Opinion ID: 426437
Heading Depth: 1
Heading Rank: 2

Heading: Priority in Tradename and Trademark

Text: 11 Monitek urges that the magistrate erred in giving E-Systems priority in its tradename and trademark. A prior tradename user does not have to prove direct or market competition with the latecomer in order to establish priority in its tradename. Stork Restaurant v. Sahati, 166 F.2d 348, 355 (9th Cir.1948). E-Systems has used the Montek tradename since 1955. Monitek was founded in 1969 and did not change its corporate name to Monitek until 1977. E-Systems therefore has a clear priority in tradename. 12 Trademark priority in this case presents more complex problems. However, we need not address the issue at this time. E-Systems claims that it desires only a modification of Monitek's tradename practices. E-Systems states in its brief that only the tradename issue is before the court and that Monitek's trademark practices remain unaffected. Taking these statements at face value, we vacate that part of the district court's decision dealing with trademarks.III. Laches 13 Laches can bar recovery in trademark or tradename actions where injunctive relief is sought. Prudential Ins. Co. v. Gibraltar Financial Corp., 694 F.2d 1150, 1152 (9th Cir.1982). For laches to constitute a defense, the passage of time must be accompanied by circumstances which estop plaintiff from obtaining injunctive relief. Carter-Wallace, Inc. v. Procter & Gamble Company, 434 F.2d 794, 803 n. 4 (9th Cir.1970). In the years from 1970 on Monitek incurred substantial advertising expenditures and rapidly expanded its business. Because plaintiff and defendant advertised in the same magazines and exhibited at the same trade fairs, plaintiff had ample opportunity to discover defendant's activities before defendant developed a substantial business. When Monitek registered its trademark in 1972, plaintiff had constructive notice of the claim of ownership. 15 U.S.C. Sec. 1072. But plaintiff did not file suit for infringement of either tradename or trademark until 1978. Had defendant's encroachment been minimal, or its growth slow and steady, there would be no laches. Prudential Ins. Co. v. Gibraltar Financial Corp., 694 F.2d at 1154; Carter-Wallace, Inc. v. Procter & Gamble Company, 434 F.2d at 803. The facts of this case fail to indicate that defendant's activities fit within either exception. 14 Carl Zeiss Stiftung v. V.E.B. Carl Zeiss, Jena, 293 F.Supp. 892, 917 (S.D.N.Y.1968), affirmed and modified, 433 F.2d 686, 703-704 (2d Cir.1970), lists the following among the factors in determining whether laches will bar relief: 15 1. strength and value of trademark rights asserted; 16 2. plaintiff's diligence in enforcing mark; 17 3. harm to senior user if relief denied; 18 4. good faith ignorance by junior user; 19 5. competition between senior and junior users; and 20 6. extent of harm suffered by junior user because of senior user's delay. 21 On balance, these considerations favor Monitek. The Monitek name is unquestionably valuable and strong, given Monitek's rapid and continuing growth. It used the name in good faith ignorance of Montek. It would be inequitable to force Monitek to abandon the name completely in light of the extended period over which Montek could have discovered Monitek's use of its name on its products. Plaintiff ought to have discovered defendant's use sooner had it been diligently seeking to enforce its mark. Although plaintiff's and defendant's products are complementary and are already to some degree competitive, serious harm to the senior user, Montek, is unlikely; in making actual purchases customers who rely on performance specifications are unlikely to confuse the two firms' products.