Watson v. E. Leitz, Inc., 14158

• Decision Date: 27 March 1958
• Docket Number: No. 14158,14159.,14158
• Citation: 254 F.2d 777
• Parties: Robert C. WATSON, Commissioner of Patents, Appellant, v. E. LEITZ, Inc., Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

254 F.2d 777 (1958)

Robert C. WATSON, Commissioner of Patents, Appellant, v. E. LEITZ, Inc., Appellee.

Nos. 14158, 14159.

United States Court of Appeals District of Columbia Circuit.

Argued February 18, 1958.

Decided March 27, 1958.

Mr. J. Schimmel, Washington, D. C., with whom Mr. Clarence W. Moore, Sol., U. S. Patent Office, was on the brief, for appellant.

Mr. John Vaughan Groner, New York City, with whom Messrs. Donald M. Dunn and Delavan Smith, New York City, and Richard P. Schulze, Washington, D. C., were on the brief, for appellee.

Before PRETTYMAN and BURGER, Circuit Judges, and MADDEN, Judge of the United States Court of Claims.^*

MADDEN, Judge.

The appellee in 1950 filed an application, pursuant to the provisions of the Act of July 5, 1946, 15 U.S.C.A. § 1051, for the registration of the trademark here in issue. After extended proceedings in the Patent Office, the Assistant Commissioner of Patents denied the application on the ground that the applicant, the appellee here, was not the owner of the trademark. The applicant then filed suit in the District Court under section 1071 of Title 15 and section 145 of Title 35 of the United States Code, praying for a decree adjudging that it was entitled to registration of the mark and authorizing and directing the Commissioner of Patents to register the mark. The District Court entered the decree prayed for. 113 U.S.P.Q. 409. No. 14158 is the Commissioner's appeal from that judgment. Thereafter the Commissioner filed a motion under Fed. Rules Civ.Proc. Rule 60(b), 28 U.S.C.A. for relief from the judgment on the ground that material facts had been withheld in the prior proceedings. The District Court denied that motion. No. 14159 is the Commissioner's appeal from that denial.

If the appellee was the owner of the trademark in question, it was entitled to have it registered, and to have the very substantial benefits which result from registration. The appellant's position is and has been that the appellee is not the owner of the mark.

Ernest Leitz G. m. b. H., Wetzlar, Germany, hereinafter called Leitz-Wetzlar, manufactured and sold cameras, photographic equipment, and other optical and laboratory equipment. It was apparently a proprietorship with limited liability. In 1914 Leitz-Wetzlar registered in the German Patent Office the trademark "Leitz". For many years before 1916 Leitz-Wetzlar had had a branch in New York City which handled its products. In 1916 Leitz-Wetzlar caused to be formed a New York corporation, named E. Leitz, Inc. and conveyed to that corporation

"the business now conducted by me at No. 30 East 18th Street, Borough of Manhattan, City of New York, together with all contracts, patents, trademarks * * * and all goods, wares, and merchandise * * * goodwill, and property of every kind and nature belonging to me or used by me in this business * * *."

The new corporation, herein called Leitz-1916, was, as its predecessor, the New York branch of Leitz-Wetzlar had been, the outlet in the United States of the products of Leitz-Wetzlar, and it operated a repair department for those products. It later commenced the manufacture in the United States of some scientific instruments and parts, and it placed upon them the trademark "E. Leitz", or "Leitz", which was the same mark used on the goods manufactured by Leitz-Wetzlar.

During the First World War Leitz-1916 was seized by the Alien Property Custodian, but it was restored to private ownership after the war, and the business was carried on as before. About 1925 Leitz-1916 introduced the Leica camera, a product of Leitz-Wetzlar, into the United States. About 1929 or 1930 Leitz-1916 began to apply the trademark "Leitz" in the exact script form for which it applied for registration in the proceedings here under review, to appliances developed and manufactured by it in the United States, as well as to those manufactured by Leitz-Wetzlar.

By about 1935 all of the stock of Leitz-1916 was owned by Leitz-Wetzlar. It would seem that the corporation had been effectively controlled by Leitz-Wetzlar from the time of its formation in 1916, although the exact nature of the relationship between the formal owners of the stock and Leitz-Wetzlar during the intervening years is not shown by the record. In any event, there is no evidence of any disagreement between Leitz-1916 and Leitz-Wetzlar as to the former's activities in manufacturing or acquiring other products and selling them with the Leitz mark.

In 1941 the assets of Leitz-1916 were transferred to a newly-formed corporation, again named E. Leitz, Inc., which corporation is the present appellee. Leitz-1941 paid Leitz-1916 for its assets by issuing to it the stock of Leitz-1941. Since Leitz-Wetzlar was the sole stockholder of Leitz-1916, it remained, through that stockholding, the sole owner of Leitz-1941. The bill of sale of the assets of Leitz-1916 to Leitz-1941 mentioned no specific trademarks, but transferred trademarks and goodwill in general terms.

In 1942 all stock of both Leitz-1916 and Leitz-1941 was seized by the Office of Alien Property, because of its German ownership. During the war Leitz-1941 manufactured equipment for the Signal Corps of the Army, and marked its product with the word "Leitz". The Alien Property Custodian caused or permitted Leitz-1941 to apply for and receive a trademark registration for a trademark in the exact form of script which is at issue in this case. The application was made in 1944 and the registration was issued in 1946. This registration was of the kind authorized by the Act of March 19, 1920, 41 Stat. 533, and did not give the holder the protection afforded by registration under the Act of July 5, 1946, the kind of registration sought in the proceedings here under review. See Speed Products Co., Inc., v. Tinnerman Products, Inc., 2 Cir., 179 F.2d 778, for discussion of this distinction.

The Attorney General of the United States, as Alien Property Custodian, issued a prospectus describing the assets of Leitz-1941, for the purpose of inducing persons to bid for its stock. This prospectus stated that the company owned legal title to "the trade names, trademarks and registrations in the United States," both for goods manufactured by itself and for goods imported from Leitz-Wetzlar, but stated further that no opinion was expressed as to whether this ownership would prevent Leitz-Wetzlar or others authorized by it from marketing its products in the United States under their trade names, which were identical with those of Leitz-1941.

Supplementing the original vesting order issued in 1942, the Alien Property Custodian issued further vesting orders including one issued on February 26, 1952, which vested every interest, including reversionary interests, which Leitz-Wetzlar might have in any and all trademarks and trade names appurtenant to the business of Leitz-1941, and specifically including the trademark having the distinctive script here in issue. He then conveyed the rights so vested to Leitz-1941.

In 1952 the Alien Property Custodian sold all the capital stock of Leitz-1941 to Dunhill International, Inc. Dunhill sold the stock to Synthetic Nitrogen Products Corp. The present ownership of the stock derives from Synthetic Nitrogen Products Corporation.

In 1950, while the stock of Leitz-1941 was owned by the Alien Property Custodian, the application for the trademark registration here in issue was filed by the corporation, and has continued to be pressed regardless of the changes in ownership of the corporation's stock. As we have seen, the application was rejected by the Patent Office on the ground that the applicant was not the owner of the trademark sought to be registered.

When Leitz-Wetzlar marketed its products through its agents in the United States, it of course owned its trademarks. The appellant's position is that the mere agency relation continued, in substance, down to the time of the application for registration in 1950. The creation by Leitz-Wetzlar of Leitz-1916, its probable control of that corporation until about 1935 and its undoubted control of it thereafter, its...