University of Pittsburgh v. Champion Products Inc.

• Decision Date: 13 December 1982
• Docket Number: No. 82-5081,82-5081
• Citation: 686 F.2d 1040
• Parties: UNIVERSITY OF PITTSBURGH, a non profit corporation, Appellant, v. CHAMPION PRODUCTS INC., a corporation.
• Court: U.S. Court of Appeals — Third Circuit

Page 1040

686 F.2d 1040

215 U.S.P.Q. 921

UNIVERSITY OF PITTSBURGH, a non profit corporation, Appellant, v. CHAMPION PRODUCTS INC., a corporation.

No. 82-5081.

United States Court of Appeals Third Circuit.

Argued July 7, 1982.

Decided Aug. 12, 1982.

Certiorari Denied Dec. 13, 1982.

See 103 S.Ct. 571.

Walter J. Blenko, Jr. (argued), Arnold B. Silverman, Lynn J. Alstadt, Buell, Blenko, Ziesenheim & Beck, Pittsburgh, Pa., for appellant.

Paul J. Weiner, Adrian v. White, Breed, Abbott & Morgan, New York City, and Anderson, Moreland & Bush, Pittsburgh, Pa., for appellee; William H. Hauser, Pittsburgh, Pa., of counsel.

Before SEITZ, Chief Judge, and VAN DUSEN and SLOVITER, Circuit Judges.

OPINION OF THE COURT

VAN DUSEN, Senior Circuit Judge.

This is an appeal from a final order of the district court, sitting without a jury, entering judgment for the defendant based upon a finding that the plaintiff's trademark infringement and unfair competition claims are barred by laches. University of Pittsburgh v. Champion Products, Inc., 529 F.Supp. 464, 469 (W.D.Pa.1982). This court has jurisdiction under 28 U.S.C. § 1291 (1976).

Because we believe that the district court erred in applying the doctrine of laches to bar plaintiff's claims for prospective injunctive relief, we will reverse that portion of the judgment and remand for further consideration of the facts and law underlying plaintiff's claim for future injunctive relief. See, e.g., In re Arthur Treacher's Franchisee Litigation, Arthur Treacher's Fish & Chips, Inc. v. A & B Management Corp., etc., 689 F.2d 1137, (3d Cir. 1982). In all other respects, the judgment of the district court will be affirmed.

I.

The historical facts of this case are set forth in detail in the district court's opinion. See 529 F.Supp. at 466-67. The University of Pittsburgh ("Pitt") is a non-profit Pennsylvania corporation, originally established in 1787, which has been operating under its present name since 1908. ¹ Shortly thereafter, Pitt adopted the panther as the mascot for its athletic teams. Since that time, Pitt has come to enjoy a widespread reputation for the excellence of its undergraduate, graduate and professional schools and, more recently, for its national calibre athletic programs. As a result, "University of Pittsburgh," "Pitt," "Panthers," and "Pitt Panthers" have become largely synonymous in the public mind. As the district court found, the names "University of Pittsburgh" and "Pitt" have been used by Pitt on its athletic uniforms for over 50 years. 529 F.Supp. at 466. Further, at least since World War II, the Pitt bookstore has sold an array of clothing and novelty items bearing these names and various representations of the University seal and panther mascot. Id. ²

Champion Products, Inc. ("Champion") is a New York corporation engaged in the business of manufacturing and marketing "soft goods," ³ approximately 80% of which are imprinted with the names and/or symbols of schools, colleges, universities, and other entities or events. N.T. at 547, reprinted at 530a. It is largely undisputed that Champion created and nurtured the imprinted soft goods industry ⁴ and is now the premier manufacturer in the field with annual sales in excess of $100 million. Id. By Champion's own testimony, the names or insignia of more than 10,000 schools, colleges and universities appear on Champion goods. Champion has developed this business to a point where it employs over 100 salesmen, maintains an extensive art department to update old designs and develop new ones, and spends in excess of $800,000. annually to advertise its products. N.T. at 547-53, reprinted at 530a-36a. There has been no allegation that Champion's goods are not of the highest quality. Champion does not now, and apparently never has, maintained any licensing arrangement with, or paid royalties to, any of the schools or colleges whose insignia it uses. N.T. at 548-49, reprinted at 531a-32a. ⁵

Although the testimony was not without confusion, ⁶ the district court found that the relationship between Pitt and Champion began in 1936 when Champion began supplying Pitt with athletic uniforms bearing Pitt's name and marks. At approximately the same time, Pitt began carrying Champion-made Pitt soft goods in the campus bookstore. 529 F.Supp. at 467. This arrangement continued until 1960. ⁷ During the same period, Champion apparently also sold goods with the Pitt marks to others in the Pittsburgh area not affiliated with the University. Id. Since 1946, Champion sold such goods to Shea's Sporting Goods store in Pittsburgh, a business not affiliated with the University, which in turn resold the goods to the general public. Pitt maintains that Shea's had an informal license agreement with the University to sell insignia goods to campus organizations but that Pitt had no knowledge of and never approved any other distribution of Pitt insignia goods. The question of knowledge aside, however, Pitt never objected to any action taken by Champion until the early stages of this litigation.

The mid-1970s marked a period of dramatic success and increased national exposure for the Pitt football team. ⁸ Following the 1976 football season, the Pitt team was invited to play the University of Georgia for the unofficial national championship ⁹ at the 1977 Sugar Bowl game in New Orleans. Upon returning from that game, the manager of Pitt's campus bookstore reported to her superiors that literally thousands of garments bearing various Pitt insignia were in evidence at the game. This report engendered discussions of the issue among university officials and culminated in a decision to register its name and marks under federal and state trademark laws and license their use by manufacturers. N.T. at 269-71, reprinted at 302a-04a. ¹⁰ On August 4, 1980, Pennsylvania trademark registrations were issued to Pitt covering 29 marks or combinations, including eight for use on clothing. ¹¹ On December 18, 1980, Pitt contacted Champion, gave notice of its claim to the marks, and requested that Champion execute a license agreement. ¹² Champion refused.

On December 2, 1981, Pitt brought this action in state court, alleging (1) common law trademark infringement; (2) trademark infringement in violation of Pa.Stat.Ann. tit. 73, § 23 (Purdon 1971); (3) common law unfair competition; and (4) false designation of origin of goods under the Lanham Act, 15 U.S.C. § 1125(a) (1976). Champion removed the case the next day to the United States District Court for the Western District of Pennsylvania. ¹³ On December 4, 1981, after a hearing, the court denied Pitt's request for a preliminary injunction. A bench trial on the issue of liability was held on December 10-11 and 14-17, 1981, and on January 7, 1982, the district court filed its findings of fact and conclusions of law holding the plaintiff's claims to be barred by laches. Pitt's motion to make additional findings of fact and amended conclusions of law was denied on January 18, 1982.

This appeal followed.

II.

The issue before this court-and the only issue discussed in the district court's opinion-is very narrow: has Champion carried its burden of establishing on these facts the affirmative defense of laches to a degree which must bar Pitt's claims in their entirety? Because laches is an equitable doctrine, its application is inextricably bound up with the nature and quality of the plaintiff's claim on the merits relevant to a prospective injunction. Consequently, while we must of necessity discuss the merits of the plaintiff's claim, we express no opinion on the ultimate question of precisely what has been proven on this record, nor on the availability or scope of the prospective injunctive remedy available, preferring not to venture into this expanding area of the law without the benefit of the district court's findings and conclusions on the issues raised by the application for such a prospective injunction.

A. The Doctrine of Laches

It is hornbook law that laches consists of two essential elements: (1) inexcusable delay in instituting suit, and (2) prejudice resulting to the defendant from such delay. Gruca v. United States Steel Corp., 495 F.2d 1252, 1258 (3d Cir. 1974); Sobosle v. United States Steel Corp., 359 F.2d 7, 12-13 (3d Cir. 1976). ¹⁴ Pennsylvania and federal law in this field are identical for all practical purposes. Anheuser-Busch v. Du Bois Brewing Co., 175 F.2d 370, 373-74 (3d Cir. 1949), cert. denied, 339 U.S. 934, 70 S.Ct. 664, 94 L.Ed. 1354 (1950); Artus Corp. v. Nordic Co., 512 F.Supp. 1184, 1187 (W.D.Pa.1981); Consolidated Home Specialties v. Plotkin, 358 Pa. 14, 30, 55 A.2d 404, 412 (1947).

Although there is some degree of confusion on this point in the older cases, it is also clear that actual "laches" in effect works an equitable estoppel barring all relief and requires a showing of both delay and prejudice. Jenn-Air Corp. v. Penn Ventilator Co., 464 F.2d 48, 49-50 (3d Cir. 1972), quoting Holmberg v. Armbrecht, 327 U.S. 392, 396, 66 S.Ct. 582, 584, 90 L.Ed. 743 (1946); Sobosle v. United States Steel Corp., 359 F.2d at 12. In the trademark context, the concepts of "mere delay" or "laches without more," although confusing as a matter of semantics, see Alfred Dunhill of London v. Kasser Dist. Prod. Corp., 350 F.Supp. 1341, 1364-65 (E.D.Pa.1972), aff'd mem., 480 F.2d 917 (3d Cir. 1973), are nonetheless relevant in two ways.

First, there is that narrow class of cases where the plaintiff's delay has been so outrageous, unreasonable and inexcusable as to constitute a virtual abandonment of its right. In Anheuser-Busch v. Du Bois Brewing Co., for example, we postulated that, "for example, had there been a lapse of a hundred years or more, we think it highly dubious that any court of equity would grant injunctive relief against even a fraudulent infringer." 175 F.2d at 374. Second, there is the much more common situation in which the plaintiff's less egregious delay will bar its claim for...