube machinery business and from representing to prospective buyers of bar and tube machinery that there is any connection between the Meeco bar and tube machinery business and the Medart bar and tube business. The order enjoined the appellants from making use of the drawings, customers' lists and photographs held by Siegerist or Meeco in conjunction with their bar and tube business and directed that they should deliver to the Clerk of the District Court for destruction:

"all drawings, prints, photographs,

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