Case Name: Application of NATIONAL DISTILLERS AND CHEMICAL CORPORATION, doing business as National Distillers Products Co.
Court: United States Court of Customs and Patent Appeals
Jurisdiction: United States
Decision Date: 1962-01-12
Citations: 297 F.2d 941
Docket Number: Patent Appeal No. 6706
Parties: Application of NATIONAL DISTILLERS AND CHEMICAL CORPORATION, doing business as National Distillers Products Co.
Judges: Before WORLEY, Chief Judge, RICH, MARTIN and SMITH, Judges, and Judge WILLIAM H. KIRKPATRICK.
Reporter: Federal Reporter 2d Series
Volume: 297
Pages: 941–954

Head Matter:
49 CCPA
Application of NATIONAL DISTILLERS AND CHEMICAL CORPORATION, doing business as National Distillers Products Co.
Patent Appeal No. 6706.
United States Court of Customs and Patent Appeals.
Jan. 12, 1962.
Breed, Abbott & Morgan, New York City (Gerald J. Craugh, New York City, of counsel), for appellant.
Clarence W. Moore, Washington, D. C. (George C. Roeming, Washington, D. C., of counsel), for Commissioner of Patents.
Before WORLEY, Chief Judge, RICH, MARTIN and SMITH, Judges, and Judge WILLIAM H. KIRKPATRICK.
United States Senior District Judge for the Eastern District of Pennsylania, designatod to participate in place of Judge O’CONNELL, pursuant to provisions of Section 294(d), Title 28 United States Code,

Opinion:
SMITH, Judge.
The Commissioner of Patents, purporting to act under Rule 7 of this court, 35 U.S.C.A.Appendix, has filed a Petition for Rehearing of the decision of this court which was rendered herein on August 16, 1961. In this petition of some 27 pages we are told that there are 20 "errors manifest" or matters "overlooked or misapprehended" which are explained and argued at great length and in considerable detail.
This petition amounts to a reargument of the case which was more concisely argued in the Commissioner's main brief of but 21 pages. The petition presents nothing new, nothing that was overlooked, and nothing that was not briefed and argued by the parties and fully considered by this court prior to rendering the decision herein. The Commissioner's Petition for Rehearing is therefore denied both on its merits and for failure to comply with the requirement of our Rule 7 that:
"The petition in each case shall be confined to a brief statement of points supposed to have been overlooked or misapprehended by the court, with proper references to the particular portion of the transcript of the record or original briefs relied upon, and with authorities and suggestions, concisely stated, in support of the points. " (Emphasis added.)
In order, however, to revise certain portions of our prior opinion it is hereby withdrawn and the following opinion is substituted therefor.
This ease comes to us on appeal by the applicant from the original decision of the Trademark Trial and Appeal Board of the United States Patent Office rendered April 8, 1960, In re National Distillers & Chemical Corp., 125 USPQ 197, affirming the decision of the Examiner of Trademarks refusing registration of applicant's trademark MERITO for rum, and from a decision on applicant's petition for rehearing or reconsideration rendered May 9, 1960 which, in effect, adheres to the original decision of April 8, 1960.
The board held that the marks MER-ITO for rum and MARQUÉS DEL MÉR-ITO for wines so resemble each other that confusion or mistake or deception of purchasers would be likely, and affirmed the examiner in rejecting, under section 2(d) of the Lanham Act [15 U.S.C. § 1052(d), 15 U.S.C.A. § 1052(d)], the application for registration of the mark MERITO for rum.
The issue before us on this appeal is whether the examiner and the Trademark Trial and Appeal Board properly refused to register the mark MERITO for rum. The board below, in refusing this registration, stated in its decision of May 9, 1960:
"The board remains of the opinion that applicant's mark so resembles the registered trademark as to be likely, when applied to such goods, to cause confusion or mistake of purchasers."
Applicant asserts that there are such differences in the marks and in the goods as would eliminate likelihood of confusion or mistake or deception of purchasers, and in addition asserts its right to use the mark MERITO on rum based on agreements with the owner of the reference mark.
We shall first consider whether the differences in the marks and in the goods are such that confusion or mistake or deception of purchasers is likely. The marks MARQUÉS DEL MÉRITO and MERITO do not look alike, sound alike nor evoke the same psychological responses. Wines and rum are goods whose differences are clearly recognized by the purchasers thereof. These differences are sufficient to raise a doubt as to likelihood of confusion, mistake or deception of purchasers arising from'the common use of the word MERITO. Under these circumstances, we think the alleged agreements between applicant and the owner of the reference registration are of evidentiary value.
As was stated in Avon Shoe Co., Inc. v. David Crystal, Inc., 171 F.Supp. 293 (D.C.S.D.N.Y.1959), affirmed 279 F.2d 607:
"Likelihood of confusion is a relative concept which can be determined only according to the particular circumstances of each case. Mere comparison of the trademarks side by side is not sufficient. The conditions in the market place, not the courtroom, are the controlling factors. Gort Girls Frocks, Inc. v. Princess Pat Lingerie, Inc., D.C.S.D.N.Y.1947, 73 F.Supp. 364."
It is a fact of which we take judicial notice that in the "market place" the lawful right to use a mark frequently is based on agreements between users of the marks. Such agreements may, as here, constitute a consent by one party to the use of a mark by the other party. The question then arises as to what effect should be given to such consent. As such, it seems to us that here the agreements should have been treated as the written consent was treated in Ex parte Frostmann & Huffmann, 151 Ms.D. 789, 18 TMR 589 (Comrn'r, 1928), where First Assistant Commissioner Kinnan, prior to the Lanham Act, stated:
"This consent must be construed to mean that in the judgment of the registrant confusion in the trade would be quite unlikely or entirely absent. If the goods were identical registration should notwithstanding this consent of the registrant, be denied the applicant, but since the goods are different to some degree at least and since woolen goods are not generally used for the same purpose as the goods upon which the registrant uses its mark, it is believed, as the registrant has given consent to the applicant's use of the mark upon its particular class of goods, registration should not be denied."
We also agree with Professor Derenberg's statement that:
" where there may exist reasonable doubt in the examiner's mind because of differences in either the marks or the goods, or both, consent by a prior registrant should, and under recent practice usually will, have an important persuasive effect in determining registrability. In other words, the Patent Office may conclude that if the previous registrant would not consider himself injured by the application [registration], there may be less likelihood that the general public would be confused. Such a liberal attitude toward the acceptance of letters of consent will very often avoid unnecessary contests between two or more parties who honestly believe that simultaneous use of their respective marks never has resulted and probably never will result in likelihood of confusion. " (The Patent Office as Guardian of the Public Interest in Trade-Mark Registration Proceedings, 14 Law and Contemporary Problems 288, 307 (1949), 31 JPOS 647, 676.)
However, before we can consider the legal effect here of the alleged agreements between applicant and the owner of the-reference registration, we are faced with a problem as to what "evidence" is before us as to the existence and content of these agreements which support applicant's position. The examiner and the Trademark Trial and Appeal Board acted on the basis of certain alleged facts which were stated by applicant's attorney in responses to the examiner's refusal to grant registration. The Commissioner's main brief here asserts that the allegations of fact thus made by applicant are "unsupported by affidavits or other competent evidence," and are therefore "without evidentiary support."
The position of the Commissioner asserted for the first time by the solicitor in this court, is that the allegations of fact accepted by the examiner and the board are not competent evidence because they are not contained in affidavits but are merely assertions made over the signature of counsel for applicant.
While we agree with the solicitor that statements made over the signature of counsel are not evidence of the facts averred, it seems to us that it is the clear intent of sections 1(c) and 41 of the Lanham Act (15 U.S.C. § 1051, 1123, 15 U.S.C.A. § 1051, 1123) to vest considerable discretion in the Commissioner in adopting rules which establish the legal effect of signed statements of counsel of the kind which the examiner and the board appear here to have accepted in lieu of evidence.
When counsel for applicant made allegations of fact in signed responses to the Patent Office actions, he certified, under Rule 2.15 of the Trade-Mark Rules of Practice, 15 U.S.C.A.Appendix, that "there is good ground to support" them. While such statements are not "evidence" of the facts stated, it seems to us that the examiner may either accept such statements and act upon them, or demand evidence of the facts so stated and which are relevant to the issue. A large measure of discretion is properly given the examiner in this respect. Where, as here, no objection was made to the statements of counsel and the examiner acted upon them, it seems to us that such statements have in legal effect become the equivalent of competent evidence. On this basis, we accept, for purposes of resolving the present issue, the following statement of fact set forth in the original opinion of the board:
"According to the record in this application, in 1939, National Distillers and Chemical Corporation, applicant herein, became the sole distributor in the United States of wines bearing the mark 'MARQUES DEL MERITO'. On September 8, 1939, in connection with this exclusive distributorship, the registration in question was assigned to applicant. In June, 1941, applicant adopted and began to use 'MERITO' as a trademark for rum. On November 27, 1946, applicant, in continuance of its distributorship of 'MARQUES DEL MERITO' wines, entered into agreements with companies controlled by the registrant, who supplied the sherry and port wines sold under this mark. Under the terms of these agreements, applicant was appointed sole distributor in the United States, its territories and possessions, of 'MARQUES DEL MERITO' sherry and port wines. In addition, each of the agreements provide [sic] for the supplier to assign to applicant, as sole distributor, all trademarks and labels used upon said goods, together with the good will of the business in connection therewith in applicant's territory, and any registrations thereof for said territory; for applicant to secure registrations of such trademarks and labels in its own name where they have not been obtained; and for such trademarks, labels and registrations as had been assigned to or were secured by applicant with the supplier's consent, to be reassigned to the supplier upon termination of the agreement. The agreements further provide that such reassignment shall not apply to the trademark 'MERITO' used by applicant on rum, the supplier consenting to use and registration by applicant of 'MERITO' for rum and waiving all right, title and interest in and to said trademark for such goods. On November 26, 1958, at registrant's request, applicant reassigned the cited registration to registrant. In this assignment, applicant's right to use 'MERITO' for rum was reaffirmed. Applicant has since ceased to be the sole distributor of 'MARQUES DEL MERITO' sherry wines, although it is still the exclusive distributor of 'MARQUES DEL MERITO' port wines.
"The record further shows that applicant has continuously used 'MERITO' for rum since June, 1941. From June, 1941 to December 31, 1958, applicant sold over a million and a half cases of 'MERITO' rum at a total sales price exceeding forty-three million dollars. During the same period, applicant expended more than a million and a half dollars in advertising and promoting 'MERITO' rum in national publications, newspapers, and the like."
The record here does not contain the actual agreements under which applicant asserts it has the right to use and register MERITO for rum. Appellant's brief summarizes the apparently accepted fact that the agreements provide as follows:
"1. Suppliers [the prior registrant here] admit applicant's ownership of amd right to use and register the trademark MERITO for rum, and waive all right, title and interest in and to said trademark for rum, provided
"(a) that said trademark is used on rum produced in Puerto Rico, the United States or its possessions, or the Philippine Islands; and
"(b) that said rum shall not be exported to, sold or offered for sale in Spain, any Spanish possession, Portugal or any Portuguese possession, or Cuba.
"2. Suppliers agree never to export to, sell or offer for sale or permit anyone else to export to, sell or offer for sale in the continental United States, or its possessions, or the Philippine Islands, any rum bearing any name consisting wholly or partly of the word 'Mérito.' "
The agreements upon which applicant relies to support its right to use and register MERITO for rum are between applicant and the owner of the cited registration. Both must be presumed to be familiar with the trade and the market practices in connection with which the marks are used. The agreements, under which applicant has used MERITO, make this use a concurrent lawful use with the registered mark MARQUÉS DEL MÉRITO for wines which, we think, is not likely to cause confusion or mistake or deception of purchasers. We think, therefore, that the agreements by which the prior registrant consented to applicant's restricted use of MERITO for rum should be accepted as additional evidence of applicant's right to registration of the mark which it has been and is using thereunder.
The intent of the Lanham Act appears to us to be to permit registrations of a mark under all of the foregoing conditions. As stated in Senate Report No. 1333, 79th Cong., 2d Sess. (May 14, 1946), at page 3, U.S.Code Cong.Service 1946, p. 1274, one purpose of the Act was
" to simplify registration and to make it stronger and more liberal, to dispense with mere technical prohibitions and arbitrary provisions »
The Senate Report points out (pages 4, 5, U.S.Code Cong.Service 1946, p. 1276) that the prior trademark statutes "have not kept pace with the commercial development" and that the Lanham Act attempts to "modernize the trade-mark statutes so that they will conform to legitimate present-day business practice." See also, 4 Callman Unfair Competition and Trademarks (2d Ed.) p. 2167, and The New Trademark Manual, Robert, 1947, p. 55-56.
Agreements permitting joint and concurrent use of marks have been recognized as valid by the courts. We consider the following decisions to be more persuasive on this issue than we do the arguments to the contrary advanced on behalf of the Commissioner of Patents.
In Chester H. Roth Co., Inc. v. Esquire, Inc., 186 F.2d 11 (C.A.2d 1951), certiorari denied, 341 U.S. 921, 71 S.Ct. 743, 95 L.Ed. 1354 (1951), the court recognized as valid certain agreements which provided for the joint use and protection as a trademark of the word "Esquire," the common use of which might otherwise be confusing. The court said, "Such agreements have a legitimate business purpose and are not contrary to public policy."
In California Fruit Growers Exchange v. Windsor Beverages, 118 F.2d 149, (C.A.7th 1941) the court considered and held valid an agreement which permitted the joint and concurrent use of the two marks in issue under an agreement by which each party had granted the other the right to employ the mark. The court approved this practice.
Applicant has urged us to apply section 19 of the Trade-Mark Act of 1946 in the present ex parte proceeding and has argued in its brief:
"Since the agreements of November 27, 1946 expressly admit applicant's right to use and register MERITO for rum, they constitute a legal estoppel, that is, an estoppel by contract, in favor of applicant. In addition, applicant's long and extensive use of MERITO for rum, in reliance upon such argeements, also works an equitable estoppel in favor of applicant."
We think the clear intent of Congress was that section 19 be limited to inter partes proceedings, and this for the very sound reason that the equitable principles of laches, estoppel and acquiescence are based on facts and should not be applied either in favor of or against one not a party to the proceeding. An ex parte proceeding arising from the refusal of the Patent Office to register a trade-mark does not become an inter partes proceeding in the sense of section 19 of the Lanham Act (15 U.S.C. § 1069, 15 U.S.C.A. § 1069), as urged by applicant, merely because the applicant and the Patent Office appear many times in opposing roles.
The authorities cited for giving no effect to the agreements between the parties are: Skookum Packers Ass'n, v. Pacific Northwest Canning Co., 45 F.2d 912, 18 CCPA 792 (1930), In re Laskin Brothers, Inc., 146 F.2d 308, 32 CCPA 820 (1944), and Schering & Glatz, Inc. v. Sharpe & Dohme, Inc., 146 F.2d 1019, 32 CCPA 827 (1944). In these cases it was held that the parties by their deeds or agreement cannot confer upon the Commissioner of Patents the power to do that which the statute forbids. We do not think these pre-Lanham Act cases are controlling here since the Lanham Act liberalized the prior act and gave the Commissioner authority to register marks used concurrently under such circumstances as we have in this case.
We think the provisions of the asserted agreements are important circumstances of this case and should have been considered for their bearing upon the issue of confusion, mistake or deception of purchasers.
The 1946 agreements here relied upon by applicant as supporting its asserted right to use and register the mark MERITO for rum contain conditions on this right. If we consider the agreements, to be "consents" to use the mark MERITO for rum, they are limited or restricted consents. Section 1(a) (1) of the Lanham Act (15 U.S.C. § 1051, 15 U.S.C.A. § 1051) indicates that such limitations and' restrictions should be stated in an application for registration of marks where they are exceptions to applicant's claim of exclusive right to use. The present application for registration is not so limited. Since applicant on the present record does not appear to be entitled to a. registration broader than its contractual1 right to use the mark, the present application to register the mark does not appear to comply with section 1(a) (1) of the Lanham Act.
For the foregoing reasons, we reverse. the decision of the board and remcmd the case for further proceedings consistent, herewith.
Reversed and remanded.
MARTIN, Judge, sat but did not participate in decision.
. The earlier opinion was withdrawn from publication.
. Application Ser. No. 58,363, filed Sepi tember 4, 1958. - • '
. Reg. No. 304.257, registered June 27, 1933; renewed June 27, 1953.
. "2.15 Signature and certificate of attorney or agent.
"(a) Every paper filed by an attorney at law or other person representing an applicant or party to a proceeding in the Patent Office must bear the signature of such attorney at law or other person except those papers which are required to be signed by the applicant or party (such as the application itself and verifications required of applicants, registrants or others). The signature of an attorney at law or such other person to a paper filed by him, or the filing of any paper by him, constitutes a certificate that the paper has been read; that its filing is authorized; that to the best of his knowledge, information, and belief there is good ground to support it; and that it is not interposed for delay."