Wallpaper Mfrs., Ltd. v. Crown Wallcovering Corp.

• Decision Date: 29 July 1982
• Docket Number: Appeal No. 81-550.
• Parties: The WALLPAPER MANUFACTURERS, LIMITED, Appellant, v. CROWN WALLCOVERING CORPORATION, Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

680 F.2d 755

The WALLPAPER MANUFACTURERS, LIMITED, Appellant, v. CROWN WALLCOVERING CORPORATION, Appellee.

Appeal No. 81-550.

United States Court of Customs and Patent Appeals.

June 17, 1982.

Rehearing Denied July 29, 1982.

COPYRIGHT MATERIAL OMITTED

Edward M. Prince, Washington, D. C., for appellant.

Albert Robin, New York City, for appellee.

Before MARKEY, Chief Judge, and RICH, BALDWIN, MILLER and NIES, Judges.

NIES, Judge.

This appeal is from the decision of the Trademark Trial and Appeal Board (board)¹ granting a petition to cancel Reg.No. 620,396² for the trademark CROWN for wallpaper on the ground of abandonment. We reverse.

Background

On July 23, 1975, appellee, Crown Wallcovering Corporation (CWC), a New York corporation, filed a petition to cancel the registration of CROWN for wallpaper owned by appellant, The Wall Paper Manufacturers Limited (WPML), a corporation of the United Kingdom.

In the petition, as amended,³ CWC alleged that for many years it has been using the corporate name Crown Wallcovering Corp., its trade name CROWN WALLCOVERING, and its trademark CROWN in connection with the manufacture, sale and distribution of wallcoverings, including wallpapers; and that CROWN has become and now is the means by which CWC's wallcoverings are known and their source or origin identified. As grounds for cancellation, CWC alleged (1) that prior to CWC's first use of CROWN, or subsequently, WPML had discontinued use of CROWN as a trademark for wallpaper with intent not to resume use of the mark; and, (2) that for the purpose of obtaining a right of incontestability under 15 U.S.C. § 1065, WPML had filed an affidavit on July 17, 1961, falsely asserting continuous use of its trademark CROWN during the preceding five years.

Extensive evidence was submitted by both parties in the form of depositions and accompanying exhibits of advertising, wallpaper books, packaging, and sales figures, to show the manner and extent of their respective uses of CROWN in connection with wallcoverings.

The record shows that WPML is one of the largest wallpaper manufacturers in the world and CROWN is one of its principal trademarks. The testimony of Eric Baverstock, secretary of WPML, was that CROWN has been used throughout the world since 1930, excluding the war years. A summary of its business in the United States under the mark from 1957 to March 1975 showed sales in each year, ranging from a low of £ 4,816 in 1968 to a high of £ 240,612 for fiscal year ending March 1975, and totalling £ 755,422 for the entire period.

Gilbert Goodman, a resident of Canada, is the president of CWC, a New York corporation with offices in New York City. Since 1945, Mr. Goodman has been active in a family business, Crown Wall Paper Company, in Toronto, Canada. The exact relationship between the Canadian corporation and the New York corporation is not clear. Much of the advertising put in evidence by appellee carries the names of both companies and Mr. Goodman's testimony, as well as the testimony of other witnesses, does not, in many instances, distinguish between the two.⁴

CWC is not a manufacturer but converts its own line of goods⁵ and is a distributor of imported goods of others. The record establishes that CWC has continuously, since 1964, used Crown in its company name. The company name is displayed on sample books and goods of others, which it handles as a distributor, i.e., in legends such as "Imported by Crown Wallcovering Corp." on the DECORENE and REGALIA lines of Storey Brothers & Company Limited. CROWN VINYL was used on labels for wallpaper and instruction leaflets beneath REGALIA in the early 1970's but was stopped in 1975 when WPML made an objection to use of this mark to Storey Brothers, the British manufacturer and supplier to both the U.S. and Canadian companies of Mr. Goodman. CWC has also identified its business by the trade names "Crown" and "Crown Wallcovering" in advertising. It has used CROWN FOILS as a trademark for wallcovering from time to time or possibly continuously since 1965-66. CROWN has been displayed on labels for wallcoverings called DECOR Photowalls since sometime after 1970. CWC's overall business has increased from $12,000 in 1964 to $1,250,000 in 1973 and to over $1,900,000 in 1975. No specific figures are given for CROWN FOIL or any CROWN brand products.

With respect to the allegations of abandonment based on WPML's non-use of the mark CROWN, the board said:

Petitioner argued, with some vigor, that even conceding that there were some sales of wallcoverings under the trademark "CROWN" in the United States by respondent, they were insufficient to avoid abandonment as a result of nonuse coupled with an intention not to resume use, or nonuse for two consecutive years, because the quantum of use was very small both in absolute terms and in relation to respondent's worldwide sales.

* * * * * *

Our discussion of the evidence shows that, starting at least as early as 1948, respondent has made commercial sales of wallcoverings marked with the trademark "CROWN" to the United States. The sales were effected until the mid-1970's through independent distributors who, at least through the "LANCASTRIA" collections, participated in the selection of the papers to be included in the various offerings. Since about the mid-1970's, sales have been made through companies under common corporate control with respondent.

It may be true that the "LANCASTRIA" collections were promoted and sold under that name, but as discussed above, that does not denigrate the trademark significance of "CROWN", which was printed or stamped on the selvage or on the back or on the label of the wallcoverings. There is no rule of law that the owner of a trademark must reach a particular level of success, measured either by the size of the market or by its own total worldwide sales, to avoid abandoning a mark.

The law on what is needed to maintain the right to a mark against a charge of nonuse was explained in La Societe Anonyme des Parfums le Galion v. Jean Patou, Inc., 495 F.2d 1265 181 USPQ 545 (2nd Cir., 1974). The important facts were that Patou, the American company, used its registration of "SNOB" for perfume to exclude from this country the "SNOB" perfume sold by le Galion in a number of countries while Patou itself used the mark only to the extent of selling 89 bottles of perfume in a period of twenty-one years without ever making a serious effort to merchandise its product. In view of this situation, the Court said, at 181 USPQ 548:

"Adoption and a single use of the mark may be sufficient to entitle the user to register the mark,... But more is required to sustain the mark against a charge of nonuse. To prove bona fide usage, the proponent of the trademark must demonstrate that his use of the mark has been deliberate and continuous, not sporadic, casual or transitory citations omitted."

Respondent's WPML's use was certainly deliberate; it was planned, purposeful, and ... profitable. The use was continuous; it could not remotely be described as sporadic, casual or transitory.

* * * * * *

Accordingly, we hold that respondent did not abandon its trademark "CROWN" because of nonuse for any period of time....

CWC's failure to prove the allegations of its petition, however, did not end the matter.

In its brief to the board, CWC advanced the position that WPML had abandoned its mark because its course of conduct had caused CROWN to lose its significance as an indication of origin in WPML, stating:

During the period 1964-1975, petitioner built up substantial rights and goodwill in CROWN as a trademark and trade name for its wallcoverings. By 1975, CROWN had become associated in the United States with petitioner, not registrant. During the same period registrant's use of "Crown" in the United States was at most "technical" use. Registrant should not be permitted to retain its "incontestible" registration of CROWN which would enable it to exploit petitioner's reputation under the CROWN mark and reap where it had not sown. The equities in this case strongly favor petitioner. For the foregoing reasons, it is respectfully requested that Registration No. 629,396 be cancelled. Emphasis added.

WPML responded with a motion to strike the argument from CWC's brief on the ground that this issue was never tried. The board refused, as a matter of policy, to strike a portion of a brief and reserved its ruling on WPML's objections until final decision. Except for stating that WPML could not have been "surprised" by certain testimony indicating that WPML had been aware of the use of CROWN by the U.S. company of Mr. Goodman since in or around 1973, the board did not discuss WPML's objection. In any event, the board did not decide the case on the ground asserted by CWC, that is, that CROWN identified only petitioner, not respondent. The board framed the issue as follows:

The critical question is whether respondent has permitted petitioner to use "CROWN" as a trademark or part of a trade name in the United States without objection and for such a period of time and under such circumstances that respondent's acts of omission (failure to take action effectively to stop petitioner's use) has caused the mark to lose its significance as an indication of origin.

The board then noted and discussed the following factors in the record:

(1) WPML had been aware of CWC's use of "CROWN" as a symbol of trade identification since at least as early as 1973 and while objection was made to use of CROWN as a mark, it had taken no action against CWC's trade name usage;

(2) the testimony of a witness, considered friendly to WPML, that the trade, being dealers, was likely to be more familiar with the Crown Wallcovering name since the company was a distributor they buy from than with the WPML's CROWN INDOOR RAINBOW book, one of hundreds of collection books; and

(3) the testimony of a magazine publisher who refused to accept WPML's advertising for CROWN wallpaper because

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