Williams v. Curtiss-Wright Corp.

• Decision Date: 21 October 1982
• Docket Number: No. 82-5181,CURTISS-WRIGHT,82-5181
• Citation: 691 F.2d 168
• Parties: James WILLIAMS, Individually and d/b/a GMP Company v.CORPORATION. Appeal of James WILLIAMS, Individually and d/b/a GMP Company and Turbine Alloy Company.
• Court: U.S. Court of Appeals — Third Circuit

Page 168

691 F.2d 168

217 U.S.P.Q. 108

James WILLIAMS, Individually and d/b/a GMP Company v. CURTISS-WRIGHT CORPORATION.

Appeal of James WILLIAMS, Individually and d/b/a GMP Company

and Turbine Alloy Company.

No. 82-5181.

United States Court of Appeals, Third Circuit.

Argued Sept. 14, 1982.

Decided Oct. 21, 1982.

James W. Broscious (argued), Schumann, Seybolt & Broscious, Washington, N. J., for appellants.

Robert F. Brodegaard (argued), Helene D. Jaffe, Ronald D. Reynolds, New York City, Francis J. Vernoia, Newark, N. J., for Curtiss-Wright Corp.; Weil, Gotshal & Manges, New York City, Zazzali & Kroll, Newark, N. J., of counsel.

Before GIBBONS, WEIS and SLOVITER, Circuit Judges.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

James Williams appeals from an order preliminarily enjoining him from using a numbering system for replacement parts for the J-65 jet engine consisting of the part number selected by Curtiss-Wright Corporation, the manufacturer of the J-65 engine, prefixed by the letter G. The numbering system was proposed by Williams following the affirmance by this court of a preliminary injunction prohibiting him from using trade secrets of Curtiss-Wright. ¹ Curtiss-Wright contends that the numbering system inadequately complies with that injunction, and also violates section 43(a) of the Lanham Act. ² Williams proposes using the numbering system on three types of J-65 replacement parts: (1) parts manufactured by Williams from drawings created by reverse engineering from genuine Curtiss-Wright parts; (2) surplus unused parts manufactured by Curtiss-Wright and obtained from other sources such as sales of American military surplus; and (3) used parts manufactured by Curtiss-Wright and reconditioned by Williams. Customers for the J-65 parts are mostly foreign military organizations. We conclude that the grant of a preliminary injunction against use of the proposed numbering system on the first category of parts should be affirmed, but that the district court's findings of fact do not adequately support the grant of a preliminary injunction as broad as that issued with respect to the second and third categories.

I.

The preliminary injunction which this court affirmed in the prior appeal required Williams to serve and file a proposal for unique identification of parts. Up to the time that injunction issued Williams had been using the Curtiss-Wright numbering system. Thus the only change Williams proposed in response to the earlier order was addition of the prefix G. Curtiss-Wright, contending that the Williams proposal violated section 43(a) of the Lanham Act and the New Jersey common law of unfair competition, applied for a temporary restraining order prohibiting the practice. No temporary restraining order issued, but by agreement of the parties the trial court scheduled a single hearing to consider an application for preliminary injunctive relief. That hearing encompassed both the Lanham Act and New Jersey law claims of unfair competition and Williams' compliance with the September 14 order. Following a two day hearing the trial court issued an opinion holding that the numbering system violated Section 43(a) and failed to satisfy the earlier preliminary injunction. ³ Williams v. Curtiss-Wright Corp., No. 79-1431 Civ. (N.J. March 8, 1982). The court's order dealt separately with each category of Williams parts.

As to parts manufactured by Williams from drawings created by reverse engineering, the court prohibited Williams' proposed numbering system, and ordered that such parts could be sold if the Curtiss-Wright part number was transposed to block letters alphabet A through J for the digits 1 through 0. As to unused and unmodified Curtiss-Wright parts, the court prohibited Williams from delivering such parts identified as having been manufactured by Williams, and ordered: (1) that the Curtiss-Wright part number remain on the part; (2) that Williams add its alphabetical equivalent to the part; and (3) that Williams disclose to the purchaser that such parts have not been inspected or approved by Curtiss-Wright subsequent to their original manufacture. Finally, as to surplus used Curtiss-Wright parts upon which Williams performs some manufacturing function, the court ordered the obliteration of the Curtiss-Wright number and the substitution of the Williams alphabetized equivalent. Id.

There is evidence in the record that the established practice in the aircraft engine manufacturing industry is to identify parts, original and spare, by the number of the drawing from which they are made. The drawings contain not only dimension information but also material specification and other technical data. There is also evidence that for military procurement often several vendors of parts are approved sources, and that such vendors usually use a distinctive numbering system. Finally there is evidence that sometimes military procurement is from approved alternative sources: that is, sources which manufacture in accordance with the specifications shown on the original manufacturer's drawings. In those situations the industry practice is for the original manufacturer and the approved alternative source to use the same part number, with the approved alternative source adding a letter prefix such as G. The evidence suggests that the general understanding in the industry is that the approved alternative source has submitted its drawing and sample part for approval and testing by the government prior to approval. It is undisputed that Williams is not an approved alternative source for J-65 parts.

II. Reverse Engineered Parts

The relevant part of the prior injunction, quoted in the margin, deals only with reverse engineered parts. It requires that such parts "shall be uniquely identified in a fashion that will make it possible to establish the source of such part even in the event of failure...." Williams v. Curtiss-Wright Corp., No. 79-1481 Civ. (N.J. Sept. 14, 1981). The prior decision of this court affirmed that injunctive provision, and thus it is law of the case. The injunction expressly requires submission to the court of a plan to achieve such unique identification, and impliedly reserves to the court authority to consider its sufficiency in achieving the intended result. The court found:

The evidence is also clear that to allow use of the Curtiss-Wright number plus the prefix G is inadequate, since the segment carrying the prefix may be broken off and lost in the event of failure and ensuing tumbling and churning. This would leave what remains as all or part of a Curtiss-Wright number with no means effectively and easily to establish manufacturing source. Also, the testimony about secondary meaning acquired by the prefix makes its use, under the circumstances of this case, unwise.

Williams v. Curtiss-Wright Corp., No. 79-1431 Civ.Mem. (N.J. Feb. 10, 1982). The first injunction was predicated primarily upon the likelihood that Curtiss-Wright would be able to establish that Williams was manufacturing not reverse engineered parts, but parts manufactured from drawings which were Curtiss-Wright trade secrets acquired in violation of New Jersey law. The unique identification requirement was an appropriate pendente lite provision, since at final hearing relief with respect to parts sold pendente lite might be required.

The court's finding that Williams' prefix proposal is an inadequate compliance with the unique identification requirement is not clearly erroneous. The prior preliminary injunction, which this court affirmed, establishes the unique identification requirement as law of the case. It is true that some system of unique identification other than the transposition of digits to letters might have been appropriate. None other was tendered by Williams save that found to be inadequate. In prohibiting use of a letter prefix with the Curtiss-Wright number while permitting sales of reverse engineered parts with the Curtiss-Wright number transposed to letters the court did not commit an abuse of discretion. Our limited scope of review precludes us from adopting the suggestion of the dissent. On remand, Williams may be able to convince the trial court to modify the preliminary injunction by adopting one of the other methods of identification referred to by the dissent. These methods may also be considered before a permanent injunction, if any, is granted.

The court's reference to the secondary meaning of the suffix obviously is a reference to Curtiss-Wright's contention that Williams' numbering system amounts to a "false designation of origin" or a "false description or representation" within the meaning of section 43(a). Considering the evidence of the industry practice for numbering by an approved alternative source, a finding by the court that Curtiss-Wright is likely to succeed on the merits of its section 43(a) claim probably would be affirmed even absent the earlier preliminary injunction. The trial court did not, however, explicitly so find. Thus, in affirming the preliminary injunction as to reverse engineered parts we do not rely on the Lanham Act or the New Jersey law of unfair competition, but only on the prior injunction.

III. Surplus Unused Parts Manufactured by Curtiss-Wright

The prior injunction does not apply to parts manufactured by Curtiss-Wright. As to such parts, therefore, the injunction under review here may be sustained only on the basis of Curtiss-Wright's claim, not considered in the first appeal, that use of Williams' proposed numbering system violates section 43(a) or the New Jersey law of unfair competition. In determining whether the trial court erred in preliminarily enjoining sales of unused surplus Curtiss-Wright parts except on the conditions outlined above, we review for abuse of discretion. In the context of review of a preliminary injunction, that standard requires our consideration of whether the court made an obvious error in applying the law or a serious mistake in...