Opinion ID: 436179
Heading Depth: 2
Heading Rank: 1

Heading: The Unfair Competition Action

Text: 15 Rickard brought this action seeking relief from appellee's alleged misappropriation of appellant's unregistered mark. Congress provided such protection for unregistered trademarks in Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), which prohibits a false designation of origin but does not require a federal registration. Under this section, any person who violates another's established rights in an unregistered trademark by employing a false designation of origin shall be liable to a civil action. 2 Section 43(a), however, does not explicitly provide any remedies. Consequently, although courts have had no trouble in deciding that Congress intended to create a new federal remedy in enacting Sec. 43(a), 3 considerable confusion has developed in determining the nature and source of the remedy Congress made available. The answers to these questions could lie in federal statutory or common law, or in state common law. Because the intent of Congress in enacting the Lanham Act was to establish a comprehensive and simplified regulatory scheme for trademark protection, 4 our first task is to determine whether the relief available in civil actions under Sec. 43(a) can be gleaned from the statute, itself. 16 Although Sec. 43(a) is silent as to relief, Sec. 35 contains an exhaustive catalog of remedies available in trademark infringement actions: 17 When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.... In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party. 18 Lanham Act Sec. 35, 15 U.S.C. Sec. 1117 (1982). The question becomes, then, whether the relief specified in Sec. 35 is available in actions under Sec. 43(a) involving unregistered trademarks. This difficult question of statutory construction requires us to apply systematically various interpretive aids, beginning, of course, with those rules relating to the precise words Congress enacted.
19 As the opinion of the district court below demonstrates, a cogent argument can be made, based upon the language of the statute, that Sec. 35 does not extend to Sec. 43(a) suits. First, as an elementary principle of statutory construction, a reviewing court must accord primacy to the plain meaning of the language Congress has enacted. 5 5] In the instant case, the statute in question states that the specified remedies are available [w]hen a violation of any right of the registrant of a mark registered in the Patent and Trademark Office shall have been established. 15 U.S.C. Sec. 1117 (1982) (emp. added). Thus, under the plain-meaning rule of statutory construction, Sec. 35 is, arguably, limited to infringement of a federally registered trademark. 6 20 An obvious prerequisite to application of the plain meaning rule of statutory construction is that the statutory language be unambiguous. 7 One reliable indicium of the clarity of Congress' language is consistent judicial interpretation of the provision in question. 8 The confusion which the question presently before this panel has generated in the courts and in the legal community in general belies the contention that Congress has spoken so clearly as to make it unnecessary to look beyond the plain meaning of the language to ascertain Congress' intent. One court has expressly held that Sec. 35 relief applies in Sec. 43(a) actions. 9 Other courts have reached the same result by assuming, without deciding, that Sec. 35 relief was available. 10 Still others have sanctioned damage awards in Sec. 43(a) actions without stating any basis whatsoever for such an award. 11 Finally, rounding out the hodgepodge of judicial inconsistency, the court below and a few other courts have held that Sec. 35 is inapplicable to Sec. 43(a) suits. 12 Commentators are also divided. 13 Under these circumstances, we are justified in looking beyond the language of the statute to ascertain Congress' intent. 14 Indeed, our failure to do so would merely perpetuate the confusion that has resulted from previous courts' failure to undertake such an analysis. Therefore, because the starting point of statutory construction--the statutory language--is not dispositive of the issue in this case, we turn to other interpretive aids to determine whether Sec. 35 remedies are available in Sec. 43(a) actions.2. Legislative History 21 The legislative history of the Lanham Act reveals an interesting and somewhat puzzling development of Sec. 35. On June 28, 1943, the House passed a bill, H.R. 82, but the bill contained language noticeably different from current Sec. 35, reading as follows: 22 Sec. 35. Whenever the plaintiff shall have established his right to relief in any civil action arising under this act, he shall be entitled ... to recover .... 15 23 After passing the House, H.R. 82 was referred to the Senate Committee on Patents, and a subcommittee held hearings. 16 On December 4, 1944, the bill was reported in the Senate with amendments. 17 The Senate deferred action on H.R. 82, 18 however, and the bill was not reached again before the end of the congressional session. 24 Representative Lanham reintroduced H.R. 82 in the next session as H.R. 1654. 19 The bill was referred to the House Committee on Patents, 20 which submitted a report to the House recommending that H.R. 1654 pass with certain nonsubstantive amendments. 21 On March 5, 1945, the House passed H.R. 1654, but the wording of Sec. 35 was different from that contained in H.R. 82, which the House had passed two years earlier: 25 Sec. 35. When a violation of any right of the registrant of a mark registered in the Patent Office shall have been established in any civil action arising under this act, the plaintiff shall be entitled.... 22 26 With other minor amendments not relevant for present purposes, H.R. 1654 became the Lanham Trademark Act of 1946. 27 The change from the earlier bill, which made Sec. 35 relief available to any plaintiff establishing a right to relief under the Act, to the later version, which apparently made such remedies available only to a registrant of a mark registered in the Patent Office, is certainly noteworthy. In our view, however, this semantic change does not control the question whether Sec. 35 relief is available in Sec. 43(a) suits involving unregistered trademarks. The legislative history offers no explanation for the change. Neither the 1944 Senate Hearings 23 and Report 24 nor the 1945 House Report 25 even mention the modification. Furthermore, nowhere does the legislative history of the Lanham Act suggest that different policies were to govern relief for actions involving unregistered trademarks under Sec. 43(a) as opposed to actions involving registered trademarks under Sec. 32(1). 26 Under these circumstances, we decline to attach controlling significance to a word change that is neither explained nor even mentioned in the legislative history. Like the statutory language, the legislative history is, therefore, not dispositive of the issue at hand. 3. Purpose and Intent Analysis 28 Because neither the statutory language nor the legislative history are dispositive of the issue, we guide ourselves generally by the purposes of the Lanham Act and the intent of Congress in enacting it. 27 As a general rule, the cardinal purpose, intent or purport of the whole act shall control, and all parts shall be interpreted as subsidiary and harmonious. 28 In order to provide a harmonious relationship between Sec. 35 and Sec. 43(a), therefore, we must ascertain the Lanham Act's underlying purposes. 29 The House Report submitted by Representative Lanham from the Committee on Patents contains a concise and elucidating statement of the purposes of H.R. 1654, which later became the Lanham Trademark Act: 30 This bill [H.R. 1654] attempts to accomplish these various things: 31 5. Generally to simplify trade-mark practice .... 32 The theory once prevailed that protection of trade-marks was entirely a State matter and that the right to a mark was a common-law right. This theory was the basis of previous national trade-mark statutes.... It is obvious that the States can change the common law with respect to trade-marks and many of them have, with the possible result that there may be as many different varieties of common law as there are States. A man's rights in his trade-mark in one State may differ widely from the rights which he enjoys in another. 33 However, trade is no longer local, but is national. Marks used in interstate commerce are properly the subject of Federal regulation. It would seem as if national legislation along national lines securing to the owners of trade-marks in interstate commerce definite rights should be ... enacted now. 34 [A] sound public policy requires that trade-marks should receive nationally the greatest protection that can be given them. 29 35 Thus, it is clear that, without distinguishing between registered and unregistered marks, Congress intended (1) to simplify trademark practice, (2) to establish uniform regulation of trademarks thereby eliminating the possibility that remedies would vary from state to state, and (3) to provide the greatest protection possible for all trademarks used in interstate commerce. 36 In view of this explicit statement of the purpose of the Lanham Act, we conclude that Sec. 35 relief applies to Sec. 43(a) actions involving unregistered trademarks. To hold otherwise would undermine Congress' goals of simplifying trademark practice, establishing uniformity and providing ample relief. First, if we were to hold that Sec. 35 relief did not apply to Sec. 43(a) actions, the courts would have to develop as a matter of common law the relief available in Sec. 43(a) actions. Although today this can be accomplished through federal common law, Congress' goals of simplicity and uniformity are much more efficiently and effectively accomplished by affording holders of unregistered trademarks certain and uniform relief under Sec. 35. 30 Second, Congress' intention to provide trademarks the greatest protection that can be given them is, with respect to unregistered trademarks, even more dependent today upon our holding that Sec. 35 relief is available in Sec. 43(a) actions than it was at the time the Lanham Act was enacted. Originally, the Act did not provide for the award of attorneys' fees, 31 and the Supreme Court expressly held that no award of attorneys' fees could be implied. 32 The Act has been amended, however, and now permits a court in exceptional cases [to] award reasonable attorneys' fees to the prevailing party. 33 Hence, unless Sec. 35 relief applies to Sec. 43(a) actions, attorneys' fees could not be awarded, and unregistered trademarks would not receive nationally the greatest protection that can be given them. For these reasons, we conclude that the express purposes of the Lanham Act are best served by applying Sec. 35 remedies to Sec. 43(a) actions, and we so hold. 34