Wrist-Rocket Manufacturing Co., Inc. v. Saunders

• Citation: 379 F. Supp. 902
• Decision Date: 02 August 1974
• Docket Number: Civ. No. 72-0-120.
• Parties: WRIST-ROCKET MANUFACTURING COMPANY, INC., Plaintiff, v. Charles SAUNDERS, d/b/a Saunders Archery Co., Defendant.
• Court: U.S. District Court — District of Nebraska

379 F. Supp. 902

WRIST-ROCKET MANUFACTURING COMPANY, INC., Plaintiff, v. Charles SAUNDERS, d/b/a Saunders Archery Co., Defendant.

Civ. No. 72-0-120.

United States District Court, D. Nebraska.

May 30, 1974.

As Amended August 2, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

William G. Campbell, Kutak, Rock, Cohen, Campbell, Garfinkle & Woodward, Omaha, Neb., for plaintiff.

Esther O. Kegan, Kegan, Kegan & Berkman, Chicago, Ill., George R. Nimmer, Omaha, Neb., for defendant.

MEMORANDUM OPINION

SCHATZ, District Judge.

This case was tried to the Court without a jury. Plaintiff, Wrist-Rocket Manufacturing Co., Inc., is a Nebraska corporation with its principal place of business in Columbus, Nebraska. Plaintiff is successor of the Tru-Mark Manufacturing Company which in turn succeeded the proprietorship of one Howard F. Ellenburg. Defendant, Saunders Archery Company, is a Nebraska corporation also having its principal place of business in Columbus, Nebraska. Defendant is the successor to Saunders Archery-Target Co., a co-partnership of Charles Saunders and his wife, Phyllis Saunders. This Court has jurisdiction over the parties and subject matter of these actions under 28 U.S.C. § 1338, 2201, and 15 U.S.C. § 1119, 1121.

In the winter of 1954, Howard Ellenburg (hereinafter referred to as Ellenburg) approached Charles Saunders (hereinafter referred to as Saunders) regarding the latter's interest in marketing an arm-braced slingshot device which Ellenburg had recently invented and which, at that time, he was marketing through a sporting goods distributor based in Sioux City, Iowa, under the name "Howard's Wrist Locker Slingshot." Saunders, being an experienced dealer in marketing and manufacturing archery related equipment indicated interest in the marketing of the device, and shortly after their meeting, Ellenburg terminated his relationship with the Iowa firm.

An agreement was then entered into and from the late summer of 1954 to the early fall of 1971, these individuals, and their respective successor-companies, successfully maintained the manufacture and marketing of these devices under the name "Wrist Rocket," Ellenburg manufacturing and packaging these devices in Columbus, Nebraska, and delivering them to Saunders' place of business (also in Columbus) where the latter shipped them on order to various archery dealers and jobbers throughout Nebraska and the United States. In 1965, Ellenburg registered the trademark "Wrist Rocket" in the United States Patent Office in his name doing business as Tru-Mark Manufacturing Company. The particular facts surrounding the business arrangement of these individuals will be noted in more detail throughout this opinion, but suffice it at this point to say that the relationship continued, generally unaltered, for the seventeen-year period following their initial meeting and agreement. In October, 1971, after attempts at negotiations over price and costs of the device to Saunders, the latter company informed Ellenburg that it was terminating their long-standing relationship in thirty days, which it did in November of 1971. Subsequent to this parting of the way, plaintiff revived his relationship with the Iowa sporting goods distributor and continued to manufacture the device and distribute it through that dealer under the name "Wrist Rocket." On January 25, 1972 (after the filing of the complaint herein), Ellenburg's successor company, Tru-Mark Manufacturing Company, amended its articles and changed its name to Wrist Rocket Manufacturing Co., Inc. Saunders Archery Company, after this arrangement was dissolved by it, also began to manufacture a similar device and to market it under the same name, "Wrist Rocket."

The plaintiff, Wrist Rocket Manufacturing Co., the successor to the manufacturing concern initially started by Ellenburg (hereinafter referred to simply as Ellenburg for purposes of clarity) then filed this action for infringement of the federally registered trademark "Wrist Rocket," and for breach of fiduciary duty between its predecessor and the defendant. Defendant has counterclaimed seeking declaratory relief as to the exclusive right to the use of the trademark "Wrist Rocket;" for damages for unfair competition and deceptive trade practice under Nebraska Deceptive Trade Practices Act, Neb.R.R.S. 1943, Sections 87-301 et seq.; and for damages under 15 U.S.C. § 1120 for alleged fraudulent and false statements made by Ellenburg in his application to the United States Patent Office for the trademark registered herein.

There is no contention on the part of defendants that if the plaintiff has the exclusive right to the mark, defendant is not infringing upon it. The question relevant to the determination of the issue of infringement is whether plaintiff has such a right.

In order for Ellenburg to succeed in his assertion of trademark infringement, he must, of course, establish his exclusive right to use the mark here in issue. Tillamook County Creamery Ass'n v. Tillamook Cheese & Dairy Ass'n, 345 F.2d 158, 160 (9th Cir.), cert. denied, 382 U.S. 903, 86 S.Ct. 239, 15 L. Ed.2d 157 (1965); Perry v. American Hecolite Denture Corp., 78 F.2d 556, 558 (8th Cir. 1935) (Woodrough, J.).

The trademark "Wrist Rocket," Registration No. 792,882, was issued on July 20, 1965, in the name of Howard Ellenburg, d/b/a Tru-Mark Manufacturing Company. Ellenburg made application for this registration on September 14, 1964. On May 4, 1965, the mark was published pursuant to Section 12(a) of the Trademark Act of 1946, 15 U.S.C. § 1062, for purposes of allowing those opposing said registration to file an opposition. Defendant filed no such opposition and the mark was, therefore, registered in July of 1965. On November 5, 1970, Ellenburg's declaration of use, filed pursuant to Section 8 of the Act, 15 U.S.C. § 1058, was accepted and on October 8, 1971, an affidavit of incontestability was filed under Section 15 of the Act, 15 U.S.C. § 1065. In December, 1971, a written assignment of the trademark rights was made from Howard Ellenburg, d/b/a Tru-Mark Manufacturing Company, to Tru-Mark Manufacturing Corporation, the latter being the predecessor to the plaintiff now before the Court, Wrist-Rocket Manufacturing Co., Inc.

Plaintiff's registration of the mark "Wrist Rocket" is prima facie evidence of its exclusive right to use the registered mark in commerce on the slingshots. 15 U.S.C. §§ 1057(b), 1115(a); Phillip Morris, Inc. v. Imperial Tobacco Co., 251 F.Supp. 362, 378-379 (E.D.Va.1965), aff'd, 401 F.2d 179 (4th Cir. 1968), cert. denied, 393 U.S. 1094, 89 S.Ct. 875, 21 L.Ed.2d 784 (1969). This prima facie case does not preclude an opposing party from proving any legal or equitable defense or defect which might have been asserted in the absence of registration, 15 U.S.C. § 1115; it merely shifts the burden of doing so. Persha v. Armour & Co., 239 F.2d 628, 630 (5th Cir. 1957). Furthermore, although plaintiff does hold an affidavit of incontestability issued under 15 U.S. C. § 1065, such an affidavit is not deemed an offensive weapon to aid in plaintiff's infringement action. John Morrell & Co. v. Reliable Packing Co., 295 F.2d 314, 316 (7th Cir. 1961); Tillamook County Creamery Ass'n v. Tillamook Cheese & Dairy Ass'n, supra, 345 F.2d at 163. The registration, except for the rebuttable presumption that it creates, clearly does not create rights to a trademark if they did not exist prior thereto. The case of Ungles-Hoggette Mfg. Co. v. Farmers' Hog & Cattle Powder Co., 232 F. 116, 119 (8th Cir. 1916), succinctly states the rule:

If there be no valid common-law trademark by the appropriation and use of a word or symbol that indicates origin or ownership, as distinguished from describing the article manufactured or sold, the bare fact of registration cannot make it so. Registration is only prima facie evidence of ownership. If that presumption is overcome by the facts in a given case, then registration is of no avail. (Citations omitted.)

See also, Schwinn Bicycle Co. v. Murray Ohio Mfg. Co., 339 F.Supp. 973, 979 (M.D.Tenn.1971), aff'd, 470 F.2d 975 (6th Cir. 1972). See generally, 4 Callmann, Unfair Competition, Trademarks and Monopolies, Sec. 97.3(a) at 582, et seq., (3d Ed. 1970). Hence, plaintiff's infringement action depends on more than its registration and a right to the trademark must be found in the plaintiff before an infringement action can be maintained.

One obtains rights to a trademark under the common law, through a number of well-recognized avenues of procedure. To start with, a trademark is defined in the Trademark Act of 1946 as:

* * * * * *

. . . any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others. 15 U.S.C. § 1127.

Neither party contends that the name, "Wrist Rocket," as affixed to the slingshot device herein involved is not, or was not subject to achieving trademark status. The function of a trademark and the means by which one entity gains the exclusive right over another to affix it to certain goods is set forth in United Drug Co. v. Rectanus Co., 248 U.S. 90, 97, 100, 39 S.Ct. 48, 50, 63 L.Ed. 141 (1918):

The law of trade-marks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another's product as his; it is not the subject of property except in connection with an existing business. (Citations omitted.)

Undoubtedly, the general rule is that, as between conflicting claimants to the right to use the same mark, priority of appropriation determines the question. * * * (T)he reason is that purchasers have come to understand the mark as indicating the origin of the wares, so that its use by a second producer

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